Proactiveinvestors United Kingdom Baker Steel Resources Trust Proactiveinvestors United Kingdom Baker Steel Resources Trust RSS feed en Wed, 12 Dec 2018 21:02:47 +0000 Genera CMS (Proactiveinvestors) (Proactiveinvestors) <![CDATA[RNS press release - Net Asset Value(s) ]]> Fri, 07 Dec 2018 13:03:04 +0000 <![CDATA[RNS press release - Net Asset Value(s) ]]> Tue, 06 Nov 2018 07:00:11 +0000 <![CDATA[RNS press release - Director Declaration ]]> Fri, 19 Oct 2018 08:26:41 +0100 <![CDATA[RNS press release - Net Asset Value(s) ]]> Fri, 05 Oct 2018 07:00:04 +0100 <![CDATA[RNS press release - Net Asset Value(s) ]]> Mon, 10 Sep 2018 07:00:07 +0100 <![CDATA[RNS press release - Holding(s) in Company ]]> Tue, 04 Sep 2018 07:24:31 +0100 <![CDATA[News - Baker Steel Resources looks to new investment ]]> Investment group Baker Steel Resources Trust Ltd (LON:BSRT), which earlier this year became fully invested, is waiting to cash out of Polymetal and put money into alternative opportunities.

Lock-up agreements prevent Baker Steel from selling the majority Polymetal shares until October.

“Polymetal is a cash generative mid-size producer with a good growth profile and progressive dividend policy but does not fit into the strategy of the company,” Baker Steel Resources said in Friday’s interim results statement.

READ: Baker Steel Resources eyeing valuation uplifts in four significant investments

“The company will therefore utilise the high liquidity of Polymetal's shares to provide funds when the company has a strong investment proposition more in line with its strategy.”

Looking ahead to new investments, the company added that it would seek to invest, via convertible instruments, into projects where it can have a significant interest and be able to proactively influence policy.

Baker Steel also highlighted its existing policy to distribute at least 15% of aggregate realised cash gains.

The shareholding in Polymetal represents 29.8% of all the investment group’s holdings.

Baker Steel reported that its net asset value had reduced by 0.5% in the first six months of 2018, at 57.1p per share.

Fri, 17 Aug 2018 11:31:00 +0100
<![CDATA[RNS press release - Half-year Report ]]> Fri, 17 Aug 2018 09:06:52 +0100 <![CDATA[RNS press release - Net Asset Value(s) ]]> Fri, 03 Aug 2018 07:00:04 +0100 <![CDATA[RNS press release - Net Asset Value(s) ]]> Thu, 05 Jul 2018 07:00:07 +0100 <![CDATA[News - Baker Steel Resources eyeing valuation uplifts in four significant investments ]]> Flushed with the success of its investment in the Prognoz silver mine, Baker Steel Resources Trust Limited (LON:BSRT) is hoping to repeat the trick.

The mineral resources-focused trust’s largest investment, Polar Acquisition Limited (PAL), agreed in February to sell Polar Silver Resources, which owns 50% of the Prognoz silver mine in Russia, for US$72mln worth of Polymetal International PLC (LON:POLY) shares.

READ Baker Steel Resources Trust boosts NAV with US$72 mln sale of Prognoz silver mine

“We made three times our money on Prognoz over a period when the silver price halved,” Trevor Steel, the chief investment officer and co-founder of Baker Steel, told Proactive Investors.

“10% is retained in terms of a revenue royalty on Prognoz so … that sets us up in terms of having more liquidity in the portfolio to pursue new ideas if we wish,” he added.

Having said that, he thinks Polymetal shares, which now form 30% of the trust’s portfolio, are attractively priced right now.

“They offer a good yield of 5% or 6%; they’ve got organic growth plus they’ve got good exposure into the hopefully higher silver and gold prices,” Steel said.

Chief investment officer highlights four investments that have revaluation potential

Lest any shareholders think the trust is ready to rest on its laurels, Steel’s message is that it has four stocks that it thinks could provide significant uplifts to the trust’s net asset value (NAV) between now and 2019.

“Futura, if you like, is the next cab off the rank,” Steel said.

Futura has two advanced coking coal developments in the Bowen Basin in Australia.

The forecast low capital costs to bring the projects into production together with excellent local infrastructure means Futura is targeting first positive cash flows before the end of 2018.

