Interim Management Statement (5680U)

TIDMBSRT

RNS Number : 5680U

Baker Steel Resources Trust Ltd

18 October 2010

BAKER STEEL RESOURCES TRUST LTD

www.bakersteelresourcestrust.com

September 2010 Quarterly Factsheet

 
                                 Price / Index    % Change        % Change 
   At 30 September 2010              Level        in Quarter    from Inception 
------------------------------  --------------  ------------  ---------------- 
   Net Asset Value 
    (pence/share)                    93.7           -1.9%          -4.3%* 
------------------------------  --------------  ------------  ---------------- 
   Ordinary Share Price 
    (pence/share)                    84.0          -13.6%         -16.0%** 
------------------------------  --------------  ------------  ---------------- 
   Subscription Share Price 
    (pence/share)                    14.5          -42.0%            n/a 
------------------------------  --------------  ------------  ---------------- 
   MSCI World Index                 305.16         +13.8%           -1.0% 
------------------------------  --------------  ------------  ---------------- 
   HSBC Global Mining Index         1341.23        +21.1%           +3.1 
------------------------------  --------------  ------------  ---------------- 
   CRB Index                        286.86         +11.0%           +5.0% 
------------------------------  --------------  ------------  ---------------- 
   Chinese Domestic Iron Ore - 
    Hebei/Tangshan (US$/t)            181          +16.0%           -5.7% 
------------------------------  --------------  ------------  ---------------- 
   Copper (US$/t)                    8006          +23.5%           7.4% 
------------------------------  --------------  ------------  ---------------- 
   Gold (US$/oz)                    1308.35         +5.3%          12.0 % 
------------------------------  --------------  ------------  ----------------

Source: Bloomberg closing 27/4/10, **Issue price 28/4/10, * NAV 30/4/10

This document constitutes an interim management statement for the period from 1 July 2010 to 15 October 2010 (the "Period"). Financial information has been drawn up as at 30/9/2010. There have been no material changes since that date.

Review

Baker Steel Resources Trust Limited ("BSRT") has now been trading for a little over 5 months and the Company is 67% invested. The NAV was down 1.9% to 30 September 2010, largely due to an appreciation in Sterling against the US dollar, in which the majority of the Company's investments are denominated.

During the Period, markets for commodities and mining equities have recovered strongly with the HSBC Global Mining Index rising 21.1% to 30 September 2010. Under the Company's valuation policy, carrying values for unlisted investments are not generally adjusted for short term movements in the prices of listed equities. However if this is perceived to be a longer term re-rating and is considered to be indicative of a change in the investments' fair value, then adjustments would be considered.

There has been corporate activity in a number of BSRT's investments. During August, seven directors of Ferrous Resources were replaced by eight shareholder appointed directors, representing over 75% of the shareholder base, following postponement of the IPO in July. The new board has appointed Deutsche Bank to examine financing options for the company going forward. This strategic process is expected to be completed during the fourth quarter.

Approval from the government of the Democratic Republic of Congo ("DRC") for the purchase of Copperbelt by a Chinese consortium has taken longer than anticipated and following operational problems in China for one of the two original consortium members, it withdrew from the proposed acquisition. Copperbelt has signed a revised agreement with the other consortium member and the acquisition is now scheduled for completion during November 2010.

In July a new investment was made in Forbes & Manhattan Coal Corporation ("Forbes Coal") a private company in the process of listing through a reverse takeover. Forbes Coal duly listed on the Toronto Stock Exchange in September and was up 23.9% on BSRT's acquisition price at 30 September 2010.

Outlook

Although the listed equity markets for mining shares, in particular in the gold sector, have found renewed strength over the Period, it has remained difficult for new listings to come to the market. Combined with investors preferring more liquid investments, this has resulted in continued constraints on unlisted mining projects raising finance, which in turn continues to provide opportunities for BSRT. A number of negotiations for new investments are well advanced and the Company is moving forward to becoming fully invested.

Investment Objective

To seek capital growth over the long term through a focused global portfolio consisting principally of the equities, or related instruments of natural resources companies.

Investment Strategy

Investing predominantly in attractively valued private companies with strong development projects and focused management and also in listed securities to exploit value inherent in market inefficiencies.

