BlackRock World Mining Trust plc
LEI: LNFFPBEUZJBOSR6PW155
Annual Report and Financial Statements 31
December 2024
Performance record
|
|
As at
31 December
2024
|
As at
31 December
2023
|
|
|
Net assets (£’000)1
|
975,199
|
1,160,051
|
|
|
Net asset value per ordinary share (NAV) (pence)
|
510.53
|
606.78
|
|
|
Ordinary share price (mid-market) (pence)
|
481.00
|
587.00
|
|
|
Reference index2
– net total return
|
5,411.07
|
6,002.54
|
|
|
Discount to net asset value3
|
5.8%
|
3.3%
|
|
|
|
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|
|
|
For the
year ended
31 December
2024
|
For the
year ended
31 December
2023
|
|
|
Performance (with dividends reinvested)
|
|
|
|
|
Net asset value per share2,3
|
-10.7%
|
-6.2%
|
|
|
Ordinary share price2,3
|
-12.7%
|
-10.4%
|
|
|
Reference index2
|
-9.9%
|
+2.4%
|
|
|
|
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|
|
|
Since inception
to 31 December
2024
|
Since inception
to 31 December
2023
|
|
|
Performance since inception (with dividends
reinvested)
|
|
|
|
|
Net asset value per share2,3
|
+1,167.4%
|
+1,319.4%
|
|
|
Ordinary share price2,3
|
+1,180.2%
|
+1,365.9%
|
|
|
Reference index2
|
+896.3%
|
+1,005.2%
|
|
|
|
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|
|
|
For the
year ended
31 December
2024
|
For the
year ended
31 December
2023
|
Change
%
|
|
Revenue
|
|
|
|
|
Net revenue profit after taxation (£’000)
|
44,127
|
64,691
|
-31.8
|
|
Revenue return per ordinary share (pence)4
|
23.09
|
33.95
|
-32.0
|
|
|
---------------
|
---------------
|
---------------
|
|
Dividends per ordinary share (pence)
|
|
|
|
|
– 1st interim
|
5.50
|
5.50
|
–
|
|
– 2nd interim
|
5.50
|
5.50
|
–
|
|
– 3rd interim
|
5.50
|
5.50
|
–
|
|
– Final
|
6.50
|
17.00
|
-61.8
|
|
|
---------------
|
---------------
|
---------------
|
|
Total dividends paid and payable
|
23.00
|
33.50
|
-31.3
|
|
|
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1 The
change in net assets reflects portfolio movements, dividends paid
and the buyback of ordinary shares into treasury during the
year.
2 MSCI
ACWI Metals & Mining 30% Buffer 10/40 Index (net total return).
With effect from 31 December 2019,
the reference index changed to the MSCI ACWI Metals & Mining
30% Buffer 10/40 Index (net total return). Prior to 31 December 2019, the reference index was the
EMIX Global Mining Index (net total return). The performance
returns of the reference index since inception have been blended to
reflect this change.
3 Alternative
Performance Measures, see Glossary in the Company’s Annual Report
for the year ended 31 December
2024.
4 Further
details are given in the Glossary
in the Company’s Annual Report for the year ended 31 December 2024.
Chairman’s Statement
Highlights
- NAV
per share -10.7%1
(with dividends reinvested)
- Share
price -12.7%1
(with dividends reinvested)
- Total
dividends of 23.00p per share
Overview
2024 proved to be a challenging year for the commodity market.
Negative sentiment regarding China, particularly in the country’s domestic
property market, and geopolitical turmoil across the globe,
including the war between Russia
and Ukraine, and the conflict in
the Middle East, continued to
destabilise markets.
Approximately half of the world’s population went to the polls in
2024, fostering a volatile economic climate. The results of the US
election increased uncertainty around global trade and stimulus
measures announced by China had an
underwhelming effect on domestic demand expectations. All of these
items generated continued concern for global growth causing
commodity prices to come under pressure.
Performance
Over the twelve months to 31 December
2024, the Company’s net asset value per share (NAV) returned
-10.7%1
and the share price returned -12.7%1.
Over the same period, the Company’s reference index, the MSCI ACWI
Metals & Mining 30% Buffer 10/40 Index (net total return),
returned -9.9%, the FTSE All-Share Index returned +9.5% and the UK
Consumer Price Index (CPI) increased by 3.5%.
Our portfolio managers provide a more detailed explanation of the
Company’s performance during the year in their report below. They
also provide more insight into the positioning of the portfolio and
their views on the outlook for the coming year.
Revenue return and dividends
The Company’s revenue per share for the year to 31 December 2024 was 23.09p, a 32.0% decrease
compared to the prior year revenue per share of 33.95p. The
decrease was driven by lower dividend payments from a number of key
mining companies as they chose to invest in future growth
opportunities.
During the year, three quarterly interim dividends of 5.50p per
share were paid. The Board is proposing a final dividend payment of
6.50p per share for the year ended 31
December 2024. This, together with the quarterly interim
dividends, makes a total of 23.00p per share (2023: 33.50p per
share) representing a decrease of 31.3% on payments in
2023.
As in past years, all dividends are fully covered by income. In
accordance with the Board’s stated policy, the total dividends
represent substantially all of the year’s available
income.
Subject to approval at the Annual General Meeting, the final
dividend will be paid on 27 May 2025
to shareholders on the Company’s register on 21 March 2025, the ex-dividend date being
20 March 2025.
Gearing
The Company operates a flexible gearing policy which depends on
prevailing market conditions. It may borrow up to 25% of the
Group’s net assets. The maximum level of gearing used during the
year was 14.7% and the level of gearing at 31 December 2024 was 12.0%. Average gearing over
the year to 31 December 2024 was
11.6%.
Management of premium/discount
The Directors recognise the importance to investors of the market
price of the Company’s shares relative to the underlying NAV.
Accordingly, in normal market conditions, the Company may
repurchase shares or reissue shares from treasury or issue new
shares (at a premium to NAV) to manage the premium or discount at
which the Company’s shares trade, where it is deemed to be in
shareholders’ interests.
Over the Company’s financial year ending in December, the Company’s
shares have traded at an average discount of 5.2%. During the year,
the Company purchased 165,000 shares at an average price of 529.70p
per share at an average discount of 10.0% for a total cost of
£874,000. Since the year end and up to 28
February 2025, a further 150,000 shares have been bought
back at an average price of 490.00p per share for a total cost of
£735,000. All shares have been placed in treasury. No shares were
issued in 2024 or in 2025 up to the date of this report.
Resolutions to renew the authorities to issue and buy back shares
will be put to shareholders at the forthcoming Annual General
Meeting.
Board composition
Having served nearly nine years, Jane
Lewis will not be seeking re-election at the forthcoming
Annual General Meeting (AGM) and will retire from the Board with
effect from the conclusion of the meeting. The Board wishes to
thank Ms Lewis for her wise counsel and valuable contribution to
the Company over her tenure as a Director.
The Board has appointed an external recruitment firm, Cornforth
Consulting, to undertake a search process to identify a new
Director with the skills the Board has identified it requires. We
will announce the appointment of a new Director following the
AGM.
In order to manage succession planning for the remainder of the
Board and to ensure an element of continuity, Judith Mosely, the Company’s Senior Independent
Director, will retire following the AGM to be held in
2026.
Agreement with Saba
On 22 January 2025, the Board entered
into an agreement with Saba Capital Management L.P. (Saba) pursuant
to which Saba has provided a number of undertakings which has the
effect of limiting certain actions by Saba. The press release can
be found at the following link:
www.londonstockexchange.com/news-article/BRWM/agreement-with-saba/16863479.
The agreement lasts until the earlier of the day following the
completion of the Company’s 2027 AGM or 31
August 2027. The agreement does not limit Saba’s ability to
acquire or dispose of shares in the Company.
Shareholder communication and
engagement
We appreciate how important access to regular information is to our
shareholders. To supplement our Company website, we offer
shareholders the ability to sign up to the Trust Matters newsletter
which includes information on the Company as well as news, views
and insights on the investment trust market. Information on how to
sign up is included on the inside front cover of the Company's
Annual Report for the year ended 31 December
2024.
The Board encourages all shareholders to either attend the AGM or
exercise your right to vote by proxy. The Board has sought to
engage with shareholders who hold their shares through an
intermediary or platform via the provisions of Section 793 of the
Companies Act 2006. In addition, the Board is aware that certain
execution only investment platforms are now providing shareholders
with the ability to vote electronically. The Board encourages
shareholders to take advantage of this functionality where it is
available to you. For those of you who hold shares via platforms,
information on how to vote can be found here:
https://www.theaic.co.uk/availability-on-platforms.
Annual General Meeting arrangements
The Company’s AGM will be held at the offices of BlackRock at 12
Throgmorton Avenue, London EC2N
2DL on Wednesday, 21 May 2025 at
11.30 a.m. Details of the business of
the meeting are set out in the Notice of Meeting in the Company’s
Annual Report for the year ended 31 December
2024.
The Board very much looks forward to meeting shareholders and we
encourage you to attend this year’s AGM. In the meantime, if
shareholders would like to contact me, please write to BlackRock
World Mining Trust plc, 12 Throgmorton Avenue, London EC2N 2DL, marked for the attention of
the Chairman.
Outlook
As we enter 2025, we continue to be excited by the continued
enthusiasm for the energy transition minerals, the emerging demand
for the minerals and energy resources necessary to support the
emerging artificial intelligence space, the continued efforts by
China to find the right economic
support to foster domestic demand and the positive outlook in
the United States. All of these
opportunities will require significant natural resources against a
backdrop of continued declining grades and increasing project
development timelines. We continue to identify companies with
dedicated management teams that are focused on cost management,
innovative project opportunities and solid financial structures.
While the generalist investors are focused on other areas of the
market, we are finding the opportunity to put your funds to work in
attractive long-term opportunities.
Of course, the geopolitical challenges we have seen in 2024 will
continue to impact the near-term economic environment but the
fundamental need for commodities to support our modern economy will
remain. It is in these environments that the foundations for
long-term outperformance are established.
CHARLES
GOODYEAR
Chairman
4 March 2025
1 Alternative
Performance Measures. All percentages calculated in Sterling terms
with dividends reinvested. Further details of the calculation of
performance with dividends reinvested are given in the Glossary in
the Company’s Annual Report for the year ended 31 December 2024.
Investment Manager’s Report
Market overview
2024 was disappointing with the Company’s net asset value (NAV)
total return being negative despite several themes playing out as
expected during the year. The NAV total return in the first half
was lacklustre with the relative performance of the NAV behind that
of the reference index (MSCI ACWI Metals and Mining 30% Buffer
10/40 Index (net total return)) due to factors which were covered
in the 2024 Half Yearly Financial Report. During the second half of
the year, relative performance was much improved despite economic
weakness in China, Europe and other parts of the world adding
downward pressure on commodity prices. The overall move lower was
significant and, despite a brief China induced rally in September 2024, the year finished in negative
territory. The final quarter of the year was particularly poor with
share prices of many companies declining.
In addition to the economic headwinds, demand for exposure to the
mining sector declined as investor focus remained on the
influential US large cap technology stocks, known as “the
Magnificent 7”, and the artificial intelligence (AI) theme. This
led to share prices failing to capture the performance of the
underlying commodity price moves which were generally positive.
Despite the disappointing year, and probably to the surprise of
many people, the sector has done well versus the performance of
world markets over the last five years apart from when it
underperformed in Q4 of 2024.
Within the commodity space, the key performers during the year were
the gold and silver prices which enjoyed strong returns, up by
27.2% and 21.5%, respectively. Yet the gold mining companies were
unable to convert this into meaningful returns. The FT Gold Mines
Index was only up by 7% in 2024. However, there was significant
dispersion in returns between the companies, as we discuss below.
The industrial metals suite was generally positive but volatile.
Copper, a key exposure within the Company, was up approximately 8%
when looking at year-on-year average price levels. The battle for
control of future production resulted in a number of merger &
acquisitions (M&A) events which delivered solid gains for the
portfolio.
For the year ended 31 December 2024,
the NAV total return of the Company was -10.7% and the share price
total return was -12.7% as the discount widened over the year. This
compares to the FTSE 100 Index returning +9.7%, Consumer Price
Index (CPI) up by 3.5% and the reference index returning -9.9% (all
numbers in Sterling terms with dividends reinvested).
Dispersion frustrations
As highlighted above, the huge frustration during the year has been
a breakdown in the relationship between commodity prices and the
share prices of the companies that produce them. Historically,
mining equities have been a very efficient way to capture returns
from commodity markets. The combination of option like leverage at
the earnings level, combined with exploration, volume growth,
dividends and M&A has delivered superior share price returns to
the underlying commodity price moves. In the last few years this
relationship has been tested.
The key areas where this was felt in the portfolio were in large
mining companies that simply did not perform as they have
historically. In the copper sector the “go to” company,
Freeport-McMoRan,
generated a -9.4% total return during the year whilst the average
price of copper was up by approximately 8%. Across the gold sector,
the two largest producers,
Newmont
Corporation
and
Barrick
Gold,
generated -7.9% and -12.3% returns respectively, compared to the
average gold price which
was up by 23.0%. Examples like this can be found across the mining
sector.
There are, of course, numerous exceptions but these seem to have
been driven by specific events. In copper, M&A delivered
returns of 38% in USD terms for investors in
Filo Mining,
a holding of the Company, when this was bought by
BHP
and
Lundin Mining.
In gold, Centamin was acquired by
AngloGold Ashanti
resulting in a 44% return for investors.
The reduced correlation between mining company share prices and
underlying commodity prices remains prevalent and it is the result
of the mining companies’ inability to convert the higher commodity
prices into increased free cash flow, earnings and dividends. Much
of the beta has been consumed by cost inflation, rising maintenance
expenditure and a recent pick-up in growth capital. Management
teams that can unlock the conversion of higher revenues into free
cash flow, earnings and dividends are likely to be the winners in
the years to come.
ESG (Environmental, Social and Governance) and the social
license to operate
ESG issues are highly relevant to the mining sector and we seek to
understand the ESG risks and possible opportunities facing holdings
in the portfolio. As an extractive industry, the mining sector
naturally faces a number of ESG challenges given its dependence on
water, carbon emissions and the geographical location of assets.
However, the sector provides critical infrastructure, taxes and
employment to local communities, as well as materials essential for
the energy transition.
As part of our investment process, we consider ESG insights and
data, including ESG risks. ESG insights are not the sole
consideration when making investment decisions but, in most cases,
the Company will not invest in companies which have high ESG risks
(risks that affect a company’s financial position or operating
performance) unless there are plans to address the
deficiencies.
- We
take a long-term approach, focused on engaging with company boards
and executive leadership to understand the drivers of risk and
financial value creation in business models, including material
ESG-related risks and opportunities.
- Where
a serious event has occurred we will assess whether the relevant
portfolio company is taking appropriate action to resolve matters
before deciding whether or not to retain our investment.
- There
will be companies which have derated (the downward adjustment of
multiples) as a result of an adverse ESG event or due to poor ESG
practices. This may present opportunities to invest at a discounted
price. However, the Company will only invest in these value-based
opportunities if we are satisfied that there is real evidence that
the company’s culture has changed and that better operating
practices have been implemented.
Once again, an important focus of engagement this year related to
how companies are reducing carbon emissions. By and large, most
companies are making reasonable progress. For example, BHP
announced that emissions reduction versus the 2020 baseline was
already 32% lower, ahead of the stated 2030 goal.
Governance is also an area of focus. There have been examples where
companies have acted contrary to best practices. Examples include
CEOs moving to the position of Chairman, CEO option awards having
exercise prices reset to lower levels and compensation awards not
matching company performance. The worst example related to a gold
mining company where a poorly executed equity raise resulted in a
substantial share price fall. Shareholders were then invited to
vote on the award of options to the CEO at exercise prices set at
much lower levels than the price during the disastrous equity
raise. Despite huge opposition, the proposal narrowly passed and
the CEO accepted the award. This is a governance issue that we
raised, although the Company did not own shares in the gold mining
company.
Site visits in 2024 focused on seeing growth projects, receiving
updates on existing assets, evaluating country risk, reviewing ESG
work and meeting with new leadership teams.
Positive commodity returns
The year was generally positive for the main commodities within the
Company’s portfolio. Average prices for the year, which are key to
corporate profitability, were materially better than 2023. This is
in contrast to the past two years where prices were weaker across
the board.
In 2024 nickel, lithium and palladium suffered from oversupply at a
time of weakness in the automobile industry (palladium for exhaust
systems and nickel/lithium for batteries). These lower prices are
now well below the cost curve which has triggered a supply side
response, but not yet sufficient to move the market back into
balance.
Iron ore prices have been resilient with average pricing for the
past three years remaining around US$100/tonne, a level at which the industry
enjoys significant profitability. New supply is coming online
between now and the end of the decade and steel demand growth will
be needed to absorb these additional supplies.
Commodity price moves
|
|
31 December 2024
|
% Change in 2024
|
% Change average
prices 2024 vs 2023
|
|
Commodity
|
|
|
|
|
Gold US$/ounce (oz)
|
2,624.5
|
+27.2
|
+22.9
|
|
Silver US$/oz
|
28.9
|
+21.5
|
+20.7
|
|
Platinum US$/oz
|
907.6
|
-8.5
|
-1.2
|
|
Palladium US$/oz
|
912.6
|
-17.1
|
-26.6
|
|
Aluminium US$/pound (lb)
|
2,516.0
|
+7.8
|
+7.4
|
|
Copper US$/lb
|
8,706.0
|
+2.7
|
+7.8
|
|
Lead US$/lb
|
1,921.0
|
-5.4
|
-3.1
|
|
Nickel US$/lb
|
15,100.0
|
-7.4
|
-21.9
|
|
Tin US$/lb
|
28,900.0
|
+14.8
|
+16.1
|
|
Zinc US$/lb
|
2,974.0
|
+12.6
|
+4.8
|
|
WTI Cushing US$/barrel
|
71.7
|
+0.1
|
-1.2
|
|
Iron Ore (China 62% fines) US$/tonne (t)
|
99.5
|
-29.9
|
-8.8
|
|
Thermal Coal US$/t
|
125.3
|
-14.5
|
-22.7
|
|
Coking Coal US$/t
|
196.5
|
-39.3
|
-18.5
|
|
Lithium carbonate US$/lb
|
10,343.0
|
-23.4
|
-63.2
|
|
|
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|
Sources: LSEG Datastream and Bloomberg, December 2024.
Look through commodity exposure
With a large proportion of the Company’s NAV invested in the
diversified mining companies, we have provided a more detailed
understanding of the portfolio’s underlying commodity exposure at
31 December 2024 looking through the
commodity exposure of the underlying holdings in the Annual Report
for the year ended 31 December 2024.
Our methodology takes our existing sub-sector breakdowns but breaks
out the diversified miners sub-sector based on their H1 2024
percentage contribution to EBITDA by commodity and then multiplied
them by the respective position size as at end of December 2024 and added these on to the existing
sub-sector exposures. Please note, for
BHP,
we have used 12 months to the end of June
2024, given its specific reporting period. We have also made
an adjustment for
Glencore
acquiring
Teck Resources’
coking coal assets.
Income
The Company was again able to generate a competitive income return
from the portfolio. Although the absolute level of income was down,
the yield remains comparable to alternatives available to investors
from other sectors.
Revenue from ordinary dividends fell once again as companies were
unable to match payments in the prior year due to lower levels of
profitability and higher reinvestment to build their assets base.
Yet historic dividend policies mostly remain in place with
companies maintaining the commitment to shareholder
returns.
In aggregate, other sources of income for the Company were
comparable to prior years, highlighting the benefits of
diversification. Royalty income was 10%, option income increased to
20%, while income from fixed income securities declined to 1% given
the compression in yields we have seen across the
sector.
Income levels in 2025 are expected to be similar to those in 2024
given current commodity prices. We believe there is room for an
upside in some areas such as gold.
Base metals
Copper, aluminium and zinc all finished the year higher. Copper
benefited from improved demand, declining interest rates and
stimulus measures in China. This
resulted in a new all-time high for the copper price and the strong
copper-producer performance during the first half the year.
However, the second half of the year was more challenging as demand
conditions in China, particularly
linked to property, worsened and the Federal Reserve dampened
expectations for the pace of interest rate cuts. While prices
softened, we have seen good downside cost support given supply
tightness in copper and zinc and rising costs for
aluminium.
Copper is supported by China’s focus on green spending, with
spending on the electric grid up 21% year-on-year and investments
in the renewable energy sector remaining strong. In 2024, China’s
overall copper demand was up 6%. When we look at the growth in new
demand from the energy transition sector, it matches the amount of
new supply expected to reach the market. If we see traditional
demand stabilise and even improve, we expect to see the copper
market tighten quickly.
In November we visited Chile to
see a series of copper assets, including Escondida, the world’s
largest copper mine.
BHP
has outlined a plan to spend up to US$15
billion across its Chilean copper assets as it looks to
offset 400 kilotons of production decline. This is a significant
investment, yet it adds limited new copper tonnes to the market and
highlights the difficulty in growing supply. We believe we need
higher copper prices to generate an appropriate return on new
investments and to offset operating cost inflation.
