World Mining
Annual Report and Financial Statements 31 December 2023
Freeport-McMoRan Copper Mark (independent ESG assessment: https://coppermark.org) 2
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.
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Financial
highlights
as at 31 December 2023
606.78p
Net asset value (NAV)
per ordinary share
-11.8%
£1,160.1m
Net assets
-10.7%
33.50p
Total dividends
1
-6.2%
1,3
NAV total return
MSCI ACWI Metals and Mining
30% Buffer 10/40 Index +2.4%
3
FTSE All-Share Index +7.9%
3
FTSE 100 +7.9%
3
CPI
4
+4.0%
587.00p
Ordinary share price
-15.8%
33.95p
Revenue return per
ordinary share
-16.6%
5.7%
1,2
Yield
-10.4%
1,3
Share price total return
MSCI ACWI Metals and Mining
30% Buffer 10/40 Index +2.4%
3
FTSE All-Share Index +7.9%
3
FTSE 100 +7.9%
3
The above financial highlights are at 31 December 2023 and percentage comparisons
are year-on-year against 31 December 2022.
¹
Alternative Performance Measures, see Glossary on pages 148 to 152.
2
Based on dividends paid and declared for the year ended 31 December 2023 and
share price as at 31 December 2023.
3
NAV, mid-market share price and reference indices performance are calculated in
Sterling terms with dividends reinvested.
4
Consumer Price Index.
Section 1: Overview and performance
1
Ivanhoe Mines continues to deliver at
its Komoa-Kakula asset
in the Democratic Republic of the Congo (pictured on the front
cover). Komoa-Kakula receives electricity from the Mwadingusha
hydropower plant (pictured opposite), the upgrading of which
Ivanhoe Mines undertook in partnership with the DRC. The balance
of generated power is integrated into the national electricity grid.
PHOTOS COURTESY OF IVANHOE MINES
2
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
Why BlackRock
World Mining
Trust plc?
Investment policy
The Company’s investment policy is to provide a diversified investment in mining and
metal assets 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 and
up to 20% may be invested in unquoted investments.
Reasons to invest
Conviction
A conviction-led approach to adding
value by truly understanding and
comparing companies in the mining
sector, rather than by betting on the
short-term direction of commodity
prices. Unconstrained by market cap,
sub-sector or region, the Investment
Manager (BlackRock Investment
Management (UK) Limited) can invest
in a wide range of opportunities.
Yield
The Company offers an attractive yield
of 5.7% for the year ended 31 December
2023. Whilst mainly invested in equities,
the Company makes use of fixed income
and unquoted instruments to enhance
income. The Company’s global remit
means that the majority of its holdings
generate earnings from around the
world.
Flexibility
The Company provides a diversified
exposure to the mining sector, with a
total return approach. The Investment
Manager has the ability to use
investment tools such as option writing
and gearing.
Opportunity
There is an increased focus on
sustainability and, globally, regulation
is stepping up as the world looks to
crack down on pollution and carbon
emissions. As part of its portfolio,
the Company seeks opportunities
in mining companies that produce
materials required for the technology
underpinning the carbon/energy
transition.
Expertise
The Company is managed by
BlackRock’s Sectors and Thematics
team, one of the largest investors
in natural resources. The team has
the ability to undertake extensive,
proprietary, on-the-ground research
and is best placed to assess capability
and reliability of management of the
companies in which they invest.
Closed-end structure
Investment trusts have an independent
Board of Directors appointed to protect
shareholders’ interests and enhance
shareholder value. The closed-end
structure means the Company does not
have to sell assets to meet redemptions,
making it more suitable for holding less
liquid assets. It can also use gearing to
potentially increase returns over time
and can invest for the long term in a
more diverse portfolio of assets.
A member of the Association of Investment Companies
Further details about the Company including the latest annual and half-yearly financial reports, fact sheets
and stock exchange announcements are available on the website at
www.blackrock.com/uk/brwm
.
Section 1: Overview and performance
3
Contents
Section 1: Overview and performance
Financial highlights
1
Why BlackRock World Mining Trust plc?
2
Performance record
4
Chairman’s Statement
5
Investment Manager’s Report
9
Section 2: Portfolio
Ten largest investments
27
Investments
29
Portfolio analysis
32
Section 3: Governance
Governance structure
36
Directors’ biographies
37
Strategic Report
39
Directors’ Report
55
Directors’ Remuneration Report
63
Directors’ Remuneration Policy
67
Corporate Governance Statement
69
Report of the Audit Committee
76
Statement of Directors’ Responsibilities in respect of the Annual Report
and Financial Statements
81
Section 4: Financial statements
Independent auditors’ report
86
Consolidated Statement of Comprehensive Income
94
Consolidated Statement of Changes in Equity
95
Parent Company Statement of Changes in Equity
96
Consolidated and Parent Company Statements of Financial Position
97
Consolidated and Parent Company Cash Flow Statements
98
Notes to the financial statements
99
Section 5: Additional information
Shareholder information
138
Analysis of ordinary shareholders
142
Historical record (unaudited)
143
Management and other service providers
144
AIFMD disclosures (unaudited)
145
Information to be disclosed in accordance with Listing Rule 9.8.4
147
Glossary
148
Section 6: Annual General Meeting
Notice of Annual General Meeting
156
Share fraud warning
160
4
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
Performance record
As at
31 December
2023
As at
31 December
2022
Net assets (£’000)¹
1,160,051
1,299,285
Net asset value per ordinary share (NAV) (pence)
606.78
688.35
Ordinary share price (mid-market) (pence)
587.00
697.00
Reference index
2
– net total return
6,002.54
5,863.32
(Discount)/premium to net asset value
3
(3.3)%
1.3%
For the
year ended
31 December
2023
For the
year ended
31 December
2022
Performance (with dividends reinvested)
Net asset value per share
3
-6.2%
+17.7%
Ordinary share price
3
-10.4%
+26.0%
Reference index
2
+2.4%
+11.5%
Performance since inception (with dividends reinvested)
Net asset value per share
3
+1,319.4%
+1,413.6%
Ordinary share price
3
+1,365.9%
+1,535.8%
Reference index
2
+1,005.2%
+979.6%
For the
year ended
31 December
2023
For the
year ended
31 December
2022
Change
%
Revenue
Net revenue profit after taxation (£’000)
64,691
76,013
-14.9
Revenue return per ordinary share (pence)
4
33.95
40.68
-16.6
Dividends per ordinary share (pence)
– 1st interim
5.50
5.50
–
– 2nd interim
5.50
5.50
–
– 3rd interim
5.50
5.50
–
– Final
17.00
23.50
-27.7
Total dividends paid and payable
33.50
40.00
-16.3
Rebased to 100
2022
2021
2020
2018
2019
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1993
1994
Capital only share price
Dividend reinvested share price returns
2023
•
•
0
100
200
300
400
500
600
700
800
900
1000
1100
1200
1300
1400
1500
1600
1700
1800
Long-term capital and dividend returns
1
The change in net assets reflects portfolio movements, share reissues and dividends paid 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 on pages 148 to 152.
4
Further details are given in the Glossary on page 151.
Section 1: Overview and performance
5
Dear
Shareholder
Highlights
•
NAV per share -6.2%
1
(with dividends reinvested)
•
Share price -10.4%
1
(with dividends reinvested)
•
Total dividends of 33.50p per share
Overview
After a solid year of performance in 2022, the last 12 months to 31 December 2023
have proved more difficult for the mining sector. The sector performed strongly at the
start of the financial year with mined commodity prices up almost across the board,
supported by the pace of China’s reopening following COVID-19 and expectations for
a pick-up in demand. However, the mining sector soon pulled back as improvements
in Chinese economic data were slower than had been hoped for and, as we progressed
through the year, there were concerns about the demand outlook in major Western
economies as well. Increased geopolitical tensions in the Middle East and expectations
that higher interest rates would persist for longer than initially anticipated also
contributed to a challenging time for the sector. As we entered the final part of the
Company’s financial year, signs of moderating inflation and easing interest rate
expectations led to positive market sentiment for both the mining sector and broader
equity markets.
Performance
Over the twelve months to 31 December 2023, the Company’s net asset value per
share (NAV) returned -6.2%
1
and the share price returned -10.4%
1
. In comparison,
over the same period, the Company’s reference index, the MSCI ACWI Metals & Mining
30% Buffer 10/40 Index (net total return), returned +2.4%, the FTSE All-Share Index
returned +
7.9% and the UK Consumer Price Index increased by 4.0%.
Our portfolio managers provide a more detailed explanation on the Company’s
performance and the factors that contributed to, or detracted from, performance
during the year in their Investment Manager’s Report that follows. 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 return per share for the year amounted to 33.95p, a 16.6%
decrease compared with the prior year revenue return per share of 40.68p. Lower
commodity prices, higher all in costs and a weakening US Dollar (as many commodity
company dividends are paid in US Dollars) contributed to the reduction in earnings,
leading to lower returns for shareholders.
Chairman’s Statement
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 on page 149.
David Cheyne
Chairman
6
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
During the year, three quarterly interim dividends of 5.50p per share were paid on 5 May 2023, 6 October 2023 and 24 November
2023. The Board is proposing a final dividend payment of 17.00p per share for the year ended 31 December 2023. This, together
with the quarterly interim dividends, makes a total of 33.50p per share (2022: 40.00p per share) representing a decrease of 16.3%
on payments made in the previous financial year.
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 14 May 2024 to shareholders on the
Company’s register on 22 March 2024, the ex-dividend date being 21 March 2024. It remains the Board’s intention to seek to
distribute substantially all of the Company’s available income along similar lines in the future.
Gearing
The Company operates a flexible gearing policy which depends on prevailing market conditions. The Company may borrow up
to 25% of the Group’s net assets. The maximum level of gearing used during the year was 14.6% and the level of gearing at 31
December 2023 was 11.9%. Average gearing over the year to 31 December 2023 was 11.9%. For the calculations, please see the
Glossary on page 148 of this Annual Report.
Management of share rating
The Directors recognise the importance to investors that the market price of the Company’s shares should not trade at a significant
premium or discount to the underlying NAV. Accordingly, in normal market conditions, the Board may use the Company’s share
buyback authority or alternatively reissue shares from treasury or issue new shares (at a premium to NAV) to ensure that the share
price is broadly in line with the underlying NAV, if it is deemed to be in shareholders’ interests.
The Company’s shares started the year under review trading at a premium and I am pleased to report that during the year the
Company reissued 2,430,000 ordinary shares from treasury for a total net consideration of £15,658,000, at an average price of
644.37p per share and an average 1.4% premium to NAV. The Company did not buy back any shares and, since the year end, no
further shares have been reissued. The discount at the year end was 3.3% and on 5 March 2024 (the latest date before approving
this Annual Report) was 6.5%.
Resolutions to renew the authorities to issue and buy back shares will be put to shareholders at the forthcoming Annual General
Meeting.
Board composition
As mentioned in the Half Yearly Financial Report, the Board was delighted to welcome Charles (Chip) Goodyear as a non-executive
Director. I also advised at that time that I would be stepping down as Chairman following the forthcoming Annual General Meeting
(AGM) and that Chip would succeed me as Chairman. It has been a privilege to be Chairman of the Company for the past five years.
I would like to thank all shareholders for their support, as well as thanking my Board colleagues and the team at BlackRock for
making my tenure as Chairman as rewarding and enjoyable as it has undoubtedly been. With Chip’s extensive experience of leading
mining companies, I leave the Company in the capable hands of the Board and Investment Manager and wish it every success for
the future.
The Board commenced a search to identify a new Director in early 2024, assisted by a third-party recruitment firm, Fletcher Jones.
The successful candidate will be appointed as a Director following the conclusion of the AGM on 9 May 2024.
30th anniversary
In celebration of the Company’s 30th anniversary, the Board agreed to make an annual donation of US$15,000 over three years to
the Julian Baring Scholarship Fund (the Fund). The Fund was established in 2000 in the name of the Company’s first fund manager,
Julian Baring. The advisers to the Fund, with the support of the industry, endow annual scholarships for talented, but financially
disadvantaged, students in Africa and South America to continue their studies and to pursue a career in the mining industry. The
Fund has assisted more than 150 individuals since inception in mining related faculties.
Section 1: Overview and performance
7
Following Chip Goodyear’s appointment last August, he sought approval to waive his rights to compensation related to his role
as a Director of the Company. This waiver was at his initiative and request. The Board discussed the matter and decided it was
appropriate to donate annually to the Fund an amount equivalent to Chip’s Director’s fee, in addition to the US$15,000 on the
preceding page. With our previous support at the time of the Company’s 25th anniversary, the Fund was able to broaden its reach
from Africa to include South America. The Board receives regular updates from the Fund trustees about students past and present
and their progress and Justin Baring, the chair of the Fund, will provide a brief introduction to shareholders at the forthcoming AGM.
Annual General Meeting arrangements
The Company’s AGM will be held at the offices of BlackRock at 12 Throgmorton Avenue, London EC2N 2DL on Thursday, 9 May
2024 at 11.30 a.m. Details of the business of the meeting are set out in the Notice of Meeting on pages 156 to 159 of this Annual
Report. The Board very much looks forward to meeting shareholders and answering any questions you may have on the day.
For the benefit of shareholders who are unable to attend this year’s AGM in person, we have arranged for the proceedings to be
viewed via a webinar. You can register to watch the AGM by scanning the QR Code inside the cover of this Annual Report or by
visiting our website at
www.blackrock.com/uk/brwm
and clicking on the registration banner.
Please note that it is not possible to speak or vote at the AGM via this medium and joining the webinar does not constitute
attendance at the AGM. Shareholders wishing to exercise their right to attend, speak and vote at the AGM should either attend in
person or exercise their right to appoint a proxy to do so on their behalf. For further details please see page 158 of the Annual Report.
Outlook
Higher interest rates and greater volatility have resulted in a high level of uncertainty for markets and a remarkable dispersion
in commodity price returns during 2023. There has also been a challenging geopolitical backdrop with little end in sight for the
conflicts in both Eastern Europe and the Middle East, as well as structural competition between US and China. The number of
volatile situations worldwide is the highest in decades and 2024 is set to be the biggest election year, with more than half the world’s
population voting.
However, against this backdrop, inflationary pressures are easing in the US and UK and inflation is expected to return towards
target in 2024. Remaining COVID-19 pandemic era supply disruptions are also fading and the Chinese government has moved
forward with a series of stimulus measures to turn round its ailing economy which should support commodity demand. The energy
transition to a low carbon economy is also set to increase demand for materials in the supply chain for low carbon technologies,
including copper, steel and lithium, which is a positive tailwind for selective parts of the mining sector.
David Cheyne
Chairman
7 March 2024
Section 1: Overview and performance
9
Investment
Manager’s
Report
Evy Hambro
Olivia Markham
Overview
2023 was a year of huge swings in performance for the sector as a whole and
markets more broadly. While 2022 as a year finished with strong gains across the
sector but much of this came from the rally in the fourth quarter of 2022 on the
expectation that the reopening of China, post its zero COVID-19 policy, would drive
further growth in 2023. Sadly, this was not to be as momentum stalled as January
ended due to the complex array of headwinds that drove moves in 2023. Financial
factors such as interest rates and inflation, combined with lower-than-expected
growth in China and geopolitical events, created uncertainty amongst investors
leading to a significant dispersion in returns.
Commodity price returns were similarly diverse across the suite. These ranged
from iron ore prices massively exceeding estimates by failing to move lower,
whilst lithium fell sharply finishing the year well below even the most cautious of
forecasts. Copper prices, despite tight market conditions, did not react to large
production downgrades and surprise disruptions. Precious metals also moved in
different directions with gold moving higher, whilst the platinum group metals
fell. Mining company share prices generally derated during the year as investors,
fearful of China demand weakness, moved out of the sector into either higher
yielding cash or to gain exposure to the “magnificent 7” (Alphabet, Amazon, Apple,
Meta, Microsoft, Nvidia and Tesla) opportunity. This left the sector trading on multi
decade low multiples, presenting an opportunity for the Company.
However, overall the year was disappointing for the Company as a number of key
holdings failed to generate returns for a variety of factors. Examples include: First
Quantum Minerals where the Panama Government enforced the closure of the
company’s largest asset due to a populist agenda; Chalice Mining set unrealistic
project parameters; weakness in lithium prices impacted valuations of holdings in
the Company, but the opposite for South Korean steel company POSCO with shares
rerated on their exposure; and mid-sized copper growth holdings heavily derated
during the year. The cumulative impact of this caused the Company’s NAV to
underperform the reference index (MSCI ACWI Metals & Mining 30% Buffer 10/40
Index (net total return)) for only the second time in the last 9 years.
Bravo Mining reported excellent drilling results, an updated resource for their Luanga
project and completed a financing in 2023 for exploration and study expenditure.
PHOTO COURTESY OF BRAVO MINING
10
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
For the year as a whole, the NAV of the Company was down by 6.2% with income reinvested and share price total return
was -10.4% as the discount widened slightly over the year. This compares to the FTSE 100 rising
by
7.7%, Consumer Price
Index (CPI) up by 4.0% and the reference index up by 2.4% (all numbers based in Sterling terms). Despite this poor one-year
performance the Company’s track record over three and five years remains firmly intact.
Seismic shifts
2023 arrived with a huge spread of expectations. How much further would interest rates rise? Would inflation be sticky or start
to fade? Would companies be able to manage margins? These questions were then mixed in with slower growth, bank rescues
(Silicon Valley Bank, First Republic and Credit Suisse), conflict in the Middle East and a far slower reopening trade in China.
Given the above, it is amazing to have finished the year with such positive returns for equity markets (S&P 500 Index up 18.6%
in Sterling terms) and without widespread recession across the world.
For the mining sector the fundamentals of the medium term have remained firmly in place. Energy transition related
commodity demand growth remains robust. Sales of electric vehicles (EVs) broke new records in both total numbers and
market share levels. Installation of renewable power infrastructure also broke records with huge amounts built during the year
and an industry sales pipeline for future projects as full as can be expected.
On the supply side, copper production numbers both for 2023 and beyond look to be less than expected as mines have been
unable to ramp-up on time or to expected levels. Capital expenditure for new projects continues to exceed expectations,
making project development less likely. Metal inventories generally declined during the year leaving them at multi year lows,
again keeping markets tight. Resource nationalism remains an ever-present threat with risks in many countries around the
world and some mines have been forced to close, including Cobre de Panama. With supply looking increasingly price inelastic
in the near to medium term there seems little room to manoeuvre should disruptions escalate in 2024.
Despite these supportive factors the sector was unable to generate enough momentum to create widespread investor interest
and the alternative, such as money market deposits at 5%, captured much of the flow of savings. Mining shares significantly
underperformed the broader markets as valuations moved to multi decade lows (see chart below). This is in stark contrast to
2022 when the sector, alongside oil, was one of the best places to be exposed.
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
11%
12%
13%
Apple
Apple
Citigroup
Chevron
Chevron
General
Electric
Exxon
Mobile
Apple
IBM
Pfizer
Pfizer
Philip
Morris
Exxon
Mobile
Apple
Bank of
America
General
Electric
General
Electric
JPMorgan
JPMorgan
JPMorgan
Wells Fargo
Wells Fargo
General
Electric
Google
Google
Google
Google
Google
Google
Google
Johnson &
Johnson
Microsoft
Microsoft
Microsoft
Microsoft
Microsoft
Microsoft
Microsoft
Microsoft
Microsoft
Microsoft
Exxon
Mobile
Exxon
Mobile
Apple
Apple
Apple
Apple
Apple
Apple
Eli Lilly
Meta
Meta
Meta
AT&T
Amazon
Amazon
Amazon
Amazon
Amazon
Berkshire
Intel
Merck
Mastercard
Nvidia
Nvidia
Nvidia
Tessla
Merck
Exxon
Mobile
Chevron
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
YTD 2023
Amazon
Bank of America
Berkshire
Citigroup
Chevron
Meta
General Electric
Google
IBM
Intel
Johnson & Johnson
JPMorgan
Coca-Cola
Microsoft
Pfizer
Philip Morris
AT&T
Wells Fargo
Exxon Mobile
Mastercard
Merck
Nvidia
Tessla
Eli Lilly
Top 5 contributing stocks by year* dominated by the magnificent 7
* % increase in market price during the year.
Source: Baird, December 2023.
Section 1: Overview and performance
11
Merger and acquisition (M&A) activity was elevated versus recent years, but most was characterised by failing to complete.
Lithium companies in Australia were the focus of deals during the year. Despite a number of suitors being able to announce
terms the deals were eventually thwarted by domestic interest, for example Liontown and Azure. In Canada, Teck Resources
(Teck) announced plans to separate into an energy metals company by divesting its metallurgical coal mines. Soon after being
announced, Teck received a bid from Glencore for the whole company which was rebuffed by management. Eventually Teck
announced a joint plan to sell the coal business to Glencore for cash.
In the United States (US), Newmont Corporation agreed terms to buy Newcrest Mining and this deal was completed in the final
quarter of the year. Also, US Steel announced terms of a deal that could see it sold to Nippon Steel if the deal is approved by US
regulators, the unions and of course shareholders.
ESG and the social license to operate
ESG (Environmental, Social and Governance) issues are highly relevant to the mining sector and we seek to understand the
ESG risks and possible related opportunities facing companies and industries 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 geographical
location of assets. However, we consider that the sector can provide critical infrastructure, taxes and employment to local
communities, as well as materials essential to technological development, enabling the carbon transition through the
production of the metals required for the technology underpinning that transition.
We consider ESG insights and data, including sustainability risks, within the total set of information in our research process
and make a determination as to the materiality of such information as part of the investment process used to build and
manage the portfolio. 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) and which have no plans to address existing deficiencies or controversies in an appropriate way.
•
We take a long-term approach, focused on engaging with portfolio company boards and executive leadership
to understand the drivers of risk and financial value creation in companies’ business models, including material
sustainability-related risks and opportunities, as appropriate.
0
5
10
15
20
25
Dec 1991
May 1993
Oct 1994
Mar 1996
Aug 1997
Jan 1999
Jun 2000
Nov 2001
Apr 2003
Sep 2004
Feb 2006
Jul 2007
Dec 2008
May 2010
Oct 2011
Mar 2013
Aug 2014
Jan 2016
Jun 2017
Nov 2018
Apr 2020
Sep 2021
Feb 2023
EV / EBITDA – World DS General Mining Index
The figures shown relate to past performance. Past performance is not a reliable indicator of current or future results. Index performance
returns do not reflect any management fees, transaction costs or expenses. Indices are unmanaged and one cannot invest directly in an
index.
Source: DataStream, 31 December 2023.
12
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
•
There will be cases where a serious event has occurred, for example an accident at mine site and, in that case, we will
assess whether the relevant portfolio company is taking appropriate action to resolve matters before deciding what to do.
•
There will be companies which have derated (the downward adjustment of multiples) as a result of an adverse ESG event
or generally due to poor ESG practices where there may be 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 relevant
company’s culture has changed and that better operating practices have been put in place.
Given the activities that mining companies undertake, it is no surprise that there are always events that unfold during any
calendar year. 2023 was a year where there were fewer events for the Company and this meant that engagement once
again focused mainly on our holdings’ approach to the energy transition and how they plan to not only benefit from the
opportunities, but also how they are planning to decarbonise their own operations.
During the year the main areas of focus were prior ESG issues relating to Vale and governance in relation to the board’s
fiduciary responsibilities. Vale has continued to make further progress on its journey to raise its ESG profile following the
tragic tailings related events from the last decade. The company paid US$55.9 million in March 2023 to settle charges related
to misleading disclosures in relation to the Brumadinho dam. On the governance front, changes have been made to the board
with new international independent directors being added. Vale also announced plans to separate its base metals division
and raised capital to support this process. Analysts from BlackRock visited Brazil to review restoration work done around the
tailings failures and engaged with local communities impacted by these initiatives. It was pleasing to see ESG ratings agencies
reflect the work the company has done in improved rating scores.
General price weakness
Similar to last year, average prices were generally lower across the suite aside from gold and silver. This, however, hides the
intra year volatility which was more elevated than in recent times. For example, the price of copper over the year was basically
flat but this hides the fact that at one point it had fallen 17% from peak to trough. This pattern played out across the metals
universe and, were it not for the year end rally, most would have finished 2023 well below levels seen at the start of the year.
Despite the overall negative tone to price moves, the standout performer was iron ore which over the year was up by 20.3%.
Even more importantly, the average price was flat which might not sound like a win but with estimates forecasting it to decline
sharply the impact on margins of it being flat was significant.
Commodity price moves
31 December 2023
% Change in 2023
% Change average
prices 2023 vs 2022
Commodity
Gold US$/ounce (oz)
2,065
13.8%
7.8%
Silver US$/oz
24.25
2.1%
7.3%
Platinum US$/oz
1,006
-2.4%
0.6%
Palladium US$/oz
1,119
-37.0%
-36.4%
Copper US$/pound (lb)
3.84
1.2%
-3.9%
Nickel US$/lb
7.43
-45.2%
-17.9%
Aluminium US$/lb
1.06
-0.2%
-16.6%
Zinc US$/lb
1.2
-12.1%
-23.9%
Lead US$/lb
0.92
-12.9%
-0.7%
Tin US$/lb
11.42
1.7%
-17.3%
Baltic Freight Rate
2,094
38.2%
-27.9%
West Texas Intermediate Oil (Cushing) US$/barrel
71.9
-10.4%
-18.2%
Iron Ore (China 62% fines) US$/tonne
142
20.3%
-0.9%
Thermal Coal US$/tonne
146.4
-62.4%
-47.7%
Coking Coal US$/tonne
323.8
9.9%
-19.1%
Lithium US$/lb
108.7
-43.2%
-32.9%
Sources: Datastream and Bloomberg, December 2023.
Section 1: Overview and performance
13
Income
As highlighted in last year’s report, income received by the Company has exceeded expectations for several years in a row. This
has been driven by higher absolute pay out levels for ordinary dividends, a greater number of holdings in the portfolio paying
dividends, improved capital discipline by companies and generally stronger balance sheets. Looking back, the peak seems to
have been in 2021 with last year a close second.
This year has seen income fall due to lower commodity prices and higher all in costs reducing profitability, meaning less to
return to shareholders. In addition, as highlighted in last year’s report, companies allocated more surplus cash to share buy
backs which bodes well for the future but in the short term further reduced dividend payments. It is noticeable just how rapidly
share counts have declined on the back of these buy backs. For example, the shares in issue for ArcelorMittal and Glencore
have declined by 8% and 5% respectively with a combined total of US$2.9 billion used to buy the shares back.
Looking forward, we see no reason for companies not to honour their capital allocation plans and as such with commodity
prices lower than in 2023 payments could in turn be below that of last year. However, at the time of writing, the commodity
most important for dividends, iron ore, is well in excess of market forecasts meaning there is room for upgrades to dividend
estimates.
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
55000
60000
65000
Ordinary dividends
2014
Special dividends
Fixed income securities
Option premium and other
income
Royalty
2015
2016
2017
2018
2019
2020
2021
2022
2023
Income (£)
Source of dividends and quantum/share for last ten years
The energy transition
As alluded to earlier, the energy transition continues to gather pace. EVs are taking market share away from combustion
engine vehicles at levels well in excess of expectations. The roll out of renewable power projects and related infrastructure is
happening far quicker than planned. This has, in part, been driven by a desire by European countries to diversify away from
Russian supplied fossil fuels and the fact that with fossil fuel prices so high, renewable power is substantially more cost
effective, not to mention helping countries/companies to meet their net zero commitments.
It is clear that we remain very close to the start of the energy transition cycle given the enormous scale of investment that is
going to be needed over the coming decades. Looking at the data for renewable power, it is increasingly obvious how much
more resource intensive it is (see charts on page 14). On top of this there will also be commodity demand from battery storage
needs and the buildout of the hydrogen economy.
Source: BlackRock.
14
BlackRock World Mining Trust plc
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Annual Report and Financial Statements 31 December 2023
It is also essential for mining companies to embrace the need to decarbonise their own operations as future demand is likely
to seek out supply from companies that do not just meet quality but also have green credentials. This move from “Brown
to Green” presents a range of investment opportunities for the Company both in trying to reduce the heavy discount rates
applied to carbon intensive production techniques, as well as new technologies that could solve some of the more damaging
historical processes.
Base metals
It was a difficult year for the base metals with average prices down across the board as concerns around global growth, higher
interest rates and China’s property sector saw significant destocking of metals which depressed prices. With prices moving
lower and costs increasing (albeit at a slower rate than in 2022) margins for the producers also declined reducing cash
generation and dividends. Encouragingly, as we approached the end of the year, expectations of US interest rate cuts and
signs of demand stabilisation and stimulus in China buoyed prices.
Copper, our favoured base metal, finished the year flat as macro concerns offset improving fundamentals particularly on the
supply side. Despite headwinds from China’s property market, China’s copper demand was healthy with apparent demand
+12% year-on-year. China’s focus on “green” related investments in renewables, EVs and the grid, offset the drag on copper
demand from the property sector.
The most interesting feature in the copper market this year has been the escalation in copper supply disruptions as we
approached the end of the year. It was widely expected that 2024 would see notable supply growth as assets recovered post
COVID-19 and new assets such as Anglo American’s Quelleveco mine and Teck’s Quebrada Blanca Phase 2 (QB2) project in
Chile began ramping-up. However, we now expect copper concentrate supply to be lower in 2024 versus 2023.
Source: Issues in Science and Technology, The Hard Math of Minerals Report, 27/02/22. For illustrative purposes only.
The impact of switching from natural-gas fired turbines to wind turbines
Section 1: Overview and performance
15
The most impactful supply shock is the closure of First Quantum Minerals’ Cobre Panama mine, which is now on care and
maintenance. Cobre Panama has capacity to produce about 400ktpa of copper and there is a high degree of uncertainty
when this mine will be restarted. We have also seen meaningful production downgrades from Anglo American, which
lowered its copper production guidance by 180-210kt in 2024; Southern Copper, Vale and Rio Tinto all lowered their copper
supply forecast in 2024 and we see ramp-up risk for Teck QB2 in 2024. Given the low level of copper inventories, the lack of
investment in new mine capacity and structural operating challenges for many copper mines, prices are poised to rebase
higher once the demand outlook improves.
With the long-term fundamentals of the copper market remaining robust, in particular copper’s role in enabling the energy
transition, we continue to remain positively exposed to copper producers within the Company. It was a mixed performance
result among the companies with strong share price performance, including Foran Mining (0.9% of the portfolio). Foran
Mining also delivered exciting exploration results at McIlvenna Bay and its Tesla Discovery site in Canada which has potential
to increase production rates in the future. Lundin Mining (1.2% of the portfolio) also performed well, delivering improved
operational performance and acquiring a 51% stake in the Casserone’s copper mine in Chile. Ivanhoe Mines (1.9% of the
portfolio) continues to deliver as their Komoa-Kakula asset in the Democratic Republic of the Congo ramps
-up and they
also announced exciting exploration results at their earlier stage Western Forelands land package. The key disappointment
during the year was the performance of First Quantum Minerals (1.5% of the portfolio) which saw its share price decline by
approximately 60% as the government of Panama requested the closure of the Cobre Panama mine.
The aluminium price finished the year flat compared with 2022. However, this masks the 17% decline in average prices year-
on-year. Aluminium prices have declined significantly over the last two years as energy prices have fallen which is the largest
cost component of producing aluminium. China’s demand for aluminium has been strongly boosted by its solar rollout, but
so too has its production levels which has left the Chinese market largely balanced. Demand ex-China declined by circa 1%
in 2023 largely due to inventory de-stocking with limited new supply coming into the market ex
-China. Longer term we see
upside to aluminium prices as carbon costs begin to be incorporated into prices. The demand for “green” or “low-carbon”
aluminium continues to grow with these products sold at a premium to traditional London Metals Exchange grade aluminium.
The Company’s largest exposure to aluminium is via Hydro (2.6% of the portfolio) which is one of the lowest-carbon producers
of aluminium by virtue of its access to hydro power in Norway. Hydro continues to pursue its strategy of growing its low-carbon
product mix via recycling and investing into renewable energy, with the company announcing an investment into its renewable
energy company Hydro Rein by Macquarie Asset Management which acquired a 49.9% stake for US$332 million during the
year.
The nickel market was particularly challenging in 2023 with the nickel price finishing the year down 45% and average prices
declining 18% year-on-year. Significant growth in Indonesian nickel supply has structurally changed the nickel market in
recent years and with nickel pig iron (NPI) producers rapidly growing production and adapting their facilities to allow the
Copper market supply and demand forecast
-7
-6
-5
-4
-3
-2
-1
0
1
2
3
4
5
6
7
-40
-30
-20
-10
0
10
20
30
40
Total Global Consumption
Total scrap
Mine production
Global Supply/Demand Balance
Million tonnes
Million tonnes
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Source: Goldman Sachs, 7 October 2023. For illustrative purposes only. There is no guarantee that any forecasts made will come to pass.
16
BlackRock World Mining Trust plc
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Annual Report and Financial Statements 31 December 2023
production of nickel matte and other intermediary products. This allows them to sell into the market for class 1 battery grade
nickel which is expected to see increasing demand alongside the growth in EVs. A key question for the nickel market is whether
or not we see differential pricing for nickel based on the carbon intensity of production which is significant for many of the
Indonesian producers given their reliance on thermal coal. The Company has two pure play exposures to nickel – the first
Nickel Industries (0.5% of the portfolio) today a NPI producer which is transitioning towards LME grade nickel production
which will improve earnings and margins. The second investment was done via a “PIPE” deal in 2022 into Lifezone Metals
which has traded as a public company since the end of June 2023. Lifezone Metals, in conjunction with BHP, owns the
Kabanga project in Tanzania which is one of the world’s largest undeveloped nickel sulphide deposits.
Bulks and steel
The iron ore market was an area of strength in 2023 with the price finishing 20% higher and average prices flat year-on-year.
Given the depressed outlook for China’s property sector, the broad expectation from commodity analysts was for prices to
decline in 2023 alongside falling steel production in China. The iron ore market benefited from better-than-expected Chinese
steel production in 2023, rising blast furnace production at the expense of lower scrap-fed electric arc furnace production and
higher steel exports from China which were up 40% year-on-year. With steel margins in China under pressure, the premium for
higher grade material declined. However, we remain positive on the outlook for higher grade iron ore longer term, particularly
as the steel industry looks to reduce its carbon intensity.
