BlackRock World Mining Trust (BRWM) has suffered a 0.47 per cent fall in its net asset value (NAV) after it reduced the value of its investment in Banro's gold-linked preference shares. The trust's board and BlackRock's pricing committee decided to increase the discount against the valuation of these shares from 15 per cent to 30 per cent, following gold price weakness and a fall in the price of gold miner Banro's senior secured notes.
The day after the announcement, the trust's shares were down more than 7 per cent at 233.3p a share, and the trust now trades on a discount to NAV of 8.3 per cent, albeit tighter than the 10-15 per cent levels seen earlier this year.
The trust had recently increased the value of its investments in Banro. It reduced the discount applied to the company's senior secured note to nil and the gold-linked preference shares' discount from 30 per cent to 15 per cent. This was partly due to a $90m financing in February 2015, which meant Banro had sufficient funds to meet near-term liquidity needs - after the financing Banro's equity and bonds rallied sharply.