At 31 December 2024 the Company had
24.8% of the portfolio exposed to copper producers, boosting
performance. Pure play copper producers
Ivanhoe
Mines,
Sociedad Minera Cerro Verde
and
Capstone Mining
were the standout names, up between 20-30% for the year.
Ivanhoe Mines has done an excellent
job increasing production at its Democratic Republic of the Congo based asset,
Kamoa-Kakula. As we look into 2025, the focus for Ivanhoe Mines is to commission the smelter,
gaining greater access to the Lobito rail corridor and improving
power availability, which should see costs decline by more than
20%. Ivanhoe Mines has exciting
exploration potential via its Western Forelands deposit which is
adjacent to Kamoa-Kakula. Among our other copper positions, Filo
Mining was acquired at a premium by BHP and Lundin Mining. We
expect it to become a tier-1 copper asset in the next decade. Given
our expectation for copper demand growth and increasing M&A
appetite for quality copper assets, we continue to add to our
copper exploration and development exposure via names such
as
Foran Mining,
MCC Mining
and
NGEx Minerals.
In the aluminium market, alumina prices more than doubled due to
bauxite issues in the Republic of Guinea and tightness in refinery capacity. We
expect the tightness in alumina prices to moderate as more refining
capacity is built in China and
Indonesia over the next 12 months.
The Company took advantage of this tightness by increasing its
investment in
Alcoa.
Aluminium demand has been supported by strong solar and grid
investment in China where it is
likely to reach its peak production cap of 45 million tonnes per
annum in 2025 and, given the lack of new aluminium capacity being
added ex-China, we see the
potential for this to put upwards pressure on aluminium
premiums.
Zinc was the best performing base metal during the year, up 13%.
While the demand outlook for zinc has been muted, action taken from
the industry to curtail higher cost production a few years back has
tightened the market balance and in turn supported prices. This
tightness has been most acute for the smelters where we saw
negative spot treatment charges for zinc as they aggressively bid
to access material. Zinc exposed holdings in the portfolio
include
Glencore,
Teck Resources
and
Develop Global.
Nickel was the underperformer among the base metals. Indonesia continues to increase supply,
resulting in
an oversupply in the nickel market. A key question for 2025 is how
this evolves given the Indonesian government is reducing available
production quotas by 9% year-on-year.
Bulks and steel
Iron ore prices fell 30% year-on-year and the average price dropped
9% versus 2023. Supply growth from the major producers during 2023
and the first half of 2024 has seen greater port inventories in
China, which combined with a
contraction in steel demand, put downward pressure on the iron ore
price.
A key feature of the iron ore market in recent years has been its
resilience to lower prices. High-cost supply from India and China is price sensitive and acts to balance
the market quickly. This has maintained the price above its cost
curve price support of US$80-90/tonne. We expect this relationship to be
maintained near term. However, there are risks as new supply from
Guinea emerges over the next
couple of years.
Given the importance of the iron ore price to the free cash flow of
the diversified miners, an important question is how the major
producers manage volumes with extra supply expected to come online.
Iron ore assets face depletion and there is a constant need to
replace reserves.
Vale
estimates annual depletion rates of 3% across the major seaborne
iron ore producers. This requires the iron ore producers to
constantly reinvest to maintain current production
levels.
The Company’s exposure to iron ore is primarily in
Rio Tinto,
BHP
and
Vale,
which have all had a challenging year with share prices declining
by 19%, 27% and 44%, respectively. The Company has reduced its
exposure to these companies over the year, in particular to Vale.
The Company also has exposure to two pure-play high-grade iron ore
producers,
Champion Iron
and
Labrador Iron
whose share prices declined by 31% and 17%, respectively. We have
also taken a position in
Fortescue
following
the 31% fall in its share price.
In the metallurgical coal market, prices for top quality hard
coking coal dropped by 39.3%. China has reduced its imports of Australian
and Canadian metallurgical coal, instead increasing its imports of
Russian and Mongolian coal, and India’s steel production softened
in the second half of 2024 decreasing the demand for metallurgical
coal. We have seen increased M&A activity, with Glencore
acquiring a 77% interest in Teck Resources’ Canadian Elk Valley
Resource (EVR) coking coal business for US$6.9 billion.
Anglo
American
announced the sale of its Australian coking coal assets for up to
US$4.9 billion.
The thermal coal market has returned to a more balanced position
this year. China remains a
significant importer of thermal coal and, as we have seen in recent
years, many western world thermal coal producers have committed to
reduce production over time. This has left the market tight and
vulnerable to price spikes. The Company’s thermal coal exposure is
primarily via our 6.7% position in
Glencore
which has used elevated prices in recent years to deleverage.
Glencore announced in August that they will retain both their
thermal and metallurgical coal businesses and remain committed to
the responsible rundown of the thermal coal operations. We expect
higher cash generation from
Glencore
with the inclusion of EVR and the proceeds from the Viterra asset
sale.
Precious metals
Gold surged 27.2% in US Dollar terms to US$2,625/oz, supported by central bank demand,
physical demand in Asia and, in
the final quarter, inflows into physically backed gold exchange
traded funds. Geopolitical tensions remained elevated through 2024,
which contributed to demand.
The increase in the gold price has occurred in the face of what
would historically have been major headwinds: rising real interest
rates and a stronger US Dollar. We believe these relationships
remain important but prices have reset at new levels.
It was disappointing to see gold mining shares fail to turn
improved prices into profits. Production costs rose significantly
from 2021 to 2024 and we have also seen a number of production
downgrades. We believe we are past peak cost inflation and are
positive about the direction for margins at these
prices.
Gold equities still look attractively valued versus their history.
M&A activity has increased and we expect further consolidation
given the issues the sector faces around declining reserve lives.
We think gold producers delivering on free cash flow and capital
discipline could be a catalyst to re-rate the space over the next
12 months. The Company finished the year with circa 21% of its
portfolio exposed to gold miners, with its largest holding
Agnico Eagle Mines
(5.2% of the portfolio) delivering a total return of 48% in
Sterling terms, versus a 27.2% move in spot gold prices in US
Dollar terms.
Demand for the Platinum Group Metals (PGMs) continues to be
impacted by the weakness in global automobile production and the
continued growth in electric vehicles (EV) which do not use PGMs.
Research from Morgan Stanley estimates a 1 million oz negative
impact on PGM demand over the past four years from increasing EV
market share and a reduction in PGM loadings for internal
combustion engines/hybrid vehicles. A key question going forward is
PGM use in hybrid EVs. We see this as providing some upside to PGM
demand relative to current expectations.
The Company’s exposure to PGM producers was 1.7% for the portfolio
at the year end.
Bravo Mining
(0.8% of the portfolio) is a PGM and nickel exploration company in
Brazil. During the year the
company announced some exciting exploration results with the
discovery of copper-gold mineralisation east of its Luanga deposit
and we look forward to receiving additional drill results in 2025.
The Company invested in Bravo Mining pre-initial public offering
(IPO) in April 2022 at US$0.50/share based on our belief in the assets
and the strong management team. At 31
December 2024, Bravo Mining was trading at circa
CAD 1.76/share, even after a share
price fall in 2024.
The energy transition
In 2024 global battery electric vehicle (BEV) sales were expected
to reach around 17 million units, up from approximately 14 million
in 2023. This growth is driven by several factors, including
rapidly falling battery prices, advancements in next-generation
battery technology and improving economics of BEVs. However, an
oversupply of raw materials for batteries, such as lithium and
cobalt, continued to weigh on pricing. The lithium carbonate price
fell by 23% in 2024, ending the year at US$10,050 per tonne, far from the record prices
above US$70,000 per tonne in
2022.
Despite this, the strategic importance of lithium in the global
transition to renewable energy was underscored by Rio Tinto’s bid
for Arcadium Lithium in October 2024,
which had a ripple effect on the entire lithium market. The
Company’s position in
Sigma Lithium
had a negative impact on performance in 2024 after Sigma’s review
process failed to result in a sale. The company is now focusing on
its near-term expansion plans which include doubling production in
2025. Sigma Lithium’s stock price fell 64% in 2024.
A critical component of EVs is the e-motor, which most commonly
uses a Praseodymium-Neodymium (NdPr) magnet, an alloy of two rare
earth elements (REE). The supply of REE is majority controlled by
China but has been deemed of
strategic importance by both Europe and the US. The Company has exposure to
REEs through
Lynas Rare Earths
(Lynas), a REE miner and processor based in Malaysia and Australia. Lynas’ stock price fell 10.0% in
2024 after a period of weaker REE pricing. Lynas is in the process
of completing several initiatives to benefit from the demand for
non-Chinese supply of REE, including heavy rare earth separation
and expanding its mining and processing throughput in Australia.
In 2024 there was increased recognition of the key role of nuclear
energy in the energy transition. The strategic importance of
uranium was highlighted by Microsoft’s agreement with Constellation
Energy to restart the Three Mile Island nuclear plant in
Pennsylvania. This is part of
Microsoft’s efforts to secure carbon-free electricity for its AI
data centres. The Company’s holding in uranium producer
Cameco
rose 21.8% in 2024, as the market continued to reward its position
as a western supplier of nuclear fuel and engineering.
Royalty and unquoted investments
As at the end of 2024, the unquoted investments in the portfolio
amounted to 8.4% of the portfolio and consist of the
BHP
Brazil Royalty,
the
Vale Debentures,
Jetti Resources
and
MCC Mining.
These, and any future investments, will be managed
in line with the guidelines set by the Board as outlined to the
shareholders in the Strategic Report.
BHP Brazil Royalty Contract
In 2014 the Company invested US$12
million in return for a royalty (net revenue after
deductions for freight, smelter and refining charges) comprising 2%
on copper, 25% on gold and 2% on all other metals produced from
mines built on Avanco’s Antas North and Pedra Branca licences. In
addition, there is a flat 2% royalty over all metals produced from
any other discoveries within Avanco’s licence area.
Since our investment, Avanco was acquired by OZ Minerals, with BHP
acquiring OZ Minerals. BHP is currently the operator of the mine.
The Company has received US$32
million in royalty payments with the royalty achieving full
payback on the initial investment in 3½ years. At the end of
December 2024, the royalty was valued
at £22.2 million (2.0% of the portfolio) which equates to a 419.4%
return on the initial US$12 million
invested.
We are pleased to report that production at Pedra Branca has
normalised following a geotechnical event in the second half of
2023. Recent results show an improvement in production during 2024.
During the year the valuation of the royalty was increased,
primarily driven by an increase in the long-term price assumption
for gold.
Vale Debentures
At the beginning of 2019 the Company completed a significant
transaction to increase its holding in Vale debentures. The
debentures consist of a 1.8% net revenue royalty over Vale’s
Northern System and Southeastern System iron ore assets in
Brazil, as well as a 1.25% royalty
over the Sossego copper mine. The iron ore assets are world class
given their grade, cost position, infrastructure and resource
life.
Distribution payments are expected to grow once royalty payments
commence on the Southeastern system which Vale currently expects to
occur in 2025. During 2024 we have seen an improvement in Vale’s
iron ore volumes and we expect to see further volume improvement
over the medium term.
Since our investment in 2019 when we acquired the debentures for
R$23 million, we have received
R$22 million in distributions which
represents a payback on the initial investment in six years versus
the underlying asset resource life in excess of 50 years. As at the
end of December 2024, the Company’s
exposure to the Vale Debentures was 2.7%.
Whilst the Vale Debentures are a royalty, they are also a listed
security on the Brazilian National Debentures System. As we have
highlighted in previous reports, shareholders should be aware that
historically there has been a low level of liquidity in the
debentures and price volatility is to be expected.
Jetti Resources (2.0% of the portfolio)
In early 2022 the Company made an investment into a mining
technology company, Jetti Resources (Jetti), which has developed a
new catalyst that improves copper recovery from primary copper
sulphides (specifically copper contained in chalcopyrite) which is
often uneconomic under conventional leach conditions. Jetti is
currently trialling its technology across a number of mines where
it will look to integrate their catalyst into existing heap leach
SX-EW mines to improve recoveries at a low capital cost. The
technology is currently being used at Capstone Mining’s Pinto
Valley copper mine and trialled at a series of other copper
operations, most notable Escondida the world’s largest copper mine,
where we expect an investment decision to be made during 2025 to
approve its use at scale.
During the year the Company has chosen to reduce the holding value
in Jetti by 19.2% from 2023 to reflect the longer contract
negotiation process and slower roll-out of its leaching technology
across targeted assets which has delayed revenue projections for
the company. This remains 75% above the valuation where the Company
initially acquired its holding in 2022.
MCC Mining (1.3% of the portfolio)
MCC Mining is a private company exploring for copper in
Colombia. It is undertaking
early-stage greenfield exploration and its asset base has strong
geological potential to host multiple world class porphyry
deposits. Shareholders include other mid- to large-cap copper
miners, which is an indication of the strategic value of the
company. Following new regulations in Colombia which allowed for the exploration
drilling in the forestry reserve, the company commenced drilling at
its Comita and Pantanos deposits in 2023. Drilling to date has been
very encouraging with two porphyry deposits confirmed at Comita and
Pantanos. The company successfully completed a US$50 million funding round at a 50% premium to
our initial investment and in the second half of the year the
Company modestly increased its exposure to MCC Mining.
Derivatives activity
The Company from time to time enters into derivatives contracts,
mostly involving the sale of “puts” and “calls”. These are taken to
revenue and are subject to strict Board guidelines which limit
their magnitude to an aggregate 10% of the portfolio. All
derivatives are appropriately covered at all times. In 2024 income
generated from options was £10.2 million which was considerably
above prior years. The increase was driven by a range of specific
opportunities such as M&A, short-term spikes in volatility and
greater breadth in the opportunity set. At the end of the year the
Company had 0.1% of the net assets exposed to derivatives and the
average exposure to derivatives during the year was less than 5% of
net assets.
Gearing
At 31 December 2024 the Company had
£135.7 million of net debt, with a gearing level of 12.0%. The debt
is held principally in US Dollar rolling short-term loans and
managed against the value of the debt securities and the high
yielding royalty positions in the Company. This year debt was
generally held against the breadth of the portfolio and for use in
derivative transactions. In addition, a small number of new
holdings were made in debt like securities that have higher yields
than both the cost of the debt and the underlying equities. In
summary, debt came with a higher cost and this meant absolute
gearing was kept below that of prior years to minimise the interest
cost.
Outlook
We remain confident that supportive demand trends, strong balance
sheets, limited supply growth and low valuations are likely to
underpin a recovery to positive returns, especially after such a
negative final quarter to the year. Yet we are also realistic that
this upside requires a catalyst.
In the near term there are several factors that are likely to hold
back the sector, including uncertainty around China. It is clear that the Chinese government
has recognised the issues needed to support the economy and drive
change, but has not delivered the significant stimulus program the
markets have been looking for to catalyse material improvement in
economic activity. Uncertainty is also high regarding the scope,
scale and timing of tariffs that President Trump is willing to use,
which could lead to a slowdown in global trade.
The sector remains highly exposed to key trends driving global
markets such as the energy transition and AI. On AI, the staggering
scale of investment in data centres requires enormous amounts of
materials to build the infrastructure: copper for the energy
intensive connections and the metals needed for nuclear
rejuvenation.
In summary, 2024 failed to meet expectations in terms of share
price performance. But with fundamentals intact, low valuations,
competitive shareholder returns and a positive outlook currently
ignored by the broader market, it feels as though we are well
positioned to capture returns when near-term issues
fade.
EVY HAMBRO AND OLIVIA MARKHAM
BLACKROCK INVESTMENT MANAGEMENT (UK)
LIMITED
4 March 2025
Ten largest investments
Together, the Company’s ten largest investments represented 52.7%
of the Company’s portfolio as at 31 December
2024 (2023: 54.8%)
1
►
BHP1,2
(2023: 1st)
Diversified mining group
Market value: £99,586,000
Share of investments: 9.1% comprising equity of 7.1% and
mining royalty of 2.0%
(2023: 10.1%)
The world’s largest diversified mining group by market
capitalisation. The group is an important global player in a number
of commodities including iron ore, copper, nickel, metallurgical
coal and potash.
2
▲
Rio Tinto
(2023: 4th)
Diversified mining group
Market value: £78,643,000
Share of investments: 7.2%
(2023: 7.3%)
One of the world’s leading mining groups. The British-Australian
group’s primary product is iron ore, but it also produces
aluminium, copper, diamonds and industrial minerals.
3
►
Glencore
(2023: 3rd)
Diversified mining group
Market value: £65,792,000
Share of investments: 6.0%
(2023: 8.3%)
One of the world’s largest globally diversified natural resources
groups. The group produces copper, nickel, alumina/aluminium, zinc
and thermal and metallurgical coal and also has a commodity
marketing/distribution business.
4
▲
Anglo
American
(2023: 17th)
Diversified mining group
Market value: £64,013,000
Share of investments: 5.9%
(2023: 1.9%)
A globally diversified group with exposure to copper, premium iron
ore, crop nutrients and other commodities. The company is currently
undertaking a restructuring to simplify the business.
5
▲
Agnico Eagle Mines
(2023: 19th)
Gold producer
Market value: £56,737,000
Share of investments: 5.2%
(2023: 1.6%)
A senior gold producer and the second-largest in the world by
market capitalisation. The company has operations in Canada, Finland, Australia and Mexico.
6
▼
Vale2,3
(2023: 2nd)
Diversified mining group
Market value:
£49,055,000
Share of investments: 4.5% comprising equity of 1.8% and
debentures of 2.7%
(2023: 9.6%)
Vale is the world’s largest producer of iron ore and iron ore
pellets and the world’s largest producer of nickel. The group also
produces nickel, copper and cobalt as part of its base metals
division.
7
▼
Freeport-McMoRan4
(2023: 5th)
Copper producer
Market value: £47,842,000
Share of investments: 4.4%
(2023: 5.0%)
A global mining group producing copper, gold and molybdenum. The
company has operations in Indonesia, North
America and South
America.
8
►
Wheaton Precious Metals
(2023: 8th)
Gold producer
Market value: £42,312,000
Share of investments: 3.9%
(2023: 3.0%)
One of the world’s largest precious metals streaming companies. The
company provides financing to traditional mining companies in
exchange for a percentage of the metals produced by one or more of
the companies’ mines.
9
▲
Cameco
(2023: 11th)
Uranium producer
Market value: £36,909,000
Share of investments: 3.4%
(2023: 2.3%)
One of the largest global providers of uranium fuel for nuclear
power. The company has uranium assets in Canada, the US and Kazakhstan.
10
▼
Barrick Gold
(2023: 7th)
Gold producer
Market value: £33,626,000
Share of investments: 3.1%
(2023: 3.2%)
A senior gold producer and the third-largest in the world by market
capitalisation. The company has operations and projects in
North America, South America and Africa.
1 Includes
mining royalty contract.
2 Includes
investments held at Directors’ valuation.
3 Includes
fixed income securities.
4 Includes
options.
All percentages reflect the value of the holding as a percentage of
total investments. For this purpose, where more than one class of
securities is held, these have been aggregated.
Arrows indicate the change in relative ranking of the position in
the portfolio compared to its ranking as at 31 December 2023.
