Portfolio Update

BLACKROCK WORLD MINING TRUST plc  (LEI - LNFFPBEUZJBOSR6PW155)
All information is at 30 September 2018 and unaudited.
Performance at month end with net income reinvested
		One			Three				One	Three		Five
		Month			Months				Year	Years		Years
Net asset value		5.5%			-3.7%				8.2%	120.2%		6.0%
Share price		2.4%			-4.5%				5.1%	108.6%		0.1%
EMIX Global Mining Index (Gross)		4.4%			-4.2%				6.7%	111.1%		21.1%
EMIX Global Mining Index (Net)*		4.3%			-4.3%				6.2%	108.5%		18.1%
(Total return)
Sources: BlackRock, EMIX Global Mining Index, Datastream
* The Company’s performance benchmark (the EMIX Global Mining Total Return Index) may be calculated on either a Gross or a Net return basis.  Net return (NR) indices calculate the reinvestment of dividends net of withholding taxes using the tax rates applicable to non-resident institutional investors, and hence give a lower total return than indices where calculations are on a Gross basis.  As the Company is subject to the same withholding tax rates for the countries in which it invests, the NR basis is felt to be the most accurate, appropriate, consistent and fair comparison for the Company.  Historically the benchmark data for the Company has always been stated on a Gross basis, and therefore for transparency both sets of benchmark data are provided in the table above.  Going forward it is the Board’s intention to monitor the Company’s performance with reference to the NR version of the benchmark.
At month end
Net asset value including income1:								426.19p
Net asset value capital only:								416.10p
1 Includes net revenue of 10.09p
Share price:								366.00p
Discount to NAV2:								14.1%
Total assets:								£864.0m
Net yield3:								4.3%
Net gearing:								13.5%
Ordinary shares in issue:								176,435,242
Ordinary shares held in treasury:								16,576,600
Ongoing charges4:								1.00%
2 Discount to NAV including income. 3 Based on quarterly interim dividends of 3.00p per share declared on 25 April 2018 and 16 August 2018 in respect of the year ending 31 December 2018 and a quarterly interim dividend of 3.00p per share declared on 10 November 2017 and a final dividend of 6.60p per share in respect of the year ended 31 December 2017. 4 Calculated as a percentage of average net assets and using expenses, excluding finance costs, for the year ended 31 December 2017.
Sector	% Total					Country Analysis					% Total
	Assets										Assets
Diversified	47.3					Global					59.4
Copper	20.9					Latin America					11.9
Gold	13.0					Australasia					10.6
Silver & Diamonds	8.1					Canada					6.5
Industrial Minerals	6.6					Other Africa					6.4
Steel	1.0					USA					1.4
Zinc	0.8					South Africa					0.8
Nickel	0.4					Kazakhstan					0.6
Aluminium	0.4					Indonesia					0.4
Materials	0.2					Russia					0.4
Iron Ore	0.1					Peru					0.2
Current Assets	1.2					Argentina					0.1
						Mexico					0.1
						Current Assets					1.2
	-----										-----
	100.0										100.0
	=====										=====
Ten Largest Investments
Company				% Total Assets
BHP				9.9
Vale				9.6
Rio Tinto				9.4
Glencore				8.1
First Quantum Minerals				6.3
Teck Resources				4.8
Sociedad Minera Cerro Verde				3.0
Mountain Province Diamonds				2.9
Lundin Mining				2.8
Avanco Resources - royalty				2.4

Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted:

Performance

The Company’s NAV increased by 5.5% in September, outperforming its benchmark, the EMIX Global Mining Index (net return), which increased by 4.3%.

After a challenging August, the mining sector bounced back somewhat in September. At the macro-level, trade tensions escalated as the US imposed a 10% tariff on an additional $200bn of Chinese goods, with this tariff increasing to 25% in 2019. Interestingly, metals prices and mining shares were flat to up on the news, suggesting that an escalation had already been priced in. Furthermore, trade agreements between the US and Canada and the US and Mexico increased optimism that we could see an improvement in US/China relations.

Most mined commodities were up over the month with copper, zinc and iron ore (62% Fe) prices rising 5.0%, 8.0% and 3.7% respectively. (Returns in USD.) Within the iron ore market, higher grade material continued to trade at a healthy premium. We expect this to remain the case for some time, as we are now entering the winter heating season in China in which we expect increased scrutiny on pollution, with steel producers to look to higher grade iron ore to maximize production as a result. Meanwhile, the copper price was supported by an update from base metals producer, MMG (not held in the Company), in which it downgraded expected 2018 copper production at its Las Bambas mine by ~35 thousand tonnes due to ‘localised wall instability’. For copper, this further tightened an already tight market.

Outperformance over the month was largely stock-specific. The Company’s exposure to some emerging producers, such as Ero Copper and SolGold, added value through the rising market.  In addition, our position in Nevsun was among the top performers. Nevsun accepted a takeover bid from Zijin Mining during the month, as Zijin offered the company a superior deal to the multiple takeover attempts seen from Lundin Mining in recent months.

On the negative side, our position in First Quantum was the largest detractor after it was negatively impacted by two rulings during the month. Firstly, Panama’s Supreme Court ruled that Law 9, used to approve a mining concession contract between the state and Minera Petaquilla (a subsidiary of First Quantum) in February 1997, was unconstitutional - the impact of this on First Quantum remains unclear. Secondly, the Zambian government announced an increase in royalty rates and taxes; First Quantum currently operates the Kansanshi and Sentinel mines in Zambia.

Strategy and Outlook

After strong years in 2016 and 2017, this year has been more challenging for the mining sector so far. Sentiment has deteriorated on trade tensions and mined commodity prices have fallen across the board as a result. It has been interesting to see financially-traded commodities (e.g. copper, zinc and aluminium) underperforming the physically-traded ones (e.g. iron ore and steel), where investors are unable to speculate as much. This suggests to us that underlying fundamentals remain strong and weakness has been mainly driven by speculation. Meanwhile, underlying demand conditions in China appear to be stable, whilst we are seeing early signs of stimulus coming through. We believe we could be at peak pessimism around trade wars and are looking to add risk in the Company. Meanwhile, mining shares are trading on attractive multiples versus history and relative to broader equities. The sector is trading on close to its highest ever free cash flow yield, whilst relative price-to-book is close to a historic low. Finally, we believe the capital discipline story remains intact, as management teams remain focused on capital discipline and shareholder returns.

All data points are in GBP terms unless stated otherwise.

17 October 2018

Latest information is available by typing www.blackrock.co.uk/brwm on the internet. Neither the contents of the Manager’s website nor the contents of any website accessible from hyperlinks on the Manager’s website (or any other website) is incorporated into, or forms part of, this announcement.