Over the year to the end of December 2015 Baker Steel Resources net asset value fell by 27.6% – somewhat more than comparative indices such as the Euromoney Global Mining 100 Index which fell by 15.4% and the FTSE Gold Mines Index which fell by 9.8% over the same period. The statement says that some of their hardest hit investments were in the iron ore sector where, thanks to the falling iron ore price, they wee forced to write down their investments in Ferrous Resources and Ironstone Resources.
On the positive side, they say that the weakness of many currencies of resource producing countries relative to the US dollar is boosting margins for producers as their product is priced in dollars but their costs are in the local currency.
The company announced a number of transformative measures including a discount control policy and measures to expand the fund which we have already reported on. They say the largest new holdings in the portfolio as a result of this deal are Red 5 Limited, an Australian Stock Exchange listed gold producer and MagIndustries Corporation, a Toronto Stock Exchange listed potash development company.
BSRT : Baker Steel hit hardest by iron ore price falls