Baker Steel Resources Trust (BSRT) provides investors with exposure to a concentrated, globally diversified portfolio of natural resources businesses, primarily at the development stage. Managed by the specialist Baker Steel Capital Managers, the trust invests across listed and unlisted equities, convertible loans and royalties, seeking to capture the increase in project valuations as businesses progress towards commercial production. With several major holdings approaching production or expansion, BSRT’s investment proposition increasingly combines potential development gains with royalty and dividend income, asset realisations and capital returns to shareholders.
1. BSRT seeks to generate returns beyond commodity price appreciation.
Unlike conventional mining equity funds, BSRT aims to generate returns primarily from the advancement of individual projects through financing, permitting, construction and ultimately production. The manager typically invests from around the bankable feasibility stage, when successful development milestones can materially increase project valuations. Baker Steel Capital Managers’ experienced investment team, with strong technical backgrounds in mining, geology and engineering, uses its extensive industry network to identify opportunities and is actively involved in progressing portfolio projects, frequently through board representation. The trust also has the flexibility to structure investments through convertible loans and royalties, potentially providing some downside protection while preserving exposure to development gains. Nevertheless, commodity prices and market sentiment towards junior mining companies remain important drivers of portfolio valuations.
2. The drive to secure Western critical minerals supplies offers significant opportunities.
Growing concerns about the security of critical minerals supply chains, particularly China’s dominance of tungsten production, have created an increasingly favourable environment for several BSRT investments. Western governments are seeking to develop alternative sources of supply, which is helping strategically important mining projects secure funding and advance towards production. This is illustrated by UK government support for the redevelopment of Tungsten West’s Hemerdon mine in Devon and US government-backed initiatives involving Blue Moon Metals’ Springer tungsten project in Nevada. These developments demonstrate how strategic considerations can strengthen the investment case for development-stage mining businesses and potentially accelerate project delivery. While successful execution remains essential, we believe this trend could provide lasting support for valuations across parts of BSRT’s portfolio.
3. Portfolio maturation creates scope for significant royalty and dividend income.
Several of BSRT’s investments are approaching stages at which they could generate recurring income. Cemos Group, a Moroccan cement producer, has commissioned a compact calcination unit that should significantly reduce costs and is developing a second grinding plant to expand production capacity. These investments offer scope for higher earnings and future dividends. BSRT also holds a 1% net smelter royalty over the Bilboes gold project in Zimbabwe, which could eventually become a meaningful source of recurring income once production commences. The trust’s investment in Futura Resources, an Australian coking coal producer, also includes a gross revenue royalty. While the manager expects substantial income potential from the portfolio as projects mature, this remains dependent on successful development and production ramp-up.
4. Asset realisations and a new capital allocation policy offer an additional route to shareholder returns.
As BSRT’s portfolio matures, the trust has increasing opportunities to crystallise development gains through asset sales, listings or partial disposals of existing holdings. Importantly, the board has introduced a capital allocation policy targeting annual capital returns equivalent to 5% of NAV, comprising a 3% annual dividend and additional share buybacks or dividends. The policy also provides a framework for returning a substantial portion of proceeds from significant asset realisations, particularly when BSRT trades at a wide discount to NAV. We believe this offers shareholders a clearer mechanism to participate in portfolio value creation, while buybacks at a discount can enhance NAV per share. That said, the sustainability of distributions will depend on further portfolio realisations and the emergence of meaningful recurring income, while continued development progress and successful capital returns could support a narrowing of BSRT’s discount to NAV.
Published 12 November 2026