The iron ore market remains highly concentrated with the four largest producers accounting for circa 70% of the seaborne
market. We have seen the industry remain disciplined from a supply perspective with limited supply growth from the major
producers, despite strong cash generation from their existing iron ore assets. We expect this to remain the case over the next
few years as producers continue to focus on value over volume and decarbonising their operations.
The Company’s exposure to iron ore is primarily via the diversified majors BHP, Vale and Rio Tinto. These companies tend to
generate strong margins and free cash flow from the iron ore businesses which underpins the attractive dividend yield they
trade on. Given better than expected iron ore prices in 2023, we see scope for dividends from the iron ore producers to surprise
to the upside. In addition, the Company has exposure to two pure play high grade iron ore producers, Champion Iron and
Labrador Iron. Champion Iron is ramping-up its Bloom Lake operation in Canada and targeting the production of high grade
(69% Fe) iron ore which is a key component of low carbon steel production.
Site visit to Teck Resources’ Quebrada Blanca Phase 2
Source: BlackRock.
Section 1: Overview and performance
17
During 2023 we saw notable differences in the performance of steel margins and equity prices for each of the key steel
producing regions. The US has remained an area of strength in the global steel market, supported by higher infrastructure and
re-shoring investment, alongside supply discipline from the producers. In Europe, steel prices and margins have been under
pressure as industrial production in areas such as Germany have remained depressed and higher Chinese exports have
weakened prices. Steel margins in China have remained around breakeven levels for much of the year, with steel prices largely
tracking moves in its key cost inputs iron ore and coking coal. Our expectation was for steel production in China to moderate in
the second half of 2023 in line with the government’s target of reducing steel production year-on-year. However, this did not
eventuate supporting iron ore prices.
Supply demand balance history and forecast for iron ore
Source: Goldman Sachs.
2020
-47
2021
2023
2024
2022
-27
-40
-17
0
Global iron ore supply (demand) balance
-60
-50
-40
-30
-20
-10
0
10
20
30
40
million tonnes
From an equity perspective, the Asian (ex-China) steel producers outperformed in 2023, a detraction from relative
performance for the Company given its lack of exposure. Korean listed POSCO performed strongly in 2023 on the
announcement of its battery material plans, with Japanese listed Nippon Steel also performing well with renewed interest
in Japanese listed equities. The Company’s exposure to steel is focused on companies with a track record of capital returns
through share buybacks and dividends, as well as disciplined growth and an industry leading approach to decarbonisation.
Our preference in the Company is to have exposure to low carbon producers such as the US Electric Arc Furnace producers
Nucor and Steel Dynamics, or to be invested in those producers which might be carbon intensive today but have credible plans
to decarbonise their production as is the case with Arcelor Mittal.
Stronger than expected steel demand and rising blast furnace utilisation also benefited coking coal prices which averaged
US$295.5/tonne during the year. China’s coking coal imports remained healthy with domestic supply impacted by accidents
and rising safety inspections. India, the world’s fastest growing steel market, continued to increase its imports of coking coal
and is set to increase its coking coal demand by circa 50Mt by the end of the decade, equivalent in size to Japan’s coking coal
demand today. Combined with limited supply growth we expect a “stronger for longer” price environment over the medium
term to persist. During the year we saw M&A in the space with Glencore acquiring a 77% interest in Teck’s coking coal
business for US$6.9 billion with the deal expected to complete in Q3 of 2024. BHP sold its Blackwater and Daunia coking coal
mines in Queensland to Whitehaven for a cash consideration of up to US$4.1 billion. The Company’s exposure to metallurgical
coal remains in the two leading producers, BHP and Teck Resources, which have been able to generate very strong levels of
free cash flow from their coking coal businesses to support returns to shareholders in recent years.
18
BlackRock World Mining Trust plc
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Annual Report and Financial Statements 31 December 2023
After record-high thermal coal prices in 2022 following the European energy crisis, prices declined meaningfully in 2023
but finished modestly above market expectations. China has dominated coal demand growth in 2023 with thermal power
generation higher in 2023, with both coal imports and domestic coal production in China higher year-on-year. This higher level
of demand was largely met by rising Indonesian coal exports, along with higher Australian supply which has been hampered
in recent years by heavy rainfall. We have seen less supply disruption in Australia during 2023 which has helped stabilise
demand.
The Company’s thermal coal exposure is via our 8.3% position in Glencore which has used elevated thermal coal prices in
recent years to deleverage the business and buyback shares. During the year, Glencore made a proposal to Teck to merge
their two businesses and subsequently demerger the combined coal business to create two separate companies – a metals
business and a coal business. This proposal was not accepted by the Teck board and instead they chose to sell their coking
coal business which Glencore acquired. Glencore has indicated that it will separate coal from the rest of the business over time.
As a reminder, the Company has no exposure to pure play thermal coal producers.
Precious metals
Precious metals were an area of strength during 2023 with the gold price up by 14% and the average price 8% higher year-
on-year. The gold price benefited from elevated geopolitical issues during the year, strong central bank purchases and as
we approached the end of the year and the expectation of Federal Reserve interest rate cuts which would see real yields fall.
Central bank net purchases of gold in 2023 of 1,037 tonnes almost matched the 2022 record, falling just 45 tonnes short.
Central bank purchases have been dominated by China which continues to build gold reserves.
Another interesting feature of the gold market in recent years has been the disconnect between the gold price and real yields.
Historically, gold has performed well in an environment of low real yields, as gold is a non-yielding asset. Conversely, in an
environment of rising real yields, the attractiveness of other “safe haven” assets such as cash and government bonds improves,
which typically acts as a headwind to gold. Rising physical demand for gold from central banks alongside elevated geopolitical
Our preference within steel is to have exposure to low carbon producers such as the US Electric Arc Furnace producers Nucor and
Steel Dynamics.
PHOTO COURTESY OF STEEL DYNAMICS
Section 1: Overview and performance
19
risk partly explains the strong performance of gold despite elevated real yields in 2023. As we approached the end of 2023 and
the market began to price in rate cuts, we did see the gold price rally, more in line with the traditional correlation between gold
and rates.
The silver price has modestly underperformed gold when looking at average prices during 2023 versus the same period
last year. Industrial demand for silver was strong during 2023 with solar installations globally exceeding expectations. With
silver inventories declining over the last two years and supply challenges in the world’s largest producer of silver, Mexico, the
physical market for silver is set to tighten further particularly if solar installations continue to supply to the upside.
The Company has increased its exposure to gold producers during the year given the improved gold price outlook. However,
we have maintained our strategy of focusing on high quality producers which have an attractive operating margin and solid
production profile and resource base. Typically, gold royalty companies offer a higher quality and lower risk exposure to gold
as they do not face operating and capital cost inflation. Disappointingly, Franco-Nevada’s (1.4% of the portfolio) exposure to
First Quantum Minerals’ Cobre Panama mine which was placed into care and maintenance towards the end of the year saw the
shares finish the year down by 19% in US Dollar terms. 2023 marked another year of consolidation in the gold industry with
Newmont Corporation (3.6% of the portfolio) successfully acquiring Australian listed Newcrest Mining to create the world’s
largest gold producer.
Energy transition metals
Battery electric vehicles (BEVs) sales continued to grow in 2023, with estimates that sales would reach over 14 million battery
electric vehicle units. This growth has been mainly driven by China, where BEV sales totalled 8.8 million units, +38% year-on-
year according to the China Passenger Car Association. Globally, competition has resulted in EV price declines supporting
volumes. However, this has cost profitability and led to weakening investor sentiment as some large equipment manufacturers,
particularly in the US, have slowed investment plans as they prioritise returns.
2023 marked another year of consolidation in the gold industry with Newmont Corporation successfully acquiring Australian listed
Newcrest Mining to create the world’s largest gold producer.
PHOTO COURTESY OF NEWMONT CORPORATION
20
BlackRock World Mining Trust plc
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Annual Report and Financial Statements 31 December 2023
Legislation continued to evolve and of particular note was the US looking to exclude Foreign Entity of Concern (FEOC) owned
companies from qualifying for EV incentives under the Inflation Reduction Act. Beginning in 2024, an eligible clean vehicle
may not contain any battery components that are manufactured by an FEOC and beginning in 2025 an eligible clean vehicle
may not contain any critical minerals that were extracted, processed or recycled by a FEOC. This is disruptive as it will exclude
many Chinese companies from the US supply chain.
The Company has exposure to the raw materials that go into EV batteries and the e-motor. Lithium is a critical component of
an EV battery and, although demand for lithium has been strong this year, prices have been weak falling by 43% as the sector
saw both destocking and increased supply. The Company’s holdings in lithium producers such as Albemarle and SQM cost
performance. The holding in Sigma Lithium was an exception, up a modest 6.6% over the year. The company started producing
lithium concentrate from its Brazilian project during the year, as well as announcing a Strategic Review was underway.
A critical component of the electric car is also the e-motor, which most commonly uses a Praseodymium
-Neodymium (NdPr)
magnet, an alloy of two rare earth elements (REEs). REEs are commonly mined and processed in China and have 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 crucially based in Malaysia and Australia. In 2023 Lynas equity fell by 13.4% during a period of
weaker Rare Earth Mineral pricing. This year the company successful commissioned their cracking and leaching plant in
Australia, as well as progressing their US plant securing a site in Texas.
2023 saw a rapid rise in interest around uranium cumulating at the 28th United Nations Climate Change Conference
(COP28), which recognised the key role of nuclear energy in reaching Net Zero with a declaration to triple nuclear energy
capacity by 2050. The uranium price rose sharply during the year with the Ux Consulting weekly spot price up by 82.3%. The
Company’s holding in uranium producer Cameco rose by 81% in the year, benefiting from rising prices. They also completed
an acquisition of 49% of Westinghouse, a nuclear reactor technology original equipment manufacturer and service provider,
further integrating them into the nuclear power supply chain.
Royalty and unquoted investments
During the year the Company evaluated several new private investment deals but in the end declined to participate for a variety
of reasons. As mentioned in previous reports, the focus of the unquoted investments is to aim to generate both capital growth
and income to deliver the superior total return goal for the portfolio.
Gold price versus US 10-year treasury inflation protected securities (TIPS)
The figures shown relate to past performance. Past performance is not a reliable indicator of current or future results. Index performance
returns do not reflect any management fees, transaction costs or expenses.
Sources: Morgan Stanley and DataStream, 31 October 2023. For illustrative purposes only.
Source: LSEG Data & Analytics.
Section 1: Overview and performance
21
We continue 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.
2023 saw several of the recently listed shares deliver further progress at their projects. Bravo Mining reported excellent drilling
results, an updated resource for their Luanga project and completed a financing which covers them for the next couple of
years. Ivanhoe Electric reported strong drill results and completed a significant capital raise during the period.
As at the end of 2023, the unquoted investments in the portfolio amounted to 6.7% 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 shareholders in the Strategic Report of this Annual Report.
BHP Brazil Royalty Contract (1.4% of the portfolio)
In July 2014 the Company signed a binding royalty agreement with Avanco Minerals (Avanco). The Company provided US$12
million in return for a Net Smelter Return royalty payments (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 as at the time of the agreement.
In 2018 we were delighted to report that Avanco Minerals was acquired by OZ Minerals, an Australian based copper and gold
producer for A$418 million. We were equally pleased to report that in early 2023 OZ Minerals was acquired by BHP, the world’s
largest mining company and which now operates the assets underlying the royalty. Since our initial US$12 million investment
was made, we have received US$27.4 million in royalty payments with the royalty achieving full payback on the initial
investment in 3½ years. As at the end of December 2023, the royalty was valued at £18.4 million (1.4% of the portfolio) which
equates to a 329.6% cash return on the initial US$12 million invested.
In August, the Pedra Branca mine experienced a geotechnical event which suspended operations in line with BHP’s global
safety standards. The mine recommenced operations in October and is targeting normal production levels in early 2024. This
has reduced 2023 production levels and associated royalty payments, but it is not expected to impact overall reserves and
resources or long-term production rates. BHP has implemented changes to the mine design and mining method, along with
additional monitoring systems to reduce the risk of future events.
-10
-5
0
5
10
15
20
25
30
•
•
Royalty Payment
2015
2019
2018
2017
2016
2020
2021
•
Tranche Drawdown
•
2022
Source: BlackRock.
2023
US$ million
BHP Brazil Royalty payments
22
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
Vale debentures (2.8% of the portfolio)
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 which is well in excess of 50 years.
Dividend payments are expected to grow once royalty payments commence on the Southeastern System in 2025 and volumes
from S11D and Serra Norte improve.
At Vale’s Capital Markets Day in December, the company outlined 50Mt of iron ore
growth to 2026 of which S11D is the largest component and an improved quality mix which the royalty will benefit from.
The debentures offer a yield in excess of 10% based on the 1H-2023 annualised dividend. This is an attractive yield for a
royalty investment, with this value opportunity recognised by other listed royalty producers, Franco-Nevada and Sandstorm
Gold Royalties, which have both acquired stakes in the debentures in 2021.
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, although this is improving following the sell-down in April 2021.
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
Per debenture (R$)
2H12
1H13
2H13
1H14
2H14
1H15
2H15
1H16
2H16
1H17
2H17
1H18
2H18
1H19
2H19
1H20
2H20
1H21
2H21
1H22
2H22
1H23
2H23
Distribution on Vale Shareholders’ debenture payments
Source: Vale, November 2023.
Jetti Resources (2.1% of the portfolio)
In early 2022, the Company made an investment into 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 their technology across a number
of mines where they will look to integrate their catalyst into existing heap leach SX-EW mines to improve recoveries at a
low capital cost. The technology has been demonstrated to work at scale at Capstone’s Pinto Valley copper mine, as well as
Freeport-McMoRan’s Bagdad and El Abra operations. If Jetti’s technology continues to work at scale, we see valuation upside
with Jetti sharing in the economics of additional copper volumes recovered through the application of their catalyst.
During the second half of 2022 we were pleased to report that Jetti completed its Series D financing to raise US$100 million
at a substantially higher valuation than when our investment was made at the beginning of 2022. This sees the company fully
financed to execute on their expected growth plans in the years ahead.
Section 1: Overview and performance
23
MCC Mining (0.4% of the portfolio)
MCC Mining is a private company exploring for copper in Columbia. It is undertaking early-stage greenfield exploration and
has strong geological potential to host multiple world class porphyry deposits. Shareholders include other mid- to large-cap
copper miners, which is another 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. Initial drilling results were very encouraging, which confirmed two porphyry deposits at Comita and
Pantanos. The valuation of the Company is based on the US
$170.7 million equity value implied by the April 2022 equity raise.
The focus for the company is to continue exploration into 2024.
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.
In 2023 income generated from options was £6.0 million, in line with contributions from prior periods. During the year
implied volatility was generally lower than in prior years making the opportunity set less attractive. In addition, the cost of the
trades had to be looked at in the context of higher interest rates, given that the borrowing capacity is generally used for such
transactions. Despite these, enough opportunities were found to generate revenues almost in line with previous years without
having to take too much risk. 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 2023, the Company had £149.8 million of net debt, with a gearing level of 11.9%. 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. As in recent years, the Company sought to maximise the use of gearing against the equity holdings
rather than debt securities. This was driven by the risk adjusted relative value available in shares where dividend yields
were mostly in excess of the coupons being paid on the bonds. Since the companies also have strong balance sheets, it was
opportune to gear up the equity portfolio of the Company since we were not adding debt to holdings that were already heavily
leveraged themselves. However, in 2023 the debt came with a higher cost and this meant absolute gearing was kept below that
of prior years to minimise the interest cost.
Outlook
The dominant story for 2023 was that of interest rates versus inflation. The transition to higher rates was far from smooth as
short-term expectations gyrated markets creating a bumpy ride for investors. However, it now looks likely that inflationary
pressures have more than peaked and there is an increasing consensus that rates are not moving higher. It is worth
remembering that the post global financial crisis and COVID period of zero rates are an outlier versus history and as such the
new norm should be anchored around current levels rather than a return to such extreme lows.
At the time of writing it appears we are seeing a change in China’s demand for commodities, with investment into renewable
infrastructure, manufacturing and EV’s growing significantly, against more traditional areas of commodity demand such
as property declining. Energy transition spending globally continues to drive commodities demand growth and with supply
growth across a number of commodities increasingly constrained markets look set to tighten further over the next few years
which bodes well for prices.
For mining companies whose balance sheets remain strong and management teams are anchored to disciplined capital
allocation frameworks, the challenge will be balancing the desire to invest either for decarbonisation or growth, versus
returning capital to shareholders. Given the high level of capital intensity attached to building new capacity, those with the
flexibility to repurchase shares should take advantage of the current low equity valuations given that it generally remains
cheaper to buy existing capacity than to build it.
In summary, the near term as always remains volatile, but with medium-term demand and supply fundamentals strong, the
Company is well positioned to capture returns from this imbalance. In the meantime dividend payments, whilst lower than the
peak of a few years ago, remain competitive with alternatives such as bonds and cash meaning shareholders are paid to wait
for the positive outlook to be reflected in share prices.
Evy Hambro and Olivia Markham
BlackRock Investment Management (UK) Limited
7 March 2024
Section 2: Portfolio
25
Portfolio
Once again the portfolio’s largest holding at year end was BHP, the world’s largest
diversified mining group by market capitalisation.
PHOTO COURTESY OF BHP
26
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
10
7
4
1
9
6
3
8
5
2
PHOTOS COURTESY OF BHP, VALE, GLENCORE, RIO TINTO, FREEPORT-MCMORAN, NEWMONT MINING, BARRICK GOLD, WHEATON PRECIOUS METALS, HYDRO/DAG
JENSSEN, TECK RESOURCES.
Section 2: Portfolio
27
Ten largest
investments
1
BHP
1,2
(2022: 1st)
Diversified mining group
Market value: £130,674,000
Share of investments: 10.1% comprising equity of 8.7% and Mining Royalty of 1.4%
(2022: 9.5%)
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, thermal and metallurgical coal, manganese, nickel, silver and diamonds.
2
Vale
2,3,4
(2022: 2nd)
Diversified mining group
Market value: £124,601,000
Share of investments: 9.6% comprising equity of 6.9%, debentures of 2.8% and option of (0.1)%
(2022: 9.1%)
One of the largest mining groups in the world, with operations in 30 countries. 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 manganese ore, ferroalloys,
metallurgical and thermal coal, copper, platinum group metals, gold, silver and cobalt.
3
Glencore
(2022: 3rd)
Diversified mining group
Market value: £108,173,000
Share of investments: 8.3%
(2022: 7.7%)
One of the world’s largest globally diversified natural resources groups. The group’s operations include approximately 150
mining and metallurgical sites and oil production assets. Glencore’s mined commodity exposure includes copper, cobalt,
nickel, zinc, lead, ferroalloys, aluminium, thermal coal, iron ore, gold and silver.
4
Rio Tinto
(2022: 5th)
Diversified mining group
Market value: £94,600,000
Share of investments: 7.3%
(2022: 4.5%)
One of the world’s leading mining groups. The group’s primary product is iron ore, but it also produces aluminium, copper,
diamonds, gold, industrial minerals and energy products.
5
Freeport-McMoRan
(2022: 8th)
Copper producer
Market value: £65,125,000
Share of investments: 5.0%
(2022: 4.0%)
A global mining group which operates large, long-lived, geographically diverse assets with significant proven and probable
reserves of copper, gold and molybdenum.
Together, the ten largest investments represented 54.8% of total investments of the Company’s portfolio as at 31 December
2023 (2022: 54.3%).
28
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
Ten largest investments
continued
6
Newmont Corporation
4
(2022: 18th)
Gold producer
Market value: £44,450,000
Share of investments: 3.6%
(2022: 1.9%)
Following the acquisition of Goldcorp in the first half of 2019, Newmont Corporation is the world’s largest gold producer
by market capitalisation. The group has gold and copper operations on five continents, with active gold mines in Nevada,
Australia, Ghana, Peru and Suriname.
7
Barrick Gold
(2022: 13th)
Gold producer
Market value: £41,299,000
Share of investments: 3.2%
(2022: 2.3%)
Barrick Gold is the second largest gold producer by market capitalisation and has operations and projects in 15 countries
across the world. In 2019 the group successfully established a joint venture with Newmont across their Nevada assets to
maximize the synergies across both sets of assets.
8
Wheaton Precious Metals
(2022: 14th)
Gold producer
Market value: £38,795,000
Share of investments: 3.0%
(2022: 2.3%)
Wheaton Precious Metals is one of the world’s largest precious metals streaming companies, offering investors cost
predictability, direct leverage to increasing precious metals prices and a high-quality asset base consisting of 18 operating
mines and 26 development assets.
9
Hydro
(2022: 15th)
Aluminium producer
Market value: £34,264,000
Share of investments: 2.6%
(2022: 2.1%)
Hydro is a Norwegian aluminium and renewable energy company, headquartered in Oslo. It is one of the largest aluminium
companies worldwide. It has operations in some 50 countries around the world. The company is present throughout the
aluminium value chain, from energy to bauxite mining and alumina refining, primary aluminium, aluminium extrusions and
aluminium recycling.
10
Teck Resources
(2022: 9th)
Diversified mining group
Market value: £30,282,000
Share of investments: 2.3%
(2022: 3.6%)
A diversified mining group headquartered in Canada. The company is engaged in mining and mineral development with
operations and projects in Canada, the US, Chile and Peru. The group has exposure to copper, zinc, metallurgical coal and energy.
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 2022.
Section 2: Portfolio
29
Investments
as at 31 December 2023
Main
geographical
exposure
Market
value
£’000
% of
investments
Diversified
Vale
Global
88,855
}
9.6
Vale Debentures*#^
Global
36,516
Vale Call Option Jan 24 BRL15.5
Global
(770)
BHP
Global
112,240
8.7
Glencore
Global
108,173
8.3
Rio Tinto
Global
94,600
7.3
Teck Resources
Global
30,282
2.3
Anglo American
Global
24,081
}
1.9
Anglo American Put Option 19/01/24 GBP£18.00
Global
(99)
Trident
Global
3,708
0.3
497,586
38.4
Copper
Freeport-McMoRan
Global
65,125
5.0
Ivanhoe Electric
United States
27,443
2.1
Jetti Resources#
Global
27,204
2.1
Ivanhoe Mines
Other Africa
24,627
1.9
Sociedad Minera Cerro Verde
Latin America
20,142
1.6
First Quantum Minerals*
Global
19,942
1.5
BHP Brazil Royalty#~
Latin America
18,316
1.4
Lundin Mining
Global
15,672
1.2
Develop Global
Australasia
14,145
1.1
Foran Mining
Canada
11,225
0.9
CSA Cobar Mine
Australasia
8,739
0.7
Ero Copper
Latin America
6,890
0.6
MCC Mining#
Latin America
5,491
0.4
Solaris Resources
Latin America
5,473
0.4
Filo Mining
Latin America
3,528
0.3
Aurubis
Global
3,219
0.3
Antofagasta
Latin America
2,627
0.2
MTAL Founders Shares
Australasia
611
0.1
Metals Acquisition
Australasia
339
–
280,758
21.8
Gold
Newmont Corporation
Global
44,982
}
3.6
Newmont Corporation Call Option 19/01/24 US$41.50
Global
(532)
Barrick Gold
Global
41,299
3.2
Wheaton Precious Metals
Global
38,795
3.0
Agnico Eagle Mines
Canada
20,729
1.6
Franco-Nevada
Global
18,661
1.4
Northern Star Resources
Australasia
14,040
1.1
Endeavour Mining
Other Africa
9,090
0.7
Allied Gold*
Other Africa
7,770
0.6
Polymetal International
Russia
–
–
Polyus
Russia
–
–
194,834
15.2
30
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
Main
geographical
exposure
Market
value
£’000
% of
investments
Steel
Steel Dynamics
United States
28,799
2.2
Nucor
United States
27,629
2.1
ArcelorMittal
Global
23,207
1.8
Stelco Holdings
Canada
8,172
0.6
SSAB
Global
7,977
0.6
95,784
7.3
Industrial Minerals
Sigma Lithium
Latin America
17,100
1.3
Mineral Resources
Australasia
16,266
1.3
Albemarle
Global
10,963
0.8
Iluka Resources
Australasia
9,280
0.7
Lynas Rare Earths
Australasia
8,825
0.7
Sheffield Resources
Australasia
6,951
0.5
Chalice Mining
Australasia
2,297
0.2
71,682
5.5
Aluminium
Hydro
Global
34,264
2.6
Alcoa
Global
9,019
0.7
43,283
3.3
Iron Ore
Champion Iron
Canada
14,425
1.1
Labrador Iron
Canada
13,301
1.0
Deterra Royalties
Australasia
5,672
0.4
Equatorial Resources
Other Africa
201
–
33,599
2.5
Uranium
Cameco
Canada
30,264
2.3
30,264
2.3
Platinum Group Metals
Bravo Mining
Latin America
15,945
1.2
Northam Platinum
Global
2,610
0.2
Impala Platinum
South Africa
1,598
0.1
Sibanye Stillwater
South Africa
1,029
0.1
21,182
1.6
Mining Services
Woodside Energy Group
Australasia
7,209
0.5
Epiroc
Global
6,421
0.5
13,630
1.0
Nickel
Lifezone Metals
Global
7,091
0.5
Nickel Industries
Indonesia
5,923
0.5
Bindura Nickel
Global
28
–
13,042
1.0
Investments
continued
Section 2: Portfolio
31
Main
geographical
exposure
Market
value
£’000
% of
investments
Zinc
Titan Mining
United States
1,375
0.1
1,375
0.1
Comprising:
1,297,019
100.0
– Investments
1,298,420
100.1
– Options
(1,401)
(0.1)
1,297,019
100.0
* Includes fixed income securities.
# Includes investments held at Directors’ valuation.
~ Mining royalty contract.
^
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).
All investments are in equity shares unless otherwise stated.
The total number of investments as at 31 December 2023 (including options classified as liabilities on the balance sheet) was
69 (31 December 2022: 68).
As at 31 December 2023 the Company did not hold any equity interests in companies comprising more than 3% of a
company’s share capital.
32
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
Portfolio analysis
as at 31 December 2023
Commodity Exposure
1
# Represents exposure at 31 December 2022.
•
2023 portfolio
•
2022 portfolio
#
•
2023 reference index*
0
10
20
30
40
Other
&
Zinc
Nickel
Mining Services
Platinum Group Metals
Uranium
Iron Ore
Aluminium
Industrial Minerals
Steel
Gold
Copper
Diversified
0.1%
0.4%
0.3%
0.0%
1.4%
1.0%
0.8%
0.0%
0.1%
1.0%
0.4%
0.0%
1.6%
2.0%
1.4%
0.0%
2.3%
2.5%
0.4%
5.0%
3.1%
3.3%
2.8%
3.3%
5.5%
6.5%
1.8%
7.3%
8.1%
20.7%
15.2%
13.0%
21.0%
21.8%
22.0%
9.9%
38.4%
40.0%
35.6%
* MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (net total return).
&
Represents a very small exposure.
1
Based on index classifications.
Section 2: Portfolio
33
Geographic Exposure
1
1
Based on the principal commodity exposure and place of operation of each investment.
2
Consists of Indonesia and United States.
Consists of Indonesia, Russia, United Kingdom and United States.
3
•
Global 67.4%
•
Canada 7.5%
•
Latin America 7.4%
•
Australasia 7.3%
•
Other
2
7.0%
•
Other Africa (ex South Africa) 3.2%
•
South Africa 0.2%
2023
2022
•
Global 69.2%
•
Australasia 9.0%
•
Latin America 7.5%
•
Other
3
7.1%
•
Canada 4.1%
•
South Africa 0.7%
•
Other Africa (ex South Africa) 2.4%
Governance
Section 3: Governance
35
Despite the overall negative tone to price moves in commodities, the standout performer
was iron ore which over the year was up by 20.3%. The Company’s exposure to iron ore
is primarily via the diversified majors BHP, Vale and Rio Tinto.
PHOTO COURTESY OF BHP
Governance structure
Responsibility for good governance lies with the Board. The governance
framework of the Company reflects the fact that as an investment
company the Company has no employees, the Directors are all
non‑executive and investment management and administration
functions are outsourced to the Manager and other external service
providers.
The Board
5 scheduled meetings per annum
Five non-executive Directors (NEDs), all independent of the Manager
Chairman
: David Cheyne (since 2 May 2019)
Objectives:
• To determine the Company’s investment policy, strategy, and parameters;
•
To provide leadership within a framework of prudent and effective controls
which enable risk to be assessed and managed and the Company’s assets to be
safeguarded;
• To challenge constructively and scrutinise performance of all outsourced
activities; and
• To determine the Company’s remuneration policy.
Other functions:
•
To carry out the duties of a Nomination Committee, including a regular review of
the Board’s structure and composition, making recommendations for any new
Board appointments.
Audit Committee
2 scheduled meetings per annum
Membership:
All NEDs excluding the Chairman of the Board
Chairman:
Srinivasan Venkatakrishnan (since 19 April 2023)
Key objectives:
• To oversee financial reporting;
•
To consider the adequacy of the control environment and review the Company’s
risk registers;
•
To review and form an opinion on the effectiveness of the external audit process;
and
• To review the provisions relating to whistleblowing and fraud.
Management
Engagement Committee
1 scheduled meeting per annum
Membership:
All NEDs
Chair:
Jane Lewis (since 19 April 2023)
Key objectives:
•
To ensure that the provisions of the investment management agreement
follow industry practice, remain competitive and are in the best interests of
shareholders;
•
To review the performance of the Manager and Investment Manager; and
• To review the performance of other service providers.
36
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
Section 3: Governance
37
Directors’ biographies
Charles (Chip) Goodyear
Appointed 24 August 2023
Chip Goodyear brings a wealth of
relevant industry knowledge and
experience having retired in October
2007 as the chief executive officer of
BHP, the world’s largest diversified
resources company. He is also a former
executive vice president and chief
financial officer of Freeport-McMoRan
and began his career at Kidder,
Peabody & Co. where he participated in
merger and acquisition and financing
activities for natural resources
companies. He is currently president
of Goodyear Capital Corporation and
Goodyear Investment Company and
a trustee of the National World War II
Museum.
Attendance record:
Board: 1/1
Audit Committee: n/a
Management Engagement
Committee: n/a
David Cheyne
Chairman
Appointed 1 June 2012
David Cheyne is a senior adviser to
Akira Partners LLP and a trustee of the
Stowe School Foundation. He retired
as a consultant at Linklaters on 31 July
2015 where he was senior partner from
2006 to 2011 and a partner from 1980.
Throughout his career at Linklaters, he
played a central role in a wide range
of corporate transactions, including
M&A deals, joint ventures, flotations
and general corporate finance work. In
particular, he advised on a number of
large mining transactions. He was also
vice chairman of Europe, Middle East
and Africa at Moelis & Company from
2011 to 2015.
Attendance record:
Board: 5/5
Management Engagement
Committee: 1/1
Jane Lewis
Chair of the Management
Engagement Committee
Appointed 28 April 2016
Jane Lewis is an investment trust
specialist who, until August 2013, was
a director of corporate finance and
broking at Winterflood Investment
Trusts. Prior to this she worked at
Henderson Global Investors and
Gartmore Investment Management
Limited in investment trust business
development and at West LB Panmure
as an investment trust broker. She is
chairman of CT UK Capital and Income
Investment Trust PLC and a non-
executive director of JPMorgan Global
Growth & Income plc and Majedie
Investments PLC.
Attendance record:
Board: 5/5
Audit Committee: 2/2
Management Engagement
Committee: 1/1
38
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
None of the Directors has a service contract with the Company. The terms of their appointment are detailed in a letter sent to
them when they joined the Board. These letters are available for inspection at the registered office of the Company and will be
available at the Annual General Meeting.
Judith Mosely
Senior Independent Director
Appointed 19 August 2014
Judith Mosely is a non-executive
director of Galiano Gold Inc. and
Eldorado Gold Corp. and is Chair of
sustainability and member of the audit
committee of both companies. She
is also a board member of Women
in Mining (UK) and a member of the
investment advisory committee of
Resource Capital Fund credit. She
has over 20 years of experience in
the mining and metals sector and
most recently held the position of
Business Development Director for
Rand Merchant Bank in London with
responsibility for developing the bank’s
African business with international
mining and metals companies. She
previously headed the mining finance
team at Société Générale in London.
Attendance record:
Board: 5/5
Audit Committee: 2/2
Management Engagement
Committee: 1/1
Srinivasan Venkatakrishnan
Chairman of the Audit Committee
Appointed 1 August 2021
Srinivasan Venkatakrishnan is the
Chairman of Endeavour Mining Plc
and a non‑executive director of the
Weir Group PLC (resigned effective
31 March 2024). He brings a wealth
of mining and financial experience
to the Board gained through his vast
experience of leading global mining
businesses, in a career that spans
across six continents and several
metals, notably gold. He served as CEO
of Vedanta Resources plc from 2018
to 2020 and was CEO of AngloGold
Ashanti Limited between 2013 to 2018,
having previously been chief financial
officer of the business from 2005, and
of Ashanti Goldfields Limited from
2000. His earlier career was as an
accountant and restructuring specialist
with Deloitte & Touche in India and the
UK.
Attendance record:
Board: 5/5
Audit Committee: 2/2
Management Engagement
Committee: 1/1
Directors’ biographies
continued
Section 3: Governance
39
Strategic Report
The Directors present the Strategic Report of BlackRock World Mining Trust plc for the year ended 31 December 2023. 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 7 March 2024.
Principal activities
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
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 a worldwide portfolio of mining and metal
securities.
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 (BNYM). Other service providers include the Depositary (also BNYM) 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, 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
40
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
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.
As approved by shareholders in August 2013, 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.
In March 2015 the Board refined the guidelines associated with the Company’s royalty strategy and proposed to maintain the
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 should 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 14.6% and, at the financial reporting date, net gearing (calculated as
borrowings less cash and cash equivalents as a percentage of net assets) stood at 11.9% of shareholders’ funds (2022: 9.6%).
For further details on borrowings refer to note 14 in the Financial Statements and the Alternative Performance Measure in the
Glossary.
Portfolio analysis
Information regarding the Company’s investment exposures is contained within Section 2 (Portfolio), with information on the
ten largest investments on pages 27 and 28, the investments listed on pages 29 to 31 and portfolio analysis on pages 32 and
33. Further information regarding investment risk and activity throughout the year can be found in the Investment Manager’s
Report.