Another investment that could see a valuation catalyst before the year is out is Sarmin, a world-class potash discovery in what Steel termed as “the good Congo”, i.e. the Republic of Congo.

“They’re both quite substantial investments in the portfolio. Futura is 10% of NAV and Sarmin is seven or eight per cent of NAV,” Steel revealed.

By the end of 2018 Steel thinks the carrying value of the investments on the trust’s books could be two to three times higher.

Next year, attention will switch to Bilboes, a Zimbabwean gold mine, and Cemos, a private company that is about to start producing cement from its Moroccan operations.

Bilboes is due to complete a feasibility study in the first quarter of next year, at which point Steel thinks there could be a re-rating of the investment, either through a trade transaction of the pursuit of a market listing.

Steel observed that the trust is carrying that investment on its books at US$10 per ounce whereas comparative projects in Africa are valued at US$100 an ounce or so.

“Of course, this is in Zimbabwe, where you may have said US$10 was the right price,” Steel quipped, “but with the positive changes there we feel very optimistic that there’s plenty of scope for a re-rating.”

Bilboes currently represents 13% of Baker Steel’s portfolio.

As for Cemos, that is currently being carried at book cost but Steel thinks that valuation will need to be revised next year.

“We anticipate the company will make 10 million a year of Ebitda for next year and we’re carrying that at a valuation of around US$20mln so we think there’s meaningful upside potentially there,” Steel revealed.

The shares have been whittling away an absurdly large discount to NAV

As Cosmo Sturge, the company’s director of marketing, outlined for Proactive Investors, the company’s shares have been on a roll over the last year, rising from around 34p to 46p.

The share price has still got some way to go before it catches up with the NAV – and that’s before the NAV uplifts Trevor Steel is expecting – but the discount to NAV has come down to about 18% compared to around 30% a year ago.

Sturge thinks now is a very interesting time to be looking at the mining sector.

“If you look at where we are in the natural resources cycle, most fundamentally, the return of inflation has been a very influential point for the resources sector and, of course, current robust levels of economic growth are positive for us,” Sturge said.

Of course the US tariffs – “Trump’s tariffs”, Sturge calls them – are potentially highly inflationary.

“There’s a varied impact at the moment but given the escalation which we’ve seen in recent weeks we think higher prices are very much the likely outcome there,” Sturge said.

“We believe the longer-term outlook is very much supported by strong growth from China’s ambitious infrastructure plans,” Sturge added.

Tity-for-tat tariffs may have a short-term effect but it is important to take a longer-term view

Steel concedes that there is a risk that the trade war could escalate but emphasised – as just about all investment officers do – that the company takes a longer-term view on commodity prices.

For instance, the company has some exposure to copper through its investment in Nussir, which is moving forward with a definitive feasibility study on its Nussir/Ulveryggen copper project in Norway, and sentiment towards the metal might take a short-term hit from the wrangling between the US and China.

“In the case of copper, we feel that the medium to longer-term fundamentals are really excellent with the demand and prospects from electric vehicles. I think that’s actually the more important driver than potentially the tariffs,” Steel opined.

About half of the company’s current portfolio is currently in precious metals but this is largely a by-product of the company’s successful investment in the Prognoz asset.

Steel clearly likes the battery metals but it steers clear of what Steel calls “the more esoteric metals” that are not traded on an exchange; geographically, it also steers clear of projected in “risky countries like the Democratic Republic of Congo”, so do not expect to see the trust taking a punt on cobalt any time soon.


Tue, 26 Jun 2018 15:24:00 +0100
<![CDATA[Media files - Baker Steel Resources Trust outlines 2018 growth drivers and upcoming milestones ]]> Tue, 26 Jun 2018 13:48:00 +0100 <![CDATA[RNS press release - Holding(s) in Company ]]> Thu, 21 Jun 2018 07:26:49 +0100 <![CDATA[RNS press release - AGM Statement ]]> Mon, 18 Jun 2018 08:27:27 +0100 <![CDATA[RNS press release - Net Asset Value(s) ]]> Tue, 05 Jun 2018 07:00:07 +0100 <![CDATA[RNS press release - Notice of AGM ]]> Thu, 03 May 2018 10:14:55 +0100 <![CDATA[RNS press release - Net Asset Value(s) ]]> Thu, 03 May 2018 07:00:04 +0100 <![CDATA[RNS press release - Final Results ]]> Mon, 23 Apr 2018 14:52:52 +0100 <![CDATA[News - Baker Steel Resources Trust well placed to benefit from "battery metals" enthusiasm ]]> Natural resources companies backer Baker Steel Resources Trust Ltd (LON:BSRT) saw net asset value (NAV) per share rise by 18.6% in 2017 to 56.8p.