Percentages in brackets represent the value of the holding as at
31 December 2023.
Investments as at 31 December
2024
|
|
Main
geographical
exposure
|
Market
value
£’000
|
|
% of
investments
|
|
Diversified
|
|
|
|
|
|
Rio Tinto
|
Global
|
78,643
|
|
7.2
|
|
BHP
|
Global
|
77,389
|
|
7.1
|
|
Glencore
|
Global
|
65,792
|
|
6.0
|
|
Anglo American
|
Global
|
64,013
|
|
5.9
|
|
Vale Debentures1,2,3
|
Global
|
29,308
|
}
|
4.5
|
|
Vale
|
Global
|
19,747
|
|
Teck Resources
|
Global
|
33,014
|
|
3.0
|
|
Vox Royalty
|
Canada
|
2,511
|
|
0.2
|
|
|
|
---------------
|
|
---------------
|
|
|
|
370,417
|
|
33.9
|
|
|
|
=========
|
|
=========
|
|
Copper
|
|
|
|
|
|
Freeport-McMoRan
|
Global
|
48,268
|
}
|
4.4
|
|
Freeport-McMoRan Put Option 17/01/25 US$39.00
|
Global
|
(426)
|
|
Ivanhoe Mines
|
Other Africa
|
27,205
|
|
2.5
|
|
Sociedad Minera Cerro Verde
|
Latin America
|
22,458
|
|
2.0
|
|
BHP Brazil Royalty2,4
|
Latin America
|
22,197
|
|
2.0
|
|
Jetti Resources2
|
Global
|
21,973
|
|
2.0
|
|
Ivanhoe Electric
|
United States
|
16,107
|
|
1.5
|
|
Lundin Mining
|
Global
|
15,915
|
|
1.5
|
|
Foran Mining
|
Canada
|
14,791
|
|
1.4
|
|
Southern Copper Corporation
|
Latin America
|
14,121
|
|
1.3
|
|
MCC Mining2
|
Latin America
|
14,097
|
|
1.3
|
|
Metals Acquisition
|
Australasia
|
11,778
|
|
1.1
|
|
Capstone Mining
|
United States
|
11,357
|
|
1.0
|
|
Develop Global
|
Australasia
|
10,571
|
|
1.0
|
|
First Quantum Minerals
|
Global
|
10,003
|
|
0.9
|
|
NGEx Minerals
|
Latin America
|
5,245
|
|
0.4
|
|
Solaris Resources
|
Latin America
|
3,489
|
|
0.3
|
|
Ero Copper
|
Latin America
|
2,207
|
|
0.2
|
|
|
|
---------------
|
|
---------------
|
|
|
|
271,356
|
|
24.8
|
|
|
|
=========
|
|
=========
|
|
Gold
|
|
|
|
|
|
Agnico Eagle Mines
|
Canada
|
56,737
|
|
5.2
|
|
Wheaton Precious Metals
|
Global
|
42,312
|
|
3.9
|
|
Barrick Gold
|
Global
|
33,626
|
|
3.1
|
|
Newmont Corporation
|
Global
|
30,495
|
|
2.8
|
|
Franco-Nevada
|
Global
|
18,946
|
|
1.7
|
|
Northern Star Resources
|
Australasia
|
14,336
|
|
1.3
|
|
Kinross Gold
|
Global
|
13,554
|
|
1.2
|
|
Endeavour Mining
|
Other Africa
|
7,401
|
|
0.7
|
|
Allied Gold1
|
Other Africa
|
7,345
|
|
0.7
|
|
AngloGold Ashanti
|
Global
|
6,422
|
|
0.6
|
|
Firefly Metals
|
Canada
|
4,853
|
|
0.4
|
|
Capricorn Metals
|
Australasia
|
4,604
|
|
0.4
|
|
Polyus
|
Russia
|
–
|
|
–
|
|
|
|
---------------
|
|
---------------
|
|
|
|
240,631
|
|
22.0
|
|
|
|
=========
|
|
=========
|
|
Steel
|
|
|
|
|
|
Nucor
|
United States
|
20,909
|
|
1.9
|
|
ArcelorMittal
|
Global
|
18,199
|
|
1.7
|
|
Steel Dynamics
|
United States
|
12,060
|
|
1.1
|
|
Cleveland-Cliffs
|
United States
|
462
|
|
–
|
|
|
|
---------------
|
|
---------------
|
|
|
|
51,630
|
|
4.7
|
|
|
|
=========
|
|
=========
|
|
Uranium
|
|
|
|
|
|
Cameco
|
Canada
|
36,943
|
}
|
3.4
|
|
Cameco Call Option 17/01/25 US$60.00
|
Canada
|
(34)
|
|
|
|
---------------
|
|
---------------
|
|
|
|
36,909
|
|
3.4
|
|
|
|
=========
|
|
=========
|
|
|
|
|
|
|
|
Iron Ore
|
|
|
|
|
|
Fortescue
|
Australasia
|
14,336
|
|
1.3
|
|
Labrador Iron
|
Canada
|
11,281
|
|
1.1
|
|
Champion Iron
|
Canada
|
8,872
|
|
0.8
|
|
Equatorial Resources
|
Other Africa
|
163
|
|
–
|
|
|
|
---------------
|
|
---------------
|
|
|
|
34,652
|
|
3.2
|
|
|
|
=========
|
|
=========
|
|
Industrial Minerals
|
|
|
|
|
|
Albemarle
|
Global
|
8,441
|
|
0.8
|
|
Lynas Rare Earths
|
Australasia
|
7,297
|
|
0.7
|
|
Sigma Lithium
|
Latin America
|
6,100
|
|
0.6
|
|
Iluka Resources
|
Australasia
|
5,268
|
|
0.5
|
|
Sheffield Resources
|
Australasia
|
1,701
|
|
0.1
|
|
Chalice Mining
|
Australasia
|
1,371
|
|
0.1
|
|
Australian Carbon
|
Australasia
|
–
|
|
–
|
|
Victorian Hydrogen & Ammonia Industry
|
Australasia
|
–
|
|
–
|
|
|
|
---------------
|
|
---------------
|
|
|
|
30,178
|
|
2.8
|
|
|
|
=========
|
|
=========
|
|
Aluminium
|
|
|
|
|
|
Hydro
|
Global
|
14,562
|
|
1.3
|
|
Alcoa
|
Global
|
11,104
|
}
|
1.0
|
|
Alcoa Call Option 17/01/25 US$40.00
|
Global
|
(162)
|
|
|
|
---------------
|
|
---------------
|
|
|
|
25,504
|
|
2.3
|
|
|
|
=========
|
|
=========
|
|
Platinum Group Metals
|
|
|
|
|
|
Bravo Mining
|
Latin America
|
8,812
|
|
0.8
|
|
Anglo American Platinum
|
South Africa
|
6,207
|
|
0.6
|
|
Northam Platinum
|
Global
|
1,778
|
|
0.2
|
|
Impala Platinum
|
South Africa
|
1,544
|
|
0.1
|
|
|
|
---------------
|
|
---------------
|
|
|
|
18,341
|
|
1.7
|
|
|
|
=========
|
|
=========
|
|
Nickel
|
|
|
|
|
|
Nickel Industries
|
Indonesia
|
6,501
|
|
0.6
|
|
Lifezone Metals
|
Global
|
5,310
|
|
0.5
|
|
Bindura Nickel
|
Global
|
–
|
|
–
|
|
|
|
---------------
|
|
---------------
|
|
|
|
11,811
|
|
1.1
|
|
|
|
=========
|
|
=========
|
|
Zinc
|
|
|
|
|
|
Titan Mining
|
United States
|
1,147
|
|
0.1
|
|
|
|
---------------
|
|
---------------
|
|
|
|
1,147
|
|
0.1
|
|
|
|
=========
|
|
=========
|
|
Energy Minerals
|
|
|
|
|
|
Gippsland Energy
|
Australasia
|
–
|
|
–
|
|
Latrobe Fertilisers
|
Australasia
|
–
|
|
–
|
|
|
|
---------------
|
|
---------------
|
|
|
|
–
|
|
–
|
|
|
|
---------------
|
|
---------------
|
|
|
|
1,092,576
|
|
100.0
|
|
|
|
=========
|
|
=========
|
|
Comprising:
|
|
|
|
|
|
– Investments
|
|
1,093,198
|
|
100.1
|
|
– Options
|
|
(622)
|
|
(0.1)
|
|
|
|
---------------
|
|
---------------
|
|
|
|
1,092,576
|
|
100.0
|
|
|
|
=========
|
|
=========
|
1 Includes
fixed income securities.
2 Includes
investments held at Directors’ valuation.
3 The
investment in the Vale debentures is illiquid and has been valued
using secondary market pricing information provided by the
Brazilian Financial and Capital Markets Association
(ANBIMA).
4 Mining
royalty contract.
All investments are in equity shares unless otherwise
stated.
The total number of investments as at 31
December 2024 (including options classified as liabilities
on the balance sheet) was 70 (2023: 69).
As at 31 December 2024 the Company
did not hold any equity interests in companies comprising more than
3% of a company’s share capital.
Portfolio analysis as at 31 December
2024
Commodity Exposure1
|
|
2024
portfolio
|
2023
portfolio2
|
2024 reference index3
|
|
Diversified
|
33.9%
|
38.4%
|
33.5%
|
|
Copper
|
24.8%
|
21.8%
|
13.8%
|
|
Gold
|
22.0%
|
15.2%
|
24.3%
|
|
Steel
|
4.7%
|
7.3%
|
17.9%
|
|
Uranium
|
3.4%
|
2.3%
|
0.0%
|
|
Iron Ore
|
3.2%
|
2.5%
|
3.4%
|
|
Industrial Minerals
|
2.8%
|
5.5%
|
0.6%
|
|
Aluminium
|
2.3%
|
3.3%
|
3.4%
|
|
Platinum Group Metals
|
1.7%
|
1.6%
|
1.0%
|
|
Nickel
|
1.1%
|
1.0%
|
0.0%
|
|
Zinc
|
0.1%
|
0.1%
|
0.4%
|
|
Mining Services
|
0.0%
|
1.0%
|
0.0%
|
|
Other4
|
0.0%
|
0.0%
|
1.7%
|
1
Based on index classifications.
2
Represents exposure at 31 December
2023.
3
MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (net total
return).
4
Represents a very small exposure.
Geographic Exposure1
|
2024
|
|
|
Global
|
61.3%
|
|
Canada
|
12.5%
|
|
Latin America
|
8.9%
|
|
Australasia
|
6.5%
|
|
Other2
|
6.2%
|
|
Other Africa (ex South Africa)
|
3.9%
|
|
South Africa
|
0.7%
|
|
2023
|
|
|
Global
|
67.4%
|
|
Canada
|
7.5%
|
|
Latin America
|
7.4%
|
|
Australasia
|
7.3%
|
|
Other2
|
7.0%
|
|
Other Africa (ex South Africa)
|
3.2%
|
|
South Africa
|
0.2%
|
1
Based on the principal commodity exposure and place of operation of
each investment.
2
Consists of Indonesia and
United States.
Strategic Report
The Directors present the Strategic Report of BlackRock World
Mining Trust plc for the year ended 31
December 2024. The aim of the Strategic Report is to provide
shareholders with the information to assess how the Directors have
performed their duty to promote the success of the Company for the
collective benefit of shareholders.
The Chairman’s Statement together with the Investment Manager’s
Report form part of this Strategic Report. The Strategic Report was
approved by the Board at its meeting on 4
March 2025.
Principal activities
The Company carries on business as an investment trust with a
listing on the London Stock Exchange. Its principal activity is
portfolio investment and that of its subsidiary, BlackRock World
Mining Investment Company Limited (together the Group), is
investment dealing. The Company was incorporated in England on 28 October
1993 and this is the thirty-first Annual Report.
Investment trusts are pooled investment vehicles which allow
exposure to a diversified range of assets through a single
investment, thus spreading investment risk.
Objective
The Company’s objective is to maximise total returns to
shareholders through the cycle using a worldwide portfolio of
mining and metal investments.
The Board recognises the importance of dividends to shareholders in
achieving that objective, in addition to capital
returns.
Strategy, business model and investment
policy
Strategy
The Company invests in accordance with the objective given above.
The Board is collectively responsible to shareholders for the
long-term success of the Company and is its governing body. There
is a clear division of responsibility between the Board and
BlackRock Fund Managers Limited (the Manager). Matters reserved for
the Board include setting the Company’s strategy, including its
investment objective and policy, setting limits on gearing (both
bank borrowings and the effect of derivatives), capital structure,
governance and appointing and monitoring of the performance of
service providers, including the Manager.
Business model
The Company’s business model follows that of an externally managed
investment trust. Therefore, the Company does not have any
employees and outsources its activities to third-party service
providers including the Manager who is the principal service
provider. In accordance with the Alternative Investment Fund
Managers’ Directive (AIFMD), as implemented, retained and onshored
in the UK, the Company is an Alternative Investment Fund (AIF).
BlackRock Fund Managers Limited is the Company’s Alternative
Investment Fund Manager.
The management of the investment portfolio and the administration
of the Company have been contractually delegated to the Manager who
in turn (with the permission of the Company) has delegated certain
investment management and other ancillary services to BlackRock
Investment Management (UK) Limited (the Investment Manager). The
Manager, operating under guidelines determined by the Board, has
direct responsibility for the decisions relating to the day-to-day
running of the Company and is accountable to the Board for the
investment, financial and operating performance of the
Company.
The Company delegates fund accounting services to the Manager,
which in turn sub-delegates these services to The Bank of New York
Mellon (International) Limited (BNY). Other service providers
include the Depositary (also BNY) and the Registrar, Computershare
Investor Services PLC. Details of the contractual terms with the
Manager and the Depositary and more details of the arrangements in
place governing custody services are set out in the Directors’
Report.
Investment policy
The Company’s investment policy is to provide a diversified
investment in mining and metal securities worldwide actively
managed with the objective of maximising total returns. While the
policy is to invest principally in quoted securities, the Company’s
investment policy includes investing in royalties derived from the
production of metals and minerals as well as physical metals. Up to
10% of gross assets may be held in physical metals.
In order to achieve its objective, it is intended that the Group
will normally be fully invested, which means at least 90% of the
gross assets of the Company and its subsidiary will be invested in
stocks, shares, debt securities, royalties and physical metals.
However, if such investments are deemed to be overvalued, or if the
Manager finds it difficult to identify attractively priced
opportunities for investment, then up to 25% of the Group’s assets
may be held in cash or cash equivalents. Risk is spread by
investing in a number of holdings, many of which themselves are
diversified businesses.
The Group may occasionally utilise derivative instruments such as
options, futures and contracts for difference, if it is deemed that
these will, at a particular time or for a particular period,
enhance the performance of the Group in the pursuit of its
objectives. The Company is also permitted to enter into stock
lending arrangements.
The Group may invest in any single holding of quoted or unquoted
investments that would represent up to 20% of gross assets at the
time of acquisition. Although investments are principally in
companies listed on recognised stock exchanges, the Company may
invest up to 20% of the Group’s gross assets in investments other
than quoted securities. Such investments include unquoted
royalties, equities or bonds. In order to afford the Company the
flexibility of obtaining exposure to metal and mining related
royalties, it is possible that, in order to diversify risk, all or
part of such exposure may be obtained directly or indirectly
through a holding company, a fund or another investment or special
purpose vehicle, which may be quoted or unquoted. The Board will
seek the prior approval of shareholders to any unquoted investment
in a single company, fund or special purpose vehicle or any single
royalty which represents more than 10% of the Group’s assets at the
time of acquisition.
The Company’s royalty strategy permits a 20% maximum exposure to
royalties but the royalty/unquoted portfolio should itself deliver
diversification across operator, country and commodity. To this
end, new investments into individual royalties/ unquoted
investments will not exceed circa 3% of gross assets at the time of
investment. Total exposure to any single operator, including other
issued securities such as debt and/or equity, where greater than
30% of that operator’s revenues come from the mine over which the
royalty lies, must also not be greater than 3% at the time of
investment. In addition, the guidelines require that the Investment
Manager must, at the time of investment, manage total exposure to a
single operator, via reducing exposure to listed securities if they
are also held in the portfolio, in a timely manner where
royalties/unquoted investments are revalued upwards. In the
jurisdictions where statutory royalties are possible (in countries
where mineral rights are privately owned) these will be preferred
and in respect of contractual royalties (a contractual obligation
entered into by the operator and typically unsecured) the valuation
must take into account the higher credit risk involved. Board
approval will continue to be required for all royalty/unquoted
investments.
While the Company may hold shares in other listed investment
companies (including investment trusts), the Board has agreed that
the Company will not invest more than 15% of the Group’s gross
assets in other UK listed investment companies. In order to comply
with the current Listing Rules, the Company will also not invest
more than 10% of its gross asset value in other listed closed-ended
investment funds which themselves may invest more than 15% of their
gross assets in other listed closed-ended investment funds. This
restriction does not form part of the Company’s investment
policy.
The Group’s financial statements are maintained in Sterling.
Although many investments are denominated and quoted in currencies
other than Sterling, the Board does not intend to employ a hedging
strategy against fluctuations in exchange rates.
No material change will be made to the investment policy without
shareholder approval.
Gearing
The Investment Manager believes that tactical use of gearing can
add value from time to time. This gearing is typically in the form
of an overdraft or short-term loan facility, which can be repaid at
any time or matched by cash. The level and benefit of gearing is
discussed and agreed with the Board regularly. The Company may
borrow up to 25% of the Group’s net assets. The maximum level of
gearing used during the year was 14.7% and, at the financial
reporting date, net gearing (calculated as borrowings less cash and
cash equivalents as a percentage of net assets) stood at 12.0% of
shareholders’ funds (2023: 11.9%). For further details on
borrowings refer to note 14 in the Financial Statements and the
Alternative Performance Measure in the Glossary in the Company's
Annual Report for the year ended 31 December
2024.
Portfolio analysis
Information regarding the Company’s investment exposures is
contained within Section 2 (Portfolio) in the Company's Annual
Report for the year ended 31 December
2024, with information on the ten largest investments, the
investments listed and portfolio analysis above. Further
information regarding investment risk and activity throughout the
year can be found in the Investment Manager’s Report.
At 31 December 2024, the Level 3
unquoted investments (see note 11 below) in the BHP Brazil Royalty
Contract and preferred shares and equity shares of Jetti Resources
and MCC Mining were held at Directors’ valuation, representing a
total of £58,267,000 (2023: £51,011,000). Unquoted investments can
prove to be more risky than listed investments.
Continuation vote
As agreed by shareholders in 1998, an ordinary resolution for the
continuation of the Company is proposed at each Annual General
Meeting. The Directors remain confident on the value available in
the mining sector and therefore recommend that shareholders vote in
support of the Company’s continuation.
Performance
Details of the Company’s performance for the year are given in the
Chairman’s Statement. The Investment Manager’s Report includes a
review of the main developments during the year, together with
information on investment activity within the Company’s
portfolio.
Results and dividends
The results for the Company are set out in the Consolidated
Statement of Comprehensive Income. The total loss for the year,
after taxation, was £119,941,000 (2023: £78,985,000) of which
£44,127,000 (2023: £64,691,000) is revenue profit.
It is the Board’s intention to distribute substantially all of the
Company’s available income. The Directors recommend the payment of
a final dividend as set out in the Chairman’s Statement. Dividend
payments/payable for the year ended 31
December 2024 amounted to £43,942,000 (2023:
£64,016,000).
Future prospects
The Board’s main focus is to maximise total returns over the longer
term through investment in mining and metal assets. The outlook for
the Company is discussed in both the Chairman’s Statement and the
Investment Manager’s Report.
Social, community and human rights
issues
As an investment trust, the Company has no direct social or
community responsibilities or impact on the environment and the
Company has not adopted an ESG investment strategy or exclusionary
screens. However, the Directors believe that it is important and in
shareholders’ interests to consider human rights issues and
environmental, social and governance factors when selecting and
retaining investments. Details of the Company’s approach to ESG are
set out in the Company’s Annual Report for the year ended
31 December 2024 and details of the
Manager’s approach to ESG integration are also set out in the
Company’s Annual Report for the year ended 31 December 2024.
Modern Slavery Act
As an investment vehicle, the Company does not provide goods or
services in the normal course of business and does not have
customers. The Investment Manager considers modern slavery as part
of supply chains and labour management within the investment
process. Accordingly, the Directors consider that the Company is
not required to make any slavery or human trafficking statement
under the Modern Slavery Act 2015. In any event, the Board
considers the Company’s supply chains, dealing predominantly with
professional advisers and service providers in the financial
services industry, to be low risk in relation to this
matter.
Directors, gender representation and
employees
The Directors of the Company on 31 December
2024 are set out in the Directors’ Biographies in the
Company’s Annual Report for the year ended 31 December 2024. The Board consists of two male
Directors and three female Directors. The Company’s policy on
diversity is set out in the Company’s Annual Report for the year
ended 31 December 2024. The Company
does not have any executive employees.
Key performance indicators
At each Board meeting, the Directors consider a number of
performance measures to assess the Company’s success in achieving
its objectives. The key performance indicators (KPIs) used to
measure the progress and performance of the Company over time and
which are comparable to other investment trusts are set out
overleaf. As indicated in the footnote to the table, some of these
KPIs fall within the definition of ‘Alternative Performance
Measures’ under guidance issued by the European Securities and
Markets Authority (ESMA) and additional information explaining how
these are calculated is set out in the Glossary in the Company’s
Annual Report for the year ended 31 December
2024. Additionally, the Board regularly reviews the
performance of the portfolio, as well as the net asset value and
share price of the Company and compares this against various
companies and indices. Information on the Company’s performance is
given in the Chairman’s Statement.
|
|
Year ended
31 December
2024
|
Year ended
31 December
2023
|
|
Net asset value total return1,2
|
-10.7%
|
-6.2%
|
|
Share price total return1,2
|
-12.7%
|
-10.4%
|
|
Discount to net asset value2
|
5.8%
|
3.3%
|
|
Revenue earnings per share
|
23.09p
|
33.95p
|
|
Total dividends per share
|
23.00p
|
33.50p
|
|
Ongoing charges2,
3
|
0.95%
|
0.91%
|
|
Ongoing charges on gross assets2,
4
|
0.84%
|
0.81%
|
|
|
=========
|
=========
|
1 This
measures the Company’s NAV and share price total return, which
assumes dividends paid by the Company have been
reinvested.
2 Alternative
Performance Measures, see Glossary in the Company’s Annual Report
for the year ended 31 December
2024.
3 Ongoing
charges represent the management fee and all other operating
expenses, excluding finance costs, direct transaction costs,
custody transaction charges, VAT recovered, taxation, prior year
expenses written back and certain non-recurring items, as a % of
average daily net assets.
4 Ongoing
charges based on gross assets represent the management fee and all
other operating expenses, excluding finance costs, direct
transaction costs, custody transaction charges, VAT recovered,
taxation, prior year expenses written back and certain
non-recurring items, as a % of average daily gross assets. Gross
assets are calculated based on net assets during the year before
the deduction of the bank overdraft and loans. Ongoing charges
based on gross assets are considered to be an appropriate
performance measure as management fees are payable on gross assets
(subject to certain adjustments and deductions).