As at 31 December 2023, the Level 3 unquoted investments (see note 18 in the Financial Statements) in the BHP Brazil
Royalty Contract and preferred shares and equity shares of Jetti Resources and MCC Mining were held at Directors’ valuation,
Strategic Report
continued
Section 3: Governance
41
representing a total of £51,129,000 (US$65,178,000) (2022: £56,891,000 (US$67,269,000)). 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 £78,985,000 (2022: profit of £202,420,000) of which £64,691,000 (2022: £76,013,000) 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 2023 amounted to £64,016,000 (2022: £75,405,000).
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 on page 52 and details of the Manager’s
approach to ESG integration are also set out on page 52.
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 2023 are set out in the Directors’ Biographies on pages 37 and 38. The Board
consists of three male Directors and two female Directors. The Company’s policy on diversity is set out on pages 70 and 71. 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 on pages
148 to 152. 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.
42
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
Year ended
31 December
2023
Year ended
31 December
2022
Net asset value total return
1,2
-6.2%
17.7%
Share price total return
1,2
-10.4%
26.0%
(Discount)/premium to net asset value
2
(3.3)%
1.3%
Revenue earnings per share
33.95p
40.68p
Total dividends per share
33.50p
40.00p
Ongoing charges
2,3
0.91%
0.95%
Ongoing charges on gross assets
2,4
0.81%
0.84%
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 on pages 148 to 152.
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).
Strategic Report
continued
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. The COVID-19 pandemic gave rise
to unprecedented challenges for businesses across the globe. Additionally, 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,
high 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.
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.
Section 3: Governance
43
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 the following table.
Market
Principal risk
Market risk arises from volatility in the prices of the Company’s investments. It represents the potential loss the Company
might suffer through realising investments in the face of negative market movements.
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 and the war in Ukraine and 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 Environmental, Social and Governance (ESG) risks and opportunities
facing companies and industries in the portfolio. The Company has not adopted an ESG 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 on page 52.
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.
44
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
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 on page 52. 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.
Strategic Report
continued
Section 3: Governance
45
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 18 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.
46
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
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 2027. 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 on page 58 in the Directors’ Report.
Strategic Report
continued
Section 3: Governance
47
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 with a listing on the premium segment of the official list of the
Financial Conduct Authority (FCA) and trade on the London Stock Exchange’s (LSE) main market for listed securities, 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.
48
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
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 in the table 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
More than ever, the importance of good governance and sustainability practices 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 sustainability 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 investment
strategy and does not exclude investment in stocks based on ESG criteria, but the Board believes that responsible investment
and sustainability are 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 on page 52. The Investment Manager’s approach to engagement with investee
companies and voting guidelines is summarised on page 53 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 licen
s
e 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.
Strategic Report
continued
Section 3: Governance
49
In 2020 BlackRock exited its active public debt and equity investment in businesses generating greater than 25% of their
revenue from thermal coal production due to the heightened risks associated with their economic activity. During the year
under review, the Company has had no exposure to companies whose principal activity is the extraction of thermal coal.
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 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 on page 144.
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.
Feedback from all substantive meetings between the Investment Manager and shareholders will be shared with the Board.
The Directors will also receive updates from the Company’s
Broker
s
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.
50
BlackRock World Mining Trust plc
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Annual Report and Financial Statements 31 December 2023
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 issue 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 on page 56.
During the financial year the Company reissued 2,430,000 shares from treasury. As at 5 March 2024 the Company’s shares
were trading at a discount of 6.5
% 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.
Strategic Report
continued
Section 3: Governance
51
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 an external search consultant, Fletcher Jones, to identify potential candidates
to replace Mr Cheyne who retires as a Director and Chairman 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 2023
evaluation process are given on page 72). 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 on page 144 with any
issues.
Impact
As at the date of this report, the Board was comprised of three men and two women. Under the AIC Code the tenure of a
director who is elevated to Chairman may be extended by three years. The Board decided that this extension should apply
to Mr Cheyne’s tenure which was therefore extended until the Annual General Meeting in May 2024. Mr Cheyne will not be
seeking re-election at the forthcoming Annual General Meeting. During the year, the Directors identified Mr Goodyear as a
suitable replacement to fill the vacancy following Mr Edey’s retirement and he will succeed Mr Cheyne as Chairman. Following
the recruitment process, the successful candidate will be appointed as a Director following the Annual General Meeting being
held on 9 May 202
4. Details of each Director’s contribution to the success and promotion of the Company are set out in the
Directors’ Report on pages 60 and 61 and details of the Directors’ biographies can be found on pages 37 and 38.
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’ re-election at the 2023 Annual
General Meeting are given on the Manager’s website at
www.blackrock.com/uk/brwm
.
52
BlackRock World Mining Trust plc
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Annual Report and Financial Statements 31 December 2023
Environmental, Social and Governance issues and approach
The Board’s approach
Environmental, Social and Governance (ESG) issues can present both opportunities and threats to long-term investment
performance. The Company’s investment universe comprises sectors that are undergoing significant structural change and
are likely to be highly impacted by increasing regulation as a result of climate change and other social and governance factors.
Your Board is committed to ensuring that we have appointed an Investment Manager that integrates ESG considerations
into its investment process and has the skill to navigate the structural transition that the Company’s investment universe is
undergoing. The Board believes effective engagement with company management is, in most cases, the most effective way of
driving meaningful change in the behaviour of investee company management. While the Company does not have an ESG or
impact focused investment strategy or apply exclusionary screens, as in most cases the Company will not invest in companies
which have high ESG risks and no plans to address existing deficiencies. Where the Board is not satisfied that an investee
company is taking steps to address matters of an ESG nature, it may discuss with the Investment Manager how this situation
might be resolved, including potentially by a full disposal of shares.
ESG integration does not change the Company’s investment objective or constrain the Investment Manager’s investable
universe, and does not mean that an ESG or impact focused investment strategy or any exclusionary screens have been or will
be adopted by the Company. Similarly, ESG integration does not determine the extent to which the Company may be impacted
by sustainability risks. More information on BlackRock’s global approach to ESG integration, as well as activity specific to the
BlackRock World Mining Trust plc portfolio, is set out below.
The Company does not meet the criteria for Article 8 or 9 products under the EU Sustainable Finance Disclosure Regulation
(SFDR) and the investments underlying this financial product do not take into account the EU criteria for environmentally
sustainable economic activities. The Investment Manager has access to a range of data sources, including principal adverse
indicator (PAI) data, when making decisions on the selection of investments. However, whilst BlackRock considers ESG risks
for all portfolios and these risks may coincide with environmental or social themes associated with the PAIs, the Company
does not commit to considering PAIs in driving the selection of its investments. Additional information on ESG integration,
sustainability risk and SFDR is set out in the AIFMD Fund Disclosures available on the Company’s website.
BlackRock’s approach to ESG integration
BlackRock believes that sustainability risk, including climate risk
,
are investment risks. As a fiduciary, we manage material
risks and opportunities that could impact portfolios. Sustainability can be a driver of investment risks and opportunities and
we incorporate them in our firm wide processes when they are material. This in turn (in BlackRock’s view) is likely to drive a
significant reallocation of capital away from traditional carbon-intensive industries over the next decade. BlackRock believes
that carbon-intensive companies will play an integral role in unlocking the full potential of the energy transition, and to do this,
they must be prepared to adapt, innovate and pivot their strategies towards a low carbon economy.
As part of BlackRock’s structured investment process, ESG risks and opportunities (including sustainability/climate risk) are
considered within the portfolio management team’s fundamental analysis of companies and industries and the Company’s
portfolio managers work closely with the BlackRock Investment Stewardship (BIS) team
to assess the governance quality of
companies and understand any potential issues, risks or opportunities.
As part of their approach to ESG integration, the portfolio managers use ESG information when conducting research and
due diligence on new investments and again when monitoring investments in the portfolio. In particular, portfolio managers
now have access to 1,200 key ESG performance indicators in Aladdin (BlackRock’s proprietary trading system) from third-
party data providers. BlackRock’s internal sustainability research framework scoring is also available alongside third-party
ESG scores in core portfolio management tools. BlackRock’s analysts’ sector expertise and local market knowledge allows
it to engage with companies through direct interaction with management teams and conducting site visits. BIS engages
with company leadership to understand how they are identifying and managing material business risks and opportunities,
including sustainability related risks and the potential impacts these may have on long-term financial performance.
BIS and
the portfolio management team’s understanding of material sustainability risks and opportunities is further supported by
BlackRock’s Sustainable and Transition Solutions (STS) function. STS looks to advance ESG research and integration, active
engagement and the development of sustainable investment solutions across the firm.
Strategic Report
continued
Section 3: Governance
53
BlackRock World Mining Trust plc – BlackRock Investment Stewardship engagement with
portfolio companies for the year ended 31 December 2023
Given the Board’s belief in the importance of engagement and communication with portfolio companies, they receive regular
updates from the Investment Manager in respect of activity undertaken for the year under review. The Investment Manager
engages with company management teams and undertakes company meetings to identify the best management teams with
the ability to create value for shareholders over the long term. In addition, BlackRock also has a separate BlackRock Investment
Stewardship (BIS) team. Investment stewardship is one of the ways in which BlackRock fulfils its fiduciary responsibilities
as an asset manager to its clients. BIS serves as a link between them and the companies BlackRock invests in. BIS engages
with investee companies to build its understanding of these companies’ approach to addressing material business risks and
opportunities. Additional information is set out in the table and charts that follow, as well as the key engagement themes for
the meetings held in respect of the Company’s portfolio holdings.
Year ended
31 December
2023
Number of engagements held
48
Number of companies met
22
% of equity investments covered
33
Shareholder meetings voted at
60
Number of proposals voted on
651
Number of votes against management
39
% of total items voted represented by votes against management
6.0
Sources: BlackRock, Institutional Shareholder Services.
0%
25%
50%
75%
100%
48%
40%
92%
56%
28%
10%
47%
15%
13%
Engagement themes
1
Environmental
Engagement Themes
Engagement Topics
Social
Governance
Engagement topics
1
0%
10%
20%
30%
40%
50%
60%
46%
48%
42%
56%
40%
25%
21%
17%
10%
10%
15%
17%
Social risks and opportunities
Human capital management
Health and safety
Diversity and inclusion
Community relations
Sustainability reporting
Remuneration
Governance structure
Corporate strategy
Business oversight/risk management
Board composition and effectiveness
Climate risk management
1
*Engagements include multiple company meetings during the year with the same company. Most engagement conversations
cover multiple topics and are based on our vote guidelines and our engagement priorities found here:
https://www.blackrock.com/
corporate/about-us/investment-stewardship#engagement-priorities
. More detail on BIS’ engagement priorities can be found here:
www.blackrock.com/corporate/literature/publication/blk-stewardship-priorities-final.pdf
.
Percentages reflect the number of meetings held in respect of the Company’s portfolio holdings at which a particular topic is
discussed as a percentage of the total meetings held; as more than one topic is discussed at each meeting the total will not add up
to 100%.
Source: BlackRock.
54
BlackRock World Mining Trust plc
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Annual Report and Financial Statements 31 December 2023
Investment stewardship
Consistent with BlackRock’s fiduciary duty as an asset manager, BIS seeks to support investee companies in their efforts
to deliver long‑term financial value on behalf of their clients. These clients include public and private pension plans,
governments, insurance companies, endowments, universities, charities and, ultimately, individual investors, among others.
BIS serves as a link between BlackRock’s clients and the companies they invest in. Clients depend on BlackRock to help them
meet their investment goals; the business and governance decisions that companies make may have a direct impact on
BlackRock’s clients’ long-term investment outcomes and financial well being.
From BlackRock’s perspective, business relevant sustainability issues can contribute to a company’s long-term financial
performance, and thus further incorporating these considerations into the investment research, portfolio construction, and
stewardship process can enhance long-term risk adjusted returns. The Company’s Investment Manager works closely with
BIS to assess the governance quality of companies and business practices, and better understand any potential issues,
risks or opportunities. The Investment Manager uses this information when conducting research and due diligence on new
investments and again when monitoring investments in the portfolio.
Global principles
The
BIS Global Principles
,
regional voting guidelines
, and
engagement priorities
(collectively, the ‘BIS policies’) set out the core
elements of corporate governance that guide BIS’ efforts globally and within each regional market, including when engaging
with companies and voting at shareholder meetings when authorised to do so on behalf of clients. Each year, BIS reviews its
policies and updates them as necessary to reflect changes in market standards and regulations, insights gained over the year
through third-party and its own research, and feedback from clients and companies.
Regional proxy voting guidelines
BIS’ regional voting guidelines are intended to help clients and companies understand its thinking on key governance matters.
They are the benchmark against which it assesses a company’s approach to corporate governance and the items on the
agenda to be voted on at a shareholder meeting. BIS applies its guidelines pragmatically, taking into account a company’s
unique circumstances where relevant. BlackRock informs voting decisions through research and engages as necessary.
BIS reviews its voting guidelines annually and updates them as necessary to reflect changes in market standards, evolving
governance practices and insights gained from engagement over the prior year. BIS’ market-specific voting guidelines are
available on its website at
www.blackrock.com/corporate/about-us/investment-stewardship#stewardship-policies
.
BlackRock is committed to transparency in terms of disclosure on its stewardship activities on behalf of clients. The BIS
policies help BlackRock’s clients understand its work to advance their interests as long-term investors in public companies.
Additionally, BIS publishes both
annual
and
quarterly
reports detailing its stewardship activities, as well as
vote bulletins
that
describe its rationale for certain votes at high profile shareholder meetings.
BlackRock’s reporting and disclosures
In terms of its own reporting, BlackRock believes that the Sustainability Accounting Standards Board provides a clear set
of standards for reporting sustainability information across a wide range of issues, from labour practices to data privacy to
business ethics. For evaluating and reporting climate-related risks, as well as the related governance issues that are essential
to managing them, the Task Force on Climate-related Financial Disclosures (TCFD) provides a valuable framework. BlackRock
recognises that reporting to these standards requires significant time, analysis, and effort. BlackRock’s 2022 TCFD report can
be found at
www.blackrock.com/corporate/literature/continuous-disclosure-and-important-information/tcfd-report
-2022-
blkinc.pdf
.
By order of the Board
CAROLINE DRISCOLL
For and on behalf of
BlackRock Investment Management (UK) Limited
Company Secretary
7 March 2024
Strategic Report
continued
Section 3: Governance
55
The Directors present the audited Annual Report and Financial Statements of the Company and its subsidiary (together the
Group) prepared in accordance with section 415 (2) of the Companies Act 2006 for the year ended 31 December 2023.
Status of the Company
The Company is domiciled in the United Kingdom public company limited by shares and is also an
investment company under section 833 of the Companies Act 2006 and operates as such. It is not a close company and has
no employees.
The Company has been approved by HM Revenue & Customs (HMRC) as an investment trust in accordance with sections
1158 and 1159 of the Corporation Tax Act 2010, subject to the Company continuing to meet eligibility conditions. The
Directors are of the opinion that the Company has conducted its affairs in a manner which will satisfy the conditions for
continued approval.
As an investment company that is managed and marketed in the United Kingdom, the Company is an Alternative Investment
Fund (AIF) falling within the scope of, and subject to the requirements of, the Alternative Investment Fund Managers’ Directive
(AIFMD) as implemented, retained and onshored in the UK. The Company is governed by the provisions of The Alternative
Investment Fund Managers Regulations 2013 (the Regulations). It must comply with a number of obligations, including the
appointment of an Alternative Investment Fund Manager (AIFM) and a depositary to carry out certain functions. The Company
must also comply with the Regulations in respect of leverage, outsourcing, conflicts of interest, risk management, valuation,
remuneration and capital requirements and must also make additional disclosures to both shareholders and the FCA. Further
details are set out in the AIFMD disclosures section and in the notes to the Financial Statements.
The Company’s shares are eligible for inclusion in the stocks and shares component of an Individual Savings Account (ISA).
Information to be disclosed in accordance with Listing Rule 9.8.4 (information to be
included in annual report and financial statements)
Disclosures in respect of how the Company has complied with Listing Rule 9.8.4 are set out on page 147.
Facilitating retail investments
The Company currently conducts its affairs so that the shares issued by the Company can be recommended by independent
financial advisers to ordinary retail investors in accordance with the FCA’s rules in relation to non-mainstream pooled
investments and intends to continue to do so for the foreseeable future. The shares are excluded from the FCA’s restrictions
which apply to non-mainstream pooled investments because they are shares in an investment trust.
In the context of the implementation of RDR (Retail Distribution Review) and the growing popularity of investment trusts
on platforms, it is worth noting that the Company’s shares are designed for private investors in the UK, including retail
investors and professionally advised private clients. It is also attractive to institutional investors who seek long-term capital
growth through investing in mining equities and who understand and are willing to accept the risks of exposure to equities.
When assessing the suitability of shares, private investors should consider consulting an independent financial adviser
who specialises in advising on the acquisition of shares and other securities before acquiring shares. Naturally, investors
should also be capable of evaluating the risks and merits of an investment in the Company and should always have sufficient
resources to bear any loss that may result.
The Common Reporting Standard
Tax legislation under the Organisation for Economic Cooperation and Development (OECD) Common Reporting Standard for
Automatic Exchange of Financial Account Information (the Common Reporting Standard) was introduced on 1 January 2016.
The legislation requires investment trust companies to provide personal information to HMRC about investors who purchase
shares in investment trusts. As an affected company, BlackRock World Mining Trust plc has to provide information annually
to the local tax authority on the tax residencies of a number of non-UK based certification shareholders and corporate
entities. The local tax authority to which the information is initially passed may in turn exchange the information with the
tax authorities of another country or countries in which the shareholder may be tax resident, where those countries (or tax
authorities in those countries) have entered into agreements to exchange financial account information.
All new shareholders, excluding those whose shares are held in CREST, entered on to the share register, will be sent a
certification form for the purposes of collecting this information.
Directors’ Report
56
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
Directors’ Report
continued
GDPR
Data protection rights were harmonised across the European Union following the implementation of the General Data
Protection Regulation (GDPR) on 25 May 2018, since retained in the UK by the European Union (Withdrawal) Act 2018. The
Board has sought and received assurances from its third-party service providers that they have taken appropriate steps to
ensure compliance with the regulation.
Shareholder Rights Directive II
The Shareholder Rights Directive II took effect from 10 June 2019 with some transitional provisions. It encourages long-term
shareholder engagement and transparency between companies and shareholders. In substantive terms the changes were
small for investment companies and the majority of requirements apply to the Company’s remuneration policy and disclosure
of processes, as well as related party transactions. There are also additional rules for AIFMs and proxy advisers.
Dividends
Details of the dividends paid and payable in respect of the year are set out in the Chairman’s Statement and in note 8 on page
109.
Investment management and administration
BlackRock Fund Managers Limited (BFM), AIFM or the Manager was appointed as the Company’s AIFM with effect from 2
July 2014, having been authorised as an AIFM by the FCA on 1 May 2014. The management contract is terminable by either
party on six months’ notice. Under the agreement, the Board continues to be independent from the AIFM. The agreement
provides the appropriate balance between the Board’s control over the Company, its investment policies and compliance with
regulatory obligations.
BlackRock Investment Management (UK) Limited (BIM (UK)) continues to act as the Company’s Investment Manager under
a delegation agreement with BFM. BIM (UK) also acted as the Secretary of the Company throughout the year. The Manager
receives an annual management fee equivalent to 0.80% of the Company’s gross assets (subject to certain adjustments and
deductions), which includes all services provided by BlackRock.
Included within this management fee is a contribution of £144,000 (excluding VAT) to a consortium element of a focused
investment trust sales and marketing initiative, which enables the BlackRock investment trusts to achieve efficiencies by
combining certain sales and marketing activities and is matched by BlackRock. This contribution will be deducted from the
fee payable to BlackRock. The purpose of the programme is to ensure effective communication with existing shareholders and
to attract new shareholders to the Company. This has the benefit of improving liquidity in the Company’s shares and helps
sustain the stock market rating of the Company.
BFM and BIM (UK) are subsidiaries of BlackRock, Inc. which is a publicly traded corporation on the New York Stock Exchange
operating as an independent firm.
Appointment of the Manager
The Board considers the arrangements for the provision of investment management services to the Company on an ongoing
basis and a formal review is conducted annually. As part of this review, the Board considered the quality and continuity of the
personnel assigned to handle the Company’s affairs, the investment process and the results achieved to date.
The Board believes that the continuing appointment of BFM (the Manager) as AIFM, and the delegation of investment
management services to BIM (UK) (the Investment Manager) on the terms disclosed above is in shareholders’ interests
as a whole. The specialist nature of the Company’s investment remit is, in the Board’s view, best served by the Sectors and
Thematics team at BlackRock, which has a proven track record in successfully investing in the mining sector.
Depositary and Custodian
The Company is required under the AIFMD to appoint an AIFMD compliant depositary. The Company has appointed The Bank
of New York Mellon (International) Limited (BNYM or the Depositary) to perform this role.
The Depositary’s duties and responsibilities are outlined in the investment fund legislation (as defined in the FCA Handbook).
The main role of the Depositary under AIFMD is to act as a central custodian with additional duties to monitor the operations
of the Company, including monitoring cash flows and ensuring the Company’s assets are valued appropriately in accordance
with the relevant regulations and guidance. The Depositary is also responsible for enquiring into the conduct of the AIFM in
Section 3: Governance
57
each annual accounting period. The Depositary receives a fee payable at 0.0095% per annum of net assets. The Company has
appointed the Depositary in a tripartite agreement, to which BFM as AIFM is also a signatory. The Depositary is liable for the
loss of the financial instruments held in custody.
Under the depositary agreement, custody services in respect of the Company’s assets have been delegated to The Bank of
New York Mellon (International) Limited (BNYM). BNYM receives a custody fee payable by the Company at rates depending
on the number of trades effected and the location of securities held. The depositary agreement is subject to 90 days’ notice of
termination by any party.
Registrar
The Company has appointed Computershare Investor Services PLC as its Registrar (the Registrar). The principal duty of
the Registrar is the maintenance of the register of shareholders (including registering transfers). It also provides services in
relation to any corporate actions, dividend administration, shareholder documentation, the Common Reporting Standard and
the Foreign Account Tax Compliance Act.
The Registrar receives a fixed fee each year, plus disbursements and VAT for the maintenance of the register. Fees in respect of
corporate actions are negotiated on an arising basis.
Change of control
There are no agreements to which the Company is a party that might be affected by a change in control of the Company.
Exercise of voting rights in investee companies
The exercise of voting rights attached to the Company’s portfolio has been delegated by the Company to the Investment
Manager by BFM. BIM (UK’s) approach to voting at shareholder meetings, engagement with companies and corporate
governance is framed within an investment context. BIM (UK) believes that sound corporate governance practices by
companies can contribute to their long-term financial performance and thus to better risk adjusted returns. BIM (UK)’s proxy
voting process is led by the BlackRock Investment Stewardship (BIS) team, located in nine offices around the world. The team’s
globally-coordinated, local presence and breadth of experience enables more frequent and better informed dialogue with
companies. In addition to its own dedicated staff, the BIS team draws upon the expertise of (BIM) UK’s portfolio managers,
researchers and other internal and external resources globally.
BIM (UK)’s stewardship policies are published on the website at:
https://www.blackrock.com/corporate/insights/investment-
stewardship
. The principles set out BIM (UK)’s views on the overarching features of corporate governance that apply in all
markets. For each region, BIM (UK) also publishes regional voting guidelines, which are updated every year to ensure that they
remain relevant. The regional voting guidelines are principles based and not prescriptive because in BIM (UK)’s experience,
each voting situation needs to be assessed on its economic merits. Voting decisions are taken to support the outcome that, in
BIM (UK)’s assessment, will be best aligned with the long-term financial interests of their clients.
During the year under review, the Investment Manager voted on 651 proposals at 60 general meetings on behalf of the
Company. At these meetings the Investment Manager voted in favour of most resolutions, as should be expected when
investing in well-run companies, but voted against 19 shareholder resolutions, abstained from voting on 8 shareholder
resolutions and withheld 18 votes. Most of the votes against were in respect of resolutions relating to the election or re-
election of directors, changes to board structure and governance and directors’ remuneration, which were deemed by the
Investment Manager as not being in the best interests of shareholders.
Continuation vote
As agreed by shareholders, an ordinary resolution for the continuation of the Company as an investment trust is proposed
annually at the Annual General Meeting. If any such resolution is not passed, the Board shall put proposals to shareholders
within 42 days of the Annual General Meeting with a view to enabling shareholders to realise their holding of shares for cash
or, if appropriate, a non-cash consideration with a cash alternative.
Principal risks
The key risks faced by the Company are set out in the Strategic Report.
58
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
Going concern
The Directors, having considered the nature and liquidity of the portfolio, the Company’s investment objective and the
Company’s projected income and expenditure, are satisfied that the Company has adequate resources to continue in
operational existence for a period of at least 12 months from the date of approval of these financial statements and is
financially sound. The Board is mindful of the longer-term effects on the global economy and recovery of economies from the
COVID-19 pandemic, and the current environment of heightened geopolitical risk given the war in Ukraine and conflict in the
Middle East.
The Company has a portfolio of investments which are predominantly readily realisable and is able to meet all of its liabilities
from its assets and income generated from these assets. The portfolio mainly comprises readily realisable assets which can be
sold to meet funding requirements if necessary. As at 5 March 2024, 80.6% of the portfolio was estimated as being capable
of being liquidated within three days. Accounting revenue and expense forecasts are maintained and reported to the Board
regularly and it is expected that the Company will be able to meet all its obligations. Borrowings under the overdraft and
loan facilities shall at no time exceed £230 million or 25% of the Group’s net assets at the time of drawdown of the relevant
borrowings (whichever is lower) and this covenant was complied with during the year. Based on the above, the Board is
satisfied that it is appropriate to continue to adopt the going concern basis in preparing the financial statements and that the
Company has adequate resources to continue in operational existence for the period to 31 March 2025, being a period of at
least 12 months from the date of approval of these financial statements. Ongoing charges for the year ended 31 December
2023 were approximately 0.91% of net assets.
The Company has an annual continuation vote with the next vote due to be held at the Annual General Meeting in May 2024.
The Board has no reason to believe that this resolution will not be passed. The Company’s longer-term viability is considered in
the viability statement on pages 45 and 46.
Directors
The Directors of the Company as at 31 December 2023 and their biographies are set out on pages 37 and 38. Details of their
interests in the shares of the Company are set out in the Directors’ Remuneration Report on page 66. All of the Directors, apart
from Mr Goodyear, held office throughout the year under review and up to the date of signing the financial statements.
Although the Company’s Articles of Association require that one-third of Directors retire and seek re-election at intervals
of no more than three years, the Board has resolved that all Directors should be subject to re-election on an annual basis.
Accordingly, all of the Directors (other than Mr Cheyne who will be retiring following the Annual General Meeting) will offer
themselves for re-election at the Annual General Meeting with the exception of Mr Goodyear. Mr Goodyear, who was appointed
during the year, will stand for election. The Board has considered the positions of the Directors as part of the evaluation
process and believes that it would be in the Company’s best interests for each of the Directors to be proposed for
re-election/election
at the forthcoming Annual General Meeting, given their material level of contribution and commitment to
the role.
Having considered the Directors’ performance within the annual Board performance evaluation process, further details of
which are provided on page 72, the Board believes that it continues to be effective and the Directors bring extensive knowledge
and commercial experience and demonstrate a range of valuable business, financial and asset management skills. The Board
therefore recommends that shareholders vote in favour of each Director’s proposed re-election/election. More details in
respect of the skills and experience each Director brings to the Board are set out on page 61.
There were no contracts subsisting during or at the end of the year in which a Director of the Company is or was materially
interested and which is or was significant in relation to the Company’s business. None of the Directors has a service contract with
the Company. No Director is entitled to compensation for loss of office on the takeover of the Company.
Directors’ liability insurance and Directors’ indemnity
The Company has maintained appropriate Directors’ and Officers’ liability insurance throughout the year. In addition to
Directors’ and Officers’ liability insurance cover, the Company’s Articles of Association provide, subject to the provisions of
applicable UK legislation, a qualifying third-party indemnity for Directors in respect of costs incurred in the defence of any
proceedings brought against them by third parties arising out of their positions as Directors, in which they are acquitted,
or judgement is given in their favour. The Company has entered into Deeds of Indemnity with Directors individually which
are available for inspection at the Company’s registered office and will also be available at the Annual General Meeting. The
indemnity has been in force during the financial year and up to the date of approval of the financial statements.
Directors’ Report
continued
Section 3: Governance
59
Conflicts of interest
The Board has put in place a framework for Directors to report conflicts of interest or potential conflicts of interest which it
believes has worked effectively during the year. All Directors are required to notify the Company Secretary of any situations
or potential situations where they consider that they have or may have a direct or indirect interest or duty that conflicted or
possibly conflicted with the interests of the Company. All such situations are reviewed by the Board and, where appropriate,
duly authorised. Directors are also made aware at each meeting that there remains a continuing obligation to notify the
Company Secretary of any new situation that may arise, or any change to a situation previously notified. It is the Board’s
intention to continue to review all notified situations on a regular basis.
Directors’ Remuneration Report and Remuneration Policy
The Directors’ Remuneration Report is set out on pages 63 to 66. An advisory ordinary resolution to approve this report will be
put to shareholders at the Company’s forthcoming Annual General Meeting. The Company is also required to put the Directors’
Remuneration Policy on pages 67 and 68 to a binding shareholder vote every three years. The Company’s Remuneration Policy
was last put to shareholders at the Annual General Meeting in 2023, therefore an ordinary resolution to approve the policy will
next be put to shareholders at the 2026 Annual General Meeting.
Notifiable interests in the Company’s voting rights
As at 31 December 2023 the Company had not received any notifications in accordance with the FCA’s Disclosure Guidance
and Transparency Rule 5.1.2R.
Foreign exchange
At the financial year end, approximately 44.3% of the Company’s portfolio was invested in non-Sterling assets, with 37.6%
invested in US Dollar denominated assets. The Investment Manager does not actively hedge currency exposure.
Derivative transactions
During the year, the Group entered into a number of derivative put and call option contracts generating option premium
income of £5,964,000 (2022: £7,297,000). Three option contracts remained open at 31 December 2023 (2022: three option
contracts), details of which are given in the investment listing on page 29. All open options were fully covered.
Share capital
Details of the Company’s issued share capital are given in note 16 to the Financial Statements. Details of the voting rights in
the Company’s ordinary shares as at the date of this report are given in note 17 to the Notice of Annual General Meeting. The
ordinary shares carry the right to receive dividends and have one voting right per ordinary share. There are no restrictions on
the voting rights of the ordinary shares or on the transfer of ordinary shares, and there are no shares that carry specific rights
with regard to the control of the Company.
Share repurchases
Shares may be repurchased when, in the opinion of the Directors, the discount appears high or wider than the peer group
average and shares are available in the market. The main objective of any buy back is to enhance the net asset value per share
of the remaining shares and to reduce the absolute level and volatility of any discount to net asset value at which shares may
trade. Although the Manager initiates the buy backs, the policy and parameters are set by the Board and reviewed at regular
intervals. The Company would raise the cash needed to finance the purchase of ordinary shares either by selling securities in
the Company’s portfolio or by short-term borrowing.
During the year and up to the date of this report no shares have been bought back.
The latest authority to purchase ordinary shares for cancellation or to be held in treasury was granted to the Directors on
18 April 2023 and expires on 9 May 2024. The Directors are proposing that their authority to buy back shares be renewed at
the forthcoming Annual General Meeting. Purchases of ordinary shares pursuant to this authority will only be made in the
market for cash at prices below the prevailing NAV per share.
Treasury shares
The Company is currently authorised to purchase its own ordinary shares into treasury for reissue or cancellation at a future
date. The use of treasury shares should assist the Company in providing a discount management mechanism. The Board
intends only to authorise the sale of shares from treasury at prices at or above the prevailing net asset value per share (plus
costs of the relevant sale). This should result in a positive overall effect for shareholders if shares are bought back at a discount
and then sold at a price at or above the net asset value per share (plus costs of the relevant sale).
60
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
The Company holds 1,828,806 ordinary shares in treasury (0.96% of the Company’s issued share capital excluding treasury
shares).
Share issues
The Company has the authority to issue new shares or sell shares from treasury for cash. During the year, the Company has
reissued 2,430,000 ordinary shares from treasury for a total consideration after costs of £15,658,000 at an average price of
644.37p per share and an average 1.4% premium to NAV. Since the year end and up to 7 March 2024, the Company has not
reissued any further ordinary shares from treasury. The current authority to issue new ordinary shares or sell shares from
treasury for cash was granted to the Directors on 18 April 2023 and expires on 9 May 2024. The Directors are proposing
that their authority to issue new ordinary shares or sell shares from treasury for cash be renewed at the forthcoming Annual
General Meeting.
Streamlined Energy and Carbon Reporting (SECR) statement: Greenhouse gas (GHG)
emissions and energy Consumption disclosure
As an externally managed investment company, the Company has no greenhouse gas emissions to report from its operations,
nor does it have any responsibility for any other emissions producing sources under the Companies Act (Strategic Report and
Directors’ Reports) Regulations 2013. For the same reason, the Company considers itself to be a low energy user under the
SECR regulations and therefore is not required to disclose energy and carbon information.
As an investment company, the Company does not need to report against the Task Force on Climate-related Financial
Disclosures (TCFD) framework. However, BlackRock reports detailed information about its management of climate-related
risks and opportunities across its business in its TCFD-aligned reports. BlackRock’s latest TCFD report can be found at
www.
blackrock.com/corporate/literature/continuous-disclosure-and-important-information/tcfd-report
-2022
-blkinc.pdf
.
Articles of Association
Any amendments to the Company’s Articles of Association must be made by special resolution.
Annual General Meeting
The following information to be discussed at the forthcoming AGM is important and requires your immediate attention.
If you are in any doubt about the action you should take, you should seek advice from your stockbroker, bank manager,
solicitor, accountant or other financial adviser authorised under the Financial Services and Markets Act 2000 (as
amended).
If you have sold or transferred all of your ordinary shares in the Company, you should pass this document, together
with any other accompanying documents (but not the personalised Form of Proxy) as soon as possible to the purchaser
or transferee, or to the stockbroker, bank or other agent through whom the sale or transfer was effected, for onward
transmission to the purchaser or transferee.
The business of this year’s Annual General Meeting consists of 13 resolutions. Resolutions 1 to 11 are proposed as ordinary
resolutions and 12 and 13 are being proposed as special resolutions.
