TIDMBSRT
RNS Number : 2943D
Baker Steel Resources Trust Ltd
06 July 2016
BAKER STEEL RESOURCES TRUST LIMITED
(Incorporated in Guernsey with registered number 51576 under the
provisions of The Companies (Guernsey) Law, 2008 as amended)
5 July 2016
30 June 2016 Unaudited NAV Statement
Net Asset Value
Baker Steel Resources Trust Limited (the "Company") announces
its unaudited net asset value per share at 30 June 2016:
Net asset value per Ordinary Share: 38.7 pence
Since 31 May 2016, the NAV per share has increased by 4.6%
largely due to the decrease in the exchange rate of Sterling
against the US Dollar and the Canadian Dollar in which the majority
of the Company's investments are denominated. Increases in the
carrying values of Bilboes Gold and Polar Silver have been
outweighed by impairment in the carrying value of Black Pearl.
The Company had a total of 114,568,335 Ordinary Shares in issue
with 700,000 shares held in treasury as at 30 June 2016.
Portfolio Update
The Company is fully invested with top 10 investments as follows
as a percentage of NAV:
Polar Silver Resources Ltd 28.9%
Metals Exploration plc 16.8%
Bilboes Gold Limited 16.6%
Ivanhoe Mines Limited 8.1%
Cemos Group plc 8.1%
Black Pearl Limited Partnership 5.9%
Ironstone Resources Limited 5.5%
Gobi Coal & Energy Limited 2.9%
Archipelago Metals Limited 2.7%
Nussir ASA 2.5%
Other Investments 3.3%
Net Cash, Equivalents and Accruals -1.3%
Polar Silver Resources Limited ("Polar Silver")
Following the announcement made on 27 April 2016 outlining the
offer by a subsidiary of the Company to acquire Polar Silver's 100%
owned subsidiary, ZAO Argentum ("Argentum"), all the shareholders
and loan holders of Polar Silver have agreed an alternative
settlement whereby all loans in the Polar Silver group will be
converted into equity in Polar Silver. In addition, the Company has
agreed to acquire the interests of certain other Polar Silver
shareholders, immediately following the debt conversion for a total
outlay of US$1.2 million in cash.
Argentum holds a 50 per cent. indirect interest in the Prognoz
silver project, 444km north of Yakutsk in Russia (the "Prognoz
Asset"). An NI 43-101 compliant report by independent consultants
Micon International Limited ("Micon") in July 2009 estimated an
indicated resource of 5.86 million tonnes of ore grading 773 g/t
silver containing 146 million ounces silver and inferred resources
of 9.64 million tonnes of ore grading 473g/t silver containing 147
million ounces silver. An NI 43-101 compliant preliminary economic
assessment by Micon envisages a mine producing an average of 13
million ounces of silver per annum over a 16-year mine life.
On completion of the debt/equity exchange and acquisition of the
additional interests, the Company's shareholding in Polar Silver
will increase from 27.3% to 62.8%. The overall effect is an
approximate 2% increase in the Company's NAV before currency
considerations.
A second step is envisaged, dependent on renewal of the Prognoz
Mining Licence, which will incorporate a further reorganisation and
a subscription by a new investor. Renewal of the Prognoz Mining
Licence has been applied for and is anticipated to be received in
the second half of this year.
Half Year Adjustments to Carrying Values
The Company has carried out its normal half yearly review of
general market movements in mining equities, as well as specific
factors, and an assessment of whether these should impact the
carrying values of its unlisted holdings. In order to quantify how
the share price of a particular unlisted stock might have moved
during the period had it been listed, the Investment Manager
maintains an index of comparable listed companies for each unlisted
investment.
Black Pearl Limited Partnership ("Black Pearl")
In October 2011, the Company invested in the Black Pearl beach
placer iron sands project located at Cianjur, Indonesia via a
convertible bond. Black Pearl's simple process and proximity to
China meant it expected to be able to deliver iron ore concentrate,
CIF China, at one of the lowest costs in the world. However in
January 2014, the Indonesian Government banned the export of
unrefined raw materials, which compelled Black Pearl to revise its
strategy for the mine. The first phase of the mine was constructed
and Black Pearl made its first shipment of concentrate in December
2014 under provisional export arrangements. However since permits
for sufficient volumes were not forthcoming these provisional
arrangements proved unworkable and no further shipments were
made.
Since that time Black Pearl has engaged with a number of parties
interested in using Black Pearl's iron sands operations as the
basis for a new iron/steel smelter in Indonesia. All negotiations
to date had envisaged the full repayment of bondholders including
the Company.
However, at the end of June 2016 the agent of the bond holders
informed the Company that as part of the latest contemplated
transaction, there is the risk that bond holders would be required
to accept a significant reduction in principle and interest due
should they wish to be repaid in cash rather than accept a forced
conversion into equity. Having considered this, the Company has
decided to reduce the carrying value of its bond (including accrued
interest) by 68%. This has the effect of reducing the Company's NAV
by 12% before currency considerations.
Bilboes Gold Limited
Due to the significant increase in the prices of gold stocks
during 2016, the carrying value of Bilboes Gold has been increased
by 86% in June in US$ terms. Following the increased mineral
resource statement earlier this year to 5.2 million ounces of gold,
this uplift in valuation of Bilboes still values its JORC compliant
resources at less than US$10 per ounce. This has the effect of
increasing the Company's NAV by approximately 7% before currency
considerations.
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 is set
out in the Company's Prospectus dated 26 January 2015.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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