Principal risks
The Company is exposed to a variety of risks and uncertainties. As
required by the 2018 UK Corporate Governance Code (the UK Code),
the Board has put in place a robust ongoing process to identify,
assess and monitor the principal risks and emerging risks facing
the Company including those that would threaten its business model.
A core element of this process is the Company’s risk register which
identifies the risks facing the Company and assesses the likelihood
and potential impact of each risk and the quality of controls
operating to mitigate it. A residual risk rating is then calculated
for each risk based on the outcome of the assessment.
The risk register, its method of preparation and the operation of
key controls in BlackRock’s and third-party service providers’
systems of internal control, are reviewed on a regular basis by the
Audit Committee. In order to gain a more comprehensive
understanding of BlackRock’s and other third-party service
providers’ risk management processes and how these apply to the
Company’s business, BlackRock’s internal audit department provides
an annual presentation to the Audit Committee chairs of the
BlackRock investment trusts setting out the results of testing
performed in relation to BlackRock’s internal control processes.
The Audit Committee also periodically receives and reviews internal
control reports from BlackRock and the Company’s service
providers.
The Board has undertaken a robust assessment of both the principal
and emerging risks facing the Company, including those that would
threaten its business model, future performance, solvency or
liquidity. For instance, the risk that unforeseen or unprecedented
events including (but not limited to) heightened geopolitical
tensions such as the war in Ukraine and the conflict in the Middle East, inflation and the current cost of
living crisis has had a significant impact on global markets. The
Board has taken into consideration the risks posed to the Company
by these events and incorporated these into the Company’s risk
register. The threat of climate change has also reinforced the
importance of more sustainable practices and environmental
responsibility for investee companies.
Emerging risks are considered by the Board as they come into view
and are incorporated into the existing review of the Company’s risk
register. They were also considered as part of the annual
evaluation process. Additionally, the Manager considers emerging
risks in numerous forums and the BlackRock Risk and Quantitative
Analysis team produces an annual risk survey. Any material risks of
relevance to the Company through the annual risk survey will be
communicated to the Board.
Emerging risks that have been considered by the Board over the year
include the impact of climate change, escalating geopolitical
conflict and technological advances. The key emerging risks
identified are as follows:
Climate change:
Investors can no longer ignore the impact that the world’s changing
climate will have on their portfolios, with
the impact of climate change on returns, including climate related
natural disasters, now potentially significant and with the
potential to escalate more swiftly than one is able to predict. The
Board receives ESG reports from the Manager on the portfolio and
the way ESG considerations are integrated into the investment
decision making, so as to mitigate risk at the level of stock
selection and portfolio construction.
Geopolitical risk:
Escalating geopolitical tensions (including, but not limited to
tensions in the Middle East and
the ongoing
war in Ukraine, or deteriorating
relations between China and the
US/other countries) have a significant negative impact on global
markets, with an increasing use of tariffs and domestic regulations
making global trade more complex and driving economic
fragmentation. Within this category the continuing rise of resource
nationalism is presented and assessed.
Artificial Intelligence (AI):
Advances in computing power means that AI has become a powerful
tool that will impact a
huge range of areas and with a wide range of applications that have
the potential to dislocate established business models and disrupt
labour markets, creating uncertainty in corporate valuations. The
significant energy required to power this technological revolution
will create further pressure on environmental resources and carbon
emissions.
The Board will continue to assess these risks on an ongoing basis.
In relation to the UK Code, the Board is confident that the
procedures that the Company has put in place are sufficient to
ensure that the necessary monitoring of risks and controls has been
carried out throughout the reporting period.
The principal risks and uncertainties faced by the Company during
the financial year, together with the potential effects, controls
and mitigating factors, are set out in in the Company’s Annual
Report for the year ended 31 December
2024.
Market
Principal risk
Market risk arises from volatility in the prices of the Company’s
investments. The price of shares in the mining sector can be
volatile and this may be reflected in the NAV and market price of
the Company’s shares.
Changes in general economic and market conditions, such as currency
exchange rates, interest rates, rates of inflation, industry
conditions, tax laws, political events and trends, can also
substantially and adversely affect the securities and, as a
consequence, the Company’s prospects and share price.
Market risk includes the potential impact of events which are
outside the Company’s control, including (but not limited to)
heightened geopolitical tensions and military conflict, a global
pandemic and high inflation.
Companies operating in the sectors in which the Company invests may
be impacted by new legislation governing climate change and
environmental issues, which may have a negative impact on their
valuation and share price.
Mitigation/Control
The Board considers the diversification of the portfolio, asset
allocation, stock selection and levels of gearing on a regular
basis and has set investment restrictions and guidelines which are
monitored and reported on by the Investment Manager.
The Board monitors the implementation and results of the investment
process with the Investment Manager.
The Board also recognises the benefits of a closed-end fund
structure in extremely volatile markets such as those experienced
as a consequence of the COVID-19 pandemic, the war in Ukraine and the conflict in the Middle East. Unlike open-ended counterparts,
closed-end funds are not obliged to sell-down portfolio holdings at
low valuations to meet liquidity requirements for redemptions.
During times of elevated volatility and market stress, the ability
of a closed-end fund structure to remain invested for the long term
enables the Investment Manager to adhere to disciplined fundamental
analysis from a bottom-up perspective and be ready to respond to
dislocations in the market as opportunities present
themselves.
The Investment Manager seeks to understand the ESG risks and
opportunities facing companies and industries in the portfolio. The
Company has not adopted an ESG focused investment strategy and does
not exclude investment in stocks based on ESG criteria, but the
Investment Manager considers ESG information when conducting
research and due diligence on new investments and again when
monitoring investments in the portfolio. Further information on
BlackRock’s approach to ESG integration can be found
below.
Investment performance
Principal risk
The returns achieved are reliant primarily upon the performance of
the portfolio.
The Board is responsible for:
- deciding
the investment strategy to fulfil the Company’s objective;
and
- monitoring
the performance of the Investment Manager and the implementation of
the investment strategy.
An inappropriate investment strategy may lead to:
- underperformance
compared to the reference index;
- a
reduction or permanent loss of capital; and
- dissatisfied
shareholders and reputational damage.
The Board is also cognisant of the long-term risk to performance
from inadequate attention to ESG issues and in particular the
impact of climate change.
Mitigation/Control
To manage this risk the Board:
- regularly
reviews the Company’s investment mandate and long-term
strategy;
- has
set investment restrictions and guidelines which the Investment
Manager monitors and regularly reports on;
- receives
from the Investment Manager a regular explanation of stock
selection decisions, portfolio exposure, gearing and any changes in
gearing, and the rationale for the composition of the investment
portfolio;
- oversees
the maintenance of an adequate spread of investments in order to
minimise the risks associated with particular countries or factors
specific to particular sectors, based on the diversification
requirements inherent in the investment policy; and
- receives
and reviews regular reports showing an analysis of the Company’s
performance against other indices, including the performance of
major companies in the sector.
ESG analysis is integrated into the Investment Manager’s investment
process as set out in the Company’s Annual Report for the year
ended 31 December 2024. This is
monitored by the Board. As the world works toward a transition to a
low-carbon economy, the Investment Manager is interested in hearing
from companies about their strategies and plans for responding to
the challenges and capturing the opportunities that this transition
creates. When companies consider climate-related risks, it is
likely they will also assess their impact and dependence on natural
capital.
Operational
Principal risk
In common with most other investment trust companies, the Company
has no employees. The Company therefore relies on the services
provided by third parties and is dependent on the control systems
of the Manager, the Depositary and Fund Accountant which maintain
the Company’s assets, dealing procedures and accounting
records.
The security of the Company’s assets, dealing procedures,
accounting records and adherence to regulatory and legal
requirements depend on the effective operation of the systems of
these third-party service providers. There is a risk that a major
disaster, such as floods, fire, a global pandemic, or terrorist
activity, renders the Company’s service providers unable to conduct
business at normal operating effectiveness.
Failure by any service provider to carry out its obligations to the
Company could have a material adverse effect on the Company’s
performance. Disruption to the accounting, payment systems or
custody records (including cyber security risk) could prevent the
accurate reporting and monitoring of the Company’s financial
position.
Mitigation/Control
Due diligence is undertaken before contracts are entered into with
third-party service providers. Thereafter, the performance of the
provider is subject to regular review and reported to the
Board.
The Board reviews on a regular basis an assessment of the fraud
risks that the Company could potentially be exposed to and also a
summary of the controls put in place by the Manager, Depositary,
Custodian, Fund Accountant and Registrar specifically to mitigate
these risks.
Most third-party service providers produce Service Organisation
Control (SOC 1) reports to provide assurance regarding the
effective operation of internal controls as reported on by their
reporting accountants. These reports are provided to the Audit
Committee for review. The Committee would seek further
representations from service providers if not satisfied with the
effectiveness of their control environment.
The Company’s financial instruments held in custody are subject to
a strict liability regime and, in the event of a loss of such
financial instruments, the Depositary must return financial assets
of an identical type or the corresponding amount, unless able to
demonstrate the loss was a result of an event beyond its reasonable
control.
The Board reviews the overall performance of the Manager,
Investment Manager and all other third-party service providers on a
regular basis and compliance with the Investment Management
Agreement annually.
The Board also considers the business continuity arrangements of
the Company’s key service providers on an ongoing basis and reviews
these as part of its review of the Company’s risk
register.
Legal and regulatory compliance
Principal risk
The Company has been approved by HM Revenue & Customs as an
investment trust, subject to continuing to meet the relevant
eligibility conditions, and operates as an investment trust in
accordance with Chapter 4 of Part 24 of the Corporation Tax Act
2010. As such, the Company is exempt from corporation tax on
capital gains tax on the profits realised from the sale of its
investments.
Any breach of the relevant eligibility conditions could lead to the
Company losing investment trust status and being subject to
corporation tax on capital gains realised within the Company’s
portfolio. In such event, the investment returns of the Company may
be adversely affected.
A serious breach could result in the Company and/or the Directors
being fined or the subject of criminal proceedings or the
suspension of the Company’s shares which would in turn lead to a
breach of the Corporation Tax Act 2010.
Amongst other relevant laws, the Company is required to comply with
the provisions of the Companies Act 2006, the Alternative
Investment Fund Managers’ Directive as implemented, retained and
onshored in the UK (AIFMD), the UK Listing Rules, Disclosure
Guidance and Transparency Rules and the Market Abuse Regulation (as
retained and onshored in the UK).
Mitigation/Control
The Investment Manager monitors investment movements, the level and
type of forecast income and expenditure and the amount of proposed
dividends to ensure that the provisions of Chapter 4 of Part 24 of
the Corporation Tax Act 2010 are not breached. The results are
reported to the Board at each meeting.
Compliance with the accounting rules affecting investment trusts is
also carefully and regularly monitored.
The Company Secretary, Manager and the Company’s professional
advisers provide regular reports to the Board in respect of
compliance with all applicable rules and regulations. The Board and
the Manager also monitor changes in government policy and
legislation which may have an impact on the Company.
The Company’s Investment Manager at all times complies with the
sanctions administered by the UK Office of Financial Sanctions
Implementation, the United States Treasury’s Office of Foreign
Assets Control, the United Nations, European Union member states
and any other applicable regimes.
Financial
Principal risk
The Company’s investment activities expose it to a variety of
financial risks which include market risk, counterparty credit
risk, liquidity risk and the valuation of financial
instruments.
Mitigation/Control
Details of these risks are disclosed in note 17 to the Financial
Statements, together with a summary of the policies for managing
these risks.
In the view of the Board, there have not been any changes to the
fundamental nature of these risks and these principal risks and
uncertainties are equally applicable for the current financial
year.
Viability statement
In accordance with provision 31 of the 2018 UK Corporate Governance
Code, the Directors have assessed the prospects of the Company over
a longer period than the twelve months referred to by the ‘Going
Concern’ guidelines. The Company is an investment trust with the
objective of providing an attractive level of income return
together with capital appreciation over the long term.
The Directors expect the Company to continue for the foreseeable
future and have therefore conducted this review for a period up to
the Annual General Meeting in 2028. The Directors assess viability
over a rolling three-year period as they believe it best balances
the Company’s long-term objective, its financial flexibility and
scope, with the difficulty in forecasting economic conditions which
could affect both the Company and its shareholders. The Company
also undertakes a continuation vote every year with the next one
taking place at the forthcoming Annual General Meeting.
In making an assessment on the viability of the Company, the Board
has considered the following:
- the
impact of a significant fall in commodity markets on the value of
the Company’s investment portfolio;
- the
ongoing relevance of the Company’s investment objective, business
model and investment policy in the prevailing market;
- the
principal and emerging risks and uncertainties, as set out above,
and their potential impact;
- the
level of ongoing demand for the Company’s shares;
- the
Company’s share price discount/premium to NAV;
- the
liquidity of the Company’s portfolio; and
- the
level of income generated by the Company and future income and
expenditure forecasts.
The Directors have concluded that there is a reasonable expectation
that the Company will continue in operation and meet its
liabilities as they fall due over the period of their assessment
based on the following considerations:
- the
Investment Manager’s compliance with the investment objective and
policy, its investment strategy and asset allocation;
- the
portfolio is liquid and mainly comprises readily realisable assets
which continue to offer a range of investment opportunities for
shareholders as part of a balanced investment portfolio;
- the
operational resilience of the Company and its key service providers
and their ability to continue to provide a good level of service
for the foreseeable future;
- the
effectiveness of business continuity plans in place for the Company
and its key service providers;
- the
ongoing processes for monitoring operating costs and income which
are considered to be reasonable in comparison to the Company’s
total assets;
- the
Board’s discount management policy; and
- the
Company is a closed-end investment company and therefore does not
suffer from the liquidity issues arising from unexpected
redemptions.
In addition, the Board’s assessment of the Company’s ability to
operate in the foreseeable future is included in the Going Concern
Statement which can be found in the Directors’ Report in the
Company’s Annual Report for the year ended 31 December 2024.
Section 172 statement: Promoting the success of the
Company
The Companies (Miscellaneous Reporting) Regulations 2018 require
directors of large companies to explain more fully how they have
discharged their duties under Section 172(1) of the Companies Act
2006 in promoting the success of their companies for the benefit of
members as a whole. This includes the likely consequences of their
decisions in the longer term and how they have taken wider
stakeholders’ needs into account.
The disclosure that follows covers how the Board has engaged with
and understands the views of stakeholders and how stakeholders’
needs have been taken into account, the outcome of this engagement
and the impact that it has had on the Board’s decisions. The Board
considers the main stakeholders in the Company to be the Manager,
Investment Manager and the shareholders. In addition to this, the
Board considers investee companies and key service providers of the
Company to be stakeholders; the latter comprise the Company’s
Depositary, Registrar, Fund Accountants and Brokers.
Stakeholders
Shareholders
Continued shareholder support and engagement are critical to the
continued existence of the Company and the successful delivery of
its long-term strategy. The Board is focused on fostering good
working relationships with shareholders and on understanding the
views of shareholders in order to incorporate them into the Board’s
strategy and objective in maximising total returns to shareholders
through a worldwide portfolio of mining and metal
securities.
Manager and Investment Manager
The Board’s main working relationship is with the Manager, who is
responsible for the Company’s portfolio management (including asset
allocation, stock and sector selection) and risk management, as
well as ancillary functions such as administration, secretarial,
accounting and marketing services. The Manager has sub-delegated
portfolio management to the Investment Manager. Successful
management of shareholders’ assets by the Investment Manager is
critical for the Company to deliver successfully its investment
strategy and meet its objective. The Company is also reliant on the
Manager as AIFM to provide support in meeting relevant regulatory
obligations under the AIFMD and other relevant
legislation.
Other key service providers
In order for the Company to function as an investment trust on the
London Stock Exchange’s (LSE) main market for listed securities and
generally function as an investment trust with a listing on the
official list of the FCA, the Board relies on a diverse range of
advisers for support in meeting relevant obligations and
safeguarding the Company’s assets. For this reason, the Board
considers the Company’s Depositary, Registrar, Fund Accountant and
Brokers to be stakeholders. The Board maintains regular contact
with its key external service providers and receives regular
reporting from them through the Board and Committee meetings, as
well as outside of the regular meeting cycle.
Investee companies
Portfolio holdings are ultimately shareholders’ assets and the
Board recognises the importance of good stewardship and
communication with investee companies in meeting the Company’s
investment objective and strategy. The Board monitors the Manager’s
stewardship activities and receives regular feedback from the
Manager in respect of meetings with the management of investee
companies.
A summary of the key areas of engagement undertaken by the Board
with its key stakeholders in the year under review and how
Directors have acted upon this to promote the long-term success of
the Company are set out below.
Area of Engagement
Investment mandate and objective
Issue
The Board is committed to promoting the role and success of the
Company in delivering on its investment mandate to shareholders
over the long term.
The Board also has responsibility to shareholders to ensure that
the Company’s portfolio of assets is invested in line with the
stated investment objective and in a way that ensures an
appropriate balance between spread of risk and portfolio
returns.
Engagement
The Board worked closely with the Investment Manager throughout the
year in further developing investment strategy and underlying
policies, not simply for the purpose of achieving the Company’s
investment objective but in the interests of shareholders and
future investors. In addition, the Company continues to seek out
new unquoted investments which could add long-term
value.
Impact
The portfolio activities undertaken by the Investment Manager can
be found in their Report. The Investment Manager continues to
actively look for opportunities to grow royalty exposure given it
is a key differentiator of the Company and an effective mechanism
to lock-in long-term income which further diversifies the Company’s
revenues.
Details regarding the Company’s NAV and share price performance can
be found in the Chairman’s Statement and in this Strategic
Report.
Responsible investing
Issue
The governance and consideration of ESG risks are key factors in
making investment decisions. Climate change is becoming a defining
factor in companies’ long-term prospects across the investment
spectrum with significant and lasting implications for economic
growth and prosperity. The mining industries in which the Company’s
investment universe operate are facing ethical and ESG issues that
cannot be ignored by asset managers and investment companies
alike.
Engagement
The Board works closely with the Investment Manager to review
regularly and challenge the Company’s performance, investment
policy and strategy to seek to ensure that the Company’s investment
objective continues to be met in an effective and responsible way
in the interests of shareholders and future investors. The Company
has not adopted an ESG focused investment strategy and does not
exclude investment in stocks based on ESG criteria, but the Board
believes that responsible investment is integral to the longer-term
delivery of the Company’s success.
The Investment Manager’s approach to the consideration of ESG
factors in respect of the Company’s portfolio, as well as the
Investment Manager’s engagement with investee companies to
encourage sound corporate governance practices, are kept under
review by the Board. The Board also expects to be informed by the
Investment Manager of any sensitive voting issues involving the
Company’s investments.
The Investment Manager reports to the Board in respect of its
approach to ESG integration; a summary of BlackRock’s approach to
ESG integration is set out below. The Investment Manager’s approach
to engagement with investee companies and voting guidelines is
summarised below and further detail is available on the BlackRock
website.
Impact
The Board and the Investment Manager believe there is likely to be
a positive correlation between strong ESG practices and investment
performance over time. This is especially important in mining given
the long investment cycle and the impact of ESG practices on the
ability of a mining company to maintain its social license to
operate. ESG is one of the many factors that we look at and site
visits to companies’ operations provide valuable insights into
their ESG practices. The Investment Manager has continued to engage
with investee companies.
Within the parameters of the Company’s existing investment policy,
the Investment Manager is continuing to look for opportunities to
deploy capital in growth investments that should benefit from the
energy transition. It is likely that this area will become a more
significant part of the portfolio.
Shareholders
Issue
Continued shareholder support and engagement are critical to the
continued existence of the Company and the successful delivery of
its long-term strategy.
Engagement
The Board is committed to maintaining open channels of
communication and to engage with shareholders. The Company welcomes
and encourages attendance and participation from shareholders at
its Annual General Meetings. Shareholders will have the opportunity
to meet the Directors and Investment Manager and to address
questions to them directly. The Investment Manager will also
provide a presentation on the Company’s performance and the outlook
for the mining sector. The Chairman and Senior Independent Director
offer meetings to all major shareholders and also meet directly
with shareholders providing a forum for canvassing their views and
enabling the Board to be aware of any issues of concern.
The Annual Report and Half Yearly Financial Report are available on
the BlackRock website and are also circulated to shareholders
either in printed copy or via electronic communications. In
addition, regular updates on performance, monthly factsheets, the
daily NAV and other information are also published on the website
at www.blackrock.com/uk/brwm. The Company’s website and marketing
initiatives are geared to providing a breadth and depth of
informative and engaging content.
The Board also works closely with the Manager to develop the
Company’s marketing strategy with the aim of ensuring effective
communication with shareholders.
Unlike trading companies, one-to-one shareholder meetings normally
take the form of a meeting with the Investment Manager as opposed
to members of the Board. The Company’s willingness to enter into
discussions with institutional shareholders is also demonstrated by
the programmes of institutional presentations by the Investment
Manager. Additionally, the Investment Manager regularly presents at
professional and private investor events to help explain and
promote the Company’s strategy.