Resolution 1 – Approval of the annual report and financial statements
This resolution seeks shareholder approval of the Annual Report and Financial Statements for the year ended 31 December
2023 and the auditors’ report thereon.
Resolution 2 – Approval of the Directors’ remuneration report
This resolution is an advisory vote on the Directors’ Remuneration Report, excluding any content relating to the remuneration
policy as set out on pages 67 and 68.
Resolution 3 – Approval of the dividend
Resolution 3 seeks shareholder approval of a final dividend of 17.00p per share for the year ended 31 December 2023.
Resolutions 4 to 7 – Re-election and election of Directors
Resolutions 4 to 7 relate to the re-election and election of the Directors. The Board has undertaken a formal performance
evaluation during the year and confirms that the performance of the Directors standing for re-election/election
continues
to be effective and that each Director demonstrates commitment to their role. The biographies of the Directors are set out
Directors’ Report
continued
Section 3: Governance
61
on pages 37 and 38. The Directors have been appointed in order to bring a range of experience appropriate to managing a
business which invests in mining companies and mining related businesses. Their experiences range from holding senior
positions in mining companies, to advising mining companies on investments in other mining companies and mines, to
arranging finance for mines and mining companies and to working in the investment business. Individually their competences
and experiences mean that the Board is able to develop appropriate strategies to manage the risk of investing in this sector
and also to deal with ESG issues, such as businesses that invest in pure-play thermal coal. The skills and experience each
Director brings to the Board for the long-term sustainable success of the Company are set out below.
Resolution 4 relates to the election of Charles (Chip) Goodyear who was appointed as a Director on 24 August 2023.
Mr Goodyear was chief executive officer and executive director for BHP Billiton (now BHP) the world’s largest diversified
resources company. During his nine years at BHP the company grew considerably, becoming one of largest companies in the
world by market capitalisation. As CEO he was early in the identification of China and other emerging markets as drivers for
future demand of resources. Accordingly, he has a great deal of experience in the mining sector.
Resolution 5 relates to the re-election of Jane Lewis who has served on the Board for eight years and is Chair of the
Management Engagement Committee. She has extensive sector experience through her career in investment company
corporate broking at Winterflood and business development at leading investment trust management houses. She holds three
other investment trust directorships, including as chairman.
Resolution 6 relates to the re-election of Judith Mosely who was appointed as a Director in 2014 and is the Senior Independent
Director. Ms Mosely has over twenty years’ experience in the City focusing on the mining sector. She was employed until the
end of December 2019 by Rand Merchant Bank as Business Development Director for mining where she was responsible
for identifying opportunities in the sector in raising bank finance, mergers and acquisitions, commodity hedging and debt
capital markets. Prior to this she headed the mining finance team of Société Générale in London. She therefore has a strong
appreciation of risk, as well as a current appreciation of the opportunities and challenges in the sector including ESG. She
regularly attends key industry conferences and her involvement in industry groups such as Women in Mining ensures that she
is kept abreast of key industry matters.
Resolution 7 relates to the re-election of Srinivasan Venkatakrishnan who was appointed as a Director in 2021. He has a
proven track record of leading multinational organisations, including major publicly-listed companies, through periods of
challenging and transformative change. His career spans across six continents and 15 countries; covers gold, silver and base
metals, oil and gas and power generation. The scope of his work over the past 30+ years at the board and executive level has
spanned the full suite of leadership accountabilities, including strategy development and execution, all aspects of ESG, project
development, organisational restructuring and business planning, turnaround and productivity improvement, in addition
to complex corporate financing activities spanning mergers & acquisitions, due diligence studies and capital markets work.
These efforts have involved intricate, multi-jurisdictional financing and large complex cross-border restructuring. Leading
major businesses in the extractive sector has moreover required fostering and maintaining relationships with investors,
financiers, governments, regulators, organised labour, host communities, media, and local and international civil society
groups. Mr Venkatakrishnan is a chartered accountant and brings this skill set to his role as Chairman of the Company’s Audit
Committee.
Resolutions 8 and 9 – Re-appointment of the external auditors and auditors’ remuneration
These resolutions relate to the re-appointment and remuneration of the Company’s auditors. The Company, through its Audit
Committee, has considered the independence and objectivity of the external auditors and is satisfied that the auditors remain
independent. Further information in relation to the assessment of the auditors’ independence can be found on page 80.
Resolutions relating to the following items of special business will be proposed at the forthcoming Annual General Meeting.
Resolution 10 – Continuation of the Company as an investment trust
The ordinary resolution to be proposed will seek shareholders’ authority that the Company shall continue in being as an
investment trust.
Resolution 11 – Authority to allot shares
The Directors may only allot shares for cash if authorised to do so by shareholders in general meeting. This resolution seeks
authority for the Directors to allot shares for cash up to an aggregate nominal amount of £955,915 which is equivalent to
19,118,303 ordinary shares of 5p each and represents 10% of the current issued share capital, excluding treasury shares, as
at the date of the Notice of Annual General Meeting. This authority will expire at the conclusion of next year’s Annual General
Meeting in 2025, unless renewed prior to that date at an earlier general meeting.
62
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
Resolution 12 – Authority to disapply pre-emption rights
By law, Directors require specific authority from shareholders before allotting new shares or selling shares out of treasury
for cash without first offering them to existing shareholders in proportion to their holdings. Resolution
12 empowers the
Directors to allot new shares for cash or to sell shares which are held by the Company in treasury, otherwise than to existing
shareholders on a pro rata basis, up to an aggregate nominal amount of £955,915 which is equivalent to 19,118,303 ordinary
shares of 5p each and 10% of the Company’s issued ordinary share capital, excluding treasury shares, as at the date of the
Notice of Annual General Meeting. Unless renewed at a general meeting prior to such time, this authority will expire at the
conclusion of the Annual General Meeting of the Company to be held in 2025.
Resolution 13 – Authority to buy back shares
The resolution to be proposed will seek to renew the authority granted to Directors enabling the Company to purchase its own
shares. The Directors will only consider repurchasing shares in the market if they believe it to be in shareholders’ interests and
as a means of correcting any imbalance between supply and demand for the Company’s shares.
The Directors are seeking authority to purchase up to 28,658,337 ordinary shares (being 14.99% of the issued share capital,
excluding treasury shares, as at the date of this report) or, if less, 14.99% of the ordinary shares in issue at 9 May 2024. This
authority, unless renewed at an earlier general meeting, will expire at the conclusion of next year’s Annual General Meeting.
Recommendation
The Board considers that the resolutions to be proposed at the Annual General Meeting are likely to promote the success
of the Company and are in the best interests of the Company and its shareholders as a whole. The Directors unanimously
recommend that shareholders vote in favour of these resolutions as they intend to do so in respect of their own beneficial
holdings.
Corporate governance
Full details are given in the Corporate Governance Statement. The Corporate Governance Statement forms part of this
Directors’ Report.
Audit information
As required by section 418 of the Companies Act 2006, each of the Directors in office at the date of approval of this report
confirm that, so far as they are aware, there is no relevant audit information of which the Group’s auditors are unaware and
each Director has taken all the steps that they ought to have taken as a Director to make themselves aware of any relevant
audit information and to establish that the Group’s auditors are aware of that information.
Independent auditors
The auditors, PricewaterhouseCoopers LLP, have indicated their willingness to continue in office and resolutions proposing
their reappointment and authorising the Audit Committee to determine their remuneration for the ensuing year will be
submitted at the Annual General Meeting.
The Directors’ Report was approved by the Board at its meeting on 7 March 2024.
By order of the Board
CAROLINE DRISCOLL
For and on behalf of
BlackRock Investment Management (UK) Limited
Company Secretary
7
March 2024
Directors’ Report
continued
Section 3: Governance
63
The Board presents the Directors’ Remuneration Report for the year ended 31 December 2023 which has been prepared in
accordance with sections 420-422 of the Companies Act 2006.
The Remuneration Report comprises a remuneration policy report and a remuneration policy implementation report. The
remuneration policy report is subject to a triennial binding shareholder vote and will be put to shareholders for approval at the 2026
Annual General Meeting. The remuneration implementation report is subject to an annual advisory vote.
The law requires the Company’s auditors to audit certain of the disclosures provided. Where disclosures have been audited, they are
indicated as such. The auditors’ opinion is included in their report on pages 86 to 93.
Statement by the Chairman
The Board’s policy on remuneration is set out on pages 67 and 68. A key element of the remuneration policy is that fees
payable to Directors should be sufficient to attract and retain individuals with suitable knowledge and experience to promote
the long-term success of the Company, whilst also reflecting the time commitment and responsibilities of the role. The basis
for determining the level of any increase in the Directors’ remuneration and the Board’s policy on remuneration is set out in the
Directors’ Remuneration Policy.
The Board’s remuneration is considered annually and was last reviewed in August 2023. Following a review, with effect
from 1 October 2023 the Board agreed that the Chairman’s fees increase from £49,350 to £52,500, the Chairman of the
Audit Committee fees increase from £41,475 to £43,750 and Directors’ fees increase from £33,600 to £35,000. The Senior
Independent Director receives an additional fee of £3,500. Prior to this, Directors’ fees were last increased on 1 October 2022.
Following the retirement of Mr Cheyne, Mr Goodyear will be appointed as Chairman. Mr Goodyear has waived his fees for
the period 24 August 2023 to 31 December 2023 amounting to £12,228 and the other members of the Board discussed and
decided that they should be donated to The Julian Baring Scholarship Fund.
No discretionary fees have been paid to the Directors during the year or previous year and the payment of such fees is
expected to be a rare occurrence, only necessary in exceptional circumstances. Any discretionary fees paid to the Directors will
be clearly disclosed in the Directors’ Remuneration Report accompanied by an explanation of the work undertaken and why it
was deemed necessary to pay such additional remuneration.
Remuneration Committee
The Board as a whole fulfils the function of the Remuneration Committee and considers any change in the Directors’
remuneration policy. It is not considered necessary to have a separate Remuneration Committee as the Company’s Directors
are all non-executive and independent of the Manager. No advice or services were provided by any external agencies or third
parties in respect of remuneration levels.
Directors’ Remuneration Report
64
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
Directors’ Remuneration Report
continued
Remuneration implementation report
A single figure for the total remuneration of each Director is set out in the table below for the year ended 31 December 2023.
Year ended 31 December 2023
Year ended 31 December 2022
Directors
Fees
Taxable
expenses
1
Total
Fees
Taxable
expenses
1
Total
£
£
£
£
£
£
David Cheyne
2
50,144
–
50,144
47,588
–
47,588
Russell Edey
3
12,272
373
12,645
39,994
629
40,623
Judith Mosely
4
36,372
–
36,372
32,400
–
32,400
Jane Lewis
5
33,953
887
34,840
32,400
1,792
34,192
Srinivasan Venkatakrishnan
6
39,718
5,020
44,738
32,400
9,549
41,949
Charles Goodyear
7
–
–
–
–
–
–
Total
172,459
6,280
178,739
184,782
11,970
196,752
1
Taxable expenses relate to travel and subsistence costs incurred in carrying out business for the Company and which have been
grossed up to include PAYE and NI contributions.
2
Chairman.
3
Retired on 18 April 2023.
4
Senior Independent Director with effect from 19 April 2023.
5
Chair of the Management Engagement Committee with effect from 19 April 2023.
6
Appointed as a Director on 1 August 2021. Chairman of the Audit Committee with effect from 19 April 2023.
7
Appointed as a Director on 24 August 2023. Mr Goodyear has waived his director’s fees amounting to £12,228.
The information in the above table has been audited. The amounts paid by the Company to the Directors were for services
as non-executive Directors. As at 31 December 2023 fees of £17,000 (2022: £16,000) were outstanding to Directors.
No discretionary payments were made in the year to 31 December 2023 (2022: nil).
Relative importance of spend on remuneration
To enable shareholders to assess the relative importance of spend on pay, this has been shown in the table below compared
with the Group’s dividend distributions, total revenue, net profit on ordinary activities and issue of ordinary shares.
As the Company has no employees, no consideration is required to be given to employment conditions elsewhere in setting
Directors’ fees and expenses.
2023
2022
Change
£’000
£’000
£’000
Directors’ total remuneration
179
197
-18
Total dividends paid and payable
64,016
75,405
-11,389
Total revenue
64,691
85,996
-21,305
Net (loss)/profit on ordinary activities after taxation
(78,985)
202,420
-281,405
Issue of ordinary shares
15,658
34,902
-19,244
No payments were made in the year to any past Directors (2022: nil).
Section 3: Governance
65
Annual percentage change in Directors’ fees
The following table set outs the annual percentage change in Directors’ fees for the past five years.
31 December 31 December 31 December 31 December 31 December
2019
2020
2021
2022
2023
David Cheyne¹
+0.0%
+0.0%
+4.4%
+5.0%
+5.4%
Jane Lewis
+0.0%
+0.0%
+6.7%
+5.0%
+4.8%
Judith Mosely
2
+0.0%
+0.0%
+6.7%
+5.0%
+12.4%
Srinivasan Venkatakrishan
3
n/a
n/a
+0.0%
+5.0%
+22.5%
Charles Goodyear
4
n/a
n/a
n/a
n/a
n/a
¹ Chairman.
²
Senior Interdependent Director with effect from 19 April 2023 which accounted for the percentage increase.
3
As Srinivasan Venkatakrishan was appointed as a Director on 1 August 2021 the percentage change in his annual fixed fee in 2021
has been annualised. Appointed as Chairman of the Audit Committee on 19 April 2023 which accounted for the percentage increase
in 2023.
4
Charles Goodyear was appointed as a Director on 24 August 2023 and has waived his emoluments of £12,228 during the year.
As previously noted, the Company does not have any employees and hence no comparisons are given in respect of the
comparison between Directors’ and employees’ pay increases.
Performance
The line graph that follows compares the Company’s net asset value and mid-market share price (with dividends reinvested)
with the reference index. This index was chosen for comparison purposes as it was deemed to be the most relevant to the
Company’s investment objective when reporting to shareholders.
Performance 1 January 2013 to 31 December 2023
Total return performance record, rebased to 100 at 31 December 2013.
Sources: BlackRock and Datastream.
1
1
1
1
1
1
1
•
MSCI ACWI Metals & Mining 30% Buffer 10/40 Index
•
Share price (mid-market)
•
Net asset value per share
2013
2014
2015
2016
2017
2018
2019
2020
2023
2022
2021
1
With effect from 1 January 2020, the reference index changed to the MSCI ACWI Metals & Mining 30% Buffer 10/40 Index – net total
return. Prior to 1 January 2020, the reference index was the EMIX Global Mining Index (net total return). The performance of the reference
index during the period from 1 January 2020 to 31 December 2022 has been blended to reflect this change. Reference index returns are
calculated including the effect of reinvestment of dividends.
0
50
100
150
200
250
300
66
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
Shareholdings
The Board has not adopted a policy that Directors are required to own shares in the Company. The interests of the Directors
in the ordinary shares of the Company are set out in the following table. The Company does not have a share option scheme,
therefore none of the Directors has an interest in share options.
31 December
2023
Ordinary shares
31 December
2022
Ordinary
shares
David Cheyne
35,000
35,000
Charles Goodyear
60,000
n/a
Jane Lewis
5,362
5,362
Judith Mosely
7,400
7,400
Srinivasan Venkatakrishnan
2,000
1,000
The information in the above table has been audited.
All of the holdings of the Directors are beneficial. No changes to these holdings have been notified up to the date of this report.
Implementation of the remuneration policy in 2024 financial year
There are no significant changes in the current financial year. The remuneration policy was implemented at the 2023 Annual
General Meeting and details of changes to Directors’ fees from 1 October 2023 are outlined on page 63.
Retirement of Directors
Further details are given in the Directors’ Report on page 58.
By order of the Board
DAVID CHEYNE
Chairman
7 March 2024
Directors’ Remuneration Report
continued
Section 3: Governance
67
Directors’ remuneration policy
In determining the appropriate level of Directors’ fees, a number of factors are considered, including the workload of the
Directors, their responsibilities, any change in these responsibilities and additional legal duties (for example as a result of
new legislation being implemented), the relationship with their suppliers and the size and complexity of the Company. The
time commitment required, the level of skills and appropriate experience required and the need for Directors to maintain on
an ongoing basis an appropriate level of knowledge of regulatory and compliance requirements in an industry environment
of increasing complexity are also taken into account. The Board also considers the average rate of inflation during the period
since the last fee increase and reviews the level of remuneration in comparison with other investment trusts of a similar size
and/or mandate, as well as taking account of any data published by the Association of Investment Companies to ensure
that fees are in line with industry practice. This comparison, together with consideration of any alteration in non-executive
Directors’ responsibilities, is used to review whether any change in remuneration is necessary.
The review is performed on an annual basis. No director will be present when his or her own pay is being determined. The
Company has no employees and consequently no consideration is required to be given to employment conditions elsewhere in
setting this policy and there has been no employee consultation.
No element of the Directors’ remuneration is performance related or subject to recovery or withholding (except for tax).
Directors cannot be awarded any share options or long-term performance incentives. None of the Directors has a service
contract with the Company or receives any non-cash benefits (except as described in the policy table), pension entitlements or
compensation for loss of office.
The remuneration policy will be applied when agreeing the remuneration package of any new Director. The terms of a Director’s
appointment are detailed in a letter sent to them when they join the Board. These letters are available for inspection at the
registered office of the Company.
Directors’ appointments do not have a fixed duration, but they can be terminated by the Company in writing at any time
without obligation to pay compensation. On termination of the appointment, Directors shall only be entitled to accrued fees as
at the date of termination, together with reimbursement of any expenses properly incurred prior to that date. Directors are also
subject to re-election on an annual basis and, if not elected, their appointment ceases immediately. No payments for loss of
office are made.
Consideration of shareholders’ views
An ordinary resolution to approve the Remuneration Report is put to members at each Annual General Meeting and
shareholders have the opportunity to express their views and raise any queries in respect of the remuneration policy at
this meeting. To date, no shareholders have commented in respect of the remuneration policy. In the event that there was
a substantial vote against any resolution proposed at the Company’s Annual General Meeting, the reasons for any such
vote would be sought and appropriate action taken. Should the vote be against resolutions in relation to the Directors’
remuneration, further details will be provided in future Directors’ Remuneration Reports.
In accordance with the Companies Act 2006, the Company is required to seek shareholder approval of its remuneration policy
on a triennial basis. An ordinary resolution for the approval of the remuneration policy was put to members at the 2023 Annual
General Meeting. It is the intention of the Board that the policy on remuneration will continue to apply for all financial years of
the Company up to 31 December 2025.
Any discretionary fees paid to the Directors will be clearly disclosed in the Directors’ Remuneration Report accompanied by an
explanation of the work undertaken.
Shareholder voting
At the Company’s previous Annual General Meeting held on 18 April 2023, 99.50% of votes cast (including votes cast at
the Chairman of the Meeting’s discretion) were in favour of the resolution to approve the Directors’ Remuneration Report in
respect of the year ended 31 December 2022 and 0.50% were against. 216,410 votes were withheld.
At the Company’s Annual General Meeting held on 18 April 2023, 99.48% (including votes cast at the Chairman of the
Meeting’s discretion) were in favour of the resolution to approve the Directors’ Remuneration Policy and 0.52% of votes cast
were against. 226,874 votes were withheld.
Directors’ Remuneration Policy
68
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
Policy table
Purpose and link to
strategy
Fees and benefits payable to Directors should be sufficient to attract and retain individuals of high
calibre with suitable knowledge and experience. Those chairing the Board and key Committees
should be paid higher fees than other Directors in recognition of their more demanding roles. Fees
should reflect the time spent by Directors on the Company’s affairs and the level of complexity of
responsibilities borne by the Directors.
Description
Current levels of fixed annual fee (effective from 1 October 2023):
Chairman – £52,500
Audit Committee Chairman – £43,750
Senior Independent Director – £38,500
Directors – £35,000
Maximum and
minimum levels
Remuneration consists of a fixed fee each year, set in accordance with the stated policies and any
increase granted must be in line with the stated policies. The Company’s Articles of Association set
a limit of £250,000 in respect of the remuneration that may be paid to Directors in any financial
year, not including expenses and discretionary fees. In addition, the Directors propose a limit of
£75,000 (excluding any tax grossing up) in relation to the maximum that may be paid in respect
of taxable expenses. These ceilings have been set at a level to provide flexibility in respect of the
recruitment of additional Board members and inflation.
Policy on share
ownership
Directors are not required to own shares in the Company.
Operation – fees
Fixed fee element
The Board reviews the quantum of Directors’ pay each year to ensure that this is in line with
the level of Directors’ remuneration for other investment trusts of a similar size. When making
recommendations for any changes in fees, the Board will consider wider factors such as the
average rate of inflation over the period since the previous review and the level and any change in
complexity of the Directors’ responsibilities (including additional time commitments as a result
of increased regulatory or corporate governance requirements). Directors are not eligible to be
compensated for loss of office, nor are they eligible for bonuses, pension benefits, share options or
other incentives or benefits. Directors do not have service contracts but are appointed under letters
of appointment.
Discretionary fees
The Company’s Articles of Association authorise the payment of additional discretionary fees to
Directors for any additional work undertaken on behalf of the Company which is outside of their
normal duties. Any such work and the fees payable are subject to the prior approval of the Chairman
or, in the case of the Chairman undertaking the extra work, subject to the prior approval of the
Chairman of the Audit Committee. Any discretionary fees paid will be disclosed in the Directors’
remuneration implementation report within the Annual Report. The level of discretionary fees
shall be determined by the Directors and will be subject to a maximum of £10,000 per annum
per Director.
Operation – expenses
Taxable expenses
The Directors are entitled to be repaid all reasonable travelling, hotel and other expenses incurred
by them in or about the performance of their duties as Directors, including any expenses incurred in
attending meetings of the Board or Committees of the Board, Annual General Meetings or General
Meetings. Some expenses such as travel expenses incurred by the Directors in the course of travel
to attend Board and Committee meetings which are held at the Company’s registered office in
London and which are reimbursed by the Company are subject to tax and national insurance. The
Company’s policy is that all reasonable costs of this nature will be reimbursed as they are incurred,
including the tax and national insurance costs incurred by the Director on such expenses.
Directors’ Remuneration Policy
continued
Section 3: Governance
69
Chairman’s introduction
Corporate Governance is the process by which the Board seeks to look after shareholders’ interests and protect and enhance
shareholder value. Shareholders hold the Directors responsible for the stewardship of the Company, delegating authority and
responsibility to the Directors to manage the Company on their behalf and holding them accountable for its performance.
The Board is ultimately responsible for framing and executing the Company’s strategy and for closely monitoring risks.
We aim to run our Company in a manner which is responsible and consistent with our belief in honesty, transparency and
accountability. In our view, good governance means managing our business well and engaging effectively with investors. We
consider the practice of good governance to be an integral part of the way we manage the Company and we are committed to
maintaining high standards of financial reporting, transparency and business integrity.
As a UK-listed investment trust company our principal reporting obligation is driven by the UK Corporate Governance Code
(the UK Code) issued by the Financial Reporting Council in July 2018. However, as listed investment trust companies differ in
many ways from other listed companies, the Association of Investment Companies has drawn up its own set of guidelines, the
AIC Code of Corporate Governance (the AIC Code) issued in February 2019, which addresses the governance issues relevant to
investment companies and meets the approval of the Financial Reporting Council.
Both the UK Code and the AIC Code apply to accounting periods beginning on or after 1 January 2019. The Board has
determined that it has complied with the recommendations of the AIC Code. This in most material respects is the same as
the UK Code, save that there is greater flexibility regarding the tenure of office of the Chairman and membership of the Audit
Committee.
This report, which forms part of the Directors’ Report, explains how the Board deals with its responsibility, authority and
accountability.
Compliance
The Board has made the appropriate disclosures in this report to ensure the Company meets its continuing obligations. It
should be noted that, as an investment trust, most of the Company’s day-to-day responsibilities are delegated to third parties,
the Company has no employees and the Directors are all non-executive, therefore not all of the provisions of the UK Code are
directly applicable to the Company.
The Board considers that the Company has complied with the recommendations of the AIC Code and the provisions contained
within the UK Code that are relevant to the Company throughout this accounting period, except the provisions relating to:
•
the role of the chief executive;
•
executive directors’ remuneration; and
•
the need for an internal audit function.
The Board considers that these provisions are not relevant to the position of the Company, being an externally managed
investment company with no executive employees and, in relation to the internal audit function, in view of BlackRock having
an internal audit function. Further explanation is provided below.
Information on how the Company has applied the principles of the AIC Code and UK Code is set out below. The UK Code
is available from the Financial Reporting Council’s website at frc.org.uk. The AIC Code is available from the Association of
Investment Companies at
theaic.co.uk
.
The Board
The Board currently consists of five non-executive Directors, all of whom are independent of the Company’s Manager.
Provision 9 of the UK Code which relates to the combination of the roles of the chairman and chief executive does not apply as
the Company has no executive directors.
The Board’s primary purpose is to direct the Company to maximise shareholder value within a framework of proper controls
and in accordance with the Company’s investment objective.
Corporate Governance Statement
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Annual Report and Financial Statements 31 December 2023
Corporate Governance Statement
continued
Board structure and management
Details of the Board’s structure, roles and responsibilities and management are set out in the summary of Governance
Structure on page 36. The Directors’ biographies on pages 37 and 38 demonstrate a breadth of investment, commercial,
accounting, financial and professional experience which enables them to provide effective strategic leadership and proper
governance of the Company. Details of the Chairman’s other significant time commitments can be found on page 37.
The Company does not have a chief executive as day-to-day management of the Company’s affairs is delegated to the
Manager as AIFM, with investment management and other ancillary services delegated to the Investment Manager.
Representatives of the Manager, Investment Manager and Company Secretary attend each Board meeting. The Board, the
AIFM, the Investment Manager and the Company Secretary operate in a supportive and co-operative manner.
Board independence and tenure
The Board regularly reviews the independence of its members and considers all of the Directors to be independent. A number
of factors were taken into account when making this assertation, including length of tenure, the individual contribution of each
Director, their other directorships and interests, and their ongoing commitment and enthusiasm to promote the long-term
success of the Company, its shareholders and stakeholders. This individual independence allows all of the Directors to sit on
the Company’s various Committees, although in line with the UK Code, the Chairman of the Board does not act as a member of
the Audit Committee.
The Board is of the view that length of service will not necessarily compromise the independence or contribution of directors
of an investment trust company, where continuity and experience can add significantly to the strength of the Board. Following
the formal performance evaluation process, the Board has concluded that, notwithstanding Mr Cheyne and Ms Mosely have
served as Directors for over nine years, they continue to be independent in character and judgement and their range of skills
and experience have been beneficial for the Board.
The Board considers that the tenure of the Chairman should be determined principally by how the Board’s purpose in
providing strategic leadership, governance and bringing challenge and support to the Manager can best be maintained, whilst
also recognising the importance of independence, refreshment, diversity and retention of accumulated knowledge. It firmly
believes that an appropriate balance of these factors is essential for an effective functioning Board and, at times, will naturally
result in some longer serving directors, including the Chairman. Furthermore, the Board wishes to retain the flexibility to be
able to recruit outstanding candidates when they become available rather than simply adding new Directors based upon a
predetermined timetable.
Under the AIC Code the tenure of a director who is elevated to Chairman may be extended by three years. The Board has
decided that this extension should apply to Mr Cheyne’s tenure until he retires at the conclusion of the next Annual General
Meeting on 9 May 2024. It is intended that Mr Goodyear succeed Mr Cheyne as Chairman of the Board.
None of the Directors has a service contract with the Company. The terms of their appointment are detailed in a letter sent to
them when they join the Board. Copies of these letters are available on request from the Company’s registered office and will
be available at the Annual General Meeting.
Diversity
The Board’s aim regarding diversity, including age, gender, educational and professional background and other broader
characteristics of diversity, is to take these into account during the recruitment and appointment process. However, the Board
is committed to an objective of appointing the most appropriate candidate, regardless of gender or other forms of diversity,
and therefore no targets have been set against which to report.
The Parker Review in respect of board diversity and the recent changes to the FCA’s Listing Rules set new diversity targets
and associated disclosure requirements for UK companies listed on the premium and standard segment of the London Stock
Exchange. Listing Rule 9.8.6R (9) requires listed companies to include a statement in their annual reports and accounts in
respect of certain targets on board diversity, or if those new targets have not been met to disclose the reasons for this. This new
requirement applies to accounting periods commencing on or after 1 April 2022. Further information on the composition and
diversity of the Board and its Committees as at 31 December 2023 can be found in the disclosure table which follows.
Section 3: Governance
71
Gender
Number of
Board Members
Percentage
of Board
Number of
senior roles held¹
Men
3
60%
2
Women
2
40%
1
Ethnicity
2,3
White British (or any other white background)
4
80%
2
Mixed/Multiple Ethnic Groups
0
0%
0
Asian/Asian British
1
20%
1
Black/African/Caribbean/Black British
0
0%
0
Other ethnic group, including Arab
0
0%
0
1
According to the Listing Rules, the Chair and Senior Independent Director are defined as senior positions. In addition, the Company
considers that the role of the Audit Chair is a senior position.
2
Categorisation of ethnicity is stated in accordance with the Office of National Statistics classification.
3
Columns corresponding to the ‘Number in executive management’ and ‘Percentage of executive management’ are not included in
the table. These are inapplicable as the Company is externally managed and does not have executive management functions.
Directors’ appointment, retirement and rotation
The rules concerning the appointment, retirement and rotation of Directors are discussed in the Directors’ Report on page 58.
The Board has considered the position of each of the Directors as part of the evaluation process and believes it would be in
the best interests of the Company for the Directors to be proposed for re-election/election at the forthcoming Annual General
Meeting given their material level of contribution and commitment to the Company. Mr Cheyne will be retiring and will not be
seeking re-election.
The Board recognises the value of progressive renewing of, and succession planning for, company boards. The refreshment
of the Board will remain as an ongoing process to ensure that the Board is well-balanced through the appointment of new
Directors with the skills and experience necessary. Directors must be able to demonstrate commitment to the Company,
including in terms of time. The Board is cognisant of the concept of ‘overboarding’ and has considered the time commitment
required by the Directors’ other roles, taking into account their nature and complexity. The Board reviews this information
annually to ensure all Directors have sufficient capacity to effectively carry out their role.
Directors’ induction, training and development
When a new Director is appointed to the Board, he or she is provided with all the relevant information regarding the Company
and his or her duties and responsibilities as a Director. In addition, a new Director will also spend some time with the
Investment Manager, the Company Secretary and other key employees of the Manager whereby he or she will become familiar
with the workings and processes of the Company.
The Company’s policy is to encourage Directors to keep up to date and attend training courses on matters which are directly
relevant to their involvement with the Company. The Directors also receive regular briefings from, amongst others, the
auditors, representatives of the Manager and the Company Secretary regarding any proposed developments or changes in
laws or regulations that could affect them or the Company. Directors’ training and development needs are reviewed by the
Chairman on an annual basis.
Directors’ liability insurance
The Company has maintained appropriate Directors’ liability insurance cover throughout the year.
The Board’s responsibilities
The Board is responsible to shareholders for the overall management of the Company. It decides upon matters relating to
the Company’s investment objective, policy and strategy and monitors the Company’s performance towards achieving that
objective through its agreed policy and strategy. The Board has also adopted a schedule of matters reserved for its decision.
The Board is supplied in a timely manner with information in a form and of a quality appropriate to enable it to discharge its
duties.
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Annual Report and Financial Statements 31 December 2023
Strategic issues and all operational matters of a material nature are determined by the Board. The Board has responsibility
for ensuring that the Company keeps adequate accounting records which disclose with reasonable accuracy at any time the
financial position of the Company and which enable it to ensure that the financial statements comply with the Companies
Act 2006. It is the Board’s responsibility to present a balanced and understandable assessment, which extends to interim
and other price-sensitive reports. The Board is also responsible for safeguarding the assets of the Company and for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
The Board has established a procedure whereby Directors wishing to do so in the furtherance of their duties, may take
independent advice at the Company’s expense.
Performance evaluation
In order to review the effectiveness of the Board, the Committees and the individual Directors, the Board carries out a formal
and rigorous annual appraisal process. The annual evaluation for the year ended 31 December 2023 has been carried out
with the assistance of an independent third-party, Lintstock Ltd, and took the form of electronic performance evaluation
questionnaires. The responses were then collated, analysed and discussions held between the Chairman and the Directors.
The Chairman also reviews with each Director their individual performance, contribution and commitment and the appraisal of
the Chairman is reviewed by the other Directors, led by the Senior Independent Director.
The appraisal process is considered by the Board to be constructive in terms of identifying areas for improving the functioning
and the performance of the Board and its Committees and the contribution of individual Directors, as well as building on
and developing individual and collective strengths. The review concluded that the Board oversees the management of the
Company effectively and has the skills and expertise to safeguard shareholders’ interests. The Board, the Investment Manager
and representatives of the Manager were found to operate in a cooperative and open environment. Each Director made a
valuable contribution to the Board and its discussions, brought different qualities to the Board, challenged the Investment
Manager and Manager constructively, remained independent in character and judgement, and dedicated sufficient time to
their respective role on the Board. Board composition, dynamics and structure worked well.
There were no significant actions arising from the evaluation process and it was agreed that the current composition of
the Board and its Committees reflected a suitable mix of skills and experience and that the Board as a whole, the individual
Directors and its Committees, were functioning effectively.
Delegation of responsibilities
Management and administration
The management of the investment portfolio and the administration of the Company have been contractually delegated
to BlackRock Fund Managers Limited (BFM), as the Company’s AIFM, and BFM (with the permission of the Company) has
delegated certain investment management and other ancillary services to BlackRock Investment Management (UK) Limited
(BIM (UK) or the Investment Manager). The contractual arrangements with BFM (the Manager) are summarised on page 56.
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 Board has final investment authority on unquoted investments. The review of the Manager’s performance
is an ongoing duty and responsibility of the Board which is carried out at each Board meeting. In addition, a formal review is
undertaken annually, details of which are set out in the Directors’ Report.
The Manager has delegated the portfolio valuation and fund accounting services to The Bank of New York Mellon
(International) Limited (BNYM). The assets of the Company have been entrusted to the Depositary for safekeeping. The
Depositary is The Bank of New York Mellon (International) Limited. The address at which this business is conducted is given on
page 144.
