Further to my post yesterday about BlackRock World Mining Trust. I came across this chart from another Blogger Eddy Elfenbein and his site Crossing Wall Street, which he used to point out that Commodity prices are nearing 40 years lows. So at least you wouldn't be buying at the top and may have history on your side.
Meanwhile I knew BRWM's interims were due but I forgot to mention it in yesterday's post. They were out this morning and they confirmed an unchanged interim dividend of 7p which was covered by earnings of 9.51p. They also suggested that based on estimates for the remainder of the year that they are prepared to use some of the revenue reserves (which I touched on yesterday) to maintain this years full year dividend at 21p. So the suggested yield of around 8.5% looks on for this year. However, they then went onto say that the future use of reserves would depend on the Board’s confidence in returning to a fully covered position in the near term. Given the widespread challenges facing the mining sector, the sustainability of dividends at the underlying stock level is being closely monitored to determine the trusts appropriate dividend payments for the future.
So a good yield in the short term, but as I said the dividend is not cast in stone, although the manager is apparently focussing on those Companies which have responded to the tougher times so hopefully the downside to the revenues and dividend from here should not be too great. But given the scale of the reserves I'm a little surprised the board is not more willing to use them to maintain the dividend rather than focussing on returning to a covered dividend in short order.
Finally before I go out, in a week when we have been blessed with Perseids Meteor showers this weeks Compound Income Scores are out with appropriately Jupiter Fund Management at the top of the list.