If shareholders wish to raise issues or concerns with the Board,
they are welcome to do so at any time. The Chairman is available to
meet directly with shareholders periodically to understand their
views on governance and the Company’s performance where they wish
to do so. He may be contacted via the Company Secretary whose
details are given in the Company’s Annual Report for the year ended
31 December 2024.
Impact
The Board values any feedback and questions from shareholders ahead
of and during Annual General Meetings in order to gain an
understanding of their views and will take action when and as
appropriate. Feedback and questions will also help the Company
evolve its reporting, aiming to make reports more transparent and
understandable.
During the year the Chairman and Senior Independent Director
offered meetings to major shareholders and met with some of them,
without any members of the management group present. Feedback from
all substantive meetings between the Investment Manager and
shareholders is also shared with the Board. The Directors also
receive updates from the Company’s Brokers and Kepler, marketing
consultants, on any feedback from shareholders, as well as share
trading activity, share price performance and an update from the
Investment Manager.
The portfolio management team attended a number of professional
investor meetings (many by video conference) and held discussions
with a number of wealth management desks and offices in respect of
the Company during the year under review.
Portfolio holdings are ultimately shareholders’ assets and the
Board recognises the importance of good stewardship and
communication with investee companies in meeting the Company’s
investment objective and strategy. The Board monitors the Manager’s
stewardship activities and receives regular feedback from the
Investment Manager in respect of meetings with the management of
portfolio companies.
Management of share rating
Issue
The Board recognises the importance to shareholders that the market
price of the Company’s shares should not trade at either a
significant discount or premium to their prevailing NAV. The Board
believes this may be achieved by the use of share buyback powers
and the issuance of shares.
Engagement
The Board monitors the Company’s share rating on an ongoing basis
and receives regular updates from the Manager and the Company’s
Brokers regarding the level of discount/premium. The Board believes
that the best way of maintaining the share rating at an optimal
level over the long term is to create demand for the shares in the
secondary market. To this end, the Investment Manager is devoting
considerable effort to broadening the awareness of the Company,
particularly to wealth managers and to the wider retail
market.
In addition, the Board has worked closely with the Manager to
develop the Company’s marketing strategy, with the aim of ensuring
effective communication with existing shareholders and to attract
new shareholders to the Company in order to improve liquidity in
the Company’s shares and to sustain the share rating of the
Company.
Impact
The Board continues to monitor the Company’s premium/discount to
NAV and will look to issue or buy back shares if it is deemed to be
in the interests of shareholders as a whole. The Company
participates in a focused investment trust sales and marketing
initiative operated by the Manager on behalf of the investment
trusts under its management. Further details are set out in the
Company’s Annual Report for the year ended 31 December 2024.
During the financial year and up to the date of this report the
Company repurchased 315,000 shares which were placed in treasury.
The Company did not reissue any shares. As at 28 February 2025, the Company’s shares were
trading at a discount of 8.9% to the cum income NAV.
Service levels of third-party providers
Issue
The Board acknowledges the importance of ensuring that the
Company’s principal suppliers are providing a suitable level of
service, including the Investment Manager in respect of investment
performance and delivering on the Company’s investment mandate; the
Custodian and Depositary in respect of their duties towards
safeguarding the Company’s assets; the Registrar in its maintenance
of the Company’s share register and dealing with investor queries;
and the Company’s Brokers in respect of the provision of advice and
acting as a market maker for the Company’s shares.
Engagement
The Manager reports to the Board on the Company’s performance on a
regular basis. The Board carries out a robust annual evaluation of
the Manager’s performance, their commitment and available
resources.
The Board performs an annual review of the service levels of all
third-party service providers and concludes on their suitability to
continue in their role. The Board receives regular updates from the
AIFM, Depositary, Registrar and Brokers on an ongoing
basis.
The Board has also worked closely with the Manager to gain comfort
that relevant business continuity plans are operating effectively
for all of the Company’s key service providers.
Impact
All performance evaluations were performed on a timely basis and
the Board concluded that all third-party service providers,
including the Manager and Investment Manager, were operating
effectively and providing a good level of service.
The Board has received updates in respect of business continuity
planning from the Company’s Manager, Custodian, Depositary, Fund
Accountant, Registrar and Printer and is confident that
arrangements are in place to ensure a good level of service will
continue to be provided.
Board composition
Issue
The Board is committed to ensuring that its own composition brings
an appropriate balance of knowledge, experience and skills, and
that it is compliant with best corporate governance practice under
the UK Code, including guidance on tenure and the composition of
the Board’s committees.
Engagement
The Board has engaged the services of Cornforth Consulting Ltd to
identify potential candidates to replace Ms Lewis who retires as a
Director following the forthcoming Annual General Meeting. The
Nomination Committee has agreed the selection criteria and the
method of selection, recruitment and appointment.
All Directors are subject to a formal evaluation process on an
annual basis (more details and the conclusions of the 2024
evaluation process are given in the Company’s Annual Report for the
year ended 31 December 2024). All
Directors stand for re-election by shareholders
annually.
Shareholders may attend the Annual General Meeting and raise any
queries in respect of Board composition or individual Directors in
person or may contact the Company Secretary or the Chairman using
the details provided in the Company’s Annual Report for the year
ended 31 December 2024 with any
issues.
Impact
As at the date of this report, the Board was comprised of two men
and three women. As mentioned in the Half Yearly Financial Report,
Mr Cheyne retired as Chairman and Mrs Scott was appointed as a
Director on 9 May 2024. Following the
current recruitment process, the successful candidate will be
appointed as a Director following the Annual General Meeting being
held on 21 May 2025. Details of each
Director’s contribution to the success and promotion of the Company
are set out in the Directors’ Report and details of the Directors’
biographies can be found in the Company’s Annual Report for the
year ended 31 December
2024.
The Directors are not aware of any issues that have been raised
directly by shareholders in respect of Board composition in the
year under review. Details of the proxy voting results in favour
and against individual Directors’ election/re-election at the 2024
Annual General Meeting are given on the Manager’s website at
www.blackrock.com/uk/brwm.
BY ORDER OF THE BOARD
CAROLINE
DRISCOLL
FOR AND ON BEHALF OF
BLACKROCK INVESTMENT MANAGEMENT (UK)
LIMITED
Company Secretary
4 March 2025
Related Party Transactions
At the date of this report, the Board consists of five
non-executive Directors, all of whom are considered to be
independent of the Manager by the Board. Following the conclusion
of the Annual General Meeting on 21 May
2025, the Board will consist of four non-executive
Directors. The Chairman receives an annual fee of £54,000, the
Chairman of the Audit Committee receives an annual fee of £45,000,
and each other Director receives an annual fee of £36,000. The
Senior Independent Director receives an additional fee of £3,500.
All five members of the Board hold shares in the Company. Mr
Goodyear holds 60,000 ordinary shares, Ms Lewis holds 7,000
ordinary shares, Ms Mosely holds 7,400 ordinary shares, Mr
Venkatakrishnan holds 2,000 ordinary shares and Mrs Scott holds
2,200 ordinary shares. As at 31 December
2025, £18,000 (2023: £17,000) was outstanding in respect of
Directors’ fees.
Statement of Directors’ Responsibilities in respect of the
Annual Report and Financial Statements
The Directors are responsible for preparing the Annual Report and
Financial Statements in accordance with applicable law and
regulations. Company law requires the Directors to prepare
financial statements for each financial year. Under that law, the
Directors are required to prepare the financial statements in
accordance with UK-adopted International Accounting Standards
(IAS).
Under Company law, the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and Company and of the
profit or loss of the Group for that period. In preparing those
financial statements, the Directors are required to:
- present
fairly the financial position, financial performance and cash flows
of the Group and Company;
- select
suitable accounting policies in accordance with IAS 8: Accounting
Policies, Changes in Accounting Estimates and Errors and then apply
them consistently;
- present
information, including accounting policies, in a manner that
provides relevant, reliable, comparable and understandable
information;
- make
judgements and estimates that are reasonable and
prudent;
- state
whether the financial statements have been prepared in accordance
with UK-adopted IAS, subject to any material departures disclosed
and explained in the financial statements;
- provide
additional disclosures when compliance with the specific
requirements in accordance with UK-adopted IAS is insufficient to
enable users to understand the impact of particular transactions,
other events and conditions on the Group’s and Company’s financial
position and financial performance; and
- prepare
the financial statements on the going concern basis unless it is
inappropriate to presume that the Group and Company will continue
in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group’s and
Company’s transactions and disclose with reasonable accuracy at any
time the financial position of the Group and Company and enable
them to ensure that the financial statements comply with the
Companies Act 2006.
They are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The Directors are also responsible for preparing the Strategic
Report, Directors’ Report, the Directors’ Remuneration Report, the
Corporate Governance Statement and the Report of the Audit
Committee in accordance with the Companies Act 2006 and applicable
regulations, including the requirements of the Listing Rules and
the Disclosure Guidance and Transparency Rules. The Directors have
delegated responsibility to the Manager for the maintenance and
integrity of the Company’s corporate and financial information
included on the BlackRock website. Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
Each of the Directors, whose names are listed in the Company’s
Annual Report for the year ended 31 December
2024, confirm to the best of their knowledge
that:
- the
financial statements, which have been prepared in accordance with
UK-adopted IAS, give a true and fair view of the assets,
liabilities, financial position and net return of the Group and
Company; and
- the
Strategic Report contained in the Annual Report and Financial
Statements includes a fair review of the development and
performance of the business and the position of the Group and
Company, together with a description of the principal risks and
uncertainties that it faces.
The 2018 UK Corporate Governance Code also requires Directors to
ensure that the Annual Report and Financial Statements are fair,
balanced and understandable. In order to reach a conclusion on this
matter, the Board has requested that the Audit Committee advise on
whether it considers that the Annual Report and Financial
Statements fulfil these requirements. The process by which the
Committee has reached these conclusions is set out in the Audit
Committee’s Report
in the Company’s Annual Report for the year ended 31 December 2024.
As a result, the Board has concluded that the Annual Report and
Financial Statements for the year ended 31
December 2024, taken as a whole, are fair, balanced and
understandable and provide the information necessary for
shareholders to assess the Group’s and Company’s position,
performance, business model and strategy.
FOR AND ON BEHALF OF THE BOARD
CHARLES
GOODYEAR
Chairman
4 March 2025
Consolidated Statement of Comprehensive Income for the year
ended 31 December
2024
|
|
|
2024
|
2023
|
|
|
Notes
|
Revenue
£’000
|
Capital
£’000
|
Total
£’000
|
Revenue
£’000
|
Capital
£’000
|
Total
£’000
|
|
Income from investments held at fair value through profit or
loss
|
3
|
43,879
|
–
|
43,879
|
68,317
|
630
|
68,947
|
|
Other income
|
3
|
11,255
|
–
|
11,255
|
6,827
|
–
|
6,827
|
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
|
Total revenue
|
|
55,134
|
–
|
55,134
|
75,144
|
630
|
75,774
|
|
|
|
=========
|
=========
|
=========
|
=========
|
=========
|
=========
|
|
Net loss on investments and options held at fair value through
profit or loss
|
|
–
|
(151,792)
|
(151,792)
|
–
|
(140,576)
|
(140,576)
|
|
Net (losses)/gains on foreign exchange
|
|
–
|
(672)
|
(672)
|
–
|
9,018
|
9,018
|
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
|
Total
|
|
55,134
|
(152,464)
|
(97,330)
|
75,144
|
(130,928)
|
(55,784)
|
|
|
|
=========
|
=========
|
=========
|
=========
|
=========
|
=========
|
|
Expenses
|
|
|
|
|
|
|
|
|
Investment management fee
|
4
|
(2,188)
|
(6,764)
|
(8,952)
|
(2,374)
|
(7,317)
|
(9,691)
|
|
Other operating expenses
|
5
|
(1,269)
|
(12)
|
(1,281)
|
(1,278)
|
(15)
|
(1,293)
|
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
|
Total operating expenses
|
|
(3,457)
|
(6,776)
|
(10,233)
|
(3,652)
|
(7,332)
|
(10,984)
|
|
|
|
=========
|
=========
|
=========
|
=========
|
=========
|
=========
|
|
Net profit/(loss) on ordinary activities before finance
costs and taxation
|
|
51,677
|
(159,240)
|
(107,563)
|
71,492
|
(138,260)
|
(66,768)
|
|
Finance costs
|
6
|
(2,212)
|
(6,630)
|
(8,842)
|
(2,375)
|
(7,166)
|
(9,541)
|
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
|
Net profit/(loss) on ordinary activities before
taxation
|
|
49,465
|
(165,870)
|
(116,405)
|
69,117
|
(145,426)
|
(76,309)
|
|
Taxation (charge)/credit
|
|
(5,338)
|
1,802
|
(3,536)
|
(4,426)
|
1,750
|
(2,676)
|
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
|
Net profit/(loss) on ordinary activities after
taxation
|
|
44,127
|
(164,068)
|
(119,941)
|
64,691
|
(143,676)
|
(78,985)
|
|
|
|
=========
|
=========
|
=========
|
=========
|
=========
|
=========
|
|
Earnings/(loss) per ordinary share (pence) – basic and
diluted
|
8
|
23.09
|
(85.84)
|
(62.75)
|
33.95
|
(75.40)
|
(41.45)
|
|
|
|
=========
|
=========
|
=========
|
=========
|
=========
|
=========
|
The total columns of this statement represent the Group’s Statement
of Comprehensive Income, prepared in accordance with UK-adopted
International Accounting Standards (IAS). The supplementary revenue
and capital accounts are both prepared under guidance published by
the Association of Investment Companies (AIC). All items in the
above statement derive from continuing operations. No operations
were acquired or discontinued during the year. All income is
attributable to the equity holders of the Group.
The Group does not have any other comprehensive income/(loss)
(2023: £nil). The net loss for the year disclosed above represents
the Group’s total comprehensive income/(loss).
Consolidated Statement of Changes in Equity for the year
ended 31 December
2024
|
Group
For the year ended 31 December 2024
|
Notes
|
Called
up share
capital
£’000
|
Share
premium
account
£’000
|
Capital
redemption
reserve
£’000
|
Special
reserve
£’000
|
Capital
reserves
£’000
|
Revenue
reserve
£’000
|
Total
£’000
|
|
At 31 December 2023
|
|
9,651
|
151,493
|
22,779
|
193,008
|
725,161
|
57,959
|
1,160,051
|
|
Total comprehensive (loss)/income:
|
|
|
|
|
|
|
|
|
|
Net (loss)/profit on ordinary activities after taxation
|
|
–
|
–
|
–
|
–
|
(164,068)
|
44,127
|
(119,941)
|
|
Transactions with owners, recorded directly to equity:
|
|
|
|
|
|
|
|
|
|
Ordinary shares repurchased into treasury
|
9,10
|
–
|
–
|
–
|
(868)
|
–
|
–
|
(868)
|
|
Share repurchase costs
|
9,10
|
–
|
–
|
–
|
(6)
|
–
|
–
|
(6)
|
|
Dividends paid1
|
7
|
–
|
–
|
–
|
–
|
–
|
(64,037)
|
(64,037)
|
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
|
At 31 December 2024
|
|
9,651
|
151,493
|
22,779
|
192,134
|
561,093
|
38,049
|
975,199
|
|
|
|
=========
|
=========
|
=========
|
=========
|
=========
|
=========
|
=========
|
|
For the year ended 31 December 2023
|
|
|
|
|
|
|
|
|
|
At 31 December 2022
|
|
9,651
|
148,107
|
22,779
|
180,736
|
868,837
|
69,175
|
1,299,285
|
|
Total comprehensive (loss)/income:
|
|
|
|
|
|
|
|
|
|
Net (loss)/profit on ordinary activities after taxation
|
|
–
|
–
|
–
|
–
|
(143,676)
|
64,691
|
(78,985)
|
|
Transactions with owners, recorded directly to equity:
|
|
|
|
|
|
|
|
|
|
Ordinary shares reissued from treasury
|
9,10
|
–
|
3,386
|
–
|
12,305
|
–
|
–
|
15,691
|
|
Share reissue costs
|
9,10
|
–
|
–
|
–
|
(33)
|
–
|
–
|
(33)
|
|
Dividends paid2
|
7
|
–
|
–
|
–
|
–
|
–
|
(75,907)
|
(75,907)
|
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
|
At 31 December 2023
|
|
9,651
|
151,493
|
22,779
|
193,008
|
725,161
|
57,959
|
1,160,051
|
|
|
|
=========
|
=========
|
=========
|
=========
|
=========
|
=========
|
=========
|
1 The
final dividend of 17.00p per share for the year ended 31 December 2023, declared on 7 March 2024 and paid on 14 May 2024; 1st interim dividend of 5.50p per
share for the year ended 31 December
2024, declared on 10 May 2024
and paid on 28 June 2024; 2nd interim
dividend of 5.50p per share for the year ended 31 December 2024, declared on 23 August 2024 and paid on 30 September 2024 and 3rd interim dividend of
5.50p per share for the year ended 31
December 2024, declared on 15
November 2024 and paid on 20 December
2024.
2 The
final dividend of 23.50p per share for the year ended 31 December 2022, declared on 3 March 2023 and paid on 26 April 2023; 1st interim dividend of 5.50p per
share for the year ended 31 December
2023, declared on 18 April
2023 and paid on 31 May 2023;
2nd interim dividend of 5.50p per share for the year ended
31 December 2023, declared on
24 August 2023 and paid on
6 October 2023 and 3rd interim
dividend of 5.50p per share for the year ended 31 December 2023, declared on 11 October 2023 and paid on 22 December 2023.
Parent Company Statement of Changes in Equity for the year
ended 31 December
2024
|
Company
For the year ended 31 December 2024
|
Notes
|
Called
up share
capital
£’000
|
Share
premium
account
£’000
|
Capital
redemption
reserve
£’000
|
Special
reserve
£’000
|
Capital
reserves
£’000
|
Revenue
reserve
£’000
|
Total
£’000
|
|
At 31 December 2023
|
|
9,651
|
151,493
|
22,779
|
193,008
|
731,067
|
52,053
|
1,160,051
|
|
Total comprehensive (loss)/income:
|
|
|
|
|
|
|
|
|
|
Net (loss)/profit on ordinary activities after taxation
|
|
–
|
–
|
–
|
–
|
(163,951)
|
44,010
|
(119,941)
|
|
Transactions with owners, recorded directly to equity:
|
|
|
|
|
|
|
|
|
|
Ordinary shares repurchased into treasury
|
9,10
|
–
|
–
|
–
|
(868)
|
–
|
–
|
(868)
|
|
Share repurchase costs
|
9,10
|
–
|
–
|
–
|
(6)
|
–
|
–
|
(6)
|
|
Dividends paid1
|
7
|
–
|
–
|
–
|
–
|
–
|
(64,037)
|
(64,037)
|
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
|
At 31 December 2024
|
|
9,651
|
151,493
|
22,779
|
192,134
|
567,116
|
32,026
|
975,199
|
|
|
|
=========
|
=========
|
=========
|
=========
|
=========
|
=========
|
=========
|
|
For the year ended 31 December 2023
|
|
|
|
|
|
|
|
|
|
At 31 December 2022
|
|
9,651
|
148,107
|
22,779
|
180,736
|
874,567
|
63,445
|
1,299,285
|
|
Total comprehensive (loss)/income:
|
|
|
|
|
|
|
|
|
|
Net (loss)/profit on ordinary activities after taxation
|
|
–
|
–
|
–
|
–
|
(143,500)
|
64,515
|
(78,985)
|
|
Transactions with owners, recorded directly to equity:
|
|
|
|
|
|
|
|
|
|
Ordinary shares reissued from treasury
|
9,10
|
–
|
3,386
|
–
|
12,305
|
–
|
–
|
15,691
|
|
Share reissue costs
|
9,10
|
–
|
–
|
–
|
(33)
|
–
|
–
|
(33)
|
|
Dividends paid2
|
7
|
–
|
–
|
–
|
–
|
–
|
(75,907)
|
(75,907)
|
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
|
At 31 December 2023
|
|
9,651
|
151,493
|
22,779
|
193,008
|
731,067
|
52,053
|
1,160,051
|
|
|
|
=========
|
=========
|
=========
|
=========
|
=========
|
=========
|
=========
|
1 The
final dividend of 17.00p per share for the year ended 31 December 2023, declared on 7 March 2024 and paid on 14 May 2024; 1st interim dividend of 5.50p per
share for the year ended 31 December
2024, declared on 10 May 2024
and paid on 28 June 2024; 2nd interim
dividend of 5.50p per share for the year ended 31 December 2024, declared on 23 August 2024 and paid on 30 September 2024 and 3rd interim dividend of
5.50p per share for the year ended 31
December 2024, declared on 15
November 2024 and paid on 20 December
2024.
