TIDMBSRT
RNS Number : 8233V
Baker Steel Resources Trust Ltd
12 April 2023
BAKER STEEL RESOURCES TRUST LIMITED
(Incorporated in Guernsey with registered number 51576 under the
provisions of The Companies (Guernsey) Law, 2008 as amended)
12 April 2023
LEI: 213800JUXEVF1QLKCC27
31 March 2023 Unaudited NAV Statement
Net Asset Value
Baker Steel Resources Trust Limited (the "Company") announces
its unaudited net asset value per share at 31 March 2023.
Net asset value per Ordinary Share: 76.8 pence.
The NAV per share has decreased by 3.6% versus the unaudited NAV
at 28 February 2023 largely as a result of a reduction in the
carrying value of Polar Acquisition Limited as outlined below.
The Company had a total of 106,462,502 Ordinary Shares in issue
with a further 700,000 shares held in treasury as at 31 March
2023.
Investment Update
The Company's top 10 investments were as follows as a percentage
of NAV:
31 March 2023 31 December 2022
Futura Resources Ltd 27.7% 26.7%
Cemos Group plc 23.4% 22.0%
Caledonia Mining Corporation 11.4% 8.9%*
Plc
Bilboes Royalty 7.0% 6.7%*
Kanga Investments Ltd 5.7% 5.4%
Silver X Mining Corporation 5.6% 5.2%
Tungsten West Plc 4.0% 5.2%
Nussir ASA 3.9% 4.0%
First Tin plc 3.0% 4.6%
Polar Acquisition Ltd 1.3% 4.9%
Listed Precious Metal Shares 3.2% 2.4%
Other Investments 3.5% 3.8%
Net Cash, Equivalents and
Accruals 0.3% 0.2%
* pro forma
to be updated on change to valuation of PAL in final audited
accounts
Polar Acquisition Limited ("PAL")
Upon consideration of the terms of a recent transaction which
provides more up to date information regarding the market view of
Russian risk, your Company has reviewed the carrying value of its
holding in PAL. This investment holds a net smelter royalty over
the Prognoz Silver Project in far eastern Russia owned by Polymetal
International plc. Polymetal recently provided a positive report
that the development of Prognoz is on schedule and mining is due to
start in late 2023 and ore will then be trucked to its concentrator
at Nehzda in early 2024. First revenues are expected to be
generated in the second quarter of 2024.
Although none of the parties are presently sanctioned and legal
advice is that PAL is currently able to receive the royalty, the
Company is cognisant of the issues surrounding political sanctions
affecting Russian investments that have arisen since the outbreak
of hostilities in the Ukraine and appreciates that the situation is
continually changing. It is not possible therefore to predict with
any degree of confidence the likely situation in the second half of
2024, when we would expect the first royalty payment to be made.
Despite the underlying Russian operating company acknowledging that
it has a contractual obligation to pay the royalty, the taxation
regime may also change and there is a risk that financial
institutions may not be willing to process bank transfers with
contractual parties. It is therefore possible that the royalty
stream might be delayed, frozen, or never received.
Given the recent transaction and these uncertainties, a further
provision has been made against the value of the royalty. This has
reduced the carrying value of PAL by 75% in addition to the
approximate 50% reduction made during 2022. As a result, PAL is now
valued at approximately 2 times the potential annual cashflow from
the royalty, should it be received.
This further reduction will be reflected in the NAV for the 2022
audited annual financial statements to be released in April 2023.
Naturally, should it become clear that the royalties will be paid
in the future, the value of the holding would be reassessed.
Tungsten West Plc ("Tungsten West")
On 3 April 2023 Tungsten West announced that it is to undertake
a restructuring exercise. Consequently, there is to be an interim
fundraising of up to GBP6.95 million through a placing of
convertible loan notes and up to a further GBP2 million via an open
offer of ordinary shares to take the maximum raised to GBP8.95
million. The proceeds of the fundraising will enable Tungsten West
additional time to satisfy the conditions for achieving the
remaining funding needed to complete the redevelopment of the
Hemerdon tungsten and tin mine in Devon, UK. This will include
working with the UK Environment Agency to secure the necessary
Mineral Processing Facility permit.
Tungsten West recently appointed Neil Gawthorpe, as Chief
Executive and he is leading a review of the funding and strategic
options which include, inter alia, cost cutting, deferring capital
expenditure, selling surplus assets, and raising additional funding
from specialist debt providers or strategic investors, or by
raising further equity.
The updated feasibility study announced by Tungsten West on 16
January 2023, would potentially position Tungsten West to become
the largest tungsten producer in the Western World for this most
strategic metal. The Company is currently the largest shareholder
in Tungsten West with approximately 16.1% of the issued equity and
intends to support Tungsten West in the fundraising. As a result of
the fundraising, which was at a 77.5% discount to the closing mid
price on 31 March 2023, the price of Tungsten West shares had
fallen some 56% on the AIM market as at the close on 6 April
2022.
Further details of the Company and its investments are available
on the Company's website www.bakersteelresourcestrust.com
Enquiries:
Baker Steel Resources Trust Limited +44 20 7389 8237
Francis Johnstone
Trevor Steel
Numis Securities Limited +44 20 7260 1000
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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END
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