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BLACKROCK WORLD MINING TRUST PLC - Portfolio Update

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By PR Newswire

PR Newswire

London, March 16

BLACKROCK WORLD MINING TRUST plc  (LEI - LNFFPBEUZJBOSR6PW155)
All information is at 28 February 2017 and unaudited.
Performance at month end with net income reinvested
One Three One Three Five
Month Months Year Years Years
Net asset value -1.0% 11.6% 84.4% -1.0% -36.0%
Share price -4.5% 11.5% 95.8% -11.8% -36.0%
Euromoney Global Mining Index -3.0% 9.4% 81.9% 13.4% -23.2%
(Total return)
Sources: BlackRock, Euromoney Global Mining Index, Datastream
At month end
Net asset value including income1: 421.48p
Net asset value capital only: 409.78p
1 Includes net revenue of 11.7p
Share price: 364.75p
Discount to NAV2: 13.5%
Total assets: £840.3m
Net yield3: 3.6%
Net gearing: 11.6%
Ordinary shares in issue: 176,455,242
Ordinary shares held in treasury: 16,556,600
Ongoing charges4: 1.1%
2 Discount to NAV including income.
3 Based on an interim dividend of 4.00p per share and a final dividend of 9.00p in respect of the year ended 31 December 2016.
4 Calculated as a percentage of average net assets and using expenses, excluding finance costs for the year ended 31 December 2016.
Sector % Total  Country Analysis % Total 
Assets  Assets 
Diversified 47.1  Global 62.9 
Copper 19.7  Latin America 12.8 
Gold 19.1  Australasia 7.5 
Silver & Diamonds 8.8  Other Africa 6.2 
Industrial Minerals 3.4  Canada 4.5 
Zinc 0.5  Emerging Europe 2.9 
Iron ore 0.1  South Africa 1.6 
Net current assets 1.3  Tanzania 0.3 
-----  Net current assets 1.3 
100.0  ----- 
=====  100.0 
===== 
Ten Largest Investments

Company		 % Total
Assets
Rio Tinto 10.6
First Quantum Minerals 8.8
Glencore 7.8
BHP Billiton 7.3
Vale 7.3
Lundin Mining 4.6
Sociedad Minera Cerro Verde 3.4
Newmont Mining 3.3
Newcrest Mining 2.9
Norilsk Nickel 2.8

   

Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted:
Performance
The mining sector came under pressure in February as the sector experienced some profit taking which outweighed a strong reporting season and mined commodities broadly posting positive returns. The mining sector had performed very strongly in the run up to February, with the sector (as measured by the Euromoney Global Mining Index) up +99.8% over the 12 month period to end January 2017. The macroeconomic environment also remained supportive for mining shares as economic data from China continued to be robust with, for example, China’s official purchasing managers’ index for the manufacturing sector rising to 51.6 in February, up from 51.1 in January (a reading above 50 indicates expansion).
Among the mined commodities, nickel was the strongest performing, up +10.4% over the month, on news that the Philippines had ordered the closure of 23 (mostly nickel) mines as part of an environmental crackdown on domestic production. For reference, the Philippines is the largest exporter of nickel ore in the world. Elsewhere, the iron ore (62% fe) price gained +8.6% to finish at $91/tonne, its highest level since August 2014, and a level well above consensus forecasts for the year. The gold price was also up +3.7% over the month, gradually trending higher on the back of increased political and economic uncertainty, notably related to the new US administration.  It should be noted though it was perhaps unusual to see the gold price increase in a month where US yields increased and the dollar strengthened.
Strategy and Outlook
After an extended down-cycle, January 2016 appears to have marked the bottom for the mining sector. The sector performed strongly in 2016, primarily driven by commodity prices bouncing off the multi-year lows. Nonetheless, positioning surveys suggest investors remain cautious of the sector, given several years of severe underperformance, and the sector continues to be under-owned relative to history. Sentiment towards China has improved and the Chinese government’s stimulus package has fed through into improved economic data points such as PMI figures above 50 and robust property prices. At the same time, we have seen mining companies focus on cutting costs, reducing debt and improving balance sheets.
Looking ahead, we expect the mining sector’s performance to remain somewhat volatile in the near-term but we see the medium to long-term outlook as positive. The situation in China has improved and for the first time since the global financial crisis we are seeing signs of synchronous growth throughout the world’s developed economies. The impact of the mining sector slashing capital expenditure and underinvesting over the past few years is beginning to be felt by global production. Finally, whilst the sector performed strongly in 2016, it has only returned to October 2014 levels and with many of the miners trading at attractive free cash flow yields, valuations still at relative lows and commodity prices surprising to the upside, the risk of being underweight the sector remains.
All data points are in US dollar terms unless stated otherwise.
16 March 2017
ENDS
Latest information is available by typing www.brwmplc.co.uk on the internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV terminal).  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.

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