The Board has delegated the exercise of voting rights attaching to the securities held in the portfolio to the Investment
Manager. Details of the Investment Manager’s approach to voting at shareholder meetings are set out on page 57.
The Company Secretary
The Board has direct access to company secretarial advice and the services of the Manager which, through its nominated
representative, is responsible for ensuring that Board and Committee procedures are followed and that applicable regulations
are complied with. The appointment and removal of the Company Secretary is a matter for the whole Board. The Board has
established a procedure whereby Directors wishing to do so in the furtherance of their duties, may take independent professional
advice at the Company’s expense.
Corporate Governance Statement
continued
Section 3: Governance
73
Committees of the Board
The Board has appointed a number of committees as set out below.
Nomination Committee
As the Board is small and comprises only non-executive Directors it fulfils the function of the Nomination Committee and is
chaired by the Chairman of the Board. Should a vacancy occur, or the Board decides to recruit new members, the Board will
take into account the size, balance and profile of the Board as a whole to identify any areas that need strengthening. Due to the
specialist nature of the investment mandate and the difficulty in finding new Directors with knowledge of the mining sector,
the existing Directors may identify suitable individuals from their range of contacts, although other sources, including external
search consultants, may also be used as required.
Audit Committee
The Audit Committee, which is currently chaired by Mr Venkatakrishnan, comprises the whole Board with the exception of
Mr Cheyne, who is not a member of the Committee but may attend by invitation. When Mr Goodyear succeeds Mr Cheyne as
Chairman, it is intended that he steps down as a member of the Audit Committee. Further details are given in the Report of the
Audit Committee on pages 76 to 80.
Management Engagement Committee
The Management Engagement Committee is chaired by Ms Lewis and comprises the whole Board. The Committee is
responsible for reviewing the performance of the Manager in terms of investment management, company secretarial services
and fund accounting and, at least annually, reviews the investment management agreement to ensure the terms remain
competitive. It will consider each year whether the continuing appointment of the Manager on the terms of the management
contract is in the interests of the Company’s shareholders as a whole. It will also consider and make recommendations to
the Board regarding the appointment of third-party service providers and ensure that third-party service providers comply
with the terms of their respective agreements with the Company and that the provisions of such agreements follow industry
practice, remain competitive and are in the best interests of shareholders.
Remuneration Committee
The Company’s policy on Directors’ remuneration, together with details of the remuneration of each Director, is detailed
in the Directors’ Remuneration Report and Directors’ Remuneration Policy on pages 63 to 68. As stated in the Directors’
Remuneration Report, the full Board determines the level of Directors’ fees and accordingly there is no separate Remuneration
Committee.
Internal controls
The Board is responsible for establishing and maintaining the internal controls of the Company and for reviewing their
effectiveness, for ensuring that financial information published or used within the business is reliable and for regularly
monitoring compliance with regulations governing the operation of investment trusts. The Board, through the Audit
Committee (the Committee) regularly reviews the effectiveness of the internal control systems to identify, evaluate and
manage the Company’s significant risks. If any significant failings or weaknesses are identified, the Manager and Board
ensure that necessary action is taken to remedy the failings. The Board is not aware of any significant failings or weaknesses
arising in the year under review.
Control of the risks identified, covering financial, operational, compliance and risk management, is embedded in the
operations of the Company. There is a monitoring and reporting process to review these controls, which has been in place
throughout the year under review and up to the date of this report, carried out by the Manager’s corporate audit departments.
This accords with the Financial Reporting Council’s ‘Guidance on Risk Management, Internal Control and Related Financial
and Business Reporting’.
The Company’s risk register sets out the risks relevant to the Company and describes, where relevant, the internal controls
that are in place at the AIFM, the Investment Manager and other third-party service providers to mitigate these risks. The
Committee formally reviews this register on a semi-annual basis and the Manager as the Company’s AIFM reports on any
significant issues that have been identified in the period. In addition, BlackRock’s internal audit department provides an
annual presentation to the Audit Committee chairs of the BlackRock investment trusts on the results of testing performed in
relation to BlackRock’s internal control processes. The Depositary also reviews the control processes in place at the Custodian,
the Fund Accountant and the AIFM and reports formally to the Committee twice yearly. Both the AIFM and the Depositary will
escalate issues and report to the Committee outside of these meetings on an ad hoc basis to the extent this is required. The
Committee also receives annual and quarterly Service Organisation Control (SOC 1) reports respectively from BlackRock and
BNYM on the internal controls of their respective operations, together with the opinion of their reporting accountant.
74
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Annual Report and Financial Statements 31 December 2023
The Board recognises that these control systems can only be designed to manage rather than eliminate the risk of failure
to achieve business objectives and to provide reasonable, but not absolute, assurance against material misstatement or
loss, and relies on the operating controls established by the Manager, the Fund Accountant and Custodian. The Manager
prepares revenue forecasts and management accounts which allow the Board to assess the Company’s activities and review
its performance. The Board and the Manager have agreed clearly defined investment criteria, specified levels of authority and
exposure limits. Reports on these issues, including performance statistics and investment valuations, are submitted to the
Board at each meeting.
The Company does not have its own internal audit function, as all the administration is delegated to the Manager and other
third-party service providers. The Board monitors the controls in place through the internal control reports and the Manager’s
internal audit department and feels that there is currently no need for the Company to have its own internal audit function,
although this matter is kept under review.
Financial reporting
The Statement of Directors’ Responsibilities in respect of the Annual Report and Financial Statements is set out on pages 81
and 82, the Independent Auditors’ Report on pages 86 to 93 and the Statement of Going Concern on page 58.
Socially responsible investment
Generally, investment trusts do not employ staff and accordingly have no direct impact on social matters but can be
significant investors in the economies of the regions in which they invest. The Board believes that it is important to consider
whether investee companies act responsibly in respect of environmental, ethical and social issues. The Manager’s evaluation
procedures and financial analysis of the companies within the portfolio includes research and appraisal, and also takes into
account environmental policies, social, ethical and other business issues. However, the Company invests primarily on financial
grounds to meet its stated investment objective. In this regard, the Manager’s Sectors and Thematics team works closely with
their colleagues in the BlackRock Investment Stewardship team.
Bribery prevention policy
The provision of bribes of any nature to third parties in order to gain a commercial advantage is prohibited and is a criminal
offence. The Board has a zero-tolerance policy towards bribery and a commitment to carry out business fairly, honestly and
openly. The Board takes its responsibility to prevent bribery very seriously and the Manager has anti-bribery policies and
procedures in place which are high level, proportionate and risk based. The Company’s service providers have been contacted
in respect of their anti-bribery policies and, where necessary, contractual changes are made to existing agreements in respect
of anti-bribery provisions.
Criminal Finances Act 2017
The Company has a commitment to zero tolerance towards the criminal facilitation of tax evasion.
Communications with shareholders
Communications with shareholders is given a high priority. Regular updates on performance are available to shareholders on
the BlackRock website and the Investment Manager will review the Company’s portfolio performance at the Annual General
Meeting. The Notice of Annual General Meeting which is sent out 20 working days in advance of the meeting sets out the
business of the Meeting which is explained in the Directors’ Report. Separate resolutions are proposed for substantive issues.
Proxy voting figures will be announced to shareholders at the Annual General Meeting and will be made available on the
website shortly after the meeting. In accordance with Provision 4 of the UK Code, when 20% of votes have been cast against a
resolution at any general meeting, the Board will explain, when announcing the results of voting, what actions it intends to take
to understand the reasons behind the vote result. An interim action statement will also be published within six months of the
vote, setting out the views received from shareholders and the actions that the Company has taken, and the Board will include
a summary of the feedback and actions in the next Annual Report.
The Company’s willingness to enter into discussions with institutional shareholders is also demonstrated by the programmes
of institutional presentations by the Investment Manager. The Board discusses with the Investment Manager at each Board
meeting any feedback from meetings with shareholders and it also receives reports from its corporate brokers. The Chairman
is available to meet directly with shareholders periodically without the Investment Manager being present. The Chairman
may be contacted via the Company Secretary whose details are given on page 144. The dialogue with shareholders provides
a two-way forum for canvassing the views of shareholders and enabling the Board to become aware of any issues of concern,
including those relating to performance, strategy and corporate governance.
Corporate Governance Statement
continued
Section 3: Governance
75
There is a section within this report entitled ‘Shareholder Information’ which provides an overview of useful information
available to shareholders. The Company’s financial statements, regular factsheets and other information are also published on
the BlackRock website at
www.blackrock.com/uk/brwm
. The work undertaken by the auditors does not involve consideration
of the maintenance and integrity of the website and, accordingly, the auditors accept no responsibility for any changes that
have occurred to the financial statements since they were initially presented on the website. Visitors to the website need to be
aware that legislation in the United Kingdom governing the preparation and dissemination of the accounts may differ from
legislation in their jurisdiction.
Packaged Retail and Insurance-Based Investment Products (PRIIPS) Regulation (The
Regulation)
The Regulation (as onshored in the UK and amended) requires that anyone manufacturing, advising on, or selling a PRIIP
to retail investors in the UK must comply with the Regulation. Shares issued by investment trusts fall into scope of the
Regulation.
Investors should be aware that the Regulation requires the AIFM, as PRIIPs manufacturer, to prepare a key information
document (KID) in respect of the Company. This KID must be made available, free of charge, to UK retail investors prior to them
making any investment decision and have been published on BlackRock’s website. The Company is not responsible for the
information contained in the KID and investors should note that the procedures for calculating the risks, costs and potential
returns are prescribed by the Regulation. The figures in the KID may not reflect the expected returns for the Company and
anticipated performance returns cannot be guaranteed.
The PRIIPs KID in respect of the Company can be found at:
www.blackrock.com/uk/brwm
.
Disclosure Guidance and Transparency Rules
Other information required to be disclosed pursuant to the Disclosure Guidance and Transparency Rules has been placed
in the Directors’ Report on pages 55 to 62 because it is information which refers to events that have taken place during the
course of the year.
For and on behalf of the Board
DAVID CHEYNE
Chairman
7
March 2024
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Annual Report and Financial Statements 31 December 2023
As Chairman of the Company’s Audit Committee (the Committee) I am pleased to present the Committee’s report to
shareholders for the year ended 31 December 2023.
Composition
All of the Directors, except the Chairman of the Board, were members of the Committee during the year under review. The
Chairman may attend Committee meetings by invitation. The Board considers that at least one member of the Committee
has recent and relevant financial experience and specific competence in accounting and/or auditing and the Committee as a
whole has competence relevant to the sector in which the Company operates.
The biographies of the Directors may be found on pages 37 and 38.
Performance evaluation
Details of the evaluation of the Committee are set out in the Corporate Governance Statement on page 72.
Role and responsibilities
The Committee meets at least twice a year. The two planned meetings are held prior to the Board meetings to approve the
half yearly and annual results. The Committee does not consider that as an investment trust company it needs to hold an
additional meeting, although this is kept under review. The Chairman of the Audit Committee meets and interacts with the
auditors and the Manager’s representative in between scheduled meetings to address relevant accounting and financial
reporting matters that may arise during the period.
The Committee operates within written terms of reference detailing its scope and duties and these are available on the website
at
www.blackrock.com/uk/brwm
. The Committee’s principal duties, as set out in the terms of reference, are set out below. In
accordance with these duties, the principal activities of the Committee during the year included:
Internal controls, financial reporting and risk management systems
•
reviewing the adequacy and effectiveness of the Group’s internal financial controls and the internal control and risk
management systems;
•
reasonably satisfying itself that such systems meet relevant legal and regulatory requirements;
•
monitoring the integrity of the financial statements;
•
reviewing the consistency of, and any changes to, accounting policies;
•
reviewing the Half Yearly and Annual Report and Financial Statements to ensure that the Group’s results and financial
position are presented accurately and fairly to shareholders;
•
reviewing semi-annual reports from the Manager on its activities as AIFM; and
•
reviewing half yearly reports from the Depositary on its activities.
Narrative reporting
•
reviewing the content of the Annual Report and Financial Statements and advising the Board on whether, taken as a whole,
they are fair, balanced and understandable and provide the information necessary for shareholders to assess the Group’s
position, performance, business model and strategy.
External audit
•
making recommendations to the Board, to be put to shareholders for approval at the Annual General Meeting in relation to
the appointment, re-appointment and removal of the Company’s external auditors;
•
reviewing the scope, execution, results, cost effectiveness, independence and objectivity of the external auditors;
•
reviewing and approving the audit and non-audit fees payable to the external auditors and the terms of their engagement;
•
reviewing and approving the external auditors’ plan for the following financial year, with a focus on the identification of areas
of audit risk and consideration of the appropriateness of the level of audit materiality adopted;
•
reviewing the efficiency of the external audit process and the quality of the audit engagement partner and the audit team,
and making a recommendation with respect to the reappointment of the auditors;
Report of the Audit Committee
Section 3: Governance
77
•
reviewing the role of the Manager and third-party service providers in an effective audit process;
•
considering the quality of the formal audit report to shareholders; and
•
overseeing the relationship with the external auditors.
Reporting responsibilities
•
reporting to the Board on its proceedings and how it has discharged its responsibilities, making whatever recommendations
it deems appropriate on any area within its remit; and
•
compiling a report on its activities to be included in the Annual Report and Financial Statements.
Internal audit
•
considering the need for an internal audit function, as set out in the Corporate Governance Statement on pages 73 and 74
and below.
The fees paid to the external auditors are set out in note 5 of the Financial Statements. An explanation of how auditor
objectivity and independence is safeguarded is reported under ‘Assessment of the effectiveness of the external audit process’
on pages 79 and 80.
Whistleblowing policy
The Committee has reviewed and accepted the ‘whistleblowing’ policy that has been put in place by BlackRock under which its
staff, in confidence, can raise concerns about possible improprieties in matters of financial reporting or other matters, insofar
as they affect the Company.
Internal audit
The Company does not have its own internal audit function, as all the administration is delegated to the Manager. The Board
considers that it is sufficient to rely on the internal audit department of BlackRock and the requirement for an internal audit
function is kept under review. The external auditors obtain an understanding of the internal controls in place at both the
Manager and the Fund Accountant by analysing the relevant control reports issued by their independent auditors.
Non-audit services
The Company’s policy on permitted audit related and non-audit services is set out in full in the Committee’s terms of reference
which are available on the Manager’s website at
www.blackrock.com/uk/brwm
. The only audit related services provided in the
year related to the review of the half yearly financial statements.
United Kingdom Single Electronic Format Regulatory Technical Standard (UKSEF)
The Committee paid special attention to the preparation of the financial statements in digital form under the UKSEF taxonomy
and regulatory technical standard. The Committee made sure the necessary procedures had been completed by all parties,
including the technical accounting team of the Manager, the Fund Accountant, The Bank of New York Mellon and a specialist
information technology provider.
Audit Committee Standard
The Financial Reporting Council’s Audit Committee Standard ‘Audit Committees and the External Audit: Minimum Standard’
was published in May 2023. It is applicable to FTSE 350 companies with a premium listing on the London Stock Exchange and
will operate on a comply or explain basis until the creation of the Audit, Reporting and Governance Authority (ARGA), at which
time compliance will be mandated. This standard is not anticipated to have a significant impact on the Company, but the Audit
Committee will be reviewing its current practices against the standard to avoid any non compliance when ARGA is formed.
Significant issues considered regarding the Annual Report and Financial Statements
During the year, the Committee considered a number of significant issues and areas of key audit risk in respect of the Annual
Report and Financial Statements. The Committee reviewed the external audit plan at an early stage and concluded that the
appropriate areas of audit risk relevant to the Company had been identified and that suitable audit procedures had been put
in place to obtain reasonable assurance that the financial statements as a whole would be free of material misstatements. The
table on page 78 sets out the key areas of risk identified and also explains how these were addressed.
As the provision of portfolio valuation, fund accounting and administration services is delegated to the Manager, which sub-
delegates certain administrative functions to The Bank of New York Mellon (International) Limited (BNYM), the Committee has
also reviewed the internal control reports prepared by BlackRock and BNYM. This enables the Committee to ensure that the
relevant control procedures are in place to cover the areas of risk as identified in the table that follows and are adequate and
appropriate and have been confirmed as operating effectively by their reporting auditor.
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Annual Report and Financial Statements 31 December 2023
Report of the Audit Committee
continued
Significant issue
The accuracy of the valuation of the investment portfolio
How the issue was addressed
Listed investments are valued using stock exchange prices from third
-party pricing providers. The Board reviews detailed
portfolio valuations including the fair valuation of unquoted investments on a regular basis throughout the year and receives
confirmation from the Manager that the pricing basis is appropriate and in line with relevant accounting standards as adopted
by the Company and that the carrying values are materially correct. In relation to the BHP Brazil Royalty Contract and equity
shares of Jetti Resources and MCC Mining, the Board reviews the valuation reports of independent external valuers. The
frequency of independent valuations differs for different assets and could also be ad hoc depending on any events.
Significant issue
The risk of misappropriation of assets and unsecured ownership of investments
How the issue was addressed
The Depositary is responsible for financial restitution for loss of financial investments held in custody. The Depositary reports
to the Committee twice a year.
The Committee reviews reports from its service providers on key controls over the assets of the Company and will take action
to address any significant issues that are identified in these reports, which may include direct discussions with representatives
of the relevant service providers to obtain more detailed information surrounding any matters of concern and gaining
assurance that appropriate remediation has been taken. Any significant issues are reported by the Manager to the Committee.
The Manager has put in place procedures to ensure that investments can only be made to the extent that the appropriate
contractual and legal arrangements are in place to protect the Company’s assets.
Significant issue
The accuracy of the calculation of the management fee
How the issue was addressed
The management fee is calculated in accordance with the contractual terms in the investment management agreement by the
Fund Accountant and is reviewed in detail by the Manager.
Significant issue
The risk that income is overstated, incomplete or inaccurate through failure to recognise proper income entitlements or to
apply the appropriate accounting treatment for recognition of income
How the issue was addressed
The Committee reviews income forecasts, including special dividends and written options, and receives explanations from the
Manager for any variations or significant movements from previous forecasts and prior year numbers. The Committee also
reviews and approves the rationale for the revenue/capital accounting treatment of option income and special dividends.
The Committee also reviews SOC1 Reports from its service providers, including the Company’s Fund Accountant and
Custodian, BNYM. These reports include information on control processes in place to ensure the accurate recording of income
and any exceptions are highlighted to the Committee and will be investigated further to ensure that appropriate remedial
action has been taken where relevant.
Section 3: Governance
79
Auditors and audit tenure
The Committee reviews the performance of the auditors on an annual basis, taking into consideration the services and advice
provided to the Company and the fees charged for these services. The Company’s auditors, PricewaterhouseCoopers LLP,
were appointed on 28 April 2016 following the result of a tender process held in late 2015. Ms Gillian Alexander has been the
Company’s audit partner since the financial year commencing on 1 January 2021.
The Committee, in conjunction with the Board, is committed to reviewing the auditors’ appointment each year to ensure that
the Company is receiving an optimal level of service. In addition, even if no change is made to the audit firm appointed, the
audit partner changes at least every five years.
There are no contractual obligations that restrict the Company’s choice of auditors. The Committee is mindful of EU audit
legislation which requires the rotation of long serving auditors. The Company will be required to put its audit contract out to
tender again by no later than 2026.
The Committee is satisfied that the Company has complied with the provisions of the Statutory Audit Services for Large
Companies Market Investigation (Mandatory Use of Competitive Processes and Audit Committee Responsibilities) Order
2014, published by the Competition and Markets Authority on 26 September 2014. In recognition of underlying audit
rotation requirements, the Committee currently intends that an audit tender process will be undertaken during the year to 31
December 2025 to appoint either the incumbent or a new audit firm for the financial year ending 31 December 2026 onwards.
Audit related service fees of £9,350 (excluding VAT) paid to PricewaterhouseCoopers LLP relate to their review of the half
yearly financial statements (2022: £8,925).
Assessment of the effectiveness of the external audit process
To assess the effectiveness of the external audit, members of the Committee work closely with the Manager to obtain a good
understanding of the progress and efficiency of the audit. The Committee has adopted a formal framework to review the
effectiveness of the external audit process and audit quality. This includes a review of the following areas:
•
the quality of the audit engagement partner and the audit team;
•
the expertise of the audit firm and the resources available to it;
•
identification of areas of audit risk;
•
planning, scope and execution of the audit;
•
consideration of the appropriateness of the level of audit materiality adopted;
•
the role of the Committee, the Manager and third-party service providers in an effective audit process;
•
communications by the auditors with the Committee;
•
how the auditors support the work of the Committee and how the audit contributes added value;
•
policies and procedures to pre-approve and monitor non-audit services including gifts and hospitality;
•
the independence and objectivity of the audit firm; and
•
the quality of the formal audit report to shareholders.
Feedback in relation to the audit process and also the effectiveness of the Manager in performing its role is also sought
from relevant involved parties, notably the audit partner and team. The external auditors are invited to attend the Committee
meetings at which the half yearly and annual financial statements are considered and at which they have the opportunity to
meet with the Committee without representatives of the Manager or Investment Manager being present.
The effectiveness of the Committee and the Manager in the external audit process is assessed principally in relation to
the timely identification and resolution of any process errors or control breaches that might impact the Company’s net
asset values and accounting records. It is also assessed by reference to how successfully any issues in respect of areas of
accounting judgement are identified and resolved, the quality and timeliness of papers analysing these judgements, the Board
and the Manager’s approach to the value of the independent audit and the booking of any audit adjustments arising, and the
timely provision of draft public documents for review by the auditors and the Committee.
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Annual Report and Financial Statements 31 December 2023
To form a conclusion regarding the independence of the external auditors, the Committee considers whether the skills and
experience of the auditors make them a suitable supplier of non-audit services and whether there are safeguards in place to
ensure that there is no threat to their objectivity and independence in the conduct of the audit resulting from the provision
of such services. On an ongoing basis, PricewaterhouseCoopers LLP review the independence of their relationship with the
Company and report to the Committee, providing details of any other relationship with the Manager. As part of this review, the
Committee also receives information about policies and processes for maintaining independence and monitoring compliance
with relevant requirements from the Company’s auditors, including information on the rotation of audit partners and staff, the
level of fees that the Company pays in proportion to the overall fee income of the firm, and the level of related fees, details of
any relationships between the audit firm and its staff and the Company, as well as an overall confirmation from the auditors of
their independence and objectivity.
As a result of its review, the Committee has concluded that the external audit has been conducted effectively and also that
PricewaterhouseCoopers LLP is independent of the Company and the Manager.
Conclusions in respect of the Annual Report and Financial Statements
The production and the audit of the Company’s Annual Report and Financial Statements is a comprehensive process requiring
input from a number of different contributors. In order to reach a conclusion that the Annual Report and Financial Statements
are fair, balanced and understandable, the Board has requested that the Committee advise on whether these criteria are
satisfied. In so doing, the Committee has given consideration to the following:
•
the comprehensive control framework over the production of the Annual Report and Financial Statements, including the
verification processes in place to deal with the factual content;
•
the extensive levels of review that are undertaken in the production process by the Manager, the Depositary and other third-
party service providers responsible for accounting services and the Committee;
•
the controls that are in place at the Manager and third-party service providers to ensure the completeness and accuracy of
the Group’s financial records and the security of the Group’s assets; and
•
the existence of satisfactory internal control reports that have been reviewed and reported on by external auditors to verify
the effectiveness of the internal controls of the Manager, Depositary, Custodian and Fund Accountants.
In addition to the work outlined above, the Committee has reviewed the Annual Report and Financial Statements and is
satisfied that, taken as a whole, they are fair, balanced and understandable. In reaching this conclusion, the Committee has
assumed that the reader of the Annual Report and Financial Statements would have a reasonable level of knowledge of the
investment trust industry in general and of investment trusts in particular. The Committee has reported on these findings to
the Board who affirm the Committee’s conclusions in the Statement of Directors’ Responsibilities in respect of the Annual
Report and Financial Statements.
SRINIVASAN VENKATAKRISHNAN
Chairman
Audit Committee
7
March 2024
Report of the Audit Committee
continued
Section 3: Governance
81
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 on pages 37 and 38, 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 on pages 76 to 80.
Statement of Directors’ Responsibilities
in respect of the Annual Report and
Financial Statements
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Annual Report and Financial Statements 31 December 2023
As a result, the Board has concluded that the Annual Report and Financial Statements for the year ended 31 December 2023,
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
DAVID CHEYNE
Chairman
7
March 2024
Statement of Directors’ Responsibilities
in respect of the Annual Report and
Financial Statements
continued
Financial
statements
Section 4: Financial statements
85
Ivanhoe Electric reported strong drill results and completed a significant capital
raise during the period. Pictured opposite are Geologist Emalyn Glastetter (left)
and Project Manager Wes Hall (right) at the Hog Heaven Project, Montana.
PHOTO COURTESY OF IVANHOE ELECTRIC
86
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Annual Report and Financial Statements 31 December 2023
Report on the audit of the financial
statements
Opinion
In our opinion, BlackRock World Mining Trust plc’s Group
financial statements and Company financial statements (the
“financial statements”):
•
give a true and fair view of the state of the Group’s and of
the Company’s affairs as at 31 December 2023 and of the
Group’s loss and the Group’s and Company’s cash flows for
the year then ended;
•
have been properly prepared in accordance with UK‑adopted
international accounting standards as applied in accordance
with the provisions of the Companies Act 2006; and
•
have been prepared in accordance with the requirements
of the Companies Act 2006.
We have audited the financial statements, included
within the Annual Report and Financial Statements (the
‘Annual Report’), which comprise: the Consolidated and
Parent Company Statements of Financial Position as
at 31 December 2023; the Consolidated Statement of
Comprehensive Income, the Consolidated Statement
of Changes in Equity, the Parent Company Statement
of Changes in Equity and the Consolidated and Parent
Company Cash Flow Statements for the year then ended;
and the notes to the financial statements, which include a
description of the significant accounting policies.
Our opinion is consistent with our reporting to the Audit
Committee.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (‘ISAs (UK)’) and applicable law.
Our responsibilities under ISAs (UK) are further described
in the Auditors’ responsibilities for the audit of the financial
statements section of our report. We believe that the audit
evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Independence
We remained independent of the Group in accordance
with the ethical requirements that are relevant to our
audit of the financial statements in the UK, which includes
the FRC’s Ethical Standard, as applicable to listed public
interest entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that
non‑audit services prohibited by the FRC’s Ethical Standard
were not provided.
Other than those disclosed in Note 5, we have provided
no non‑audit services to the Company or its controlled
undertakings in the period under audit.
Our audit approach
Context
The Group comprises BlackRock World Mining Trust plc
(the ‘Parent Company’) and BlackRock World Mining
Investment Company Limited. The Group engages BlackRock
Fund Managers Limited (the ‘Manager’) to manage its
assets. We conducted our audit of the financial statements
using information from The Bank of New York Mellon
(International) Limited (the ‘Fund Accountant’) to whom the
Manager has, with the consent of the Directors, delegated
the provision of certain administrative functions.
Overview
Audit scope
•
We tailored the scope of our audit taking into account the
types of investments within the Group, the involvement
of the third parties referred to in the Context section, the
accounting processes and controls, and the industry in
which the Group operates.
•
We obtained an understanding of the control environment
in place at both the Manager and the Fund Accountant and
adopted a fully substantive testing approach using reports
obtained from the Fund Accountant.
Key audit matters
•
Valuation and existence of investments (Group and
Parent).
•
Accuracy, completeness and occurrence of income (Group
and Parent).
•
Ability to continue as a going concern (Continuation Vote)
(Parent).
Materiality
•
Overall Group materiality: £11.60m (2022: £12.99m) based
on 1% of net assets.
•
Overall Company materiality: £11.02m (2022: £12.34m)
based on 1% of net assets, capped at 95% of the Group
materiality.
•
Performance materiality: £8.70m (2022: £9.74m) (Group)
and £8.27m (2022: £9.25m) (Company).
The scope of our audit
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the financial
statements.
Key audit matters
Key audit matters are those matters that, in the auditors’
professional judgement, were of most significance in the
audit of the financial statements of the current period and
include the most significant assessed risks of material
misstatement (whether or not due to fraud) identified by the
auditors, including those which had the greatest effect on:
the overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team.
These matters, and any comments we make on the results of
our procedures thereon, were addressed in the context of our
audit of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate
opinion on these matters.
Independent auditors’ report
to the members of BlackRock World Mining Trust plc
Section 4: Financial statements
87
This is not a complete list of all risks identified by our audit.
The key audit matters below are consistent with last year.
Key audit matter
How our audit addressed the key audit matter
Valuation and existence of investments (Group and Parent)
Refer to the Report of the Audit Committee (page 78),
Accounting policies (page 102) and Notes to the Financial
Statements (page 111).
The investment portfolio of £1.3bn at the year end comprised
listed equity and fixed income securities of £1.2bn and
unlisted equity and fixed income securities of £87m.
We focused on the valuation and existence of listed
investments because investments represent the principal
element of the net asset value as disclosed on the Statement
of Financial Position in the Annual Report and Financial
Statements.
For unlisted investments, we focused on the valuation of the
BHP Royalty Contract and Jetti Resources as the valuation
of these investments requires estimates and significant
judgements to be applied by the Manager. Changes to
the estimates and/or judgements can result, either on an
individual or aggregate basis, in a material change to the
valuation of the investments.
We also considered the valuation of the Vale debentures as
these are listed on the Brazilian National Debenture System
(BNDS). As the BNDS has a low volume of transactions it
creates estimation uncertainty in the valuation.
Our audit work on the valuation and existence of the listed
investments included the following:
•
We tested the valuation of all of the investments by
agreeing the valuation to independent third‑party sources;
and,
•
We tested the existence of all of the investments
and options by agreeing the Group’s holdings to an
independent custodian and broker confirmation. For the
Parent Company’s investment in the subsidiary, we agreed
the investment to the net asset value of the subsidiary
which we audited.
Our audit work on the valuation and existence of unlisted
investments included the following:
•
We tested the existence of all of the investments by
agreeing the Group's and Parent Company's holdings to an
independent custodian and broker confirmations; and,
•
We understood the valuation techniques used by the
Directors in determining the fair value of each unlisted
investment.
For the BHP Royalty Contract, we performed the following
audit procedures:
•
We obtained and reviewed the valuation report issued by
the external expert;
•
We held discussions with the external expert throughout
December 2023 up until February 2024 to understand:
–
the approach taken in the current year and obtained an
understanding of changes in the assumptions since last
year;
–
an updated understanding of the impact of the current
economic environment; and
–
the impact of climate change on the valuation.
•
We involved PwC specialists to evaluate the valuation
methodology applied, by reference to the International
Private Equity and Venture Capital Valuation guidelines
(IPEV);
•
We tested the valuation techniques used by the Directors in
determining the fair value of the BHP Royalty Contract;
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Annual Report and Financial Statements 31 December 2023
Independent auditors’ report
to the members of BlackRock World Mining Trust plc (continued)
Key audit matter
How our audit addressed the key audit matter
•
We re‑performed the calculations and assessed the
reasonableness of production volumes used in the
valuation;
•
We performed price benchmarking over gold and copper
price forecasts; and
•
We performed an analysis of discount rates used, including
determining the sensitivity of key assumptions to changes.
For Jetti Resources we performed the following audit
procedures:
•
We obtained and reviewed the valuation report issued by
the external expert;
•
We involved PwC specialists to evaluate the valuation
methodology applied, by reference to the International
Private Equity and Venture Capital Valuation guidelines
(IPEV); and,
•
We tested the valuation techniques used by the Directors
in determining the fair value of the convertible notes and
common shares.
For the Vale debentures we performed the following audit
procedures:
•
We obtained an independent price from the BNDS;
•
We obtained and reviewed the trade history both prior
to and subsequent to year end to gauge the volume of
transactions; and,
•
We assessed the validity of the pricing source based on
publicly available data.
We have no matters to report as a result of this testing.
Section 4: Financial statements
89
Key audit matter
How our audit addressed the key audit matter
Accuracy, completeness and occurrence of income (Group
and Parent)
Refer to the Report of the Audit Committee (page 78),
Accounting policies (page 101) and Notes to the Financial
Statements (page 105). Income from investments consists
primarily of dividend income.
Within dividend income there is a risk of incomplete or
inaccurate recognition of income through the failure
to recognise proper income entitlements or to apply an
inappropriate accounting treatment.
In addition, the Directors are required to exercise judgement
in determining whether income receivable in the form of
special dividends should be classified as ‘revenue’ or ‘capital’
in the Statement of Comprehensive Income.
We responded to this risk by performing the following audit
procedures:
•
We obtained an understanding of the processes and
controls around income recognition and classification of
special dividends by reviewing the internal controls reports
of the Fund Accountant; and,
•
We assessed the appropriateness of the classification of
special dividends as revenue or capital by the Directors with
reference to publicly available information.
For all dividends recorded by the Group, we performed our
audit procedures through the use of our proprietary testing
tool Halo:
•
We tested the accuracy of dividend income by agreeing the
dividend rates from investments to independent market
data;
•
We tested occurrence by examining for each investment
holding, that all dividends recorded in the year had been
declared in the market; and,
•
To test for completeness, we investigated that the
appropriate dividends had been received in the year by
reference to independent data of dividends declared for all
investment holdings held within the year.
As stipulated by the requirements set out in the AIC SORP,
we tested the allocation and presentation of dividend income
between the revenue and capital columns of the Consolidated
statement of comprehensive income by determining reasons
behind dividend distributions. We have no matters to report
as a result of this testing.
Ability to continue as a going concern (Continuation Vote)
(Parent)
A continuation vote is due to take place at the next Annual
General Meeting in 2024, which, if passed, will allow the
Parent Company to continue as an investment trust for a
further year. As such, the Directors have considered and
assessed the potential impact on the ability of the Parent
Company to continue as a going concern.
The Directors have concluded, based on their assessment
and discussions with key investors, that the Parent
Company will be able to continue its operations and meet its
liabilities as they fall due for a period of at least 12 months
from the date of approving the financial statements.
The procedures we performed and our conclusions on going
concern are included in the Conclusions relating to going
concern section below.
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Annual Report and Financial Statements 31 December 2023
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed
enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of
the Group and the Company, the accounting processes and
controls, and the industry in which they operate.
As part of designing our audit, we determined materiality
and assessed the risks of material misstatement in the
financial statements. In particular, we looked at where the
Directors made subjective judgements, for example in respect
of significant accounting estimates that involved making
assumptions and considering future events that are inherently
uncertain.