The increase in NAV was marginally lower than the 20.7% rise notched up by the trust’s benchmark index, the Euromoney Global Mining Index, although it is worth noting that 80.6% of Baker Steel’s holdings are in unquoted investments, which are carried at “fair value” - i.e. the directors’ best estimate of what they were worth.

READ Baker Steel Resources Trust boosts NAV with US$72 mln sale of Prognoz Silver mine

The largest 10 holdings were: Polar Acquisition Limited (37.4% of NAV); Bilboes Gold Limited (12.6%); Ivanhoe Mines Limited (11.3%); Cemos Group PLC (9.1%); Metals Exploration Plc (6.8%); Sarmin Minerals Exploration Inc (4.5%); Queensland Coal Investment Holdings Ltd (4.4%); Black Pearl Limited Partnership (3.9%); Ironstone Resources Limited (3.8%) and Nussir ASA (3.1%).

Towards the end of 2017 and early in 2018, the company made its first major new investment for three years, investing AS$10 million in Futura Resources Limited (formerly Queensland Coal Investment Holdings) through a convertible loan, which is the company’s preferred way of investing in companies as it provides a measure of downside protection.

Company chairman Howard Myles noted that the convertible loan to Future was completed before the 73.6% increase in the price of coking coal in the second half of the year.

The portfolio is well diversified both in terms of commodity and the geographical location of the projects, the investment manager said.

WATCH: Baker Steel Resources Trust outlines 2018 growth drivers and upcoming milestones

In terms of commodities the portfolio is concentrated on the large liquid markets of silver, gold, iron ore, coal, copper, platinum group metals and nickel. Its projects are located in Australia, Canada, Democratic Republic of Congo, Germany, Indonesia, Madagascar, Mongolia, Morocco, Norway, the Philippines, Republic of Congo, Russia, South Africa, Vietnam and Zimbabwe.

Myles told shareholders that the mining market moved further along the road to recovery in 2017 and that the current point in the cycle “appears to be an attractive time for investing in mining projects”.

The chairman asserted that the company is not one to jump on the latest bandwagon but noted that hot commodities appear to be those associated with the electrification of motor vehicles and battery technology; copper is likely to be one of the key beneficiaries of electric cars, Myles predicted, and the company already has significant exposure to copper through its investments in Ivanhoe and Nussir.

“On the ‘battery metal’ front the company has exposure to lithium and vanadium through PRISM Diversified Limited (formerly Ironstone Resources Ltd). In addition, the increasing use of silver for photovoltaic reinforces silver as a ‘green’ metal and should drive demand,” Myles predicted.

Shares in Baker Steel currently trade at 45.6p, compared to the most recently published NAV of 54.7p on April 6.


Mon, 23 Apr 2018 11:50:00 +0100
<![CDATA[News - Baker Steel Resources Trust notes completion of Prognoz sale to Polymetal ]]> Polar Acquisition Limited has completed the sale of its stake in the Prognoz silver mine in Russia to Polymetal International PLC (LON:POLY).

The consideration was US$72mln in Polymetal shares for the 45% stake, though volatility in the share of the Russian miner has since seen the current value drop to US$59.4mln.

Polar is one of the most significant investments held by Baker Steel Resources Investment Trust (LON:BSRT), which cautioned the volatility in the Polymetal share price will have an impact on the trust’s published NAV.

Over the past year, shares in Polymetal have traded between £10.95 and £5.91.

Polar intends to distribute the Polymetal shares received from Prognoz to its shareholders.

Mon, 16 Apr 2018 09:34:00 +0100
<![CDATA[RNS press release - Completion of transaction ]]> Mon, 16 Apr 2018 07:25:04 +0100 <![CDATA[RNS press release - Net Asset Value(s) ]]> Fri, 06 Apr 2018 07:00:04 +0100 <![CDATA[News - Baker Steel well positioned as resources sector continues to pick up pace ]]> Shares in Baker Steel Resources Trust (LON:BSRT) are currently trading a fraction off their three-year high of 51p.