 
 Asset Allocation       Shares in Issue             Financial Calendar 
  Unlisted Equities      Trading: The London         Listing Date: 8 April 
  GBP37.5 M 60.6%        Stock Exchange Ordinary:    2010 
  Listed Equities GBP    66,030,632                  Year End: 31 December 
  3.9 M 6.4%             Code: BSRT                  Interims: August 
  Net Cash & GBP 20.5    ISIN GG00B6686L20           Finals April 
  M 33.0 %               Subscription: 13,197,051 
  Equivalents            Code: BSRW 
 Net Assets GBP 61.9     ISIN GG00B64WLC23 
  M

Largest Investments (at 30 September 2010)

 
 Ferrous Resources Limited 18.9% NAV A   Investment Manager 
 private company with five iron ore       Baker Steel Capital 
 projects in the iron quadrilateral       Managers LLP 
 region in Minas Gerais state and one     Investment Advisers 
 in Bahia state in Brazil. It has         AWR Lloyd 
 Joint Ore Resource Committee ("JORC")    Rock Capital Partners 
 resources of 4.5 billion tonnes of       Ltd 
 iron ore at an average grade of 
 33.52% Fe. 
 Ivanhoe Nickel and Platinum Limited                           Management Fees 
 17.6% NAV A private company with a                     Monthly: 1/12 of 1.75% 
 major copper project in the                                                of 
 Democratic Republic of Congo and a                      Market Capitalisation 
 platinum project in South Africa,                         Performance: 15% of 
 which is yet to publish JORC                              NAV growth (if over 
 resources on either project.                          8% p.a. compound hurdle 
                                                     rate, with high watermark 
 Gobi Coal & Energy Limited 10.6% NAV    Board 
 A private company with three thermal,    Howard Myles (Chairman) 
 pulverised coke injection ("PCI") and    Ed Flood 
 coking projects in Mongolia with a       Charles Hansard 
 JORC compliant resource of 322           Clive Newall 
 million tonnes.                          Chris Sherwell 
 Copperbelt Minerals Limited 5.5% NAV    Joint Brokers 
 A private limited company with a 68%     RBC Capital Markets 
 interest in the Deziwa Copper-Cobalt     +44(0)20 7653 4253 
 Project in the Democratic Republic of    Winterflood Investment 
 Congo. Copperbelt completed a            Trusts 
 positive Definitive Feasibility Study    +44(0)20 3100 0000 
 on the project in January 2009. 
 First Coal Corporation 4.3% NAV A       Contact: Baker Steel Capital Managers 
 private company with a coking and PCI   LLP 86 Jermyn Street, London SW1Y 6JD 
 coal project in British Columbia,       +44 (0) 20 7389 8237 
 Canada, containing NI-43-101            enquiries@bakersteelresourcestrust.co 
 compliant resources of 78 million       m 
 tonnes of coal. 
 Forbes & Manhattan Coal Corporation     Baker Steel Resources 
 (Forbes Coal) 3.8% NAV A coal            Trust Ltd is incorporated 
 producer listed on the Toronto Stock     in Guernsey 
 Exchange with two mines in South         Registration Number: 
 Africa containing total reported         51576 
 resources of 106 million tonnes.         Arnold House, St Julian's 
                                          Avenue, 
                                         St Peter Port, Guernsey 
 South American Ferro Metals Limited 
 ("SAFM") 3.2% NAV A private company 
 whose main asset is the Ponto Verde 
 iron ore project in Minas Gerais in 
 Brazil. The remainder of the 
 Portfolio (excluding cash) comprises 
 four holdings totalling 3.0% NAV.

Further information is available on BSRT's website: www.bakersteelresourcestrust.com

Important Information

This document is issued and approved by Baker Steel Capital Managers LLP (authorised and regulated by the Financial Services Authority). The information contained in this document is not intended to and does not constitute an offer, solicitation, inducement, invitation or commitment to purchase, subscribe to, provide or sell any securities, service or product or to provide any recommendations which should be relied upon for financial, securities, investment or other advice or to take any decision based on such information. Individual advice should be sought from legal, financial, personal and other advisors before making any investment or financial decision or purchasing any financial, securities or investment-related service or product. As a registered collective investment scheme, shares in Baker Steel Resources Trust Ltd are not permitted to be directly offered to the public in Guernsey but may be offered to regulated entities in Guernsey or offered to the public by entities appropriately licensed under the Protection of Investors (Bailiwick of Guernsey) Law 1987 as amended.

This information is provided by RNS

The company news service from the London Stock Exchange

END

IMSZMMMGFRVGGZM

Baker Steel Resources (LSE:BSRT)
Historical Stock Chart
From Jun 2024 to Jul 2024