The impact of climate risk on our audit
In planning our audit, we made enquiries of the Directors
and Investment Manager to understand the extent of the
potential impact of climate change on the Group’s financial
statements. The Directors and Investment Manager
concluded that there was no material impact on the financial
statements. Our evaluation of this conclusion included
challenging key judgements and estimates in areas where
we considered that there was greatest potential for climate
change impact. This was principally in relation to the
valuation of certain hard to value investments as explained in
our key audit matter ‘Valuation and existence of investments’.
We also considered the consistency of the climate change
disclosures included in the Strategic Report and Investment
Manager’s Report with the financial statements and our
knowledge from our audit.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and
extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of
misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Financial statements – Group
Financial statements – Company
Overall materiality
£11.60m (2022: £12.99m).
£11.02m (2022: £12.34m).
How we determined it
1% of net assets.
1% of net assets, capped at 95% of the
Group materiality.
Rationale for benchmark applied
We applied this benchmark, which is a
generally accepted auditing practice for
investment trust audits.
We applied this benchmark, which is a
generally accepted auditing practice
for investment trust audits. The Parent
Company is capped at 95% of the overall
Group materiality.
For each component in the scope of our Group audit, we
allocated a materiality that is less than our overall Group
materiality. The range of materiality allocated across
components was between £11,601k and £74k. Certain
components were audited to a local statutory audit materiality
that was also less than our overall Group materiality.
We use performance materiality to reduce to an appropriately
low level the probability that the aggregate of uncorrected
and undetected misstatements exceeds overall materiality.
Specifically, we use performance materiality in determining
the scope of our audit and the nature and extent of our testing
of account balances, classes of transactions and disclosures,
for example in determining sample sizes. Our performance
materiality was 75% (2022: 75%) of overall materiality,
amounting to £8.70m (2022: £9.74m) for the Group financial
statements and £8.27m (2022: £9.25m) for the Company
financial statements.
In determining the performance materiality, we considered
a number of factors ‑ the history of misstatements, risk
assessment and aggregation risk and the effectiveness of
controls ‑ and concluded that an amount at the upper end of
our normal range was appropriate.
We agreed with the Audit Committee that we would report to
them misstatements identified during our audit above £580k
(Group audit) (2022: £649k) and £551k (Company audit)
(2022: £617k) as well as misstatements below those amounts
that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the Directors’ assessment of the Group's
and the Company’s ability to continue to adopt the going
concern basis of accounting included:
•
evaluating the Directors’ updated risk assessment and
considering whether it addressed relevant threats,
including rise of inflation and the wider macroeconomic
uncertainty;
•
evaluating the Directors’ assessment of potential
operational impacts, considering their consistency with
other available information and our understanding of
the business and assessing the potential impact on the
financial statements;
Independent auditors’ report
to the members of BlackRock World Mining Trust plc (continued)
Section 4: Financial statements
91
•
reviewing the Directors’ assessment of the Group’s
financial position in the context of its ability to meet future
expected operating expenses, their assessment of liquidity
as well as their review of the operational resilience of the
Group and oversight of key third‑party service providers;
•
assessing the implication of significant reductions in NAV
as a result of a severe downside but plausible scenario in
the market’s performance on the ongoing ability of the
Group to operate; and,
•
reviewing the Directors’ assessment of going concern
in relation to the passing of the continuation vote,
including assessing the stability of the shareholder
register, engagement with key shareholders, the financial
performance of the Parent Company compared to its
performance benchmark and the result of previous
continuation votes.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on
the Group’s and the Company’s ability to continue as a going
concern for a period of at least twelve months from when the
financial statements are authorised for issue.
In auditing the financial statements, we have concluded that
the Directors’ use of the going concern basis of accounting in
the preparation of the financial statements is appropriate.
However, because not all future events or conditions can
be predicted, this conclusion is not a guarantee as to the
Group's and the Company's ability to continue as a going
concern.
In relation to the Directors’ reporting on how they have
applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation to
the Directors’ statement in the financial statements about
whether the Directors considered it appropriate to adopt the
going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors
with respect to going concern are described in the relevant
sections of this report.
Reporting on other information
The other information comprises all of the information in
the Annual Report other than the financial statements and
our auditors’ report thereon. The Directors are responsible
for the other information. Our opinion on the financial
statements does not cover the other information and,
accordingly, we do not express an audit opinion or, except to
the extent otherwise explicitly stated in this report, any form
of assurance thereon.
In connection with our audit of the financial statements,
our responsibility is to read the other information and,
in doing so, consider whether the other information is
materially inconsistent with the financial statements or our
knowledge obtained in the audit, or otherwise appears to
be materially misstated. If we identify an apparent material
inconsistency or material misstatement, we are required to
perform procedures to conclude whether there is a material
misstatement of the financial statements or a material
misstatement of the other information. If, based on the work
we have performed, we conclude that there is a material
misstatement of this other information, we are required to
report that fact. We have nothing to report based on these
responsibilities.
With respect to the Strategic Report and Directors’ Report, we
also considered whether the disclosures required by the UK
Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit,
the Companies Act 2006 requires us also to report certain
opinions and matters as described below.
Strategic Report and Directors’ Report
In our opinion, based on the work undertaken in the course
of the audit, the information given in the Strategic Report
and Directors’ Report for the year ended 31 December 2023
is consistent with the financial statements and has been
prepared in accordance with applicable legal requirements.
In light of the knowledge and understanding of the Group
and Company and their environment obtained in the course
of the audit, we did not identify any material misstatements
in the Strategic Report and Directors’ Report.
Directors’ Remuneration
In our opinion, the part of the Directors' Remuneration
Report to be audited has been properly prepared in
accordance with the Companies Act 2006.
Corporate governance statement
The Listing Rules require us to review the Directors’
statements in relation to going concern, longer‑term viability
and that part of the Corporate Governance Statement
relating to the Company’s compliance with the provisions of
the UK Corporate Governance Code specified for our review.
Our additional responsibilities with respect to the Corporate
Governance Statement as other information are described in
the Reporting on other information section of this report.
Based on the work undertaken as part of our audit, we
have concluded that each of the following elements of the
Corporate Governance Statement is materially consistent
with the financial statements and our knowledge obtained
during the audit, and we have nothing material to add or
draw attention to in relation to:
•
The Directors’ confirmation that they have carried out a
robust assessment of the emerging and principal risks;
•
The disclosures in the Annual Report that describe those
principal risks, what procedures are in place to identify
emerging risks and an explanation of how these are being
managed or mitigated;
92
BlackRock World Mining Trust plc
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Annual Report and Financial Statements 31 December 2023
•
The Directors’ statement in the financial statements about
whether they considered it appropriate to adopt the going
concern basis of accounting in preparing them, and their
identification of any material uncertainties to the Group’s
and Company’s ability to continue to do so over a period
of at least twelve months from the date of approval of the
financial statements;
•
The Directors’ explanation as to their assessment of
the Group’s and Company’s prospects, the period this
assessment covers and why the period is appropriate; and,
•
The Directors’ statement as to whether they have a
reasonable expectation that the Company will be able
to continue in operation and meet its liabilities as they
fall due over the period of its assessment, including any
related disclosures drawing attention to any necessary
qualifications or assumptions.
Our review of the Directors’ statement regarding the
longer‑term viability of the Group and Company was
substantially less in scope than an audit and only consisted
of making inquiries and considering the Directors’ process
supporting their statement; checking that the statement is in
alignment with the relevant provisions of the UK Corporate
Governance Code; and considering whether the statement is
consistent with the financial statements and our knowledge
and understanding of the Group and Company and their
environment obtained in the course of the audit.
In addition, based on the work undertaken as part of our
audit, we have concluded that each of the following elements
of the Corporate Governance Statement is materially
consistent with the financial statements and our knowledge
obtained during the audit:
•
The Directors’ statement that they consider the
Annual Report, taken as a whole, is fair, balanced and
understandable, and provides the information necessary
for the members to assess the Group’s and Company's
position, performance, business model and strategy;
•
The section of the Annual Report that describes the review
of effectiveness of risk management and internal control
systems; and,
•
The section of the Annual Report describing the work of the
Audit Committee.
We have nothing to report in respect of our responsibility
to report when the Directors’ statement relating to the
Company’s compliance with the Code does not properly
disclose a departure from a relevant provision of the Code
specified under the Listing Rules for review by the auditors.
Responsibilities for the financial statements and
the audit
Responsibilities of the directors for the financial
statements
As explained more fully in the Statement of Directors’
Responsibilities in respect of the Annual Report and
Financial Statements, the Directors are responsible for the
preparation of the financial statements in accordance with
the applicable framework and for being satisfied that they
give a true and fair view. The Directors are also responsible
for such internal control as they determine is necessary to
enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are
responsible for assessing the Group’s and the Company’s
ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the
going concern basis of accounting unless the Directors
either intend to liquidate the Group or the Company or to
cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditors’ report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs (UK)
will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of
users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of
non‑compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above,
to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are
capable of detecting irregularities, including fraud, is
detailed below.
Based on our understanding of the Group and industry, we
identified that the principal risks of non‑compliance with
laws and regulations related to breaches of Chapter 4 of Part
24 of the Corporation Tax Act 2010, and we considered the
extent to which non‑compliance might have a material effect
on the financial statements. We also considered those laws
and regulations that have a direct impact on the financial
statements such as the Companies Act 2006. We evaluated
management’s incentives and opportunities for fraudulent
manipulation of the financial statements (including the risk
of override of controls), and determined that the principal
risks were related to posting inappropriate journal entries to
Independent auditors’ report
to the members of BlackRock World Mining Trust plc (continued)
Section 4: Financial statements
93
increase net asset value. Audit procedures performed by the
engagement team included:
•
holding discussions with the Manager and the Audit
Committee, including consideration of known or suspected
instances of non‑compliance with laws and regulation and
fraud;
•
understanding the controls implemented by the Manager
and the Fund Accountant designed to prevent and detect
irregularities;
•
assessing the Group’s compliance with the requirements
of Section 1158 of the Corporation Tax Act 2010, including
recalculation of numerical aspects of the eligibility
conditions;
•
identifying and testing journal entries, in particular year
end journal entries posted by the Fund Accountant during
the preparation of the financial statements;
•
designing audit procedures to incorporate unpredictability
around the nature, timing or extent of our testing for
example, targeting transactions that otherwise would be
immaterial; and,
•
reviewing relevant meeting minutes, including those of the
Audit Committee.
There are inherent limitations in the audit procedures
described above. We are less likely to become aware of
instances of non‑compliance with laws and regulations that
are not closely related to events and transactions reflected
in the financial statements. Also, the risk of not detecting a
material misstatement due to fraud is higher than the risk of
not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
Our audit testing might include testing complete populations
of certain transactions and balances, possibly using data
auditing techniques. However, it typically involves selecting
a limited number of items for testing, rather than testing
complete populations. We will often seek to target particular
items for testing based on their size or risk characteristics. In
other cases, we will use audit sampling to enable us to draw
a conclusion about the population from which the sample is
selected.
A further description of our responsibilities for the audit of
the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities
. This description
forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared
for and only for the Company’s members as a body in
accordance with Chapter 3 of Part 16 of the Companies Act
2006 and for no other purpose. We do not, in giving these
opinions, accept or assume responsibility for any other
purpose or to any other person to whom this report is shown
or into whose hands it may come save where expressly
agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to
you if, in our opinion:
•
we have not obtained all the information and explanations
we require for our audit; or
•
adequate accounting records have not been kept by the
Company, or returns adequate for our audit have not been
received from branches not visited by us; or
•
certain disclosures of Directors’ remuneration specified by
law are not made; or
•
the Company financial statements and the part of the
Directors' Remuneration Report to be audited are not in
agreement with the accounting records and returns.
We have no exceptions to report arising from this
responsibility.
Appointment
Following the recommendation of the Audit Committee, we
were appointed by the Directors on 28 April 2016 to audit
the financial statements for the year ended 31 December
2016 and subsequent financial periods. The period of total
uninterrupted engagement is 8 years, covering the years
ended 31 December 2016 to 31 December 2023.
Other matter
In due course, as required by the Financial Conduct Authority
Disclosure Guidance and Transparency Rule 4.1.14R, these
financial statements will form part of the ESEF‑prepared
annual financial report filed on the National Storage
Mechanism of the Financial Conduct Authority in accordance
with the ESEF Regulatory Technical Standard (‘ESEF RTS’).
This auditors’ report provides no assurance over whether
the annual financial report will be prepared using the single
electronic format specified in the ESEF RTS.
GILLIAN ALEXANDER
(Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Edinburgh
7 March 2024
94
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Annual Report and Financial Statements 31 December 2023
Consolidated Statement of
Comprehensive Income
for the year ended 31 December 2023
2023
2022
Notes
Revenue
Capital
Total
Revenue
Capital
Total
£’000
£’000
£’000
£’000
£’000
£’000
Income from investments held at fair value
through profit or loss
3
Other income
3
Total revenue
Net (loss)/profit on investments and options
held at fair value through profit or loss
10
(140,576 )
(140,576 )
Net profit/(loss) on foreign exchange
14
(17,645 )
(17,645 )
Total
(130,928 )
(55,784 )
Expenses
Investment management fee
4
(2,374 )
(7,317 )
(9,691 )
(2,615 )
(8,031 )
(10,646 )
Other operating expenses
5
(1,278 )
(15 )
(1,293 )
(1,037 )
(28 )
(1,065 )
Total operating expenses
(3,652 )
(7,332 )
(10,984 )
(3,652 )
(8,059 )
(11,711 )
Net profit/(loss) on ordinary activities before
finance costs and taxation
(138,260 )
(66,768 )
Finance costs
6
(2,375 )
(7,166 )
(9,541 )
(1,182 )
(3,520 )
(4,702 )
Net profit/(loss) on ordinary activities before
taxation
(145,426 )
(76,309 )
Taxation (charge)/credit
7
(4,426 )
(2,676 )
(5,149 )
(3,266 )
Net profit/(loss) on ordinary activities after
taxation
(143,676 )
(78,985 )
Earnings/(loss) per ordinary share (pence) -
basic and diluted
9
(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) (2022: £nil). The net profit/(loss) for the year disclosed
above represents the Group’s total comprehensive income.
The notes on pages 99 to 134 form part of these financial statements.
Section 4: Financial statements
95
Consolidated Statement of Changes
in Equity
for the year ended 31 December 2023
The notes on pages 99 to 134 form part of these financial statements.
Group
Notes
Called
up share
capital
Share
premium
account
Capital
redemption
reserve
Special
reserve
Capital
reserves
Revenue
reserve
Total
For the year ended 31 December 2023
£’000
£’000
£’000
£’000
£’000
£’000
£’000
At 31 December 2022
Total comprehensive (loss)/income:
Net (loss)/profit for the year
(143,676 )
(78,985 )
Transactions with owners, recorded directly
to equity:
Ordinary shares reissued from treasury
16,17
Share reissue costs
16,17
(33 )
(33 )
Dividends paid
1
8
(75,907 )
(75,907 )
At 31 December 2023
For the year ended 31 December 2022
At 31 December 2021
Total comprehensive income:
Net profit for the year
Transactions with owners, recorded directly
to equity:
Ordinary shares reissued from treasury
Share reissue costs
(70 )
(70 )
Dividends paid
2
8
(80,911 )
(80,911 )
At 31 December 2022
1
The final dividend of 23.50 p per share for the year ended 31 December 2022, declared on 3 March 2023 and paid on 26 April 2023;
1st interim dividend of 5.50 p per share for the year ended 31 December 2023, declared on 18 April 2023 and paid on 31 May 2023;
2nd interim dividend of 5.50 p 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 5.50 p per share for the year ended 31 December 2023, declared on 11 October 2023 and paid on
22 December 2023.
2
The final dividend of 27.00 p per share for the year ended 31 December 2021, declared on 8 March 2022 and paid on 19 May
2022; 1st interim dividend of 5.50 p per share for the year ended 31 December 2022, declared on 6 May 2022 and paid on 30 June
2022; 2nd interim dividend of 5.50 p per share for the year ended 31 December 2022, declared on 23 August 2022 and paid on 30
September 2022 and 3rd interim dividend of 5.50 p per share for the year ended 31 December 2022, declared on 16 November 2022
and paid on 22 December 2022.
96
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
Company
Notes
Called
up share
capital
Share
premium
account
Capital
redemption
reserve
Special
reserve
Capital
reserves
Revenue
reserve
Total
For the year ended 31 December 2023
£’000
£’000
£’000
£’000
£’000
£’000
£’000
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 for the year
–
–
–
–
(143,500)
64,515
(78,985)
Transactions with owners, recorded directly
to equity:
Ordinary shares reissued from treasury
16,17
–
3,386
–
12,305
–
–
15,691
Share reissue costs
16,17
–
–
–
(33)
–
–
(33)
Dividends paid
1
8
–
–
–
–
–
(75,907)
(75,907)
At 31 December 2023
9,651
151,493
22,779
193,008
731,067
52,053
1,160,051
For the year ended 31 December 2022
At 31 December 2021
9,651
138,818
22,779
155,123
748,107
68,396 1,142,874
Total comprehensive income:
Net profit for the year
–
–
–
–
126,460
75,960
202,420
Transactions with owners, recorded directly
to equity:
Ordinary shares reissued from treasury
–
9,289
–
25,683
–
–
34,972
Share reissue costs
–
–
–
(70)
–
–
(70)
Dividends paid
1
8
–
–
–
–
–
(80,911)
(80,911)
At 31 December 2022
9,651
148,107
22,779
180,736
874,567
63,445 1,299,285
1
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.
2
The final dividend of 27.00p per share for the year ended 31 December 2021, declared on 8 March 2022 and paid on 19 May
2022; 1st interim dividend of 5.50p per share for the year ended 31 December 2022, declared on 6 May 2022 and paid on 30 June
2022; 2nd interim dividend of 5.50p per share for the year ended 31 December 2022, declared on 23 August 2022 and paid on 30
September 2022 and 3rd interim dividend of 5.50p per share for the year ended 31 December 2022, declared on 16 November 2022
and paid on 22 December 2022.
For information on the Company’s distributable reserves please refer to note 17 on pages 114 and 115.
Parent Company Statement of Changes
in Equity
for the year ended 31 December 2023
The notes on pages 99 to 134 form part of these financial statements.
Section 4: Financial statements
97
Consolidated and Parent Company
Statements of Financial Position
as at 31 December 2023
31 December 2023
31 December 2022
Notes
Group
Company
Group
Company
£’000
£’000
£’000
£’000
Non current assets
Investments held at fair value through profit
or loss
10
1,305,827
1,432,075
Current assets
Current tax asset
1,276
821
Other receivables
12
3,592
4,431
Cash collateral held with brokers
18
6,269
6,795
Cash and cash equivalents
18
4,261
23,317
Total current assets
15,398
35,364
Total assets
1,321,225
1,467,439
Current liabilities
Current tax liability
(352 )
(352)
(373 )
(361)
Other payables
13
(8,052 )
(9,108)
(6,155 )
(7,223)
Derivative financial liabilities held at fair value
through profit or loss
10
(1,401 )
(1,401)
(1,227 )
(1,227)
Bank loans
14,15
(149,828 )
(149,828)
(158,783 )
(158,783)
Total current liabilities
(159,633 )
(160,689)
(166,538 )
(167,594)
Total assets less current liabilities
1,160,536
1,299,845
Non current liabilities
Deferred taxation liability
7 (c)
(485 )
(485)
(560 )
(560)
Net assets
1,160,051
1,299,285
Equity attributable to equity holders
Called up share capital
16
9,651
9,651
Share premium account
17
151,493
148,107
Capital redemption reserve
17
22,779
22,779
Special reserve
17
193,008
180,736
Capital reserves:
At 1 January
874,567
748,107
Net (loss)/profit for the year
(143,676 )
(143,500)
126,460
At 31 December
17
731,067
874,567
Revenue reserve:
At 1 January
63,445
68,396
Net profit for the year
64,515
75,960
Dividends paid
(75,907 )
(75,907)
(80,911 )
(80,911)
At 31 December
17
52,053
63,445
Total equity
1,160,051
1,299,285
Net asset value per ordinary share (pence)
9
606.78
688.35
The financial statements on pages 94 to 134 were approved and authorised for issue by the Board of Directors on 7 March
2024 and signed on its behalf by Mr David Cheyne, Chairman.
BlackRock World Mining Trust plc
Registered in England and Wales, No.2868209
The notes on pages 99 to 134 form part of these financial statements.
98
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Annual Report and Financial Statements 31 December 2023
Consolidated and Parent Company Cash
Flow Statements
for the year ended 31 December 2023
31 December 2023
31 December 2022
Group
Company
Group
Company
£’000
£’000
£’000
£’000
Operating activities
Net (loss)/profit on ordinary activities before taxation
(76,309 )
(76,309)
205,686
Add back finance costs
9,541
4,702
Net loss/(profit) on investments and options held at fair
value through profit or loss (including transaction
costs)
140,400
(152,937 )
(152,990)
Net (profit)/loss on foreign exchange
(9,018 )
(9,018)
17,645
Sale of investments and return of capital on contractual
rights
648,272
489,236
Purchase of investments and options held at fair value
through profit or loss
(662,250 )
(662,250)
(503,782 )
(503,782)
Decrease in other receivables
1,069
13
Increase in other payables
1,556
1,013
(Increase)/decrease in amounts due from brokers
(409 )
(409)
243
Net movement in cash collateral held with brokers
526
(6,215 )
(6,215)
Net cash inflow from operating activities before
taxation
53,378
55,551
Taxation paid
(12 )
(12)
(432 )
(432)
Taxation on investment income included within gross
income
(2,664 )
(2,664)
(3,210 )
(3,210)
Net cash inflow from operating activities
50,702
51,909
Financing activities
Drawdown of loans
–
2,359
Interest paid
(9,571 )
(9,571)
(4,720 )
(4,720)
Net proceeds from ordinary shares reissued from treasury
15,658
34,902
Dividends paid
(75,907 )
(75,907)
(80,911 )
(80,911)
Net cash outflow from financing activities
(69,820 )
(69,820)
(48,370 )
(48,370)
Decrease/(increase) in cash and cash equivalents
(18,942 )
(19,118)
3,539
Cash and cash equivalents at start of the year
23,317
19,866
Effect of foreign exchange rate changes
62
(88 )
(88)
Cash and cash equivalents at end of year
4,261
23,317
Comprised of:
Cash and cash equivalents
4,261
23,317
4,261
23,317
The notes on pages 99 to 134 form part of these financial statements.
Notes to the financial statements
for the year ended 31 December 2023
Section 4: Financial statements
99
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 30th Annual Report.
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.
On 31 December 2020, International Financial Reporting Standards (IFRS) as adopted by the European Union at that date
were brought into UK law and became 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 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 IAS. 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 2024, 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; and
•
the risk is adequately captured in the assumptions and inputs used in measurement of Level 3 assets, as noted in note 18 of
the Financial Statements.
None of the Group's other assets and liabilities were considered to be potentially impacted by climate change.
Adoption of new and amended International Accounting Standards and interpretations:
IFRS 9 – Fees in the ’10 per cent’ Test for Derecognition of Financial Liabilities
(effective 1 January 2022). The International
Accounting Standards Board (IASB) has amended IFRS 9 Financial Instruments to clarify the fees that a company includes
when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the
original financial liability.
(effective 1 January 2023). This standard replaces IFRS 4, which currently permits a wide
range of accounting practices in accounting for insurance contracts. IFRS 17 will fundamentally change the accounting by all
Notes to the financial statements
continued
100
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
IAS 12 – Deferred tax related to assets and liabilities arising from a single transaction
(effective 1 January 2023). The IASB
has amended IAS 12 Income Taxes to require companies to recognise deferred tax on particular transactions that, on initial
recognition, give rise to equal amounts of taxable and deductible temporary differences. According to the amended guidance,
a temporary difference that arises on initial recognition of an asset or liability is not subject to the initial recognition exemption
if that transaction gave rise to equal amounts of taxable and deductible temporary differences. These amendments might
have a significant impact on the preparation of financial statements by companies that have substantial balances of right‑
of‑use assets, lease liabilities, decommissioning, restoration and similar liabilities. The impact for those affected would be the
recognition of additional deferred tax assets and liabilities.
IAS 8 – Definition of accounting estimates
(effective 1 January 2023). The IASB has amended IAS 8 Accounting Policies,
Changes in Accounting Estimates and Errors to help distinguish between accounting policies and accounting estimates,
replacing the definition of accounting estimates.
IAS 1 and IFRS Practice Statement 2 – Disclosure of accounting policies
(effective 1 January 2023). The IASB has amended
IAS 1 Presentation of Financial Statements to help preparers in deciding which accounting policies to disclose in their
financial statements by stating that an entity is now required to disclose material accounting policies instead of significant
accounting policies.
IAS 12 – International Tax Reform Pillar Two Model Rules
(effective 1 January 2023). The IASB has published amendments
to IAS 12 Income Taxes to respond to stakeholders’ concerns about the potential implications of the imminent implementation
of the OECD pillar two rules on the accounting for income taxes. The amendment is an exception to the requirements in IAS 12
that an entity does not recognise and does not disclose information about deferred tax assets as liabilities related to the OECD
pillar two income taxes and a requirement that current tax expenses must be disclosed separately to pillar two income taxes.
Relevant International Accounting Standards that have yet to be adopted:
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.
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
(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.
Section 4: Financial statements
101
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.
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 on page 111;
•
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
Notes to the financial statements
continued
102
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
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.
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
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
(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.
Other receivables and other payables do not carry any interest and are short‑term in nature and are accordingly stated on an
Section 4: Financial statements
103
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
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
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
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
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
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.
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
•
Where new shares are issued, amounts received to the extent of any surplus received in excess of the par value are taken to the
share premium account.
Share issue costs are charged to the share premium account. Costs on share reissues are charged to the special reserve and
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.
Notes to the financial statements
continued
104
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
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.
The investment in the subsidiary company was valued based on the net assets of the subsidiary company, which is
The key assumptions used to determine the fair value of the unquoted financial instruments and sensitivity analyses are
Section 4: Financial statements
105
2023 |
2022 |
|
£’000 |
£’000 |
|
Investment income: |
||
UK dividends |
8,647 |
17,536 |
UK special dividends |
– |
2,167 |
Overseas dividends |
33,457 |
45,094 |
Overseas special dividends |
17,736 |
3,808 |
Income from contractual rights (BHP Brazil Royalty) |
4,186 |
3,096 |
Income from Vale debentures |
2,608 |
3,863 |
Income from fixed income investments |
1,683 |
2,523 |
Total investment income |
68,317 |
78,087 |
Other income: |
||
Option premium income |
5,964 |
7,297 |
Deposit interest |
678 |
513 |
Broker interest received |
104 |
18 |
Stock lending income |
81 |
81 |
6,827 |
7,909 |
|
Total income |
75,144 |
85,996 |
During the year, the Group received option premium income in cash totalling £6,724,000 (2022: £7,541,000) 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 £5,964,000 (2022: £7,297,000) were amortised to revenue.
At 31 December 2023, there were three open positions (2022: three) with an associated liability of £1,401,000 (2022:
£1,227,000).
Dividends and interest received in cash during the year amounted to £59,542,000 and £5,159,000 (2022: £68,630,000 and
£5,918,000).
Notes to the financial statements
continued
106
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
| 2023 | 2022 | |||||
Revenue | Capital | Total | Revenue | Capital | Total | |
£’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
Investment management fee | 2,374 | 7,317 | 9,691 | 2,615 | 8,031 | 10,646 |
Total | 2,374 | 7,317 | 9,691 | 2,615 | 8,031 | 10,646 |
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, £9,421,000 (2022: £9,848,000) of the investment management fee was
generated from net assets and £270,000 (2022: £798,000) 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:
Cum income | Quarterly | Gearing effect | |
NAV per share | increase/ | on management | |
Quarter end | (pence) | (decrease) % | fees (£’000) |
31 December 2021 | 622.21 | – | – |
31 March 2022 | 769.58 | +23.7 | 267 |
30 June 2022 | 584.86 | –24.0 | – |
30 September 2022 | 602.65 | +3.0 | 294 |
31 December 2022 | 688.35 | +14.2 | 237 |
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 |
The daily average of the net assets under management during the year ended 31 December 2023 was £1,203,977,000 (2022:
£1,232,043,000).
The fee is allocated 25% to the revenue account and 75% to the capital account of the Consolidated Statement of
Comprehensive Income.
Section 4: Financial statements
107
2023 |
2022 |
|
£’000 |
£’000 |
|
Allocated to revenue: |
||
Custody fee |
109 |
101 |
Auditors’ remuneration: |
||
– audit services |
55 |
51 |
– non‑audit services 1 |
9 |
9 |
Registrar’s fee |
86 |
86 |
Directors’ emoluments 2 |
179 |
197 |
AIC fees |
21 |
21 |
Broker fees |
25 |
24 |
Depositary fees |
116 |
116 |
FCA fee |
40 |
30 |
Directors’ insurance |
22 |
23 |
Marketing fees |
144 |
132 |
Stock exchange fees |
52 |
37 |
Legal and professional fees |
147 |
35 |
Bank facility fees 3 |
85 |
97 |
Printing and postage fees |
55 |
47 |
Directors’ search fees |
25 |
– |
Write back of prior year expenses 4 |
– |
(55) |
Other administrative costs |
108 |
86 |
1,278 |
1,037 |
|
Allocated to capital: |
||
Transaction charges 5 |
15 |
28 |
1,293 |
1,065 |
2023 |
2022 |
|
The Company’s ongoing charges 6 , 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: |
0.91% |
0.95% |
The Company’s ongoing charges 6 , 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: |
0.81% |
0.84% |
¹
Fees paid to the auditors for non‑audit services of £9,350 excluding VAT (2022: £8,925) 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 on page 64. 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
No expenses have been written back during the year (2022: Directors' expenses, miscellaneous fees, legal fees and professional
services fees).
5
For the year ended 31 December 2023, expenses of £15,000 (2022: £28,000) 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
Notes to the financial statements
continued
108
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
| 2023 | 2022 | |||||
Revenue | Capital | Total | Revenue | Capital | Total | |
£’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
Interest paid on bank loans | 2,370 | 7,151 | 9,521 | 1,177 | 3,505 | 4,682 |
Interest paid on bank overdraft | 5 | 15 | 20 | 5 | 15 | 20 |
Total | 2,375 | 7,166 | 9,541 | 1,182 | 3,520 | 4,702 |
(a) Analysis of charge/(credit) in the year
| 2023 | 2022 | |||||
Revenue | Capital | Total | Revenue | Capital | Total | |
£’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
Current taxation: | ||||||
Corporation taxation | 2,178 | (2,178) | – | 2,635 | (2,144) | 491 |
Prior years corporation taxation adjustment | (17) | – | (17) | – | – | – |
Double taxation relief | (391) | 391 | – | (839) | 361 | (478) |
Overseas tax | 2,697 | 95 | 2,792 | 3,210 | – | 3,210 |
Peruvian capital gains tax (credit)/charge | – | (20) | (20) | – | 116 | 116 |
Total current taxation charge/(credit) | 4,467 | (1,712) | 2,755 | 5,006 | (1,667) | 3,339 |
Peruvian capital gains tax movement (note 7(c)) | – | 183 | 183 | – | – | – |
Deferred taxation movement (note 7(c)) | (41) | (221) | (262) | 143 | (216) | (73) |
Total taxation charge/(credit) (note 7(b)) | 4,426 | (1,750) | 2,676 | 5,149 | (1,883) | 3,266 |
(b) Factors affecting total taxation charge/(credit) for the year
The taxation assessed for the year is higher (2022: lower) than the blended rate of corporation tax used of 23.52% (based
on a rate of 19.00% up to 31 March 2023 and a rate of 25.00% from 1 April 2023) (2022: standard rate of corporation tax of
19.00%). The differences are explained below:
| 2023 | 2022 | |||||
Revenue | Capital | Total | Revenue | Capital | Total | |
£’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
Profit/(loss) on ordinary activities before taxation | 69,117 | (145,426) | (76,309) | 81,162 | 124,524 | 205,686 |
Profit on ordinary activities multiplied by blended rate | ||||||
of 23.52% (2022: standard rate of 19.00%) | 16,256 | (34,205) | (17,949) | 15,421 | 23,660 | 39,081 |
Effects of: | ||||||
Overseas tax suffered | 2,697 | 95 | 2,792 | 3,210 | – | 3,210 |
Foreign exchange (gain)/loss not taxable | – | (2,121) | (2,121) | – | 3,399 | 3,399 |
Loss/(gain) on investments held at fair value | ||||||
through profit or loss not subject to tax | – | 33,181 | 33,181 | – | (29,208) | (29,208) |
Non taxable capital special dividends | – | (148) | (148) | – | – | – |
Impact of change in tax rates | (2) | (13) | (15) | 63 | – | 63 |
Non taxable UK dividends | (2,034) | – | (2,034) | (3,744) | – | (3,744) |
Non taxable overseas dividends | (12,047) | – | (12,047) | (8,962) | – | (8,962) |
Disallowed expenses | 6 | 3 | 9 | – | 5 | 5 |
Double taxation relief | (391) | 299 | (92) | (839) | 361 | (478) |
Prior years corporation taxation adjustment | (17) | – | (17) | – | – | – |
Peruvian capital gains tax (credit)/charge | – | (20) | (20) | – | 116 | 116 |
Peruvian capital gains deferred tax movement | – | 183 | 183 | – | (216) | (216) |
Group relief (received)/surrendered for no payment | (42) | 42 | – | – | – | – |
Management expenses not relieved | – | 954 | 954 | – | – | – |
(11,830) | 32,455 | 20,625 | (10,272) | (25,543) | (35,815) | |
Total taxation charge/(credit) (note 7(a)) | 4,426 | (1,750) | 2,676 | 5,149 | (1,883) | 3,266 |
Section 4: Financial statements
109
The Company is exempt from corporation tax on capital gains provided it maintains its status as an investment trust under
Chapter 4 of Part 24 of the Corporation Tax Act 2010. Due to the Company’s intention to meet the conditions required to
maintain its investment trust status, it has not provided for deferred tax on any capital gains or losses.
Following the changes in Peruvian tax legislation effective from 1 January 2011, a capital gains tax is imposed on gains
realised by non‑residents at rates of 5% or 30% depending on whether the transaction took place inside or outside of Peru. As
at 31 December 2023, the Group has an accrued capital gains tax liability of £485,000 (2022: £302,000) for unrealised capital
gains arising on investments in stocks listed on the Peruvian stock exchange. The tax has been calculated at the rate of 5% of
the unrealised capital gains, being the difference between the market value of the investments at the year end and their average
purchase cost.
