Baker Steel plans tender offer – after a year when Baker Steel managed to generate a small NAV increase (0.2%) while the wider EMIX Global Mining Index fell by 5.9%, the trust has now announced it wants to hand back £4m/£5m to shareholders. The money comes from the sale of the Prognoz silver project to Polymetal. Baker Steel got Polymetal shares in exchange but thinks that these can be sold fairly easily. Not all of the proceeds is being handed back, 75% of the money is being retained for new investments. So far in 2019, the company has made follow-up investments in Futura Resources and Anglo Saxony Mining as well as one new investment into Azarga Metals. Some of these were structured as royalties – in 2018, the company maintained an interest in the Prognoz silver mine through Polar Acquisition Limited retaining a royalty. In early 2019, it bought a royalty over the coking coal mines of Futura Resources. It also received an option to acquire a royalty over Azarga Metals’ copper/silver project, as part of a financing agreement which included investment in a convertible loan.
The tender process will kick off in May 2019 with details of a shareholder vote. The tender price will be less than NAV (the board wants the exercise to be value-enhancing for the shareholders that stick with the company).
BSRT : Baker Steel plans tender offer