2 The
final dividend of 23.50p per share for the year ended 31 December 2022, declared on 3 March 2023 and paid on 26 April 2023; 1st interim dividend of 5.50p per
share for the year ended 31 December
2023, declared on 18 April
2023 and paid on 31 May 2023;
2nd interim dividend of 5.50p per share for the year ended
31 December 2023, declared on
24 August 2023 and paid on
6 October 2023 and 3rd interim
dividend of 5.50p per share for the year ended 31 December 2023, declared on 11 October 2023 and paid on 22 December 2023.
For information on the Company’s distributable reserves please
refer to note 10 below.
Consolidated and Parent Company Statements of Financial
Position as at 31 December
2024
|
|
|
31 December 2024
|
31 December 2023
|
|
|
Notes
|
Group
£’000
|
Company
£’000
|
Group
£’000
|
Company
£’000
|
|
Non current assets
|
|
|
|
|
|
|
Investments held at fair value through profit or loss
|
|
1,093,198
|
1,100,722
|
1,298,420
|
1,305,827
|
|
Current assets
|
|
|
|
|
|
|
Current tax asset
|
|
1,317
|
1,317
|
1,276
|
1,276
|
|
Other receivables
|
|
2,861
|
2,861
|
3,592
|
3,592
|
|
Cash collateral held with brokers
|
|
4,882
|
4,882
|
6,269
|
6,269
|
|
Cash and cash equivalents – cash at bank
|
|
21,396
|
14,834
|
10,612
|
4,261
|
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
|
Total current assets
|
|
30,456
|
23,894
|
21,749
|
15,398
|
|
|
|
=========
|
=========
|
=========
|
=========
|
|
Total assets
|
|
1,123,654
|
1,124,616
|
1,320,169
|
1,321,225
|
|
|
|
=========
|
=========
|
=========
|
=========
|
|
Current liabilities
|
|
|
|
|
|
|
Current taxation liability
|
|
(877)
|
(824)
|
(352)
|
(352)
|
|
Other payables
|
|
(10,270)
|
(11,285)
|
(8,052)
|
(9,108)
|
|
Derivative financial liabilities held at fair value through profit
or loss
|
|
(622)
|
(622)
|
(1,401)
|
(1,401)
|
|
Bank loans
|
|
(135,739)
|
(135,739)
|
(149,828)
|
(149,828)
|
|
Cash and cash equivalents – bank overdraft
|
|
(4)
|
(4)
|
–
|
–
|
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
|
Total current liabilities
|
|
(147,512)
|
(148,474)
|
(159,633)
|
(160,689)
|
|
|
|
=========
|
=========
|
=========
|
=========
|
|
Total assets less current liabilities
|
|
976,142
|
976,142
|
1,160,536
|
1,160,536
|
|
|
|
=========
|
=========
|
=========
|
=========
|
|
Non current liabilities
|
|
|
|
|
|
|
Deferred taxation liability
|
|
(943)
|
(943)
|
(485)
|
(485)
|
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
|
Net assets
|
|
975,199
|
975,199
|
1,160,051
|
1,160,051
|
|
|
|
=========
|
=========
|
=========
|
=========
|
|
Equity attributable to equity holders
|
|
|
|
|
|
|
Called up share capital
|
9
|
9,651
|
9,651
|
9,651
|
9,651
|
|
Share premium account
|
10
|
151,493
|
151,493
|
151,493
|
151,493
|
|
Capital redemption reserve
|
10
|
22,779
|
22,779
|
22,779
|
22,779
|
|
Special reserve
|
10
|
192,134
|
192,134
|
193,008
|
193,008
|
|
Capital reserves:
|
|
|
|
|
|
|
At 1 January
|
|
725,161
|
731,067
|
868,837
|
874,567
|
|
Net profit/(loss) on ordinary activities after taxation
|
|
(164,068)
|
(163,951)
|
(143,676)
|
(143,500)
|
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
|
At 31 December
|
10
|
561,093
|
567,116
|
725,161
|
731,067
|
|
Revenue reserve:
|
|
|
|
|
|
|
At 1 January
|
|
57,959
|
52,053
|
69,175
|
63,445
|
|
Net profit/(loss) on ordinary activities after taxation
|
|
44,127
|
44,010
|
64,691
|
64,515
|
|
Dividends paid
|
|
(64,037)
|
(64,037)
|
(75,907)
|
(75,907)
|
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
|
At 31 December
|
10
|
38,049
|
32,026
|
57,959
|
52,053
|
|
Total equity
|
|
975,199
|
975,199
|
1,160,051
|
1,160,051
|
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
|
Net asset value per ordinary share
(pence)
|
8
|
510.53
|
510.53
|
606.78
|
606.78
|
|
|
|
=========
|
=========
|
=========
|
=========
|
Consolidated and Parent Company Cash Flow Statements for
the year ended 31 December
2024
|
|
31 December 2024
|
31 December 2023
|
|
|
Group
£’000
|
Company
£’000
|
Group
£’000
|
Company
£’000
|
|
Operating activities
|
|
|
|
|
|
Net profit/(loss) on ordinary activities before
taxation1
|
(116,405)
|
(116,405)
|
(76,309)
|
(76,309)
|
|
Add back finance costs
|
8,842
|
8,842
|
9,541
|
9,541
|
|
Net loss on investments and options held at fair value through
profit or loss
|
151,792
|
151,675
|
140,576
|
140,400
|
|
Net losses/(gains) on foreign exchange
|
672
|
672
|
(9,018)
|
(9,018)
|
|
Sale of investments held at fair value through profit or
loss
|
637,750
|
637,750
|
647,775
|
647,775
|
|
Purchase of investments held at fair value through profit or
loss
|
(585,496)
|
(585,496)
|
(662,250)
|
(662,250)
|
|
Contractual rights – return of capital
|
397
|
397
|
497
|
497
|
|
Decrease in other receivables
|
321
|
321
|
1,069
|
1,069
|
|
Increase in other payables
|
2,554
|
2,501
|
1,556
|
1,556
|
|
Decrease/(increase) in amounts due from brokers
|
410
|
410
|
(409)
|
(409)
|
|
Net movement in cash collateral held with brokers
|
1,387
|
1,387
|
526
|
526
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
|
Net cash inflow from operating activities before
taxation
|
102,224
|
102,054
|
53,554
|
53,378
|
|
|
=========
|
=========
|
=========
|
=========
|
|
Taxation paid
|
–
|
–
|
(12)
|
(12)
|
|
Taxation on investment income included within gross
income
|
(3,052)
|
(3,093)
|
(2,664)
|
(2,664)
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
|
Net cash inflow from operating
activities
|
99,172
|
98,961
|
50,878
|
50,702
|
|
|
=========
|
=========
|
=========
|
=========
|
|
Financing activities
|
|
|
|
|
|
Repayment of loan
|
(14,599)
|
(14,599)
|
–
|
–
|
|
Interest paid
|
(8,721)
|
(8,721)
|
(9,571)
|
(9,571)
|
|
Net proceeds from ordinary shares reissued
|
–
|
–
|
15,658
|
15,658
|
|
Net cost for repurchase of ordinary shares
|
(874)
|
(874)
|
–
|
–
|
|
Dividends paid
|
(64,037)
|
(64,037)
|
(75,907)
|
(75,907)
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
|
Net cash outflow from financing
activities
|
(88,231)
|
(88,231)
|
(69,820)
|
(69,820)
|
|
|
=========
|
=========
|
=========
|
=========
|
|
Increase/(decrease) in cash and cash
equivalents
|
10,941
|
10,730
|
(18,942)
|
(19,118)
|
|
Effect of foreign exchange rate changes
|
(161)
|
(161)
|
62
|
62
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
|
Change in cash and cash equivalents
|
10,780
|
10,569
|
(18,880)
|
(19,056)
|
|
Cash and cash equivalents at start of year
|
10,612
|
4,261
|
29,492
|
23,317
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
|
Cash and cash equivalents at end of
year
|
21,392
|
14,830
|
10,612
|
4,261
|
|
|
=========
|
=========
|
=========
|
=========
|
|
Comprised of:
|
|
|
|
|
|
Cash at bank
|
21,396
|
14,834
|
10,612
|
4,261
|
|
Bank overdraft
|
(4)
|
(4)
|
–
|
–
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
|
|
21,392
|
14,830
|
10,612
|
4,261
|
|
|
=========
|
=========
|
=========
|
=========
|
1 Dividends
and interest received in cash during the year amounted to
£36,895,000 and £4,584,000 (2023: £59,542,000 and
£5,159,000).
Notes to the financial statements for the year ended
31 December 2024
1. Principal activity
The principal activity of the Company is that of an investment
trust company within the meaning of Section 1158 of the Corporation
Tax Act 2010. The Company was incorporated in England on 28 October
1993 and this is the 31st Annual Report.
The principal activity of the subsidiary, BlackRock World Mining
Investment Company Limited, is investment dealing.
2. Material accounting policies
The material accounting policies adopted by the Group and Company
have been applied consistently, other than where new policies have
been adopted and are set out below.
(a) Basis of preparation
The Group and Company financial statements have been prepared under
the historic cost convention modified by the revaluation of certain
financial assets and financial liabilities held at fair value
through profit or loss and in accordance with UK-adopted
International Accounting Standards (IAS), with future changes being
subject to endorsement by the UK Endorsement Board and with the
requirements of the Companies Act 2006 as applicable to companies
reporting under those standards. The Company has taken advantage of
the exemption provided under Section 408 of the Companies Act 2006
not to publish its individual Statement of Comprehensive Income and
related notes. All of the Group’s operations are of a continuing
nature.
Insofar as the Statement of Recommended Practice (SORP) for
investment trust companies and venture capital trusts, issued by
the Association of Investment Companies (AIC) in October 2019 and updated in July 2022, is compatible with UK-adopted IAS, the
financial statements have been prepared in accordance with guidance
set out in the SORP.
Substantially all of the assets of the Group consist of securities
that are readily realisable and, accordingly, the Directors believe
that the Group has adequate resources to continue in operational
existence for the foreseeable future for the period to 31 March 2026, being a period of at least twelve
months from the date of approval of the financial statements and
therefore consider the going concern assumption to be appropriate.
The Directors have reviewed compliance with the covenants
associated with the bank overdraft facility, loan facility, income
and expense projections and the liquidity of the investment
portfolio in making their assessment.
The Directors have considered the impact of climate change on the
value of the investments included in the financial statements and
have concluded that there was no further impact of climate change
to be considered as the investments are valued based on market
pricing as required by IFRS 13.
None of the Group’s other assets and liabilities were considered to
be potentially impacted by climate change.
The Group’s financial statements are presented in Sterling, which
is the currency of the primary economic environment in which the
Group operates. All values are rounded to the nearest thousand
pounds (£’000) except where otherwise indicated.
Adoption of new and amended International Accounting
Standards and interpretations:
IAS 1 – Classification of liabilities as current or non
current
(effective 1 January 2024). The IASB
has amended IAS 1
Presentation of Financial Statements to clarify its requirement for
the presentation of liabilities depending on the rights that exist
at the end of the reporting period. The amendment requires
liabilities to be classified as non current if the entity has a
substantive right to defer settlement for at least 12 months at the
end of the reporting period. The amendment no longer refers to
unconditional rights.
IAS 1 – Non current liabilities with
covenants
(effective 1 January 2024). The IASB
has amended IAS 1 Presentation of
Financial Statements to introduce additional disclosures for
liabilities with covenants within 12 months of the reporting
period. The additional disclosures include the nature of covenants,
when the entity is required to comply with covenants, the carrying
amount of related liabilities and circumstances that may indicate
that the entity will have difficulty complying with the
covenants.
Relevant International Accounting Standards that have yet
to be adopted:
IAS 21 – Lack of exchangeability
(effective 1 January 2025). The IASB
issued amendments to IAS 21 The Effects of Changes
in Foreign Exchange Rates to specify how an entity should assess
whether a currency is exchangeable and how it should determine a
spot exchange rate when exchangeability is lacking. The amendments
also require disclosure of information that enables users of its
financial statements to understand how the currency not being
exchangeable into the other currency affects, or is expected to
affect, the entity’s financial performance, financial position and
cash flows.
IFRS 18 – Presentation and disclosure in financial
statements
(effective 1 January 2027). The IASB
issued IFRS 18, which
replaces IAS 1 Presentation of Financial Statements. IFRS 18
introduces new requirements for presentation within the statement
of profit or loss, including specified totals and subtotals.
Furthermore, entities are required to classify all income and
expenses within the statement of profit or loss into one of five
categories: operating, investing, financing, income taxes and
discontinued operations, whereof the first three are new. It also
requires disclosure of newly defined management defined performance
measures, subtotals of income and expenses, and includes new
requirements for aggregation and disaggregation of financial
information based on the identified ‘roles’ of the primary
financial statements and the notes.
None of the standards that have been issued, but are not yet
effective, are expected to have a material impact on the
Group.
(b) Basis of consolidation
The Group’s financial statements are made up to 31 December each
year and consolidate the financial statements of the Company and
its wholly owned subsidiary, which is registered and operates in
England and Wales, BlackRock World Mining Investment
Company Limited (together ‘the Group’). The subsidiary company is
not considered an investment entity. In the financial statements of
the Parent Company, the investment in the subsidiary company is
held at fair value.
Subsidiaries are consolidated from the date of their acquisition,
being the date on which the Company obtains control, and continue
to be consolidated until the date that such control ceases. The
financial statements of subsidiaries used in the preparation of the
consolidated financial statements are based on consistent
accounting policies. All intra-group balances and transactions,
including unrealised profits arising therefrom, are
eliminated.
(c) Presentation of the Statement of Comprehensive
Income
In order to better reflect the activities of an investment trust
company and in accordance with guidance issued by the AIC,
supplementary information which analyses the Consolidated Statement
of Comprehensive Income between items of a revenue and a capital
nature has been presented alongside the Consolidated Statement of
Comprehensive Income.
(d) Segmental reporting
The Directors are of the opinion that the Group is engaged in a
single segment of business being investment business.
(e) Income
Dividends receivable on equity shares are recognised as revenue for
the year on an ex-dividend basis. Where no ex-dividend date is
available, dividends receivable on or before the year end are
treated as revenue for the year. Provision is made for any
dividends and interest income not expected to be received. Special
dividends, if any, are treated as a capital or a revenue receipt
depending on the facts or circumstances of each particular case.
The return on a debt security is recognised on a time apportionment
basis so as to reflect the effective yield on the debt security.
Interest income and deposit interest is accounted for on an
accruals basis.
Options may be purchased or written over securities held in the
portfolio for generating or protecting capital returns, or for
generating or maintaining revenue returns. Where the purpose of the
option is the generation of income, the premium is treated as a
revenue item. Where the purpose of the option is the maintenance of
capital, the premium is treated as a capital item.
Option premium income is recognised as revenue evenly over the life
of the option contract and included in the revenue account of the
Consolidated Statement of Comprehensive Income unless the option
has been written for the maintenance and enhancement of the Group’s
investment portfolio and represents an incidental part of a larger
capital transaction, in which case any premia arising are allocated
to the capital account of the Consolidated Statement of
Comprehensive Income.
Royalty income from contractual rights is measured at the fair
value of the consideration received or receivable where the
Investment Manager can reliably estimate the amount, pursuant to
the terms of the agreement. Royalty income from contractual rights
received comprises of a return of income and a return of capital
based on the underlying cost of the contract and, accordingly, the
return of income element is taken to the revenue account and the
return of capital element is taken to the capital account. These
amounts are disclosed in the Consolidated Statement of
Comprehensive Income within income from investments and net profit
on investments held at fair value through profit or loss,
respectively.
The useful life of the contractual rights will be determined by
reference to the contractual arrangements, the planned mine life on
commencement of mining and the underlying cost of the contractual
rights will be revalued on a systematic basis using the units of
production method over the life of the contractual rights which is
estimated using available estimated proved and probable reserves
specifically associated with the mine. The Investment Manager
relies on public disclosures for information on proven and probable
reserves from the operators of the mine. Amortisation rates are
adjusted on a prospective basis for all changes to estimates of the
life of contractual rights and iron ore reserves. These are
disclosed in the Consolidated Statement of Comprehensive Income
within net profit on investments held at fair value through profit
or loss.
Where the Group has elected to receive its dividends in the form of
additional shares rather than in cash, the cash equivalent of the
dividend is recognised as income. Any excess in the value of the
shares received over the amount of the cash dividend is recognised
in capital.
Underwriting commission receivable is taken into account on an
accruals basis.
(f) Expenses
All expenses, including finance costs, are accounted for on an
accruals basis. Expenses have been charged wholly to the revenue
account of the Consolidated Statement of Comprehensive Income,
except as follows:
- expenses
which are incidental to the acquisition or sale of an investment
are charged to the capital account of the Consolidated Statement of
Comprehensive Income. Details of transaction costs on the purchases
and sales of investments are disclosed within note 10 to the
financial statements in the Company’s Annual Report for the year
ended 31 December 2024;
- expenses
are treated as capital where a connection with the maintenance or
enhancement of the value of the investments can be demonstrated;
and
- the
investment management fee and finance costs have been allocated 75%
to the capital account and 25% to the revenue account of the
Consolidated Statement of Comprehensive Income in line with the
Board’s expectations of the long-term split of returns, in the form
of capital gains and income, respectively, from the investment
portfolio.
(g) Taxation
The tax expense represents the sum of the tax currently payable and
deferred tax. The tax currently payable is based on the taxable
profit for the year. Taxable profit differs from net profit as
reported in the Consolidated Statement of Comprehensive Income
because it excludes items of income or expenses that are taxable or
deductible in other years and it further excludes items that are
never taxable or deductible. The Group’s liability for current tax
is calculated using tax rates that were applicable at the balance
sheet date.
Where expenses are allocated between capital and revenue accounts,
any tax relief in respect of the expenses is allocated between
capital and revenue returns on the marginal basis using the
Company’s effective rate of corporation tax for the accounting
period.
Deferred taxation is recognised in respect of all temporary
differences that have originated but not reversed at the financial
reporting date, where transactions or events that result in an
obligation to pay more taxation in the future or right to pay less
taxation in the future have occurred at the financial reporting
date. This is subject to deferred taxation assets only being
recognised if it is considered more likely than not that there will
be suitable profits from which the future reversal of the temporary
differences can be deducted. Deferred taxation assets and
liabilities are measured at the rates applicable to the legal
jurisdictions in which they arise.
(h) Investments held at fair value through profit or
loss
In accordance with IFRS 9, the Group classifies its investments at
initial recognition as held at fair value through profit or loss
and are managed and evaluated on a fair value basis in accordance
with its investment strategy and business model.
All investments, including contractual rights, are measured
initially and subsequently at fair value through profit or loss.
Purchases of investments are recognised on a trade date basis.
Contractual rights are recognised on the completion date, where a
purchase of the rights is under a contract, and are initially
measured at fair value excluding transaction costs. Sales of
investments are recognised at the trade date of the
disposal.
The fair value of the financial investments is based on their
quoted bid price at the financial reporting date, without deduction
for the estimated future selling costs. This policy applies to all
current and non-current asset investments held by the
Group.
The gains and losses from changes in fair value of contractual
rights are taken to the Consolidated Statement of Comprehensive
Income and arise as a result of the revaluation of the underlying
cost of the contractual rights, changes in commodity prices and
changes in estimates of proven and probable reserves specifically
associated with the mine.
Under IAS, the investment in the subsidiary in the Company’s
Statement of Financial Position is fair valued which is deemed to
be the net asset value of the subsidiary.
Changes in the value of investments held at fair value through
profit or loss and gains and losses on disposal are recognised in
the Consolidated Statement of Comprehensive Income as ‘Net profit
on investments held at fair value through profit or loss’. Also
included within the heading are transaction costs in relation to
the purchase or sale of investments.
For all financial instruments not traded in an active market, the
fair value is determined by using various valuation techniques.
Valuation techniques include market approach (i.e., using recent
arm’s length market transactions adjusted as necessary and
reference to the current market value of another instrument that is
substantially the same) and the income approach (i.e., discounted
cash flow analysis and option pricing models making as much use of
available and supportable market data where possible). See note
2(q) below.
(i) Options
Options are held at fair value through profit or loss based on the
bid/offer prices of the options written to which the Group is
exposed. The value of the option is subsequently marked-to-market
to reflect the fair value through profit or loss of the option
based on traded prices. Where the premium is taken to the revenue
account, an appropriate amount is shown as capital return such that
the total return reflects the overall change in the fair value of
the option. When an option is exercised, the gain or loss is
accounted for as a capital gain or loss. Any cost on closing out an
option is transferred to the revenue account along with any
remaining unamortised premium.
(j) Other receivables and other
payables
Other receivables and other payables do not carry any interest and
are short-term in nature and are accordingly stated on an amortised
cost basis.
(k) Dividends payable
Under IAS, final dividends should not be accrued in the financial
statements unless they have been approved by shareholders before
the financial reporting date. Interim dividends should not be
recognised in the financial statements unless they have been
paid.
Dividends payable to equity shareholders are recognised in the
Consolidated and Parent Company Statements of Changes in
Equity.