Group and | Group and | |
Company | Company | |
2023 | 2022 | |
£’000 | £’000 | |
Deferred tax liabilities in respect of timing differences: | ||
Deferred tax liability brought forward | (560) | (633) |
Deferred tax charge in respect of taxable dividend income (note 7(a)) | (183) | (143) |
Other deferred tax differences | (4) | – |
Movement in Peruvian capital gains tax (note 7(a)) | 262 | 216 |
Deferred tax liability carried forward | (485) | (560) |
Dividends paid on equity shares:
2023 | 2022 | |||
Record date | Payment date | £’000 | £’000 | |
Final dividend of 23.50p per share for the year | ||||
ended 31 December 2022 (2021: 27.00p) | 10 March 2023 | 26 April 2023 | 44,392 | 49,898 |
1st interim dividend of 5.50p per share for the | ||||
year ended 31 December 2023 (2022: 5.50p) | 5 May 2023 | 31 May 2023 | 10,485 | 10,251 |
2nd interim dividend of 5.50p per share for the | ||||
year ended 31 December 2023 (2022: 5.50p) | 8 September 2023 | 6 October 2023 | 10,515 | 10,381 |
3rd interim dividend of 5.50p per share for the | ||||
year ended 31 December 2023 (2022: 5.50p) | 24 November 2023 | 22 December 2023 | 10,515 | 10,381 |
75,907 | 80,911 |
The total dividends payable in respect of the year ended 31 December 2023 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:
2023 | 2022 | |
£’000 | £’000 | |
1st quarterly interim dividend of 5.50p per share for the year ended 31 December 2023 (2022: | ||
5.50p) | 10,485 | 10,251 |
2nd quarterly interim dividend of 5.50p per share for the year ended 31 December 2023 (2022: | ||
5.50p) | 10,515 | 10,381 |
3rd quarterly interim dividend of 5.50p per share for the year ended 31 December 2023 (2022: | ||
5.50p) | 10,515 | 10,381 |
Final dividend of 17.00p per share for the year ended 31 December 2023 (2022: 23.50p) | 32,501 | 44,392 |
64,016 | 75,405 |
1
Notes to the financial statements
continued
110
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
Total revenue, capital (loss)/earnings and net asset value per ordinary share are shown below and have been calculated using
the following:
2023 |
2022 |
|
Net revenue profit attributable to ordinary shareholders (£’000) |
64,691 |
76,013 |
Net capital (loss)/profit attributable to ordinary shareholders (£’000) |
(143,676) |
126,407 |
Total (loss)/profit attributable to ordinary shareholders (£’000) |
(78,985) |
202,420 |
Equity shareholders’ funds (£’000) |
1,160,051 |
1,299,285 |
The weighted average number of ordinary shares in issue during the year on which the earnings |
||
per ordinary share was calculated was: |
190,564,324 |
186,868,187 |
The actual number of ordinary shares in issue at the year end on which the net asset value per |
||
ordinary share was calculated was: |
191,183,036 |
188,753,036 |
Earnings per ordinary share |
||
Revenue earnings per share (pence) ‑ basic and diluted |
33.95 |
40.68 |
Capital (loss)/earnings per share (pence) ‑ basic and diluted |
(75.40) |
67.64 |
Total (loss)/earnings per share (pence) - basic and diluted |
(41.45) |
108.32 |
As at |
As at |
|
31 December |
31 December |
|
2023 |
2022 |
|
Net asset value per ordinary share (pence) |
606.78 |
688.35 |
Ordinary share price (pence) |
587.00 |
697.00 |
Section 4: Financial statements
111
Group |
Company |
Group |
Company |
|
2023 |
2023 |
2022 |
2022 |
|
£’000 |
£’000 |
£’000 |
£’000 |
|
UK listed equity investments held at fair value through |
||||
profit or loss |
134,106 |
134,106 |
159,828 |
159,828 |
Overseas listed equity investments held at fair value |
||||
through profit or loss |
1,092,558 |
1,092,558 |
1,126,857 |
1,126,857 |
Fixed income investments held at fair value through profit |
||||
or loss |
53,440 |
53,440 |
116,960 |
116,960 |
Contractual rights held at fair value through profit or loss |
18,316 |
18,316 |
21,199 |
21,199 |
Investment in subsidiary held at fair value through profit |
||||
or loss 1 |
– |
7,407 |
– |
7,231 |
Total value of financial asset investments |
1,298,420 |
1,305,827 |
1,424,844 |
1,432,075 |
Derivative financial instruments ‑ written option contracts |
(1,401) |
(1,401) |
(1,227) |
(1,227) |
Total value of financial asset investments and |
||||
derivatives at 31 December |
1,297,019 |
1,304,426 |
1,423,617 |
1,430,848 |
Opening book cost of investment and derivative holdings |
983,103 |
983,103 |
859,298 |
859,298 |
Investment and derivative holding gains |
440,514 |
447,745 |
396,836 |
404,014 |
Opening fair value |
1,423,617 |
1,430,848 |
1,256,134 |
1,263,312 |
Analysis of transactions made during the year: |
||||
Purchases at cost |
662,250 |
662,250 |
503,782 |
503,782 |
Sales proceeds received |
(647,775) |
(647,775) |
(488,969) |
(488,969) |
Contractual rights ‑ return of capital |
(497) |
(497) |
(267) |
(267) |
Gains on investments and derivatives 2 |
(140,576) |
(140,400) |
152,937 |
152,990 |
Closing fair value |
1,297,019 |
1,304,426 |
1,423,617 |
1,430,848 |
Closing book cost of investment and derivative holdings |
1,082,258 |
1,082,258 |
983,103 |
983,103 |
Closing investment and derivative holding gains |
214,761 |
222,168 |
440,514 |
447,745 |
Closing fair value |
1,297,019 |
1,304,426 |
1,423,617 |
1,430,848 |
Comprising of: |
||||
– Equity investments |
1,298,420 |
1,305,827 |
1,424,844 |
1,432,075 |
– Derivative financial instruments ‑ written option contracts |
(1,401) |
(1,401) |
(1,227) |
(1,227) |
Total |
1,297,019 |
1,304,426 |
1,423,617 |
1,430,848 |
1
Relates to wholly owned subsidiary, BlackRock World Mining Investment Company Limited.
2
Includes profit received in the subsidiary company of £176,000 (2022: £53,000) included within income.
The Group and Company received £647,775,000 (2022: £488,969,000) from investments sold in the year. The book
cost of these
investments when they were purchased was £562,598,000 (2022: £379,710,000). These investments have been revalued over time
and until they were sold any unrealised gains/losses were included in the fair value of investments. Special dividends amounting to
£630,000 (2022: £811,000) have been recognised in capital during the year.
During the year, transaction costs of £1,055,000 (2022: £828,000) were incurred on the acquisition of investments. Costs relating
to the disposal of investments during the year amounted to £182,000 (2022: £238,000). All transaction costs have been included
within the capital reserves.
2023 |
2022 |
|
Securities lending |
£’000 |
£’000 |
Aggregate value of securities on loan at year end |
62,789 |
52,411 |
Maximum aggregate value of securities on loan during the year |
130,797 |
189,191 |
Fee income from stock lending during the year |
81 |
81 |
In respect of securities on loan at the year end, securities of £69,549,000 (2022: £57,750,000) were held as collateral, the value
of which exceeded the value of securities on loan by £6,760,000 (2022: £5,339,000).
In respect of the maximum aggregate value of securities on loan during the year, securities of £146,885,000 (2022: £198,176,000)
were held as collateral, the value of which is more than the value of securities on loan by £16,088,000 (£8,985,000).
The value of securities on loan did not exceed the value of collateral held at any time during the year ended 31 December 2023
Notes to the financial statements
continued
112
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
At 31 December 2023, the Company had one wholly owned subsidiary which is registered and operating in England and Wales
and has been included in the consolidated financial statements. BlackRock World Mining Investment Company Limited was
incorporated on 11 November 1993. There are no non‑controlling interests in the subsidiary.
The principal activity of the subsidiary company is investment dealing. The registered address of the subsidiary company is
12 Throgmorton Avenue, London EC2N 2DL.
Issued share capital | |||
Description of shares | 2023 | 2022 | |
BlackRock World Mining Investment Company Limited | Ordinary shares of £1 | £100 | £100 |
Under IAS, the investment in the subsidiary is fair valued in the separate financial statements of the Company which is
deemed to be the total equity of the Company and equates to £7,407,000 (2022: £7,231,000). The subsidiary has not paid
Group | Company | Group | Company | |
2023 | 2023 | 2022 | 2022 | |
£’000 | £’000 | £’000 | £’000 | |
Amounts due from brokers | 410 | 410 | 1 | 1 |
Prepayments and accrued income | 3,182 | 3,182 | 4,430 | 4,430 |
3,592 | 3,592 | 4,431 | 4,431 |
Group | Company | Group | Company | |
2023 | 2023 | 2022 | 2022 | |
£’000 | £’000 | £’000 | £’000 | |
Accruals for expenses and interest payable | 8,052 | 8,052 | 6,155 | 6,155 |
Amounts due to subsidiary | – | 1,056 | – | 1,068 |
8,052 | 9,108 | 6,155 | 7,223 |
Group | Company | Group | Company | |
2023 | 2023 | 2022 | 2022 | |
£’000 | £’000 | £’000 | £’000 | |
Bank loan | 149,828 | 149,828 | 158,783 | 158,783 |
149,828 | 149,828 | 158,783 | 158,783 |
The Group has an overdraft facility of £30 million (2022: £30 million) and a multi‑currency loan facility of £200 million (2022:
£200 million) which are updated and renewed on an annual basis. Under the multi‑currency loan facility, the individual loan
drawdowns are taken with a three month maturity period. At 31 December 2023, the Group had a US Dollar loan outstanding
of US$191,000,000 which matures on 22 March 2024 (2022: US Dollar loan for US$191,000,000 which matured on 17
March 2023). The Group has no outstanding Pound Sterling loan at 31 December 2023 (2022: nil). The loans are provided
by The Bank of New York Mellon (International) Limited. The interest rate on bank loans is approximately 6.14% per annum
for US Dollar balances (2022: 3.30% per annum for US Dollar balances). The Company incurred a foreign currency gain of
£9,018,000 (2022: foreign currency loss of £17,645,000) of which the gain on the translation of US Dollar denominated loans
Section 4: Financial statements
113
Group | Company | Group | Company | |
2023 | 2023 | 2022 | 2022 | |
£’000 | £’000 | £’000 | £’000 | |
Bank loan and overdraft at beginning of the year | 158,783 | 158,783 | 139,223 | 139,223 |
Cash flows: | ||||
Movement in overdraft | – | – | (356) | (356) |
Net drawdown of loan | – | – | 2,359 | 2,359 |
Non cash flows: | ||||
Effects of foreign exchange (gain)/loss | (8,955) | (8,955) | 17,557 | 17,557 |
Bank loan and overdraft at end of the year | 149,828 | 149,828 | 158,783 | 158,783 |
Ordinary shares | Nominal | |||
in issue | Treasury shares | Total shares | value | |
number | number | number | £’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 |
During the year ended 31 December 2023 the Company:
– did not buy back shares into treasury (2022: none);
– reissued 2,430,000 shares (2022: 5,071,920 shares) from treasury for a net consideration after costs of £15,658,000 (2022:
£34,902,000).
Notes to the financial statements
continued
114
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
Capital | ||||||
reserve | ||||||
Capital | arising on | |||||
reserve | revaluation | |||||
Share | Capital | arising on | of | |||
premium | redemption | Special | investments | investments | Revenue | |
account | reserve | reserve | sold | held | reserve | |
Group | £’000 | £’000 | £’000 | £’000 | £’000 | £’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 | ||||||
Capital | ||||||
reserve | ||||||
Capital | arising on | |||||
reserve | revaluation | |||||
Share | Capital | arising on | of | |||
premium | redemption | Special | investments | investments | Revenue | |
account | reserve | reserve | sold | held | reserve | |
Company | £’000 | £’000 | £’000 | £’000 | £’000 | £’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 |
Section 4: Financial statements
115
Capital | ||||||
reserve | ||||||
Capital | arising on | |||||
reserve | revaluation | |||||
Share | Capital | arising on | of | |||
premium | redemption | Special | investments | investments | Revenue | |
account | reserve | reserve | sold | held | reserve | |
Group | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 |
At 31 December 2021 | 138,818 | 22,779 | 155,123 | 345,594 | 396,836 | 74,073 |
Movement during the year: | ||||||
Total comprehensive income: | ||||||
Net profit for the year | – | – | – | 82,729 | 43,678 | 76,013 |
Transactions with owners, recorded | ||||||
directly to equity: | ||||||
Ordinary shares reissued from treasury | 9,289 | – | 25,683 | – | – | – |
Share reissue costs | – | – | (70) | – | – | – |
Dividends paid | – | – | – | – | – | (80,911) |
At 31 December 2022 | 148,107 | 22,779 | 180,736 | 428,323 | 440,514 | 69,175 |
| Distributable reserves | ||||||
Capital | ||||||
reserve | ||||||
Capital | arising on | |||||
reserve | revaluation | |||||
Share | Capital | arising on | of | |||
premium | redemption | Special | investments | investments | Revenue | |
account | reserve | reserve | sold | held | reserve | |
Company | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 |
At 31 December 2021 | 138,818 | 22,779 | 155,123 | 344,093 | 404,014 | 68,396 |
Movement during the year: | ||||||
Total comprehensive income: | ||||||
Net profit for the year | – | – | – | 82,729 | 43,731 | 75,960 |
Transactions with owners, recorded | ||||||
directly to equity: | ||||||
Ordinary shares reissued from treasury | 9,289 | – | 25,683 | – | – | – |
Share reissue costs | – | – | (70) | – | – | – |
Dividends paid | – | – | – | – | – | (80,911) |
At 31 December 2022 | 148,107 | 22,779 | 180,736 | 426,822 | 447,745 | 63,445 |
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 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 £731,067,000 (2022: £874,567,000) comprise a gain on the capital
reserve arising on investments sold of £508,899,000 (2022: £426,822,000), a gain on the capital reserve arising on revaluation
of listed investments of £189,283,000 (2022: £409,037,000) revaluation gains on unquoted investments of £25,478,000 (2022:
£31,477,000) and a revaluation gain on the investment in the subsidiary of £7,407,000 (2022: gain of £7,231,000). The capital
reserve arising on the revaluation of listed investments of £189,165,000 (2022: £409,037,000) 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
Notes to the financial statements
continued
116
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
The Group’s investment activities expose it to various types of risks which are associated with the financial instruments
and markets in which it invests. The following information is not intended to be a comprehensive summary of all risks and
shareholders should refer to the Alternative Investment Fund Managers’ Directive FUND 3.2.2R Disclosures which can be
found at
www.blackrock.com/uk/brwm
for a more detailed discussion of the risks inherent in investing in the Group.
Risk management framework
The following information refers to the risk management framework of the Alternative Investment Fund Manager (AIFM).
However, as disclosed in the Corporate Governance Statement on pages 73 and 74 and in the Statement of Directors’
Responsibilities on pages 81 and 82, it is the ultimate responsibility of the Board to ensure that the Group’s risks are
appropriately monitored, and to the extent that elements of this are delegated to third‑party service providers, the Board is
responsible for ensuring that the relevant parties are discharging their duties in accordance with the terms of the relevant
agreements and taking appropriate action to the extent issues are identified.
The Directors of the AIFM review quarterly investment performance reports and receive semi‑annual presentations in
person from the Investment Manager covering the Group’s performance and risk profile during the year. The AIFM has
delegated the day‑to‑day administration of the investment programme to the Investment Manager. The Investment
Manager is also responsible for ensuring that the Group is managed within the terms of its investment guidelines and
limits set out in the Alternative Investment Fund Managers’ Directive FUND 3.2.2R Disclosures which can be found at
www.blackrock.com/uk/brwm
.
The AIFM is responsible for monitoring investment performance, product risk monitoring and oversight and has the
responsibility for the monitoring and oversight of regulatory and operational risk for the Group. The Directors of the AIFM
have appointed a Risk Manager who has responsibility for the daily risk management process with assistance from key risk
management personnel of the Investment Manager, including members of the Risk and Quantitative Analysis Group (RQA)
which is a centralised group which performs an independent risk management function. RQA independently identifies,
measures and monitors investment risk, including climate related risk, and tracks the actual risk management practices
being deployed across the Group. By breaking down the components of the process, RQA has the ability to determine if the
appropriate risk management processes are in place. This captures the risk management tools employed, how the levels of risk
are controlled, ensuring risk/return is considered in portfolio construction and reviewing outcomes.
The AIFM reports to the Audit Committee twice yearly on key risk metrics and risk management processes; in addition, the
Depositary monitors the performance of the AIFM and reports to the Audit Committee semi‑annually. Any significant issues
are reported to the Board as they arise.
Risk Exposures
The risk exposures of the Group and Company are set out as follows:
Market risk arises mainly from uncertainty about future values of financial instruments influenced by other price, currency and
interest rate movements. It represents the potential loss the Group may suffer through holding market positions in financial
instruments in the face of market movements.
A key metric the RQA Group uses to measure market risk is Value‑at-Risk (VaR) which encompasses price, currency and
interest rate risk. VaR is a statistical risk measure that estimates the potential portfolio loss from adverse market moves in
an ordinary market environment. VaR analysis reflects the interdependencies between risk variables, unlike a traditional
sensitivity analysis.
The VaR calculations are based on a confidence level of 99%, with a holding period of not greater than one day and a historical
observation period of not less than one year (250 days). A VaR number is defined at a specified probability and a specified
time horizon. A 99% one day VaR means that the expectation is that 99% of the time over a one‑day period the Company will
lose less than this number in percentage terms. Therefore, higher VaR numbers indicate higher risk. It is noted that the use
of VaR methodology has limitations, namely assumptions that risk factor returns are normally distributed and that the use of
historical market data as a basis for estimating future events does not encompass all possible scenarios, particularly those
that are of an extreme nature and that the use of a specified confidence level (e.g. 99%) does not take into account losses
that occur beyond this level. There is some probability that the loss could be greater than the VaR percentage amounts. These
limitations, and the nature of the VaR measure, mean that the Company can neither guarantee that losses will not exceed the
VaR amounts indicated, nor that losses in excess of the VaR amounts will not occur more frequently.
Section 4: Financial statements
117
The one‑day VaR for the Group and Company as of 31 December 2023 and 31 December 2022 (based on a 99% confidence
level) was 2.13% and 5.28% respectively.
Exposure to other price risk
Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors
specific to the individual financial instrument or its issuer, or factors affecting similar financial instruments traded in the
market. Local, regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health
issues, recessions, climate change, or other events could have a significant impact on the Group and the market price of its
investments and could result in increased premiums or discounts to the Group’s net asset value.
The Group is exposed to market price risk arising from its equity investments, fixed income investments and written options.
The movements in the prices of these investments result in movements in the performance of the Group. Other price risk
sensitivity has been covered by the VaR analysis under the market risk section above.
The Group’s exposure to other changes in market prices at 31 December 2023 on its equity and fixed interest investments
was £1,298,420,000 (2022: £1,424,844,000). In addition, the Group’s gross notional market exposure to these price changes
through its option portfolio was £72,182,000 (2022: £33,232,000).
Management of other price risk
By diversifying the portfolio, where this is appropriate and consistent with the Group’s objectives, the risk that a price change
of a particular investment will have a material impact on the NAV of the Group is minimised which is in line with the investment
objectives of the Group.
Use of derivatives
The Group may utilise both exchange traded and over‑the‑counter (OTC) option contracts as part of its investment policy.
Options written by the Group provide the purchaser with the opportunity to purchase from or sell the Group the underlying
asset at an agreed‑upon value either on or before the expiration of the option. Options are generally settled on a net basis.
During the year ended 31 December 2023 and 2022 the Group wrote covered call and put option contracts to generate
revenue income for the Group. As the call and put options are covered by dedicated cash resources and no call and put option
contracts were written to manage price risk, there is no impact on the Group’s exposure to gearing or leverage as a result of
writing covered call and put options. The notional amount of the three put options written that were open (2022: three put
options) at 31 December 2023 was £72,182,000 (2022: £33,232,000).
Economic exposure through option writing is restricted such that no more than 10% of the Group’s portfolio shall be under
option at any given time. Exposures are monitored daily by the Investment Manager, BlackRock, and its independent risk
management team. The Board also reviews the exposures regularly.
The option positions are diversified across sectors and geographies comprising three positions as at 31 December 2023
(2022: three).
The economic exposures to options can be closed out at any time by the Group with immediate effect. Details of securities and
Concentration of exposure to market price risks
An analysis of the Group’s investment portfolio is shown on pages 29 to 31. At 31 December 2023 this shows that the
portfolio had significant levels of investments in the United States of America, Latin America, Australasia, Africa and Canada.
Accordingly, there is a concentration of exposure to those regions, though it is recognised that an investment’s country of
domicile or listing does not necessarily equate its exposure to the economic conditions in that country.
(ii) Market risk arising from foreign currency risk
Exposure to foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in foreign exchange rates. Foreign currency sensitivity risk has been covered by the VaR analysis under the market
risk section.
Notes to the financial statements
continued
118
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
The fair values of the Group’s and Company’s monetary items which have foreign currency exposure at 31 December 2023
and 31 December 2022 are shown below. Where the equity investments which are not monetary items are denominated in a
foreign currency, they have been included separately in the analysis so as to show the overall level of exposure.
US | Canadian | Australian | Brazilian | |||
Dollar | Dollar | Dollar | Real | Others | Total | |
2023 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 |
Receivables (due from brokers, dividends and other income | ||||||
receivable) | 1,844 | 595 | 409 | 1,421 | 172 | 4,441 |
Cash and cash equivalents | 4,613 | 72 | – | – | – | 4,685 |
Bank loans | (149,828) | – | – | – | – | (149,828) |
Payables (due to brokers and other payables) | (533) | – | – | – | – | (533) |
Total foreign currency exposure on net monetary items | (143,904) | 667 | 409 | 1,421 | 172 | (141,235) |
Investments at fair value through profit or loss | 489,481 | 251,654 | 215,896 | 36,516 | 70,107 | 1,063,654 |
Derivative financial liabilities at fair value through profit or loss | (1,302) | – | – | – | – | (1,302) |
Total net foreign currency exposure | 344,275 | 252,321 | 216,305 | 37,937 | 70,279 | 921,117 |
US | Canadian | Australian | Brazilian | |||
Dollar | Dollar | Dollar | Real | Others | Total | |
2022 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 |
Receivables (due from brokers, dividends and other income | ||||||
receivable) | 7,035 | 671 | – | 2,159 | 158 | 10,023 |
Cash and cash equivalents | 411 | 94 | – | – | – | 505 |
Bank loans | (158,783) | – | – | – | – | (158,783) |
Payables (due to brokers and other payables) | (610) | – | – | – | – | (610) |
Derivative financial liabilities at fair value through profit or loss | (544) | – | – | – | – | (544) |
Total foreign currency exposure on net monetary items | (152,491) | 765 | – | 2,159 | 158 | (149,409) |
Investments at fair value through profit or loss | 487,897 | 278,664 | 286,992 | 37,339 | 69,922 1,160,814 | |
Total net foreign currency exposure | 335,406 | 279,429 | 286,992 | 39,498 | 70,080 1,011,405 |
Management of foreign currency risk
The Investment Manager monitors the Group’s exposure to foreign currencies on a daily basis and reports to the Board of the
Company on a regular basis.
The Investment Manager measures the risk to the Group of the foreign currency exposure by considering the effect on the
Group’s net asset value and income of a movement in the exchange rate to which the Group’s assets, liabilities, income and
expenses are exposed.
The Group does not use financial instruments to mitigate the currency exposure in the period between the time that income
is included in the financial statements and its receipt. Derivative contracts are not used to hedge against exposure to foreign
currency risk.
Consequently, the Group is exposed to risks that the exchange rate of its reporting currencies, relative to other currencies, may
change in a manner which has an adverse effect on the value of the portion of the Group’s assets which are denominated in
currencies other than their own currencies.
Section 4: Financial statements
119
(iii) Market risk arising from interest rate risk
Exposure to interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in
market interest rates.
The Group is exposed to interest rate risk specifically through its fixed income investments, cash holdings and its borrowing
facility for investment purposes. Interest rate movements may affect the level of income receivable from any cash at bank
and on deposits. The effect of interest rate changes on the earnings of the companies held within the portfolio may have
a significant impact on the valuation of the Group’s investments. Interest rate sensitivity risk has been covered by the VaR
analysis under the market risk section.
Interest rate exposure
The exposure for Group and Company at 31 December 2023 and 31 December 2022 of financial assets and liabilities to
interest rate risk is shown by reference to:
–
floating interest rates – when the interest rate is due to be re‑set; and
–
fixed interest rates – when the financial instrument is due for repayment.
| 2023 |
2022 |
|||||
Within one |
More than |
Within one |
More than |
|||
year |
one year |
Total |
year |
one year |
Total |
|
Group |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
Exposure to floating interest rates: |
||||||
Cash collateral held with brokers |
6,269 |
– |
6,269 |
6,795 |
– |
6,795 |
Cash and cash equivalents |
10,612 |
– |
10,612 |
29,492 |
– |
29,492 |
Bank loans |
(149,828) |
– |
(149,828) |
(158,783) |
– |
(158,783) |
Exposure to fixed interest rates: |
||||||
Fixed income investments |
– |
53,440 |
53,440 |
– |
116,960 |
116,960 |
Total exposure to interest rates |
(132,947) |
53,440 |
(79,507) |
(122,496) |
116,960 |
(5,536) |
| 2023 |
2022 |
|||||
Within one |
More than |
Within one |
More than |
|||
year |
one year |
Total |
year |
one year |
Total |
|
Company |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
Exposure to floating interest rates: |
||||||
Cash collateral held with brokers |
6,269 |
– |
6,269 |
6,795 |
– |
6,795 |
Cash and cash equivalents |
4,261 |
– |
4,261 |
23,317 |
– |
23,317 |
Bank loans |
(149,828) |
– |
(149,828) |
(158,783) |
– |
(158,783) |
Exposure to fixed interest rates: |
||||||
Fixed income investments |
– |
53,440 |
53,440 |
– |
116,960 |
116,960 |
Total exposure to interest rates |
(139,298) |
53,440 |
(85,858) |
(128,671) |
116,960 |
(11,711) |
Interest rates received on cash balances are approximately 4.82% for US Dollar balances and 4.37% per annum for Sterling
balances (2022: 1.51% for US Dollar balances and 1.13% for Sterling balances). Interest rates paid on bank loans are
approximately 6.14% per annum for US Dollar balances (2022: 3.30% per annum). There is no Sterling bank loan (2022:
no Sterling bank loan). Effective interest rates on fixed income investments ranged from 2.00% to 8.75% (2022: 2.00% to
7.50%).
Notes to the financial statements
continued
120
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
Management of interest rate risk
The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into account
when making investment decisions and borrowings under the loan and overdraft facilities.
The Group finances part of its activities through borrowings at levels approved and monitored by the Board of the Company.
Counterparty credit risk is the risk that the issuer of a financial instrument will fail to fulfil an obligation or commitment that it
has entered into with the Group.
The Group is exposed to counterparty credit risk from the parties with which it trades and will bear the risk of settlement
default. Counterparty credit risk to the Group arises from transactions to purchase or sell investments, fixed income
investments and through option writing transactions on equity investments held within the portfolio.
The major counterparties engaged with the Group and Company are all widely recognised and regulated entities.
Depositary
The Group’s Depositary is The Bank of New York Mellon (International) Limited (BNYM or the Depositary) (S&P long‑term
credit rating as at 31 December 2023: AA- (2022: AA-)). The Group’s listed investments are held on its behalf by The Bank of
New York Mellon (International) Limited (BNYM) as the Group’s Custodian (as sub‑delegated by the Depositary). All of the
equity and fixed income assets and cash of the Group are held within the custodial network of the global custodian appointed
by the Depositary. Bankruptcy or insolvency of the Depositary/Custodian may cause the Group’s rights with respect to its
investments held by the Depositary/Custodian to be delayed or limited. The maximum exposure to this risk at 31 December
2023 is the total value of equity and fixed income investments held with the Depositary/Custodian and cash and cash
equivalents in the Consolidated and Parent Company Statements of Financial Position.
In accordance with the requirements of the depositary agreement, the Depositary will ensure that any agents it appoints
to assist in safekeeping the equity and fixed income investments of the Group will segregate the equity and fixed income
investments of the Group. Thus, in the event of insolvency or bankruptcy of the Depositary/Custodian, the Group’s non‑cash
assets are segregated and this reduces counterparty credit risk. The Group will, however, be exposed to the counterparty credit
risk of the Depositary in relation to the Group’s cash held by the Depositary. In the event of the insolvency or bankruptcy of
the Depositary, the Group will be treated as a general creditor of the Depositary in relation to cash holdings of the Group. The
Board monitors the Group’s risk by reviewing the custodian’s internal control reports.
Securities lending
All securities lending transactions entered into by the Company are subject to a written legal agreement between the Company
and the Securities Lending Agent, BlackRock Advisors (UK) Limited, a related party to the Company, and separately between
the Securities Lending Agent and the approved borrowing counterparty. Collateral received in exchange for securities lent is
transferred under a title transfer arrangement and is delivered to and held in an account with a tri‑party collateral manager
in the name of the Depositary, The Bank of New York Mellon (International) Limited, on behalf of the Company. Collateral
received is segregated from the assets belonging to the Company’s Depositary or the Lending Agent.
The value of securities on loan as a proportion of the Group and Company’s total lendable assets as at 31 December 2023 was
5.4% (2022: 4.48%) and as a proportion of the Group’s net assets as at 31 December 2023 was 5.4% (2022: 4.04%). Income
earned from securities lending during the year ended 31 December 2023 is set out in note 3 of the financial statements.
Total lendable assets represent the aggregate value of assets forming part of the Group and Company’s securities lending
programme. This excludes any assets held by the Company that are not considered lendable due to any market, regulatory,
investment or other restriction.
Section 4: Financial statements
121
The following table details the value of securities on loan and associated collateral received, analysed by counterparty as at
31 December 2023 and 31 December 2022.
Stock | Collateral | ||
| Country of | lending | received | |
2023 | establishment | £’000 | £’000 |
Barclays Bank plc | United Kingdom | 15,137 | 17,013 |
Barclays Capital Securities Limited | United Kingdom | 1,767 | 1,901 |
BNP Paribas Arbitrage | France | 910 | 1,009 |
Citigroup Global Markets Limited | United Kingdom | 233 | 249 |
Goldman Sachs International | United Kingdom | 6,857 | 7,427 |
HSBC Bank plc | United Kingdom | 1,519 | 1,675 |
J.P. Morgan Securities plc | United Kingdom | 14,683 | 16,215 |
Macquarie Bank Limited | Australia | 13,701 | 15,132 |
Société Générale | France | 4,547 | 5,088 |
UBS AG | Switzerland | 3,435 | 3,840 |
62,789 | 69,549 |
Stock | Collateral | ||
| Country of | lending | received | |
2022 | establishment | £’000 | £’000 |
Barclays Bank plc | United Kingdom | 29,587 | 32,905 |
Barclays Capital Securities Limited | United Kingdom | 1,230 | 1,341 |
BNP Paribas Arbitrage | France | 638 | 697 |
Citigroup Global Markets Limited | United Kingdom | 1,402 | 1,454 |
Goldman Sachs International | United Kingdom | 3,392 | 3,657 |
J.P. Morgan Securities plc | United Kingdom | 1,729 | 1,892 |
Macquarie Bank Limited | Australia | 12,166 | 13,311 |
UBS AG | Switzerland | 2,267 | 2,493 |
52,411 | 57,750 |
Notes to the financial statements
continued
122
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
The Company engages in securities lending transactions for which it may hold collateral received from a counterparty.
The following table provides an analysis by currency of the underlying non‑cash collateral received by way of a title
transfer collateral arrangement by the Company, in respect of securities lending transactions as at 31 December 2023 and
31 December 2022:
Non-cash | |
collateral | |
2023 | received |
Currency | £’000 |
Australian Dollar | 382 |
Canadian Dollar | 204 |
Chinese Yuan | 11,456 |
Danish Krone | 55 |
Euro | 4,642 |
UK Sterling | 3,215 |
Hong Kong Dollar | 1,256 |
Japanese Yen | 747 |
Norwegian Krone | 371 |
Swedish Krone | 49 |
Singapore Dollar | 18 |
US Dollar | 47,154 |
Total | 69,549 |
Non-cash | |
collateral | |
| 2022 | received |
Currency | £’000 |
Canadian Dollar | 217 |
Chinese Yuan | 1,815 |
Euro | 3,084 |
Hong Kong Dollar | 2,468 |
Japanese Yen | 1,542 |
Singapore Dollar | 26 |
Swiss Franc | 1,115 |
UK Sterling | 2,561 |
US Dollar | 44,817 |
Other | 105 |
Total | 57,750 |
Non‑cash collateral received by way of a title transfer collateral arrangement in relation to securities lending transactions
cannot be sold, reinvested or pledged.
The following table provides an analysis of the type, quality and maturity tenor of non‑cash collateral received and posted by
the Group and Company by way of a title transfer collateral arrangement in respect of securities lending transactions as at
31 December 2023 and 31 December 2022.
Section 4: Financial statements
123
| Maturity Tenor | |||||
91 to 365 | More than | Open | |||
8 to 30 days | days | 365 days | Transactions | Total | |
2023 | £’000 | £’000 | £’000 | £’000 | £’000 |
Collateral received – securities lending | |||||
Fixed income | |||||
Investment grade | – | – | 5,100 | – | 5,100 |
Equities | |||||
Recognised equities | – | – | – | 64,449 | 64,449 |
Total | – | – | 5,100 | 64,449 | 69,549 |
| Maturity Tenor | |||||
91 to 365 | More than | Open | |||
8 to 30 days | days | 365 days | Transactions | Total | |
2022 | £’000 | £’000 | £’000 | £’000 | £’000 |
Collateral received – securities lending | |||||
Fixed income | |||||
Investment grade | – | – | 3,170 | – | 3,170 |
Equities | |||||
Recognised equities | – | – | – | 54,580 | 54,580 |
Total | – | – | 3,170 | 54,580 | 57,750 |
Investment grade securities are those issued by an entity with a minimum investment grade credit rating from at least one
globally recognised credit rating agency; Standard & Poor’s, Moody’s or Fitch.
