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Baker Steel Resources fund portfolio companies poised for IPOs once conditions improve

Baker Steel Resources fund portfolio companies poised for IPOs once conditions improve

Baker Steel Resources Trust (LON:BSRT), focused on pre-IPO and specialist listed resource companies, said several companies in its portfolio are poised for IPOs as soon as the market picks up again. 

In an interim management statement, the trust, which was listed on the LSE in April 2010 by Baker Steel Capital, said several of the companies in the portfolio had been planning IPOs during the second half of 2011.

“These plans have been disrupted by the recent turbulent markets but they are well positioned for when market conditions normalise,” BSRT said.

Net asset value at the end of the third quarter to September 30 2011 stood at 118.7 pence, up 1.5 percent on the previous quarter and 14.8 percent higher than a year earlier.

Following a mixed first half of 2011, markets for mining equities fell sharply in the third quarter with the HSBC Global Mining Index falling 25.6 percent.

The performance of commodities themselves was mixed with iron ore and gold holding up well and base metals such as copper falling heavily. The emphasis of markets generally has been one of de-risking as investors continue to be concerned by debt levels in the western economies and the crisis of confidence in the Eurozone, it said.

During the quarter BSRT made one significant addition to its portfolio, investing £3.75 million in Metals Exploration PLC (LON:MTL) as part of a larger strategic stake alongside other funds managed by Baker Steel.  Metals Exploration holds the Runruno gold project in the Philippines where a feasibility study has been completed into a mine producing approximately 100,000 ounces of gold per annum. 

During the quarter, the trust made its first major realisation following the takeover of First Coal Corp by Xstrata Coal in an all cash offer.  After taking into account Canadian tax payable, BSRT made a gain of C$6.75 million on its investment representing a return of 129 percent.

“The balance sheets of the majors are currently very strong and this, in the meantime, remains a route for realisations as was demonstrated by the First Coal sale,” the trust said.

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