(l) Foreign currency translation
Transactions involving foreign currencies are converted at the rate
ruling at the date of the transaction. Foreign currency monetary
assets and liabilities and non-monetary assets held at fair value
are translated into Sterling at the rate ruling on the financial
reporting date. Foreign exchange differences arising on translation
are recognised in the Consolidated Statement of Comprehensive
Income as a revenue or capital item depending on the income or
expense to which they relate. For investment transactions and
investments held at the year end, denominated in a foreign
currency, the resulting gains or losses are included in the
profit/(loss) on investments held at fair value through profit or
loss in the Consolidated Statement of Comprehensive
Income.
(m) Cash and cash equivalents
Cash comprises cash in hand, bank overdrafts and on demand
deposits. Cash equivalents are short-term, highly liquid
investments that are readily convertible to known amounts of cash
and that are subject to an insignificant risk of changes in value.
Bank overdrafts are shown separately on the Consolidated and Parent
Company Statements of Financial Position.
(n) Bank borrowings
Bank overdrafts and loans are recorded at the net proceeds
received. Finance charges, including any premium payable on
settlement or redemption and direct issue costs, are accounted for
on an accruals basis in the Consolidated Statement of Comprehensive
Income using the effective interest rate method and are added to
the carrying amount of the instrument to the extent that they are
not settled in the period in which they arise.
(o) Offsetting
Financial assets and financial liabilities are offset and the net
amount reported in the Consolidated and Parent Company Statements
of Financial Position if there is a currently enforceable legal
right to offset the recognised amounts and there is an intention to
settle on a net basis, or to realise the asset and settle the
liability simultaneously.
(p) Share repurchases and share
reissues
Shares repurchased and subsequently cancelled – share capital is
reduced by the nominal value of the shares repurchased and the
capital redemption reserve is correspondingly increased in
accordance with Section 733 of the Companies Act 2006. The full
cost of the repurchase is charged to the special
reserve.
Shares repurchased and held in treasury – the full cost of the
repurchase is charged to the special reserve.
Where treasury shares are subsequently reissued:
- amounts
received to the extent of the repurchase price are credited to the
special reserve and capital reserves based on a weighted average
basis of amounts utilised from these reserves on repurchases;
and
- any
surplus received in excess of the repurchase price is taken to the
share premium account.
Costs on share reissues are charged to the special reserve and
capital reserves.
(q) Critical accounting estimates and
judgements
The Group makes estimates and assumptions concerning the future.
The resulting accounting estimates and assumptions will, by
definition, seldom equal the related actual results. Estimates and
judgements are regularly evaluated and are based on historical
experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances.
The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are addressed
below.
Fair value of unquoted financial
instruments
When the fair values of financial assets and financial liabilities
recorded in the Consolidated and Parent Company Statements of
Financial Position cannot be derived from active markets, their
fair value is determined using a variety of valuation techniques
that include the use of valuation models.
(a) The
fair value of the BHP Brazil contractual rights was assessed by an
independent valuer with a recognised and relevant professional
qualification. The inputs to these models are taken from observable
markets where possible, but where this is not feasible, estimation
is required in establishing fair values. The estimates include
considerations of production profiles, commodity prices, cash flows
and discount rates. Changes in assumptions about these factors
could affect the reported fair value of financial instruments in
the Consolidated and Parent Company Statements of Financial
Position and the level where the instruments are disclosed in the
fair value hierarchy. To assess the significance of a particular
input to the entire measurement, the external valuer performs
sensitivity analysis.
(b) The
fair value of the investment in equity shares of Jetti Resources
and MCC Mining were assessed by an independent valuer with a
recognised and relevant professional qualification.
The valuation is carried out based on market approach using
earnings multiple and price of recent transactions. Changes in
assumptions about these factors could affect the reported fair
value of financial instruments in the Consolidated and Parent
Company Statements of Financial Position and the level where the
instruments are disclosed in the fair value hierarchy. To assess
the significance of a particular input to the entire measurement,
the external valuer performs sensitivity analysis.
(c) The
investment in the subsidiary company was valued based on the net
assets of the subsidiary company, which is considered appropriate
based on the nature and volume of transactions in the subsidiary
company.
The key assumptions used to determine the fair value of the
unquoted financial instruments and sensitivity analyses are
provided in note 17(d).
3. Income
|
|
2024
£’000
|
2023
£’000
|
|
Investment income:
|
|
|
|
UK dividends
|
10,223
|
8,647
|
|
Overseas dividends
|
24,602
|
33,457
|
|
Overseas special dividends
|
2,558
|
17,736
|
|
Overseas stock dividends
|
440
|
–
|
|
Income from contractual rights (BHP Brazil Royalty)
|
2,431
|
4,186
|
|
Income from Vale debentures
|
2,815
|
2,608
|
|
Income from fixed income investments
|
810
|
1,683
|
|
|
---------------
|
---------------
|
|
Total investment income
|
43,879
|
68,317
|
|
|
=========
|
=========
|
|
Other income:
|
|
|
|
Option premium income
|
10,227
|
5,964
|
|
Deposit interest
|
719
|
678
|
|
Broker interest received
|
189
|
104
|
|
Stock lending income
|
120
|
81
|
|
|
---------------
|
---------------
|
|
Total other income
|
11,255
|
6,827
|
|
|
=========
|
=========
|
|
Total income
|
55,134
|
75,144
|
|
|
=========
|
=========
|
During the year, the Group received option premium income in cash
totalling £10,909,000 (2023: £6,724,000) for writing put and
covered call options for the purposes of revenue
generation.
Option premium income is amortised evenly over the life of the
option contract and, accordingly, during the year, option premiums
of £10,227,000 (2023: £5,964,000) were amortised to
revenue.
At 31 December 2024, there were three open positions (2023: three)
with an associated liability of £622,000 (2023:
£1,401,000).
Dividends and interest received in cash during the year amounted to
£36,895,000 and £4,584,000 (2023: £59,542,000 and
£5,159,000).
No special dividends have been recognised in capital during the
year (2023: £630,000).
4. Investment management fee
|
|
2024
|
2023
|
|
|
Revenue
£’000
|
Capital
£’000
|
Total
£’000
|
Revenue
£’000
|
Capital
£’000
|
Total
£’000
|
|
Investment management fee
|
2,188
|
6,764
|
8,952
|
2,374
|
7,317
|
9,691
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
|
Total
|
2,188
|
6,764
|
8,952
|
2,374
|
7,317
|
9,691
|
|
|
=========
|
=========
|
=========
|
=========
|
=========
|
=========
|
The investment management fee (which includes all services provided
by BlackRock) is 0.80% of the Company’s gross assets (subject to
certain adjustments). During the year, £8,471,000 (2023:
£9,421,000) of the investment management fee was generated from net
assets and £481,000 (2023: £270,000) from the gearing effect on
gross assets due to the quarter–on– quarter increase in the NAV per
share for the year as set out below:
|
Quarter end
|
Cum income
NAV per share
(pence)
|
Quarterly
increase/
(decrease) %
|
Gearing effect
on management
fees (£’000)
|
|
31 December 2022
|
688.35
|
–
|
–
|
|
31 March 2023
|
664.51
|
–3.5
|
–
|
|
30 June 2023
|
612.72
|
–7.8
|
–
|
|
30 September 2023
|
601.47
|
–1.8
|
–
|
|
31 December 2023
|
606.78
|
+0.9
|
270
|
|
31 March 2024
|
568.07
|
–6.4
|
–
|
|
30 June 2024
|
572.21
|
+0.7
|
259
|
|
30 September 2024
|
580.66
|
+1.5
|
222
|
|
31 December 2024
|
510.53
|
–12.1
|
–
|
|
|
=========
|
=========
|
=========
|
The daily average of the net assets under management during the
year ended 31 December 2024 was £1,082,468,000 (2023:
£1,203,977,000).
The fee is allocated 25% to the revenue account and 75% to the
capital account of the Consolidated Statement of Comprehensive
Income.
There is no additional fee for company secretarial and
administration services.
5. Other operating expenses
|
|
2024
£’000
|
2023
£’000
|
|
Allocated to revenue:
|
|
|
|
Custody fee
|
98
|
109
|
|
Auditors’ remuneration:
|
|
|
|
– audit services
|
65
|
55
|
|
– non-audit services1
|
–
|
9
|
|
Registrar’s fee
|
88
|
86
|
|
Directors’ emoluments2
|
166
|
179
|
|
AIC fees
|
21
|
21
|
|
Broker fees
|
30
|
25
|
|
Depositary fees
|
104
|
116
|
|
FCA fee
|
49
|
40
|
|
Directors’ insurance
|
21
|
22
|
|
Marketing fees
|
169
|
144
|
|
Stock exchange fees
|
52
|
52
|
|
Legal and professional fees
|
126
|
147
|
|
Bank facility fees3
|
92
|
85
|
|
Printing and postage fees
|
46
|
55
|
|
Directors’ search fees
|
–
|
25
|
|
Write back of prior year expenses4
|
(19)
|
–
|
|
Other administrative costs
|
161
|
108
|
|
|
---------------
|
---------------
|
|
Total revenue expenses
|
1,269
|
1,278
|
|
|
=========
|
=========
|
|
Allocated to capital:
|
|
|
|
Transaction charges5
|
12
|
15
|
|
|
---------------
|
---------------
|
|
Total
|
1,281
|
1,293
|
|
|
=========
|
=========
|
|
|
2024
|
2023
|
|
The Company’s ongoing charges6,
calculated as a percentage of average daily net assets and using
the management fee and all other operating expenses, excluding
finance costs, direct transaction costs, transaction charges, VAT
recovered, taxation, prior year expenses written back and certain
non-recurring items were:
|
0.95%
|
0.91%
|
|
|
---------------
|
---------------
|
|
The Company’s ongoing charges6,
calculated as a percentage of average daily gross assets and using
the management fee and all other operating expenses, excluding
finance costs, direct transaction costs, transaction charges, VAT
recovered, taxation, prior year expenses written back and certain
non-recurring items were:
|
0.84%
|
0.81%
|
|
|
=========
|
=========
|
1 Fees
paid to the auditors for non-audit services of £nil excluding VAT
(2023: £9,350) relate to the review of the Condensed Half Yearly
Financial Report.
2 Details
of the Directors’ emoluments can be found in the Directors’
Remuneration Report in the Company’s Annual Report for the year
ended 31 December 2024. The Company has no employees.
3 There
is a 4 basis point facility fee chargeable on the full loan
facility whether drawn or undrawn.
4 Relates
to legal and professional fees and Directors' expenses written back
during the year (2023: no expenses were written back).
5 Expenses
of £12,000 (2023: £15,000) were charged to the capital account of
the Consolidated Statement of Comprehensive Income. These include
transaction costs charged by the custodian on sale and purchase
trades.
6 Alternative
Performance Measure, see Glossary in the Company’s Annual Report
for the year ended 31 December 2024.
6. Finance costs
|
|
2024
|
2023
|
|
|
Revenue
£’000
|
Capital
£’000
|
Total
£’000
|
Revenue
£’000
|
Capital
£’000
|
Total
£’000
|
|
Interest paid on bank loans
|
2,196
|
6,581
|
8,777
|
2,370
|
7,151
|
9,521
|
|
Interest paid on bank overdraft
|
16
|
49
|
65
|
5
|
15
|
20
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
|
Total
|
2,212
|
6,630
|
8,842
|
2,375
|
7,166
|
9,541
|
|
|
=========
|
=========
|
=========
|
=========
|
=========
|
=========
|
7. Dividends
|
Dividends paid on equity shares:
|
Record date
|
Payment date
|
2024
£’000
|
2023
£’000
|
|
Final dividend of 17.00p per share for the year ended 31 December
2023 (2022: 23.50p)
|
22 March 2024
|
14 May 2024
|
32,501
|
44,392
|
|
1st interim dividend of 5.50p per share for the year ended 31
December 2024 (2023: 5.50p)
|
31 May 2024
|
28 June 2024
|
10,515
|
10,485
|
|
2nd interim dividend of 5.50p per share for the year ended 31
December 2024 (2023: 5.50p)
|
6 September 2024
|
30 September 2024
|
10,515
|
10,515
|
|
3rd interim dividend of 5.50p per share for the year ended 31
December 2024 (2023: 5.50p)
|
29 November 2024
|
20 December 2024
|
10,506
|
10,515
|
|
|
|
|
---------------
|
---------------
|
|
Accounted for in the financial
statements
|
|
|
64,037
|
75,907
|
|
|
|
|
=========
|
=========
|
The total dividends payable in respect of the year ended 31
December 2024 which form the basis of Section 1158 of the
Corporation Tax Act 2010 and Section 833 of the Companies Act 2006,
and the amounts declared, meet the relevant requirements as set out
in this legislation.
|
Dividends paid or declared on equity shares:
|
2024
£’000
|
2023
£’000
|
|
1st quarterly interim dividend of 5.50p per share for the year
ended 31 December 2024 (2023: 5.50p)
|
10,515
|
10,485
|
|
2nd quarterly interim dividend of 5.50p per share for the year
ended 31 December 2024 (2023: 5.50p)
|
10,515
|
10,515
|
|
3rd quarterly interim dividend of 5.50p per share for the year
ended 31 December 2024 (2023: 5.50p)
|
10,506
|
10,515
|
|
Final dividend of 6.50p per share for the year ended 31 December
2024 (2023: 17.00p)
|
12,406
|
32,501
|
|
|
---------------
|
---------------
|
|
Total
|
43,942
|
64,016
|
|
|
=========
|
=========
|
1 Based
on 190,868,036 ordinary shares in issue on 28 February
2025.
8. Consolidated earnings and net asset value per ordinary
share
Total revenue, capital loss and net asset value per ordinary share
are shown below and have been calculated using the
following:
|
|
2024
|
2023
|
|
Net revenue profit attributable to ordinary shareholders
(£'000)
|
44,127
|
64,691
|
|
Net capital loss attributable to ordinary shareholders
(£'000)
|
(164,068)
|
(143,676)
|
|
|
---------------
|
---------------
|
|
Total (loss)/profit attributable to ordinary shareholders
(£’000)
|
(119,941)
|
(78,985)
|
|
|
=========
|
=========
|
|
Equity shareholders’ funds (£'000)
|
975,199
|
1,160,051
|
|
|
=========
|
=========
|
|
The weighted average number of ordinary shares in issue during the
year on which the earnings per ordinary share was calculated
was:
|
191,149,163
|
190,564,324
|
|
The actual number of ordinary shares in issue at the year end on
which the net asset value per ordinary share was calculated
was:
|
191,018,036
|
191,183,036
|
|
Earnings per ordinary share
|
|
|
|
Revenue earnings per share (pence) – basic and diluted
|
23.09
|
33.95
|
|
Capital loss per share (pence) – basic and diluted
|
(85.84)
|
(75.40)
|
|
|
---------------
|
---------------
|
|
Total loss per share (pence) – basic and
diluted
|
(62.75)
|
(41.45)
|
|
|
=========
|
=========
|
|
|
As at
31 December
2024
|
As at
31 December
2023
|
|
Net asset value per ordinary share (pence)
|
510.53
|
606.78
|
|
Ordinary share price (pence)
|
481.00
|
587.00
|
|
|
=========
|
=========
|
There were no dilutive securities at the year end.
9. Share capital
|
|
Ordinary shares
in issue
number
|
Treasury shares
number
|
Total shares
number
|
Nominal
value
£’000
|
|
Allotted, called up and fully paid share capital
comprised:
|
|
|
|
|
|
Ordinary shares of 5p each
|
|
|
|
|
|
At 31 December 2022
|
188,753,036
|
4,258,806
|
193,011,842
|
9,651
|
|
Ordinary shares reissued from treasury
|
2,430,000
|
(2,430,000)
|
–
|
–
|
|
At 31 December 2023
|
191,183,036
|
1,828,806
|
193,011,842
|
9,651
|
|
Ordinary shares repurchased into treasury
|
(165,000)
|
165,000
|
–
|
–
|
|
|
-----------------
|
-----------------
|
-----------------
|
-----------------
|
|
At 31 December 2024
|
191,018,036
|
1,993,806
|
193,011,842
|
9,651
|
|
|
==========
|
==========
|
==========
|
==========
|
During the year ended 31 December 2024 the Company:
– repurchased
165,000 shares into treasury (2023: none) for a total consideration
including costs of £874,000 (2023: £nil); and
– reissued
no shares (2023: 2,430,000 shares) from treasury for a net
consideration after costs of £nil (2023: £15,658,000).
Since the year end and up to 28 February 2025, the Company
has
repurchased 150,000 shares into treasury for a total consideration
including costs of £735,000. No shares were reissued.
10. Reserves
|
Group
|
Share
premium
account
£’000
|
Capital
redemption
reserve
£’000
|
Special
reserve
£’000
|
Capital
reserve
arising on
investments
sold
£’000
|
Capital
reserve
arising on
revaluation
of
investments
held
£’000
|
Revenue
reserve
£’000
|
|
At 31 December 2023
|
151,493
|
22,779
|
193,008
|
510,400
|
214,761
|
57,959
|
|
Movement during the year:
|
|
|
|
|
|
|
|
Total comprehensive (loss)/income:
|
|
|
|
|
|
|
|
Net (loss)/profit for the year
|
–
|
–
|
–
|
(13,425)
|
(150,643)
|
44,127
|
|
Transactions with owners, recorded directly to equity:
|
|
|
|
|
|
|
|
Ordinary shares repurchased into treasury
|
–
|
–
|
(868)
|
–
|
–
|
–
|
|
Share repurchase costs
|
–
|
–
|
(6)
|
–
|
–
|
–
|
|
Dividends paid
|
–
|
–
|
–
|
–
|
–
|
(64,037)
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
|
At 31 December 2024
|
151,493
|
22,779
|
192,134
|
496,975
|
64,118
|
38,049
|
|
|
=========
|
=========
|
=========
|
=========
|
=========
|
=========
|
|
|
|
|
Distributable reserves
|
|
Company
|
Share
premium
account
£’000
|
Capital
redemption
reserve
£’000
|
Special
reserve
£’000
|
Capital
reserve
arising on
investments
sold
£’000
|
Capital
reserve
arising on
revaluation
of
investments
held
£’000
|
Revenue
reserve
£’000
|
|
At 31 December 2023
|
151,493
|
22,779
|
193,008
|
508,899
|
222,168
|
52,053
|
|
Movement during the year:
|
|
|
|
|
|
|
|
Total comprehensive (loss)/income:
|
|
|
|
|
|
|
|
Net (loss)/profit for the year
|
–
|
–
|
–
|
(13,425)
|
(150,526)
|
44,010
|
|
Transactions with owners, recorded directly to equity:
|
|
|
|
|
|
|
|
Ordinary shares repurchased into treasury
|
–
|
–
|
(868)
|
–
|
–
|
–
|
|
Share repurchase costs
|
–
|
–
|
(6)
|
–
|
–
|
–
|
|
Dividends paid
|
–
|
–
|
–
|
–
|
–
|
(64,037)
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
|
At 31 December 2024
|
151,493
|
22,779
|
192,134
|
495,474
|
71,642
|
32,026
|
|
|
=========
|
=========
|
=========
|
=========
|
=========
|
=========
|
|
Group
|
Share
premium
account
£’000
|
Capital
redemption
reserve
£’000
|
Special
reserve
£’000
|
Capital
reserve
arising on
investments
sold
£’000
|
Capital
reserve
arising on
revaluation
of
investments
held
£’000
|
Revenue
reserve
£’000
|
|
At 31 December 2022
|
148,107
|
22,779
|
180,736
|
428,323
|
440,514
|
69,175
|
|
Movement during the year:
|
|
|
|
|
|
|
|
Total comprehensive income/(loss):
|
|
|
|
|
|
|
|
Net profit/(loss) for the year
|
–
|
–
|
–
|
82,077
|
(225,753)
|
64,691
|
|
Transactions with owners, recorded directly to equity:
|
|
|
|
|
|
|
|
Ordinary shares reissued from treasury
|
3,386
|
–
|
12,305
|
–
|
–
|
–
|
|
Share reissue costs
|
–
|
–
|
(33)
|
–
|
–
|
–
|
|
Dividends paid
|
–
|
–
|
–
|
–
|
–
|
(75,907)
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
|
At 31 December 2023
|
151,493
|
22,779
|
193,008
|
510,400
|
214,761
|
57,959
|
|
|
=========
|
=========
|
=========
|
=========
|
=========
|
=========
|
|
|
|
|
Distributable reserves
|
|
Company
|
Share
premium
account
£’000
|
Capital
redemption
reserve
£’000
|
Special
reserve
£’000
|
Capital
reserve
arising on
investments
sold
£’000
|
Capital
reserve
arising on
revaluation
of
investments
held
£’000
|
Revenue
reserve
£’000
|
|
At 31 December 2022
|
148,107
|
22,779
|
180,736
|
426,822
|
447,745
|
63,445
|
|
Movement during the year:
|
|
|
|
|
|
|
|
Total comprehensive income/(loss):
|
|
|
|
|
|
|
|
Net profit/(loss) for the year
|
–
|
–
|
–
|
82,077
|
(225,577)
|
64,515
|
|
Transactions with owners, recorded directly to equity:
|
|
|
|
|
|
|
|
Ordinary shares reissued from treasury
|
3,386
|
–
|
12,305
|
–
|
–
|
–
|
|
Share reissue costs
|
–
|
–
|
(33)
|
–
|
–
|
–
|
|
Dividends paid
|
–
|
–
|
–
|
–
|
–
|
(75,907)
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
---------------
|
|
At 31 December 2023
|
151,493
|
22,779
|
193,008
|
508,899
|
222,168
|
52,053
|
|
|
=========
|
=========
|
=========
|
=========
|
=========
|
=========
|
Pursuant to a resolution of the Company passed at an Extraordinary
General Meeting on 13 January 1998 and following the Company’s
application to the Court for cancellation of its share premium
account, the Court approval was received on 27 January 1999 and
£157,633,000 was transferred from the share premium account to a
special reserve which is a distributable reserve.