The price has consolidated at a firm 50.5p following news of a US$72mln transaction on a major silver investment held by the company in Russia.

Under the terms of this transaction Baker Steel will end up coming in for a significant chunk of that US$72mln, which will be payable in shares of Polymetal (LON:POLY), one of Russia’s largest precious metals miners.

READ: Baker Steel Resources Trust boosts NAV with US$72 mln sale of Prognoz Silver mine

In turn, Polymetal consolidates control over the Prognoz silver mine, and its 292mln ounces of silver at 536 grams per tonne.

Trevor Steel, the driving force behind the Trust, is more than happy with this outcome.

“I think it’s a creditable return on an investment period of six or so years,” he says.

“It’s a big tick in the box and it’s not been easy.”

Along the way, markets first recovered before taking a turn for the worse and that necessitated a more hands on approach at Prognoz.

“At that point,” continues Steel, “we rolled up our sleeves and sorted it out. We brought in Polymetal and demonstrated the ability of our team to do quite complex transactions.”

So now Baker Steel gets to exit at a significant return, and retains its exposure to Prognoz via a royalty and via its Polymetal shares, which are likely to reflect the value of Prognoz too, given its size.

Long term?

And is Steel a long-term holder of Polymetal?

Actually, maybe

He’s a man with considerable experience in the Russian resources sector, which is how and why this deal got done in the first place.

And he points out that the benefits of holding Polymetal are there for all to see.

“It has a dividend yield of 3%,” he says, “and since it listed in 2010 it’s paid out more than US$1bn in dividends.”

What’s more, Polymetal is serious about Prognoz, which is good news for Baker Steel since it retains what could turn out to be quite a rich royalty on the project.

Last year, Polymetal undertook 37 kilometres of drilling across the property, and this year a further 40 kilometres is planned.

So all told, although Baker Steel is likely to balance up its portfolio in the long-term and scale back its position in Polymetal, there won’t necessarily be a rush to the door when the lock-in period expires.

After all, 10% of the shares are freely tradeable now, and Baker Steel also has a sizeable position in Ivanhoe Mines (TSE:IVN), a very tradeable asset which it could always sell down if there was a requirement for ready cash.

How likely such a requirement might be remains to be seen.

Certainly there is a more active market in mining now than has prevailed in recent years.

But Baker Steel has already been taking advantage.

Late last year, it took a position in a privately-held coal company in Australia, that needs about A$20mln to get into production and ought to be able to produce at a margin of around US$100 per tonne when it does so.

There’s also Bilboes in Zimbabwe, which has suddenly assumed a greater significance following the recent change of regime there. Baker Steel owns slightly shy of 22% of Bilboes, which boasts a total JORC resource of nearly five million ounces of gold.

The plan is to put together an initial 100,000 ounce per year mining operation, and then to increase production to 200,000 ounces in due course.

And there’s also the possibility that Bilboes could act as consolidator in the Zimbabwean gold industry.

With Zimbabwe coming back and mining on the turn, this could end up providing the perfect combination of maximum upside to Baker Steel.

Tue, 20 Mar 2018 09:00:00 +0000
<![CDATA[RNS press release - Net Asset Value(s) ]]> Tue, 06 Mar 2018 07:00:05 +0000 <![CDATA[Media files - Baker Steel excited about potential in new A$10mln coking coal investment ]]> Wed, 28 Feb 2018 13:05:00 +0000 <![CDATA[News - Baker Steel Resources Trust boosts NAV with US$72 mln sale of Prognoz Silver mine ]]> One of the most significant investments held by Baker Steel Resources Investment Trust (LON:BSRT), Polar Acquisition Limited, has agreed to sell its interest in the Prognoz silver mine in Russia to Polymetal International PLC.

At the January monthly update, Polar Acquisition represented just under 38% of Baker Steel’s net asset value. But that’s likely to see significant uplift now.

WATCH: Baker Steel Resources Trust boosts NAV with US$72 mln sale of Prognoz Silver mine

The sale of 90 per cent of the silver resources at Prognoz will realise US$72 mln for Polar Acquisition, a boost to its valuation of approximately 25%.

