Baker Steel Resources Trust Ltd on Friday said its net asset value declined in its latest half year as the mining development market ‘remained challenging,’ while the economic outlook continues to be uncertain.

The investor, which backs equities, loans or related instruments of natural resources companies, said its NAV at June 30 was 67.3 pence per share, down from 79.4p at December 31. This was down from 80.4p at June 30, 2022 and from 98.4p at the end of December 2021.

‘The first half of 2023 remained challenging for your company after a difficult 2022,’ Chair Howard Myles explained.

He continued: ‘Financing new projects for junior mining development companies is arguably tougher than it has been since the period following the global financial crisis, and this has impacted valuations of these companies adversely, including several held by the company.’

Baker Steel’s net loss meanwhile narrowed in the first half of 2023 to £12.0 million from £18.2 million the year before. Expenses decreased 23% to £757,601 while cash and equivalents totalled £260,862 at June 30, up from £254,140 at December 31.

Myles said Baker Steel expects the industry outlook to ‘remain challenging for the remainder of 2023, with investors remaining risk-averse until such time as visibility on the timing of peak interest rates becomes clearer.’ However, he noted that demand continues to grow for metals and other commodities needed for electrification and decarbonisation purposes.

The firm’s investment manager, Baker Steel Capital Managers LLP, said it would be ‘unrealistic’ to try calculating an exact timeframe for the market’s recovery.

‘But shareholders should draw comfort from the mature nature of many of the projects in which the company holds positions,’ it added. ‘This should mean that the portfolio is well-placed to benefit when momentum changes.’

Baker Steel Resources shares were up 0.6% at 33.70 pence in London on Monday morning.

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