Portfolio Update

BAKER STEEL RESOURCES TRUST LIMITED

(Incorporated in Guernsey with registered number 51576 under the provisions of The Companies (Guernsey) Law, 2008 as amended)

3 April 2017

Partial Realisation of the Company's holding in Polar Acquisition Limited and associated Related Party Disclosure

Baker Steel Resources Trust Limited (the "Company") announces that its 64% owned investment Polar Acquisition Limited ("PAL") has today agreed to issue a zero coupon US$4.75 million convertible loan to discretionary clients of Sprott Inc, the Toronto listed fund management company well known for its expertise in natural resources investment and its interest in silver. 

The ‎proceeds of the convertible will be utilised to offer to buy back up to 10% of the shares in PAL proportionate to current shareholdings. This reflects the fact that PAL does not require any further funds for the foreseeable future following the announcement on 19 January 2017 of the US$3 million subscription by Polymetal International PLC ("Polymetal") for a 10% interest in PAL's subsidiary, Polar Silver Resources Limited ("Polar Silver") and its commitment to fund the feasibility study into the Prognoz Silver project.

The PAL share buyback will be undertaken at a valuation which represents a 13.6% premium to the current carrying value in the Company's books and a significant uplift from the price paid by the Company to increase its interest via PAL in the Prognoz silver project pursuant to the restructuring offer made by the Company in 2016.

The Company plans to tender at least its proportionate share of the buyback and will therefore receive at least US$3.0m in cash from the buyback, which is anticipated to be completed by mid-April 2017.

In return for its commitment to fund the drilling works and technical studies to complete a JORC Reserve statement and Feasibility Study on Prognoz, Polymetal holds an option (the "Option") to acquire PAL's 90% interest in Polar Silver on pre-agreed terms at any time up to 31 March 2020. The PAL convertible is convertible at any time by the holder into a 10% equity interest in PAL. It is anticipated that Sprott will convert the PAL convertible loan into PAL shares upon exercise by Polymetal of the Option but if not converted is repayable in cash or shares by 31 December 2020.

The Company welcomes the transaction as it is a first step towards achieving its stated aim of reducing the proportion of its net assets represented by PAL. It also provides cash at an opportune moment in the mining cycle for new investment and/or share buybacks, and will take place at a premium to the carrying value as at 28 February 2017, following the significant uplift in carrying value at 31 December 2016. The addition of Sprott as a specialist institutional investor in PAL is also welcomed and a further endorsement of the Prognoz silver project's potential.

Under the Listing Rules certain PAL shareholders, namely Genus Natural Resources Fund, Baker Steel Capital International, Sonya Trust, Northcliffe, AWR Lloyd, Rock Capital and Baker Steel Capital Managers (Cayman), holding in aggregate 9.68 per cent. of PAL's issued share capital, are deemed to be related parties to the Company and as such the proposed PAL share buyback falls under the related party provisions of LR11. Further, given the size of the buyback the potential related party transaction falls under LR 11.1.10R (Modified requirements for smaller related party transactions).

Further details of the Company and its investments are available on the Company's website www.bakersteelresourcestrust.com 

Enquiries:

Baker Steel Resources Trust Limited +44 20 7389 8237

Francis JohnstoneTrevor Steel

Numis Securities Limited +44 20 7260 1000

David Benda (corporate)

James Glass (sales)

The Net Asset Value ("NAV") figure stated is based on unaudited estimated valuations of the underlying investments and not necessarily based on observable inputs. Such estimates are not subject to any independent verification or other due diligence and may not comply with generally accepted accounting practices or other generally accepted valuation principles. In addition, some estimated valuations are based on the latest available information which may relate to some time before the date set out above.

Accordingly, no reliance should be placed on such estimated valuations and they should only be taken as an indicative guide. Other risk factors which may be relevant to the NAV figure is set out in the Company's Prospectus dated 26 January 2015.