Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

BlackRock's Hambro ramps hunt for income with $40m Banro’s buy

BlackRock's Hambro ramps hunt for income with $40m Banro’s buy

Evy Hambro and Catherine Raw, the duo at the helm of BlackRock World Mining Trust, have stepped up their drive for income by snapping up $40 million worth of Banro Corporation preference shares.

The purchase follows the team's decision to strike a royalties deal with London Mining last year, part of a bid to boost the income credentials of the £1.1 billion trust.

Hambro (pictured), who is also chief investment officer of the BlackRock natural resources team, said: 'Following the agreement in July to acquire a 2% revenue related royalty from iron ore from London Mining’s Marampa mine in Sierra Leone, this new investment again demonstrates the trust’s commitment to generate income for investors whilst maintaining exposure to changes in the price of gold and other commodities.'

Banro, a Canadian gold producer, is at a pivotal point in its history and is hoping to use 2013 to make the transition from a smiler scale operation into a mid-tier low cost producer.

It agreed the deal with Hambro and Raw in tandem with a $30 million credit facility with two African banks.

Hambro said the trust's latest investment reflects his view on gold over the longer term, even if investors are currently divided on bullion after its move into a death cross last week.

He said: 'We remain positive on the long-term outlook for gold.

'This investment demonstrates the trust’s ability to assess risk and deploy capital using innovate structures to obtain potentially attractive returns from a well-established mining company operating mines in a key gold production area.'

Broadly, resources firms have been struggling to come by performance, with the HSBC World Mining Index shedding some 4.3% over the 12 months to date.

Hambro and Raw have outperformed this and growth their trust's share price by 11.5% and its net asset value by 1.3%.

Moreover, since seeking out income generative opportunities the trust has seen its discount tighten significantly.

At the end of trade of Friday, BlackRock World Mining Trust shares traded at a 10% discount, a far cry from the 16% discount it has drifted to in recent years.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play On the Road Challenge: Clay pigeon shooting with Thesis' Lansdowne

On the Road Challenge: Clay pigeon shooting with Thesis' Lansdowne

Eleanor Mahmoud goes clay shooting at the National Clay Shooting Centre with Sam Lansdowne from Thesis Asset Management

Play AA-rated Flood on gov't bonds: 'the maths doesn't add up'

AA-rated Flood on gov't bonds: 'the maths doesn't add up'

He also addresses why his Newton Multi-Asset Income fund has such a high cash weighting and why he sees renewables as such a good opportunity.

Play AAA-rated Ali: Identifying the peripheral European plays

AAA-rated Ali: Identifying the peripheral European plays

Citywire AAA-rated Tawhid Ali thinks that plenty of good stocks in the European periphery are being thrown out with the proverbial bath water.

Read More
Your Business: Cover Star Club

Profile: 'for the first time since 1981, I have to watch politics'

Profile: 'for the first time since 1981, I have to watch politics'

James Hambro & Partners’ William Francklin says he is having to factor politics into his thinking for the first time in his 36-year career

Wealth Manager on Twitter