The share premium account and capital redemption reserve of
£151,493,000 and £22,779,000 (2023: £151,493,000 and £22,779,000)
are not distributable reserves under the Companies Act 2006. In
accordance with ICAEW Technical Release 02/17BL on Guidance on
Realised and Distributable Profits under the Companies Act 2006,
the special reserve and capital reserves of the Parent Company may
be used as distributable reserves for all purposes and, in
particular, the repurchase by the Parent Company of its ordinary
shares and for payments such as dividends. In accordance with the
Company’s Articles of Association, the special reserve, capital
reserves and the revenue reserve may be distributed by way of
dividend. The Parent Company’s capital gains of £567,116,000 (2023:
£731,067,000) comprise a gain on the capital reserve arising on
investments sold of £495,474,000 (2023: £508,899,000), a gain on
the capital reserve arising on revaluation of listed investments of
£56,862,000 (2023: £189,283,000) revaluation gains on unquoted
investments of £7,256,000 (2023: £25,478,000) and a revaluation
gain on the investment in the subsidiary of £7,524,000 (2023:
£7,407,000). The capital reserve arising on the revaluation of
listed investments of £56,980,000 (2023: £189,165,000) is subject
to fair value movements and may not be readily realisable at short
notice; as such it may not be entirely distributable. The
investments are subject to financial risks, as such capital
reserves (arising on investments sold) and the revenue reserve may
not be entirely distributable if a loss occurred during the
realisation of these investments. The reserves of the subsidiary
company are not distributable until distributed as a dividend to
the Parent Company.
11. Valuation of financial instruments
Financial assets and financial liabilities are either carried in
the Consolidated and Parent Company Statements of Financial
Position at their fair value (investment and derivatives) or at
amortised cost (due from brokers, dividends and interest
receivable, due to brokers, accruals, cash at bank and bank
overdrafts). IFRS 13 requires the Group to classify fair value
measurements using a fair value hierarchy that reflects the
significance of inputs used in making the measurements. The
valuation techniques used by the Group are explained in the
accounting policies note 2(h).
Categorisation within the hierarchy has been determined on the
basis of the lowest level input that is significant to the fair
value measurement of the relevant asset.
The fair value hierarchy has the following levels:
Level 1 – Quoted market price for identical instruments in
active markets
A financial instrument is regarded as quoted in an active market if
quoted prices are readily available from an exchange, dealer,
broker, industry group, pricing service or regulatory agency and
those prices represent actual and regularly occurring market
transactions on an arm’s length basis. The Group does not adjust
the quoted price for these instruments.
Level 2 – Valuation techniques using observable
inputs
This category includes instruments valued using quoted prices for
similar instruments in markets that are considered less than
active, or other valuation techniques where all significant inputs
are directly or indirectly observable from market data.
Valuation techniques used for non-standardised financial
instruments such as options, currency swaps and other
over-the-counter derivatives include the use of comparable recent
arm’s length transactions, reference to other instruments that are
substantially the same, discounted cash flow analysis, option
pricing models and other valuation techniques commonly used by
market participants making the maximum use of market inputs and
relying as little as possible on entity specific inputs.
Over-the-counter derivative option contracts have been classified
as Level 2 investments as their valuation has been based on market
observable inputs represented by the underlying quoted securities
to which these contracts expose the Group.
Level 3 – Valuation techniques using significant
unobservable inputs
This category includes all instruments where the valuation
technique includes inputs not based on market data and these inputs
could have a significant impact on the instrument’s
valuation.
This category also includes instruments that are valued based on
quoted prices for similar instruments where significant entity
determined adjustments or assumptions are required to reflect
differences between the instruments and instruments for which there
is no active market. The Investment Manager considers observable
data to be that market data that is readily available, regularly
distributed or updated, reliable and verifiable, not proprietary,
and provided by independent sources that are actively involved in
the relevant market.
The level in the fair value hierarchy within which the fair value
measurement is categorised in its entirety is determined on the
basis of the lowest level input that is significant to the fair
value measurement. If a fair value measurement uses observable
inputs that require significant adjustment based on unobservable
inputs, that measurement is a Level 3 measurement.
Assessing the significance of a particular input to the fair value
measurement requires judgement, considering factors specific to the
asset or liability including an assessment of the relevant risks
including but not limited to credit risk, market risk, liquidity
risk, business risk and sustainability risk. The determination of
what constitutes ‘observable’ inputs requires significant judgement
by the Investment Manager and these risks are adequately captured
in the assumptions and inputs used in measurement of Level 3 assets
or liabilities.
Valuation process and techniques for Level 3
valuations
(a) BHP Brazil Royalty
The Directors engage a mining consultant, an independent valuer
with a recognised and relevant professional qualification, to
conduct a periodic valuation of the contractual rights and the fair
value of the contractual rights is assessed with reference to
relevant factors. At the reporting date the income streams from
contractual rights have been valued on the net present value of the
pre-tax cash flows discounted at a rate the external valuer
considers reflects the risk associated with the project. The
valuation model uses discounted cash flow analysis which
incorporates both observable and non-observable data. Observable
inputs include assumptions regarding current rates of interest and
commodity prices. Unobservable inputs include assumptions regarding
production profiles, price realisations, cost of capital and
discount rates. In determining the discount rate to be applied, the
external valuer considers the country and sovereign risk associated
with the project, together with the time horizon to the
commencement of production and the success or failure of projects
of a similar nature. To assess the significance of a particular
input to the entire measurement, the external valuer performs a
sensitivity analysis. The external valuer has undertaken an
analysis of the impact of using alternative discount rates on the
fair value of contractual rights.
This investment in contractual rights is reviewed regularly to
ensure that the initial classification remains correct given the
asset’s characteristics and the Group’s investment policies. The
contractual rights are initially recognised using the transaction
price as it was indicative of the best evidence of fair value at
acquisition and are subsequently measured at fair value, taking
into consideration the relevant IFRS 13 requirements. In arriving
at their estimates of market values, the valuers have used their
market knowledge and professional judgement. The Group classifies
the fair value of this investment as Level 3.
Valuations are the responsibility of the Directors of the Company.
In arriving at a final valuation, the Directors consider the
independent valuer’s report, the significant assumptions used in
the fair valuation and the review process undertaken by BlackRock’s
Pricing Committee. The valuation of unquoted investments is
performed on a quarterly basis by the Investment Manager and
reviewed by the Pricing Committee of the Manager. On a quarterly
basis the Investment Manager will review the valuation of the
contractual rights and inputs for significant changes. A valuation
of contractual rights is performed annually by an external valuer,
SRK Consulting (UK) Limited, and reviewed by the Pricing Committee
of the Manager. The valuations
are also subject to quality assurance procedures performed within
the Pricing Committee. On a semi-annual basis, after the checks
above have been performed, the Investment Manager presents the
valuation results to the Directors. This includes a discussion of
the major assumptions used in the valuations. There were no changes
in valuation techniques during the year.
(b) Jetti Resources and MCC Mining equity
shares
The fair value of the investment equity shares of Jetti Resources
and MCC Mining were assessed by an independent valuer with a
recognised and relevant professional qualification. The valuation
is carried out based on market approach using earnings multiple and
price of recent transactions. Changes in assumptions about these
factors could affect the reported fair value of financial
instruments in the Consolidated and Parent Company Statements of
Financial Position and the level where the instruments are
disclosed in the fair value hierarchy. To assess the significance
of a particular input to the entire measurement, the external
valuer performs a sensitivity analysis.
Fair values of financial assets and financial
liabilities
The table below sets out fair value measurements using the IFRS 13
fair value hierarchy.
|
Financial assets/(liabilities) at fair value through profit or
loss
at 31 December 2024 – Group
|
Level 1
£’000
|
Level 2
£’000
|
Level 3
£’000
|
Total
£’000
|
|
Assets:
|
|
|
|
|
|
Equity investments
|
987,723
|
10,555
|
36,070
|
1,034,348
|
|
Fixed income securities
|
–
|
36,653
|
–
|
36,653
|
|
Investment in contractual rights
|
–
|
–
|
22,197
|
22,197
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
|
Total assets
|
987,723
|
47,208
|
58,267
|
1,093,198
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
|
Liabilities:
|
|
|
|
|
|
Derivative financial instruments – written options
|
–
|
(622)
|
–
|
(622)
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
|
Total
|
987,723
|
46,586
|
58,267
|
1,092,576
|
|
|
=========
|
=========
|
=========
|
=========
|
|
Financial assets/(liabilities) at fair value through profit or
loss
at 31 December 2023 – Group
|
Level 1
£’000
|
Level 2
£’000
|
Level 3
£’000
|
Total
£’000
|
|
Assets:
|
|
|
|
|
|
Equity investments
|
1,193,969
|
–
|
32,695
|
1,226,664
|
|
Fixed income securities
|
16,924
|
36,516
|
–
|
53,440
|
|
Investment in contractual rights
|
–
|
–
|
18,316
|
18,316
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
|
Total assets
|
1,210,893
|
36,516
|
51,011
|
1,298,420
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
|
Liabilities:
|
|
|
|
|
|
Derivative financial instruments – written options
|
–
|
(1,401)
|
–
|
(1,401)
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
|
Total
|
1,210,893
|
35,115
|
51,011
|
1,297,019
|
|
|
=========
|
=========
|
=========
|
=========
|
|
Financial assets/(liabilities) at fair value through profit or
loss
at 31 December 2024 – Company
|
Level 1
£’000
|
Level 2
£’000
|
Level 3
£’000
|
Total
£’000
|
|
Assets:
|
|
|
|
|
|
Equity investments
|
987,723
|
10,555
|
43,594
|
1,041,872
|
|
Fixed income securities
|
–
|
36,653
|
–
|
36,653
|
|
Investment in contractual rights
|
–
|
–
|
22,197
|
22,197
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
|
Total assets
|
987,723
|
47,208
|
65,791
|
1,100,722
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
|
Liabilities:
|
|
|
|
|
|
Derivative financial instruments – written options
|
–
|
(622)
|
–
|
(622)
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
|
Total
|
987,723
|
46,586
|
65,791
|
1,100,100
|
|
|
=========
|
=========
|
=========
|
=========
|
|
Financial assets/(liabilities) at fair value through profit or
loss
at 31 December 2023 – Company
|
Level 1
£’000
|
Level 2
£’000
|
Level 3
£’000
|
Total
£’000
|
|
Assets:
|
|
|
|
|
|
Equity investments
|
1,193,969
|
–
|
40,102
|
1,234,071
|
|
Fixed income securities
|
16,924
|
36,516
|
–
|
53,440
|
|
Investment in contractual rights
|
–
|
–
|
18,316
|
18,316
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
|
Total assets
|
1,210,893
|
36,516
|
58,418
|
1,305,827
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
|
Liabilities:
|
|
|
|
|
|
Derivative financial instruments – written options
|
–
|
(1,401)
|
–
|
(1,401)
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
|
Total
|
1,210,893
|
35,115
|
58,418
|
1,304,426
|
|
|
=========
|
=========
|
=========
|
=========
|
A reconciliation of fair value measurement in Level 3 is set out
below.
|
|
Group
|
Company
|
|
Level 3 Financial assets at fair value through profit or
loss
at 31 December
|
2024
£’000
|
2023
£’000
|
2024
£’000
|
2023
£’000
|
|
Opening fair value
|
51,011
|
56,891
|
58,418
|
64,122
|
|
Return of capital – royalty
|
(397)
|
(497)
|
(397)
|
(497)
|
|
Additions at cost
|
5,626
|
–
|
5,626
|
–
|
|
Total profit or loss included in net profit on investments in the
Consolidated Statement of Comprehensive Income:
|
|
|
|
|
|
– assets held at the end of the period
|
2,027
|
(5,383)
|
2,144
|
(5,207)
|
|
|
---------------
|
---------------
|
---------------
|
---------------
|
|
Closing balance
|
58,267
|
51,011
|
65,791
|
58,418
|
|
|
=========
|
=========
|
=========
|
=========
|
The Level 3 valuation process and techniques used are explained in
the accounting policies in notes 2(h) and 2(q). A more detailed
description of the techniques is found in the Company's Annual
Report for the year ended 31 December 2024 under ‘Valuation process
and techniques’ for Level 3 valuations.
The Level 3 investments as at 31 December 2024 in the table that
follows relate to the BHP Brazil Royalty, equity shares of Jetti
Resources and MCC Mining. In accordance with IFRS 13, these
investments were categorised as Level 3.
In arriving at the fair value of the BHP Brazil Royalty, the key
inputs are the underlying commodity prices and illiquidity
discount. In arriving at the fair value of Jetti Resources and MCC
Mining, the key inputs are shown in the Company's Annual Report for
the year ended 31 December 2024.
Quantitative information of significant unobservable inputs
– Level 3 – Group and Company
The significant unobservable inputs used in the fair value
measurement categorised within Level 3 of the fair value hierarchy,
together with an estimated quantitative sensitivity analysis, as at
31 December 2024 and 31 December 2023 are as shown
below.
|
Description
|
As at
31 December
2024
£’000
|
Valuation
technique
|
Unobservable
input
|
Range of
weighted
average
inputs
|
Reasonable
possible
shift¹ +/-
|
Impact on
fair value
|
|
BHP Brazil Royalty
|
22,197
|
Discounted cash flows
|
Discount rate–weighted average cost of capital
|
5.0% – 8.0%
|
1.0%
|
£1.2m
|
|
|
|
|
Average gold prices
|
US$2,270-US$2,376 per ounce
|
10.0%
|
£2.1m
|
|
|
|
|
Average copper prices
|
US$9,025-US$9,325 per tonne
|
10.0%
|
£1.0m
|
|
Jetti Resources
|
21,973
|
Market approach
|
Earnings multiple
|
4.75x
|
10.0%
|
£2.3m
|
|
MCC Mining
|
14,097
|
Market approach
|
Price of recent transaction
|
|
10.0%
|
£1.4m
|
|
|
---------------
|
|
|
|
|
|
|
Total
|
58,267
|
|
|
|
|
|
|
|
=========
|
|
|
|
|
|
|
Description
|
As at
31 December
2023
£’000
|
Valuation
technique
|
Unobservable
input
|
Range of
weighted
average
inputs
|
Reasonable
possible
shift¹ +/-
|
Impact on
fair value
|
|
BHP Brazil Royalty
|
18,316
|
Discounted cash flows
|
Discount rate–weighted average cost of capital
|
5.0% – 8.0%
|
1.0%
|
£1.0m
|
|
|
|
|
Average gold prices
|
US$1,706-US$1,780 per ounce
|
10.0%
|
£1.8m
|
|
|
|
|
Average copper prices
|
US$8,397-US$8,469 per tonne
|
10.0%
|
£1.2m
|
|
Jetti Resources
|
27,204
|
Market approach
|
Earnings multiple
|
6.00x
|
5.0%
|
£1.4m
|
|
MCC Mining
|
5,491
|
Market approach
|
Price of recent transaction
|
|
5.0%
|
£0.3m
|
|
|
---------------
|
|
|
|
|
|
|
Total
|
51,011
|
|
|
|
|
|
|
|
=========
|
|
|
|
|
|
1 The
sensitivity analysis refers to a percentage amount added or
deducted from the input and the effect this has on the fair
value.
The sensitivity impact on fair value is calculated based on the
sensitivity estimates set out by the independent valuer in its
report on the valuation of contractual rights. Significant
increases/(decreases) in estimated commodity prices and discount
rates in isolation would result in a significantly higher/(lower)
fair value measurement. Generally, a change in the assumption made
for the estimated value is accompanied by a directionally similar
change in the commodity prices and discount rates.
For exchange listed equity investments, the quoted price is the bid
price. Substantially, all investments are valued based on
unadjusted quoted market prices. Where such quoted prices are
readily available in an active market, such prices are not required
to be assessed or adjusted for any price related risks, including
climate risk, in accordance with the fair value related
requirements of the Company’s financial reporting
framework.
12. Transactions with the Investment Manager and
AIFM
BlackRock Fund Managers Limited (BFM) provides management and
administration services to the Company under a contract which is
terminable on six months’ notice. BFM has (with the Group’s
consent) delegated certain portfolio and risk management services,
and other ancillary services to BlackRock Investment Management
(UK) Limited (BIM (UK)). Further details of the investment
management contract are disclosed in the Directors’ Report in the
Company’s Annual Report for the year ended 31 December
2024.
The investment management fee due for the year ended 31 December
2024 amounted to £8,952,000 (2023: £9,691,000). At the year end,
£9,018,000 was outstanding in respect of the management fee (2023:
£7,262,000).
In addition to the above services, BIM (UK) has provided the Group
with marketing services. The total fees paid or payable for these
services for the year ended 31 December 2024 amounted to £169,000
excluding VAT (2023: £144,000). Marketing fees of £64,000 were
outstanding as at 31 December 2024 (2023: £55,000).
The ultimate holding company of the Manager and the Investment
Manager is BlackRock, Inc., a company incorporated in Delaware,
USA.
13. Related party disclosure
Directors’ emoluments
At the date of this report, the Board consists of five
non-executive Directors, all of whom are considered to be
independent of the Manager by the Board. Following the conclusion
of the Annual General Meeting on 21 May 2025, the Board will
consist of four non-executive Directors.
Disclosures of the Directors’ interests in the ordinary shares of
the Company and fees and expenses payable to the Directors are set
out in the Directors’ Remuneration Report in the Company’s Annual
Report for the year ended 31 December 2024. As at 31 December 2024,
£18,000 (2023: £17,000) was outstanding in respect of Directors’
fees.
Significant holdings
The following investors are:
a. funds
managed by the BlackRock Group or are affiliates of BlackRock Inc.
(Related BlackRock Funds); or
b. investors
(other than those listed in (a) above) who held more than 20% of
the voting shares in issue in the Company and are, as a result,
considered to be related parties to the Company (Significant
Investors).
|
|
Total % of shares held by
Related BlackRock Funds
|
Total % of shares held by
Significant Investors who are
not affiliates of BlackRock
Group or BlackRock, Inc.
|
Number of Significant
Investors who are not affiliates
of BlackRock Group or
BlackRock, Inc.
|
|
As at 31 December 2024
|
1.19
|
n/a
|
n/a
|
|
As at 31 December 2023
|
1.29
|
n/a
|
n/a
|
|
|
=========
|
=========
|
=========
|
14. Contingent liabilities
There were no contingent liabilities as at 31 December 2024 (2023:
none).
15. Publication of non statutory
accounts
The financial information contained in this announcement does not
constitute statutory accounts as defined in the Companies Act 2006.
The Annual Report and Financial Statements for the year ended 31
December 2024 will be filed with the Registrar of Companies after
the Annual General Meeting.
The figures set out above have been reported upon by the auditor,
whose report for the year ended 31 December 2024 contains no
qualification or statement under Section 498(2) or (3) of the
Companies Act 2006.
The comparative figures are extracts from the audited financial
statements of BlackRock World Mining Trust plc and its subsidiary
for the year ended 31 December 2023, which have been filed with the
Registrar of Companies. The report of the auditor on those
financial statements contained no qualification or statement under
Section 498 of the Companies Act 2006.
16. Annual Report and Financial
Statements
Copies of the Annual Report and Financial Statements will be
published shortly and will be available from the registered office,
c/o The Secretary, BlackRock World Mining Trust plc, 12 Throgmorton
Avenue, London EC2N 2DL.
17. Annual General Meeting
The Annual General Meeting of the Company will be held at 12
Throgmorton Avenue, London EC2N 2DL on Wednesday, 21 May 2025 at
11.30 a.m.
The Annual Report and Financial Statements will also be available
on the BlackRock website at www.blackrock.com/uk/brwm. Neither the
contents of the website nor the contents of any website accessible
from hyperlinks on the website (or any other website) is
incorporated into, or forms part of, this announcement.
For further information, please contact:
Charles Kilner, Director, Closed End Funds, BlackRock Investment
Management (UK) Limited – Tel:
020 7743 3000
Evy Hambro, Fund Manager, BlackRock Investment Management (UK)
Limited – Tel:
020 7743 3000
Emma Phillips, Media & Communications, BlackRock Investment
Management (UK) Limited – Tel:
020 7743 2922
Press enquires:
Ed Hooper, Lansons Communications
Tel:
020 7294 3616
E-mail:
BlackRockInvestmentTrusts@lansons.com or
EdH@lansons.com
4 March 2025
12 Throgmorton Avenue
London EC2N 2DL
ENDS