The consideration is payable in shares in Polymetal.

In addition, Polar Acquisition will retain a continued interest through a royalty on future production.

The deal follows the sale in January 2017 of a 10% stake to Polymetal, which then committed to fund and undertake a pre-feasibility study on Prognoz. As part of that agreement Polymetal was granted an option to acquire the remaining 90% of Polar Silver in March 2019 for a price based on silver reserves and the silver price at that time.

READ: Baker Steel Resources investing for long-term in projects with excellent upside potential

But, following a successful field season in 2017, during which 37km of diamond drilling was undertaken, Polar Acquisition and Polymetal have now agreed to accelerate the exercise of the option.

Polar Silver holds a 50% interest in the Prognoz silver project which has JORC-compliant indicated and inferred Resources of 292 million ounces of silver at a grade of 586 grams per tonne.

Taking into account the value of the Polymetal shares to be received by Polar Acquisition and the valuation of the royalty, the Baker Steel’s carrying value of Polar Acquisition can be expected to increase to approximately US$41 million at the next NAV date, a 25% increase on the carrying value at 31 January 2018.

Baker Steel has invested a total of US$14.2mln over the past seven years into Polar Acquisition, realised US$6mln in cash during 2017, resulting in a return on investment of in excess of three times.


Mon, 19 Feb 2018 08:02:00 +0000
<![CDATA[RNS press release - Sale of Interest in Prognoz Silver Mine ]]> Mon, 19 Feb 2018 07:00:02 +0000 <![CDATA[RNS press release - Net Asset Value(s) ]]> Tue, 06 Feb 2018 07:00:04 +0000 <![CDATA[RNS press release - Net Asset Value(s) ]]> Wed, 10 Jan 2018 07:00:03 +0000 <![CDATA[RNS press release - Holding(s) in Company ]]> Wed, 13 Dec 2017 14:50:11 +0000 <![CDATA[RNS press release - Net Asset Value(s) ]]> Wed, 06 Dec 2017 07:00:06 +0000 <![CDATA[RNS press release - Net Asset Value(s) ]]> Mon, 06 Nov 2017 07:00:04 +0000 <![CDATA[News - Baker Steel allows investors access to a mining world normally open only to private equity ]]> “Resources equities are entering a recovery phase.”

That’s the straightforward strapline on one of the key slides in the latest presentation from Baker Steel Resources Trust Limited (LON:BSRT).

WATCH: Baker Steel Resources' nose for value beginning to sniff real opportunities

It’s a simple enough message that’s illustrated elsewhere in the same presentation with the use of the mining investment clock first devised by Lion Selection Trust back in the day.

According to the concept of the clock, a market crash happens at 12 o’clock. As the clock ticks round three then comes, in the following order: shock, cost cutting, company liquidations, dividend cuts, asset write downs, and credit agency downgrades.

By that time, the hour-hand has progressed to the four on the clockface. After that, between the hours of 4 o’clock and 5 o’clock comes: stabilising metals prices, a fall in debt levels, cautious buying, and the beginning of merger and acquisition activity.

By the time 6 o’clock comes round, the market is beginning to move into boom-time conditions, and a whole new phase of the cycle begins.

But according to the Baker Steel analysis, the clock now reads sometime between about five and six o’clock.

Accordingly, Baker Steel is now positioning itself for some busy times ahead.

Much groundwork has already been laid, as Trevor Steel explains.

“In bad times no-one has any money and that’s when things are cheap,” he says.

“And there’s a window when people get forced into deals. We were able to do a couple of nice deals at the bottom, in particular the restructuring of Polar Silver.”

WATCH: Baker Steel Resources investing for long-term in projects with excellent upside potential

Central to the opportunity at Polar Silver is a 293 mln ounce silver deposit in the Far East of Russia that looks highly attractive but which will take upwards of US$250mln to build.

During the bear market, the private vehicle controlling the project found itself on the wrong end of a convertible that it couldn’t repay, and accordingly Baker Steel emerged with control.

But Trevor Steel’s ties to Russia run deep. When he was still at Mercury Asset Management, he was on the board of a Russian gold mining company called Buryatzoloto and knows fine well that having a local partner makes things a run a great deal more smoothly in any business transaction in Russia.

