Net Asset Value(s)

RNS Number : 3020E

Baker Steel Resources Trust Ltd

05 November 2020

 

BAKER STEEL RESOURCES TRUST LIMITED

(Incorporated in Guernsey with registered number 51576 under the provisions of The Companies (Guernsey) Law, 2008 as amended)

5 November 2020

30 October 2020 Unaudited NAV Statement

Net Asset Value ("NAV")

Baker Steel Resources Trust Limited (the "Company") announces its unaudited net asset value per share at 30 October 2020:

Net asset value per Ordinary Share:  76.2 pence

The NAV per share increased by 1.5% against the NAV per share at 30 September 2020 as the increase in price of Metals Exploration plc following the resumption of trading in its shares on AIM, outweighed decreases in other parts of the quoted portion of the portfolio.

Th e Company had a total of 106,462,502 Ordinary Shares in issue with a further 700,000 shares held in treasury as at 30 October 2020 .

Portfolio Update

The Company's top 12 investments were as follows as a percentage of NAV:

	30 October 2020	31 December 2019
Bilboes Gold Limited	20.8%	15.9%
Futura Resources Ltd	16.6%	15.0%
Polar Acquisition Ltd	11.0%	11.3%
Cemos Group plc	9.6%	10.0%
Tungsten West Limited	8.0%	8.0%
Anglo Saxony Mining Limited	4.3%	4.6%
Mines & Metals Trading Peru PLC	4.0%	4.4%
Azarga Metals Corp	3.9%	2.7%
Nussir ASA	3.8%	4.1%
Metals Exploration plc	3.6%	1.8%
Black Pearl Limited Partnership	3.3%	3.4%
Sarmin Minerals Exploration	2.6%	3.7%
Listed Precious Metal Shares	5.4%	6.1%
Other Investments	2.6%	3.9%
Net Cash, Equivalents and Accruals	0.5%	2.3%

Investment Update

Metals Exploration plc

On 8 September 2020 Metals Ex announced details of a debt restructuring of both the Senior Facility and various pre-existing Mezzanine debt facilities. As at 31 August 2020, the total amount owing to the respective Lenders was approximately US$72 million for the Senior Facility and approximately US$65 million under the Mezzanine Facilities. During September a US$4 million repayment of the Senior debt was made leaving an aggregate of approximately US$134 million at the end of September 2020.

During the third quarter 2020, Metals Ex sold 16,094 ounces of gold from its Runruno gold mine in the Philippines, generating free cashflow of US$8.66 million. This was a significant improvement on previous quarters due to higher gold recoveries and the increased gold price.

On 23 October 2020 Metals Ex announced it had completed the debt restructuring following an extraordinary general meeting of shareholders. Importantly this debt restructuring did not include a debt for equity swap which would have been highly dilutive if enacted at close to the price of 0.75 pence per share at which Metals Ex's shares were suspended in March 2020.

Once the debt restructuring was completed Metals Ex's shares resumed trading on the AIM market on 26 October 2020 closing at 2.4 pence per share on 30 October 2020. At 30 September 2020 the Company held Metals Ex shares at the discounted price of 0.5 pence per share and the resumption of trading boosted the Company's NAV by 2.9%.

Although all Metals Ex's cashflow in the near term will be deployed towards paying down the debt, any further improvement in production performance towards the targeted 100,000 ounces per annum, or increase in the gold price, could result in the debt being paid down more rapidly which would have a significant effect on the value of Metals Ex.

Sarmin Minerals Exploration ("Sarmin")

On 28 September 2020 the Definitive Feasibility Study (DFS) into Sarmin's Kanga Potash project in the Republic of Congo was issued by Novopro a leading independent consultant in the potash sector.

The pre-feasibility study completed in September 2018 adopted a modular approach with phased development configuration from 400,000 tonnes per annum (tpa) to 2.4M tpa of Muriate of Phosphate (MOP) whilst the DFS focussed on the most financially attractive scenario of 600,000 tpa MOP.

The key results of the DFS based on an average MOP sales price of US$282 per tonne are summarised as follows:

Capital Cost:       US$ 457 million

Operating Cost:     US$ 66.3 per tonne MOP (FOB Pointe Noire)

All-in Sustaining Cost:  US$ 75.9 per tonne MOP (FOB Pointe Noire)

Post tax NPV (10%):  US$ 511 million

Post tax IRR:    22.3%

The Kanga project's key advantages apart from its exceptional geological characteristics are its proximity to the coast, minimising the cost of product transport as well as access to long term competitively priced natural gas. This results in both capital and operating costs in the lowest part of the industry cost curve making Kanga one of the most competitive MOP projects globally. It also has the potential to be expanded on a modular basis up to 2.4M tpa over 30 years.

Sarmin will now seek partners to finance the construction of the project. The carrying value of Sarmin will be reviewed together with those of the other unlisted positions at 31 December 2020 in line with the Company's policy.

Further details of the Company and its investments are available on the Company's website www.bakersteelresourcestrust.com  

Enquiries:

Baker Steel Resources Trust Limited   [phone]

Francis Johnstone
Trevor Steel

Numis Securities Limited  [phone]

David Benda (corporate)

James Glass (sales)

The Net Asset Value ("NAV") figure stated is based on unaudited estimated valuations of the underlying investments and not necessarily based on observable inputs. Such estimates are not subject to any independent verification or other due diligence and may not comply with generally accepted accounting practices or other generally accepted valuation principles. In addition, some estimated valuations are based on the latest available information which may relate to some time before the date set out above.

Accordingly, no reliance should be placed on such estimated valuations and they should only be taken as an indicative guide. Other risk factors which may be relevant to the NAV figure are set out in the Company's Prospectus dated 26 January 2015.

 

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