Baker Steel Resources Trust Ltd Edison issues review on Baker Steel RT
August 01 2023 - 7:17AM
RNS Non-Regulatory
TIDMBSRT
Baker Steel Resources Trust Ltd
01 August 2023
London, UK, 1 August 2023
Edison issues review on Baker Steel Resources Trust (BSRT)
Baker Steel Resources Trust has been affected by the challenging
funding environment for mining development projects, especially for
single-project junior mining companies. The funding environment led
Tungsten West to carry out an interim fund-raising at a depressed
valuation. BSRT's key potential NAV trigger for this year remains a
possible successful funding by Futura Resources to launch
production at its two coking coal mines in Australia. While the
fund-raising has again been delayed and the demand for coking coal
may be affected by a global economic slowdown, the project's
economics remain favourable at current coking coal prices.
BSRT is more than a simple beta play on commodity prices, given
its focus on realising the valuation upside from project
development and its investment in projects that offer a solid
safety margin in terms of an internal rate of return based on
consensus price forecasts. The majority of BSRT's current portfolio
is held either in producing assets - Cemos, Caledonia Mining
Corporation (CMCL), Silver X - where further production
ramp-up/expansion offers re-rating potential, or in projects
approaching mine construction (eg Tungsten West) and production
(Futura Resources) whose valuations may benefit from project
de-risking in the case of successful progress. We believe that,
once the fund-raising/M&A environment improves, this portfolio
may experience several positive NAV catalysts from project
progress, leading to a potential asset sale/IPO and/or recurring
royalty/dividend streams. Following the expiry of the lock-up on
CMCL shares, BSRT is again looking for potential new investment
opportunities.
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