Who better than Polymetal, the second largest gold producer in Russia and the largest producer of silver? Polymetal now has an option to buy, and it’s racing ahead with evaluation work.

Given that Polar Silver accounts for around 30% of the Baker Steel portfolio, this is good news, especially since, in Trevor Steels' words, “silver is not up with events.”

What else?

So plenty of upside there. But what else has Baker Steel got cooking as the mining investment clock continues to tick round?

In fact, the portfolio offers opportunity in commodities and jurisdictions across the board. Around 30% is in silver, accounted for by the investment in Polar.

Then, there’s 20% in gold, much of it accounted for by a multi-million ounce project in Zimbabwe which the company bought into for a relative song and which boasts discovery costs of less than a dollar an ounce. A further 13% of the asset portfolio is in copper, with 9% in iron ore, 5% in potash, 8% in cash, and some additional exposure to oil shale, cement, platinum, nickel and chrome.

If you’re bullish on commodities, this is a nice mix to be in. Notable by their absence also are some of the more racier and currently fashionable battery-related metals like lithium and cobalt, and almost the only major commodity missing is coal.

But that’s about to change. Baker Steel is currently putting the finishing touches on an A$8mln - A$10mln investment into a new Australian coal listing called Gateway. This has assets in the Bowen Basin in Queensland, an area that will be well-known to many UK investors, as both Rio Tinto (LON:RIO) and Anglo Pacific Group (LON:APF) have an interest in the nearby Kestrel mine.

Once that investment goes through, Baker Steel will be fully invested, but even so, there are no immediate plans for further fundraising. With Polar Silver, the Trust has already shown willingness to realise value, bringing in Sprott as an investor earlier this year and subsequently selling a 6.2% interest for £2.2mln in cash in July.

“We don’t anticipate doing any kind of capital raising at the moment,” says Steel.

After all, Baker Steel’s holding in Ivanhoe Mines (TSE:IVN) is very liquid and accounts for around 12% of the portfolio. That holding is almost as good as cash anyway, and should any choice opportunity emerge, could be liquidated and redeployed very rapidly.

Tue, 31 Oct 2017 11:11:00 +0000
<![CDATA[Media files - Baker Steel Resources' nose for value beginning to sniff real opportunities ]]> Fri, 20 Oct 2017 11:48:00 +0100 <![CDATA[Media files - Baker Steel Resources investing for long-term in projects with excellent upside potential ]]> Thu, 19 Oct 2017 10:07:00 +0100 <![CDATA[RNS press release - Net Asset Value(s) ]]> Thu, 05 Oct 2017 07:00:05 +0100 <![CDATA[RNS press release - Change of auditor ]]> Wed, 06 Sep 2017 10:23:17 +0100 <![CDATA[RNS press release - Net Asset Value(s) ]]> Wed, 06 Sep 2017 07:00:05 +0100 <![CDATA[RNS press release - Half-year Report ]]> Wed, 16 Aug 2017 11:13:12 +0100 <![CDATA[RNS press release - Net Asset Value(s) ]]> Fri, 04 Aug 2017 07:00:07 +0100 <![CDATA[RNS press release - Net Asset Value(s) ]]> Fri, 07 Jul 2017 07:00:04 +0100 <![CDATA[RNS press release - Result of AGM ]]> Fri, 09 Jun 2017 12:59:42 +0100 <![CDATA[RNS press release - Net Asset Value(s) ]]> Tue, 06 Jun 2017 07:00:06 +0100 <![CDATA[RNS press release - Net Asset Value(s) ]]> Fri, 05 May 2017 07:00:08 +0100 <![CDATA[RNS press release - Notice of AGM ]]> Fri, 07 Apr 2017 08:29:02 +0100 <![CDATA[RNS press release - Annual Financial Report ]]> Fri, 07 Apr 2017 07:00:06 +0100 <![CDATA[RNS press release - Net Asset Value(s) ]]> Thu, 06 Apr 2017 07:00:16 +0100 <![CDATA[RNS press release - Portfolio Update ]]> Mon, 03 Apr 2017 07:00:11 +0100 <![CDATA[RNS press release - Net Asset Value(s) ]]> Tue, 07 Mar 2017 07:00:12 +0000 <![CDATA[RNS press release - Net Asset Value(s) ]]> Tue, 07 Feb 2017 07:00:08 +0000