Source - RNS
RNS Number : 0330K
Baker Steel Resources Trust Ltd
06 April 2018




(Incorporated in Guernsey with registered number 51576 under the provisions of The Companies (Guernsey) Law, 2008 as amended)


  6th April 2018

29 March 2018 Unaudited NAV Statement

Net Asset Value

Baker Steel Resources Trust Limited (the "Company") announces its unaudited net asset value per share at 29 March 2018:

Net asset value per Ordinary Share:  54.7 pence

Since 28 February 2018 the NAV per share has decreased by 2.84%, due to a 1.9% appreciation in the value of sterling against the US dollar, a 1.8% fall in the carrying value of Polar Acquisition Limited whose principal holding now is represented in shares in Polymetal International PLC, these shares being publicly traded on the London Stock Exchange, and a fall of 15.8% in the share price of Ivanhoe Mines on the Toronto Stock Exchange.


The Company had a total of 116,139,980 Ordinary Shares in issue with a further 700,000 shares held in treasury as at 28 February 2018.



Portfolio Update


The Company's top 10 investments are as follows as a percentage of NAV:


Polar Acquisition Ltd


Bilboes Gold Limited


Cemos Group plc


Futura Resources Ltd


Metals Exploration plc




Black Pearl Limited Partnership


PRISM Diversified Inc


Ivanhoe Mines Limited


Nussir ASA


Other Investments


Net Cash, Equivalents and Accruals





Investment Update


Polar Acquisition Limited ("PAL")


On 19 February 2018 PAL announced that it had agreed to sell its 90% interest in Polar Silver Resources Limited to Polymetal International plc ("Polymetal") for a consideration of US$72 million to be satisfied in new Polymetal shares, with 90% of the consideration shares subject to a lock-up period of 180 days. In addition PAL will retain a 2-4% royalty on its 45% pro rata share of production from the Prognoz silver project.

The transaction is now expected to close by the end of April 2018 at which point the number of shares receivable by PAL will be calculated based on the average share price of Polymetal on the London Stock Exchange over the previous 6 months.  Since the beginning of 2018, the price of Polymetal shares has fallen 20.3% so that, although PAL will receive a greater number of Polymetal shares due to a lowering of the average, the value of such shares would have equated to approximately US$61.4 million based on the closing share price of Polymetal on 29 March 2018, with the Company's pro-rata interest due to its holding in PAL being US$28.4m.

The carrying value of PAL has decreased by 1.8% during February 2018 and will continue to be adjusted in line with the Polymetal share price.

On 12 March 2018 Polymetal announced its preliminary annual results for the year ended 31 December 2017, reporting EBITDA of US$745 million and net earnings of US$354 million based on production of 1.43 million ounces of gold equivalent ("GE") production. The company guided GE production of 1.55 million ounces in 2018 and 1.7 million ounces in 2019.


Ivanhoe Mines Limited ("Ivanhoe")


On 9 March 2018,  President Joseph Kabila of the Democratic Republic of Congo (DRC) signed a new mining code into effect that revises and updates the country's 2002 mining code. The international mining companies with operations in the DRC, including Ivanhoe Mines, are collectively negotiating with the DRC's national government to resolve corporate concerns about the anticipated impact on their DRC operations of changes in the new mining code. On 7 March  President Kabila reportedly gave an assurance that the companies' concerns would be resolved through transitional arrangements, mining regulations and respect for existing agreements and guarantees.

During March Ivanhoe shares fell 15.8% to C$2.72 on the Toronto Stock Exchange, following their 8.2% fall in February. Ivanhoe shares have now fallen by 50.2% from their 2017 high of C$5.46 per share and arguably already fully discount any adverse impact of the new mining code changes.



Metals Exploration plc ("Metals Ex")


On 29 March 2018 Metals Ex announced that the Company's senior lenders (HSBC and BNP Paribas) have consented to a waiver request to defer capital payments totalling US$12.96 million due in December 2017 and March 2018 and that discussions about a debt restructuring were underway. It was also reported that all areas of the operation are performing soundly and that the biox circuit ramp-up has shown a significantly improved performance over the first quarter, increasing management's confidence that the circuit will achieve design in the coming months. A full quarterly operational update regarding the Runruno gold operations will be released during April.



Futura Resources Limited ("Futura") (formerly Queensland Coal Investment Holdings Limited)


Futura is a private company which owns the Wilton and Fairhill coking coal projects in the Bowen Basin in Queensland, Australia, which is well known for its high-quality coking mines. During March, Rio Tinto announced the sale of its operating mines in Queensland, including the neighbouring Kestrel mine, valued at US$2.81 billion, which has annual hard coking coal production of 4.25 million tonnes. The sale prices achieved were well above broker consensus valuations and are supportive of the valuation on Futura's assets which are planned to ramp-up to around 1.7 million tonnes of coking coal annually by 2022.





Further details of the Company and its investments are available on the Company's website 





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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