Merrill Lynch World Mining Tst PLC
14 August 2006
MERRILL LYNCH WORLD MINING TRUST plc
All information is at 31 July 2006 and unaudited.
Performance at month end with net income reinvested
One Three One Three Five
month months year years years
Net asset value (undiluted)* 1.1% -4.9% 61.8% 201.5% 340.3%
Net asset value (diluted)* 0.9% -4.1% - - -
Share price* -2.2% -7.8% 52.8% 202.7% 353.9%
HSBC Global Mining Index -0.8% -7.7% 52.7% 152.0% 197.3%
Sources: Merrill Lynch Investment Managers, HSBC Global Mining Index, Datastream
*Net asset value and share price performance includes the warrant reinvestment,
assuming the 2004 and 2006 bonus warrant entitlements per share were sold and
the proceeds reinvested on the first day of trading.
At month end
Net asset value
Undiluted: 469.16p Includes net revenue of: 4.60p
Diluted: 464.14p
Share price: 397.00p Discount to undiluted NAV: 15.4%
Warrant price: 38.75p
Total assets: £781.8m Net yield: 0.45%
Gearing: Nil
Ordinary shares in issue: 168,298,906
Warrants in issue: 33,659,228
Sector % Total Assets Country % Total Assets
Analysis Analysis
Diversified 47.6 Global 27.1
Base Metals 25.4 Latin America 20.1
Gold 9.2 Canada 12.0
Platinum 7.1 South Africa 12.0
Industrial Minerals 4.7 Australasia 10.2
Silver/Diamonds 4.7 USA 5.2
Other 3.0 Other Africa 3.9
Net current liabilities (1.7) China 3.5
India 2.9
Europe 2.6
Laos 1.5
Indonesia 0.7
Net current liabilities (1.7)
100.0 100.0
Ten Largest Equity Investments
Company Region of Risk
Alcoa USA
Anglo American Global
BHP Billiton Global
CVRD Latin America
First Quantum Minerals Zambia
Impala Platinum South Africa
Rio Tinto Global
Teck Cominco Canada
Xstrata Global
Zinifex Australasia
Commenting on the markets, Graham Birch, representing the Investment Manager
noted:
After a strong start to July, mining shares witnessed a mid month sell-off, but
a final week rally saw them close down only 0.8%. Base metals performed
strongly, with both copper and nickel benefiting from supply side disruptions
including strikes and mine slippages. The Base Metals Index closed the month up
4.0% (in sterling terms).
The Company's strongest contributors to relative performance were Xstrata, Teck
Cominco and Inco, all of which have been involved in protracted M&A activity
with one another. Inco failed to get a sufficient number of acceptances from
Falconbridge shareholders for their friendly takeover offer and so had to drop
their bid, leaving the way clear for Xstrata's bid for Falconbridge and
triggering an increased bid by Teck Cominco for Inco. After almost a year of
wrangling, it appears that the end is in sight for Inco and Falconbridge.
The beginning of the reporting period has already seen some of the Company's
holdings reporting excellent quarterly earnings as they benefit from the strong
commodity price environment. Teck Cominco broke records with a 172% increase in
Q2 net earnings year on year; Alcoa also released record Q2 earnings, up 52%
year on year; Peabody Energy reported a 137% increase; Freeport McMoRan an 88%
increase in Q2 earnings and another special dividend; and Southern Peru Copper a
43% increase year on year in Q2 earnings.
The Company added to its positions in the larger cap gold miners which are now
benefiting from increasing profitability. The Company took part in the IPO of
Nikanor, a London-listed copper company planning to develop an operation in the
Kolwezi area of the Democratic Republic of Congo.
Despite market jitters, supply and demand fundamentals for the mining industry
remain robust. Supply side disruptions continue to impact the market in 2006,
the repercussions of which should support strong metal prices going forward.
Higher commodity prices have seen another round of spectacular results from the
mining industry and has meant many of the Company's holdings are translating
their strong balance sheets and high cash flows into higher dividends and
increased share buybacks. There is also the continued possibility of further
corporate activity as mining companies seek to grow quickly and cost
effectively. Notwithstanding the above, markets are likely to remain unusually
volatile in the near future as a result of Middle East uncertainty.
Latest information is available by typing www.mlim.co.uk/its on the internet,
'MLIMINDEX' on Reuters, 'MLIM' on Bloomberg or '8800' on Topic 3 (ICV terminal).
14 August 2006
This information is provided by RNS
The company news service from the London Stock Exchange
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