The maturity tenor analysis for fixed income securities received as collateral is based on the respective contractual maturity
date, while equity securities received as collateral are presented as open transactions as they are not subject to a contractual
maturity date.
As at 31 December 2023 and 2022, all non‑cash collateral (equity and debt securities) received by the Group and Company in
respect of securities lending transactions is held by the Group’s Depositary (or through its delegates).
The following table lists the ten largest issuers by value of non‑cash collateral (equity and debt securities) received by the
Group and Company by way of a title transfer collateral arrangement across securities lending transactions as at 31 December
2023 and 2022.
Value | % of the | |
2023 | Company’s | |
Non cash collateral issuer – securities | £’000 | NAV |
Alibaba Group | 2,324 | 0.20 |
Merck | 1,990 | 0.17 |
Agricultural Bank Of China | 1,798 | 0.15 |
Pepsico | 1,696 | 0.15 |
Meta Platforms | 1,696 | 0.15 |
Thermo Fisher Scientific | 1,696 | 0.15 |
Unitedhealth Group | 1,689 | 0.15 |
Germany Federal Republic Of (Government) | 1,626 | 0.14 |
China Construction Bank | 1,621 | 0.14 |
Encompass Health | 1,406 | 0.12 |
Other issuers | 52,007 | 4.48 |
Total | 69,549 | 6.00 |
Notes to the financial statements
continued
124
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
Value | % of the | |
2022 | Company’s | |
Non cash collateral issuer – securities | £’000 | NAV |
Southwest Airlines | 3,286 | 0.25 |
Marvell Technology Inc | 3,286 | 0.25 |
Cisco Systems Inc | 2,320 | 0.18 |
JD Health International Inc | 1,873 | 0.14 |
Cf Industries Holdings Inc | 1,217 | 0.09 |
Vale ADR Representing One Sa | 1,207 | 0.09 |
Abbott Laboratories | 1,207 | 0.09 |
Becton Dickinson | 1,207 | 0.09 |
Meta Platforms Inc Class A | 1,207 | 0.09 |
China Resources | 1,204 | 0.09 |
Other issuers | 39,736 | 3.06 |
Total | 57,750 | 4.42 |
Counterparties/brokers
The Group only invests directly in markets that operate on a delivery versus payment basis and consequently most investment
transactions in listed securities involve simultaneous delivery of securities against cash payment using an approved broker.
The risk of default is considered minimal and the trade will fail if either party fails to meet its obligation.
For a few markets that the Group invests in from time to time, although they operate on a delivery versus payment basis, there
may be a very short time gap between stock delivery and payment, giving a potential rise to counterparty credit risk with the
broker in relation to transactions awaiting settlement. Risk relating to unsettled transactions is considered small due to the
short settlement period involved and the high credit quality of the brokers used for those markets. The Group monitors the
credit rating and financial position of the broker used to further mitigate this risk.
Cash held by a counterparty to financial derivative contracts is subject to the credit risk of the counterparty. The following table
details the total number of counterparties to which the Group is exposed, the maximum exposure to any one counterparty,
any collateral held by the Group against this exposure, the total exposure to all other counterparties and the lowest long‑term
credit rating of any one counterparty (or its ultimate parent if unrated).
Maximum | |||||
exposure | Total exposure | ||||
to any one | to all other | Lowest credit | |||
| Total number of | counterparty 1 | Collateral held 1 | counterparties 1 | rating of any one | |
counterparties | £’000 | £’000 | £’000 | counterparty 2 | |
2023 | 3 | 10,612 | 6,269 | 410 | A+ |
2022 | 3 | 29,492 | 6,795 | 1 | A+ |
1
Calculated on a net basis.
2
Standard & Poor’s ratings.
The Group may also be exposed to counterparty risk should there be any rehypothecation of pledged collateral. Collateral
is received/paid where the client service agreement states that there should be collateral movements agreed with the
counterparty, where there is a requirement for a mark‑to‑market process or collateralisation to ensure that the Group is
protected against any counterparty default.
Section 4: Financial statements
125
The Group engages in activities which may require collateral to be provided to a counterparty (pledged collateral) or may hold
collateral received (Inbound Collateral) from a counterparty. The Group uses Inbound Collateral received from a counterparty
to reduce the counterparty credit risk associated with any trading activity in which the Group has engaged.
Cash collateral pledged by the Group is separately identified as an asset in the Consolidated and Parent Company Statements
of Financial Position and is not included as a component of cash and cash equivalents. The cash is subject to certain
counterparty credit risk as the Group’s access to its cash could be delayed should the counterparties become insolvent or
bankrupt. Collateral received in the form of securities is not reflected in the Consolidated and Parent Company Statements of
Financial Position. The Group has the right to sell or re‑pledge collateral received in the form of securities in circumstances
such as default.
The fair value of inbound cash collateral and cash collateral pledged is reflected in the table below:
Liability for | ||||
Pledged collateral | inbound collateral | |||
As at | As at | As at | As at | |
31 December | 31 December | 31 December | 31 December | |
2023 | 2022 | 2023 | 2022 | |
£’000 | £’000 | £’000 | £’000 | |
Cash collateral ‑ Bank of America Merrill Lynch (2022: Bank of America | ||||
Merrill Lynch) | 6,269 | 6,795 | – | – |
Receivables
Amounts due from debtors are disclosed in the Consolidated and Parent Company Statements of Financial Position as
receivables. The counterparties included in receivables are the same counterparties discussed previously under counterparty
credit risk and subject to the same scrutiny by the BlackRock RQA Counterparty & Concentration Risk Team (RQA CCR). The
Group monitors the ageing of receivables to mitigate the risk of debtor balances becoming overdue.
In summary, the exposure to credit risk at 31 December 2023 and 2022 was as follows:
2023 | 2022 | |
Group | £’000 | £’000 |
Investment in contractual rights | 18,316 | 21,199 |
Fixed income investments | 53,440 | 116,960 |
Cash collateral held with brokers | 6,269 | 6,795 |
Cash and cash equivalents | 10,612 | 29,492 |
Other receivables (amounts due from brokers, dividends and interest receivable) | 3,592 | 4,431 |
92,229 | 178,877 |
2023 | 2022 | |
Company | £’000 | £’000 |
Investment in contractual rights | 18,316 | 21,199 |
Fixed income investments | 53,440 | 116,960 |
Cash collateral held with brokers | 6,269 | 6,795 |
Cash and cash equivalents | 4,261 | 23,317 |
Other receivables (amounts due from brokers, dividends and interest receivable) | 3,592 | 4,431 |
85,878 | 172,702 |
Management of counterparty credit risk
Credit risk is monitored and managed by RQA CCR. The team is headed by BlackRock’s Chief Credit Officer who reports to the
Global Head of RQA. Credit authority resides with the Chief Credit Officer and selected team members to whom specific credit
authority has been delegated. As such, counterparty approvals may be granted by the Chief Credit Officer, or by identified RQA
Credit Risk Officers who have been formally delegated authority by the Chief Credit Officer.
Notes to the financial statements
continued
126
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
The counterparty/credit risk is managed as follows:
–
transactions are only entered into with those counterparties approved by RQA CCR, with a formal review carried out for
each new counterparty and with counterparties selected by RQA CCR on the basis of a number of risk mitigation criteria
designed to reduce the risk to the Group of default;
–
the creditworthiness of financial institutions with whom cash and fixed income instruments are held is reviewed regularly
by RQA CCR; and
–
RQA CCR review the credit standard of the Group’s brokers on a periodic basis and set limits on the amount that may be
due from any one broker.
The Board monitors the Group’s counterparty risk by reviewing:
–
the semi‑annual report from the Depositary, which includes the results of periodic site visits to the Group’s Custodian
where controls are reviewed and tested;
–
the Custodian's Service Organisation Control (SOC 1) reports which include a report by the Custodian's auditor. This report
sets out any exceptions or issues noted as a result of the auditor’s review of the custodian’s control processes;
–
the Manager’s internal control reports which include a report by the Manager’s auditor. This report sets out any exceptions
or issues noted as a result of the auditor’s review of the Manager’s control processes; and
–
in addition, the Depositary and the Manager report any significant breaches or issues arising to the Board as soon as these
are identified.
There were no past due or impaired assets as of 31 December 2023 (2022: nil). The major counterparties engaged with the
Group are all widely recognised and regulated entities.
In order to better define its contractual rights and to secure rights that will help the Group mitigate its counterparty risk, the
Group may enter into an ISDA Master Agreement or similar agreement with its OTC derivative contract counterparties. An
ISDA Master Agreement is an agreement between the Group and the counterparty that governs OTC derivative contracts
and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or
termination event. Under an ISDA Master Agreement, the Group has a contractual right to offset with the counterparty certain
derivative financial instruments payables and/or receivables with collateral held and/or posted and create one single net
payment in the event of default including the bankruptcy or insolvency of the counterparty. However, bankruptcy or insolvency
laws of a particular jurisdiction may impose restrictions on, or prohibitions against, the right of offset in bankruptcy, insolvency
or other events.
For financial reporting purposes, the Group does not offset derivative assets and derivative liabilities that are subject to netting
arrangements in the Statements of Financial Position. The disclosures set out in the following tables include financial assets
and financial liabilities that are subject to an enforceable master netting arrangement or similar agreement.
At 31 December 2023 and 2022, the Group’s and Company’s derivative assets and liabilities (by type) are as follows:
At 31 December 2023 | At 31 December 2022 | |||
Assets | Liabilities | Assets | Liabilities | |
Derivatives | £’000 | £’000 | £’000 | £’000 |
Written option contracts | – | (1,401) | – | (1,227) |
Total derivative assets and liabilities in the Consolidated and Parent | ||||
Company Statements of Financial Position | – | (1,401) | – | (1,227) |
Total assets and liabilities subject to a master netting agreement | – | (1,401) | – | (1,227) |
Section 4: Financial statements
127
The following table presents the Group’s and Company’s derivative liabilities by counterparty, net of amounts available for
offset, under a master netting agreement and net of any related collateral paid/(received) by the Group at 31 December 2023
and 2022:
Derivative |
|||||
liabilities |
|||||
subject to a |
|||||
master netting |
Derivatives |
Net amount |
|||
agreement by a |
available for |
Non-cash |
Pledged cash |
of derivative |
|
counterparty |
offset |
collateral given |
collateral |
liabilities |
|
Counterparty |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
At 31 December 2023 |
|||||
Bank of America Merrill Lynch |
(1,401) |
– |
– |
1,401 |
– |
At 31 December 2022 |
|||||
Bank of America Merrill Lynch |
(1,227) |
– |
– |
1,227 |
– |
Offsetting and cash pooling arrangements
The Company and its subsidiary have a legally enforceable right under the bank overdraft agreement with The Bank of New
York Mellon (International) Limited to set off the cash held in the subsidiary and bank overdraft balance in the Company. The
cash and overdraft balances are held in the same currency and are managed under a compensated group arrangement with
the same bank where interest is received/charged on the net cash/overdraft balance.
In practice, the Group has not and does not expect the cash and overdraft balances to settle on a net basis and, accordingly, we
have presented the cash and cash equivalents and bank overdraft balances in the Statement of Financial Position on a gross
basis before offsetting the positive cash balances held in the subsidiary company against the bank overdraft balance in the
Liquidity risk is the risk that the Group will encounter difficulties in meeting obligations associated with financial liabilities.
The Group is also exposed to the liquidity risk for margin calls on derivative instruments. The Group has an overdraft facility
of £30 million (2022: £30 million) and a multi‑currency loan facility of £200 million (2022: £200 million) which are updated
and renewed on an annual basis. As per the borrowing agreements, borrowings under the overdraft and loan facilities shall
at no time exceed £230 million or 25% of the Group’s net asset value (whichever is the lower) (2022: £230 million or 25% of
the Group’s net asset value (whichever is lower)) and this covenant was complied with during the year. For details of the loan
facility, refer to note 14.
Liquidity risk exposure
The remaining undiscounted gross cash flows of the financial liabilities as at 31 December 2023 and 2022, based on the
earliest date on which payment can be required, were as follows:
2023 | 2022 | |
3 months or | 3 months or | |
less | less | |
Group | £’000 | £’000 |
Current liabilities: | ||
Amounts due to brokers, accruals and provisions | 8,052 | 6,528 |
Derivative financial liabilities at fair value through profit or loss | 1,401 | 1,227 |
Bank loans | 149,828 | 158,783 |
159,281 | 166,538 |
Notes to the financial statements
continued
128
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
2023 | 2022 | |
3 months or | 3 months or | |
less | less | |
Company | £’000 | £’000 |
Current liabilities: | ||
Amounts due to brokers, accruals and provisions | 9,108 | 7,584 |
Derivative financial liabilities at fair value through profit or loss | 1,401 | 1,227 |
Bank loans | 149,828 | 158,783 |
160,337 | 167,594 |
Management of liquidity risk
Liquidity risk is minimised by holding sufficient liquid investments which can be readily realised to meet liquidity demands.
Asset disposals may also be required to meet liquidity needs. However, the timely sale of trading positions can be impaired
by many factors including decreased trading volume and increased price volatility. As a result, the Group may experience
difficulties in disposing of assets to satisfy liquidity demands. Liquidity risk is not significant as the majority of the Group’s
assets are investments in listed securities that are readily realisable.
The Board gives guidance to the Investment Manager as to the maximum amounts of the Group’s resources that should be
invested in any one company. The policy is that the Group should remain 90% invested in normal market conditions and that
25% of the Group’s assets may be invested in cash or cash equivalents. Short‑term borrowings may be used to manage short‑
term cash requirements.
The Group’s liquidity risk is managed on a daily basis by the Investment Manager in accordance with established policies
and procedures in place. The Investment Manager reviews daily forward‑looking cash reports which project cash obligations.
These reports allow them to manage their obligations.
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) to the Financial Statements on
page 102.
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.
Section 4: Financial statements
129
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.
Notes to the financial statements
continued
130
BlackRock World Mining Trust plc
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Annual Report and Financial Statements 31 December 2023
(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 2023 – Group | Level 1 | Level 2 | Level 3 | Total |
£’000 | £’000 | £’000 | £’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 2022 – Group | Level 1 | Level 2 | Level 3 | Total |
£’000 | £’000 | £’000 | £’000 | |
Assets: | ||||
Equity investments | 1,250,984 | 9 | 35,692 | 1,286,685 |
Fixed income securities | 68,894 | 48,066 | – | 116,960 |
Investment in contractual rights | – | – | 21,199 | 21,199 |
Total assets | 1,319,878 | 48,075 | 56,891 | 1,424,844 |
Liabilities: | ||||
Derivative financial instruments – written options | – | (1,227) | – | (1,227) |
Total | 1,319,878 | 46,848 | 56,891 | 1,423,617 |
Financial assets/(liabilities) at fair value through profit or loss | ||||
at 31 December 2023 – Company | Level 1 | Level 2 | Level 3 | Total |
£’000 | £’000 | £’000 | £’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 |
Section 4: Financial statements
131
Financial assets/(liabilities) at fair value through profit or loss | ||||
at 31 December 2022 – Company | Level 1 | Level 2 | Level 3 | Total |
£’000 | £’000 | £’000 | £’000 | |
Assets: | ||||
Equity investments | 1,250,984 | 9 | 42,923 | 1,293,916 |
Fixed income securities | 68,894 | 48,066 | – | 116,960 |
Investment in contractual rights | – | – | 21,199 | 21,199 |
Total assets | 1,319,878 | 48,075 | 64,122 | 1,432,075 |
Liabilities: | ||||
Derivative financial instruments – written options | – | (1,227) | – | (1,227) |
Total | 1,319,878 | 46,848 | 64,122 | 1,430,848 |
A reconciliation of fair value measurement in Level 3 is set out below.
| Level 3 Financial assets at fair value through profit or loss | Group | Company | ||
at 31 December | 2023 | 2022 | 2023 | 2022 |
£’000 | £’000 | £’000 | £’000 | |
Opening fair value | 56,891 | 33,413 | 64,122 | 40,591 |
Return of capital – royalty | (497) | (267) | (497) | (267) |
Additions at cost | – | 20,106 | – | 20,106 |
Transfer of equities from Level 1 to Level 3 | – | 2 | – | 2 |
Conversion of equity and transfer to Level 1 | – | (2,546) | – | (2,546) |
Conversion of convertible bonds to equity and transfer to Level 2 | – | (10,160) | – | (10,160) |
Transfer of equities and convertible bonds to Level 2 | – | (19,305) | – | (19,305) |
Total profit or loss included in net profit on investments in the | ||||
Consolidated Statement of Comprehensive Income: | ||||
‑ assets transferred to Level 1 during the period | – | 169 | – | 169 |
‑ assets transferred to Level 2 during the period | – | 14,212 | – | 14,212 |
‑ assets held at the end of the period | (5,383) | 21,267 | (5,207) | 21,320 |
Closing balance | 51,011 | 56,891 | 58,418 | 64,122 |
The Level 3 valuation process and techniques used are explained in the accounting policies in note 2(h). A more detailed
description of the techniques is found on pages 129 and 130 under ‘Valuation process and techniques’ for Level 3 valuations.
The Level 3 investments as at 31 December 2023 in the table that follows relate to the BHP Brazil Royalty, convertible bonds
and 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 securities, the key inputs are shown on page 132.
The Level 3 valuation process and techniques used by the Company are explained in the accounting policies in notes 2(h)
and 2(q) and a detailed explanation of the techniques is also available on pages 129 and 130 under ‘Valuation process and
techniques’.
The Lifezone SPAC Pipe commitment held at nil value as at 31 December 2022 was transferred to Level 1 on completion of the
merger transaction and the successful initial public offering during the year.
Notes to the financial statements
continued
132
BlackRock World Mining Trust plc
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Annual Report and Financial Statements 31 December 2023
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 2023 and 31 December 2022 are
as shown below.
As at | Range of | |||||
31 December | weighted | Reasonable | ||||
2023 | Valuation | Unobservable | average | possible | Impact on | |
Description | £’000 | technique | input | inputs | shift¹ +/- | fair value |
Discounted rate– | ||||||
weighted average | ||||||
Discounted | cost | |||||
BHP Brazil Royalty | 18,316 | cash flows | of capital | 5.0% ‑ 8.0% | 1.0% | £1.0m |
US$1,706- | ||||||
Average | US$1,780 | |||||
gold prices | per ounce | 10.0% | £1.8m | |||
US$8,397- | ||||||
Average | US$8,469 | |||||
copper prices | per tonne | 10.0% | £1.2m | |||
Market | ||||||
Jetti Resources | 27,204 | approach | Earnings multiple | 6.00x | 5.0% | £1.4m |
Market | Price of recent | |||||
MCC Mining | 5,491 | approach | transaction | 5.0% | £0.3m | |
Listing | ||||||
suspended | ||||||
– valued | ||||||
at nominal | ||||||
Polyus | – | US$0.01 | ||||
Delisted ‑ | ||||||
valued at | ||||||
nominal | ||||||
Polymetal International | – | US$0.01 | ||||
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.
As at | Range of | |||||
31 December | weighted | Reasonable | ||||
2022 | Valuation | Unobservable | average | possible | Impact on | |
Description | £’000 | technique | input | inputs | shift¹ +/- | fair value |
Discounted rate– | ||||||
weighted average | ||||||
Discounted | cost | |||||
OZ Minerals Brazil Royalty | 21,199 | cash flows | of capital | 5.0% ‑ 8.0% | 1.0% | £1.0m |
US$1,400- | ||||||
Average | US$1,600 | |||||
gold prices | per ounce | 10.0% | £1.5m | |||
US$7,209- | ||||||
Average | US$8,510 | |||||
copper prices | per tonne | 10.0% | £1.0m | |||
Market | ||||||
Jetti Resources | 29,873 | approach | Earnings multiple | 5.93x | 5.0% | £0.6m |
Market | Price of recent | |||||
MCC Mining | 5,819 | approach | transaction | 5.0% | £0.3m | |
Lifezone commitment (see Note 21) | – | |||||
Listing | ||||||
suspended | ||||||
– valued | ||||||
at nominal | ||||||
Polyus | – | US$0.01 | ||||
Total | 56,891 |
1
The sensitivity analysis refers to a percentage amount added or deducted from the input and the effect this has on the fair value.
Section 4: Financial statements
133
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
The Group’s capital management objectives are:
–
to ensure it will be able to continue as a going concern; and
–
to achieve a balanced return of dividends and capital growth over the longer term, by investing primarily in securities of
companies in the mining and metals sectors.
This is to be achieved through an appropriate balance of equity capital and gearing. The Company operates a flexible gearing
policy which depends on prevailing conditions. The policy is that debt should not be more than 25% of the Group’s net assets.
The Group’s total invested capital at 31 December 2023 was £1,309,879,000 (2022: £1,458,068,000) comprising of bank loans
and an overdraft of £149,828,000 (2022: £158,783,000) and equity shares, capital and reserves of £1,160,051,000 (2022:
£1,299,285,000).
Under the terms of the overdraft and loan facility agreement, the Group’s total indebtedness shall at no time exceed
£230 million or 25% of the Group’s net asset value (whichever is the lowest).
The cash and bank overdraft accounts of the Company and subsidiary in the same currency are managed under a
compensated group arrangement and are therefore presented on a net basis in the Group financial statements.
The Board with the assistance of the Investment Manager monitors and reviews the broad structure of the Group’s capital on
an ongoing basis. This review includes:
–
the planned level of gearing, which takes into account the Investment Manager’s view on the market; and
–
the need to buy back equity shares, either for cancellation or to be held in treasury, which takes account of the difference
between the NAV per share and the share price (i.e. the level of share price discount or premium).
The Group is subject to externally imposed capital requirements:
–
as a public company, the Group has a minimum share capital of £50,000; and
–
in order to be able to pay dividends out of profits available for distribution, the Group has to be able to meet one of the two
capital restrictions tests imposed on investment companies by law.
Notes to the financial statements
continued
134
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
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 on page 56.
The investment management fee due for the year ended 31 December 2023 amounted to £9,691,000 (2022: £10,646,000).
At the year end, £7,262,000 was outstanding in respect of the management fee (2022: £5,443,000).
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 2023 amounted to £144,000 excluding VAT (2022: £132,000). Marketing fees
of £55,000 were outstanding as at 31 December 2023 (2022: £62,000).
The ultimate holding company of the Manager and the Investment Manager is BlackRock, Inc., a company incorporated in
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 9 May 2024, the Board will consist of
five 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 on pages 64 to 66. As at 31 December 2023, £17,000 (2022: £16,000) 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).
As at 31 December 2023 | ||
Total % of shares held by Related | Total % of shares held by Significant | Number of Significant Investors who |
BlackRock Funds | Investors who are not affiliates of | are not affiliates of BlackRock Group or |
BlackRock Group or BlackRock, Inc. | BlackRock, Inc. | |
1.29 | n/a | n/a |
As at 31 December 2022 | ||
Total % of shares held by Related | Total % of shares held by Significant | Number of Significant Investors who |
BlackRock Funds | Investors who are not affiliates of | are not affiliates of BlackRock Group or |
BlackRock Group or BlackRock, Inc. | BlackRock, Inc. | |
2.27 | n/a | n/a |
There was no capital commitment at 31 December 2023 (2022: one commitment for US$10,000,000 in relation to the SPAC
Section 5: Additional information
137
Additional
information
The Company’s largest exposure to aluminium is via Hydro which is one of the
lowest-carbon producers of aluminium by virtue of its access to hydro power in
Norway.
PHOTO COURTESY OF HYDRO/BÅRD GUDIM
138
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
Financial calendar
The timing of the announcement and publication of the Company’s results may normally be expected in the months shown
below:
February/March
Annual results announced.
March
Annual Report and Financial Statements published.
April/May
Annual General Meeting.
August
Half yearly figures announced and Half Yearly Financial Report published.
Dividend – 2023
The proposed final dividend in respect of the year ended 31 December 2023 is 17.00p per share. The Board also declared three
quarterly interim dividends of 5.50p per share.
Ex-dividend date (shares transferred without the dividend)
21 March 2024
Record date (last date for registering transfers to receive the dividend)
22 March 2024
Last date for registering DRIP instructions
22 April 2024
Dividend payment date
14 May 2024
Quarterly dividends
Dividends will be paid quarterly as follows.
Period ending
Announce
Payment date
31 March
April/May
June
30 June
August
September
30 September
November
December
31 December
February
May
Payment of dividends
Cash dividends will be sent by cheque to the first-named shareholder at their registered address. Dividends may also be paid
direct into a shareholder’s bank account via BACSTEL-IP (Bankers’ Automated Clearing Service – Telecom Internet Protocol).
This may be arranged by contacting the Company’s registrar, Computershare Investor Services PLC, through their secure
website
investorcentre.co.uk
, or by telephone on 0370 707 1187, or by completing the Mandate Instructions section on the
reverse of your dividend confirmation statement and sending this to the Company’s registrar, Computershare. Dividend
confirmations will be sent to shareholders at their registered address, unless other instructions have been given, to arrive on
the payment date.
Dividend reinvestment scheme (DRIP)
Shareholders may request that their dividends be used to purchase further shares in the Company. Dividend reinvestment
forms may be obtained from Computershare Investor Services PLC through their secure website
investorcentre.co.uk
or on
0370 707 1187. Shareholders who have already opted to have their dividends reinvested do not need to reapply. The last date
for registering for this service for the forthcoming dividend is 22 April 2024.
Dividend tax allowance
The annual tax-free allowance on dividend income across an individual’s entire share portfolio is currently £1,000, reducing to
£500 from 6 April 2024. Above this amount, individuals pay tax on their dividend income at a rate dependent on their income
tax bracket and personal circumstances.
The Company continues to provide registered shareholders with confirmation of the dividends paid and this should be
included with any other dividend income received when calculating and reporting total dividend income received. It is a
shareholder’s responsibility to include all dividend income when calculating any tax liability.
If you have any tax queries, please contact a financial adviser.
Shareholder information
Section 5: Additional information
139
Share price
The Company’s mid-market ordinary share price is quoted daily in The Financial Times and The Times under ‘Investment
Companies’ and in The Daily Telegraph under ‘Investment Trusts’. The share price is also available on the BlackRock website at
www.blackrock.com/uk/brwm
.
ISIN/SEDOL numbers
The ISIN/SEDOL numbers and mnemonic codes for the Company’s shares are:
Ordinary shares
ISIN
GB0005774855
SEDOL
0577485
Reuters Code
BRWM.L
Bloomberg Code
BRWM LN
Ticker
BRWM
Share dealing
Investors wishing to purchase more shares in the Company or sell all or part of their existing holding may do so through a
stockbroker. Most banks also offer this service. Alternatively, please go to
www.computershare.com/dealing/uk
for a range of
dealing services made available by Computershare.
CREST
The Company’s shares may be held in CREST, an electronic system for uncertificated securities trading.
Private investors can continue to retain their share certificates and remain outside the CREST system. Private investors are
able to buy and sell their holdings in the same way as they did prior to the introduction of CREST, although there may be
differences in dealing charges.
Risk factors
•
Past performance is not necessarily a guide to future performance.
•
The value of your investment in the Company and the income from it can fluctuate as the value of the underlying
investments fluctuate.
•
The price at which the Company’s shares trade on the London Stock Exchange is not the same as their net asset value (NAV)
(although they are related) and therefore you may realise returns which are lower or higher than NAV performance.
Electronic communications
We encourage you to play your part in reducing our impact on the environment and elect to be notified by email when your
shareholder communications become available online. This means you will receive timely, cost-effective and greener online
annual reports, half yearly financial reports and other relevant documentation.
Shareholders who opt for this service will receive an email from Computershare with a link to the relevant section of the
BlackRock website where the documents can be viewed and downloaded. Please submit your email address by visiting
investorcentre.co.uk/ecomms
. You will require your shareholder reference number which you will find on your share certificate
or dividend confirmation statement.
You will continue to receive a printed copy of these reports if you have elected to do so. Alternatively, if you have not submitted
your email address nor have elected to receive printed reports, we will write and let you know where you can view these reports
online.
140
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
Electronic proxy voting
Shareholders are able to submit their proxy votes electronically via Computershare’s internet site at
eproxyappointment.com
using their shareholder reference number, control number and a unique identification PIN which will be provided with voting
instructions and the Notice of Annual General Meeting.
CREST members who wish to appoint one or more proxies or give an instruction through the CREST electronic proxy
appointment service may do so by using the procedures described in the CREST manual. More details are set out in the notes
on the Form of Proxy and the Notice of Annual General Meeting.
Duration of the Company
Shareholders are given an opportunity at each Annual General Meeting to vote on an ordinary resolution to continue the life of
the Company for a further twelve months.
Nominee code
Where shares are held in a nominee company name, the Company undertakes:
•
to provide the nominee company with multiple copies of shareholder communications, so long as an indication of quantities
has been provided in advance; and
•
to allow investors holding shares through a nominee company to attend general meetings, provided the correct authority
from the nominee company is available.
Nominee companies are encouraged to provide the necessary authority to underlying shareholders to attend the Company’s
general meetings.
Publication of net asset value/portfolio analysis
The net asset value per share (NAV) of the Company is calculated daily, with details of the Company’s investments and
performance being published monthly.
The daily NAV per share and monthly information are released through the London Stock Exchange’s Regulatory News Service
and are available on the website at
www.blackrock.com/uk/brwm
and through the Reuters News Service under the code
‘BLRKINDEX’, on page 8800 on Topic 3 (ICV terminals) and under ‘BLRK’ on Bloomberg (monthly information only).
Individual Savings Accounts (ISAs)
ISAs are a tax-efficient method of investment and the Company’s shares are eligible investments for inclusion within stocks
and shares Individual Savings Accounts. In the 2023/2024 tax year investors have an annual ISA allowance of £20,000
(2022/2023: £20,000) which can be invested in either cash or shares.
Online access
Other details about the Company are also available on the website at
www.blackrock.com/uk/brwm
. The financial statements
and other literature are published on the website. Visitors to the website need to be aware that legislation in the United
Kingdom governing the preparation and dissemination of the financial statements may differ from legislation in their
jurisdiction.
Shareholders can also manage their shareholding online by using Investor Centre, Computershare’s secure website at
investorcentre.co.uk
. To register on Computershare’s website you will need your shareholder reference number which can be
found on paper or electronic communications you have previously received from Computershare. Listed below are the most
frequently used features of the website.
•
Holding enquiry – view balances, values, history, payments and reinvestments.
•
Payments enquiry – view your dividends and other payment types.
•
Address change – change your registered address.
•
Bank details update – choose to receive your dividend payment directly into your bank account instead of by cheque.
Shareholder information
continued
Section 5: Additional information
141
•
e-Comms sign
-up – choose to receive email notifications when your shareholder communications become available instead
of paper communications.
•
Outstanding payments – reissue payments using the online replacement service.
•
Downloadable forms – including dividend mandates, stock transfer, dividend reinvestment and change of address forms.
Shareholder enquiries
The Company’s registrar is Computershare Investor Services PLC. Certain details relating to your holding can be checked
through the Computershare Investor Centre website. As a security check, specific information needs to be input accurately to
gain access to an individual’s account. This includes your shareholder reference number, available from your share certificate,
dividend confirmation statement or other electronic communications you have previously received from Computershare. The
address of the Computershare website is
investorcentre.co.uk
. Alternatively, please contact the registrar on 0370 707 1187.
Changes of name or address must be notified in writing either through Computershare’s website, or to the registrar at:
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
General enquiries
Enquiries about the Company should be directed to:
The Secretary
BlackRock World Mining Trust plc
12 Throgmorton Avenue
London EC2N 2DL
Telephone: 020 7743 3000
Email:
142
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
By type of holder
Number of
shares
% of total
2023
% of total
2022
Number of
holders
% of total
2023
% of total
2022
Individuals
3,013,579
2.0
2.0
1,464
50.5
74.3
Bank or Nominees
186,086,599
97.2
97.2
463
48.3
23.6
Investment Trust
213,713
0.0
0.0
3
0.1
0.2
Insurance Company
0
0.2
0.2
0
0.0
0.0
Other Company
1,604,364
0.5
0.5
30
0.8
1.4
Pension Trust
15,336
0.0
0.0
3
0.1
0.1
Other Corporate Body
249,445
0.1
0.1
10
0.2
0.4
Total
191,183,036
100.0
100.0
1,973
100.0
100.0
By size of holding
Number of
shares
% of total
2023
% of total
2022
Number of
holders
% of total
2023
% of total
2022
1-10,000
2,992,422
3.2
3.2
1,628
82.5
82.3
10,001-100,000
6,571,951
4.1
4.1
187
9.5
10.2
100,001-1,000,000
37,657,812
21.9
21.9
112
5.7
5.2
1,000,001-5,000,000*
71,757,447
49.6
49.6
37
1.9
2.0
Over 5,000,000
72,203,404
21.2
21.2
9
0.4
0.3
191,183,036
100.0
100.0
1,973
100.0
100.0
*
Excludes treasury shares of 1,828,806.
Analysis of ordinary shareholders
as at 31 December 2023 (unaudited)
Section 5: Additional information
143
Year ended
31 December
Net Assets
Undiluted
Net Asset
Value per
Ordinary
Share
Diluted
Net Asset
Value per
Ordinary
Share
1
Gearing
Ordinary
Share Price
Revenue
available
for Ordinary
Shareholders
Revenue
Earnings
per
Ordinary
Share
Dividends
per
Ordinary
Share
£’000
p
p
%
p
£’000
p
p
1994
446,816
104.94
104.12
–
93.50
3,642
0.86
0.77
1995
452,762
106.27
105.23
0.1
93.00
5,637
1.32
1.00
1996
424,774
99.70
–
–
86.50
5,082
1.19
1.15
1997
318,494
74.75
–
–
59.50
3,894
0.91
0.85
1998
230,284
60.92
–
–
55.75
5,619
1.43
2.35
1999
223,397
116.99
–
11.2
100.75
2,238
1.00
1.20
2000
186,022
109.36
–
8.3
91.50
2,939
1.63
1.30
2001
196,726
118.48
–
–
96.50
6,434
3.82
3.15
2002
243,350
149.48
–
–
131.75
4,110
2.52
2.10
2003
389,244
239.09
–
8.8
217.00
2,816
1.73
1.70
2004
2
398,129
244.55
240.29
6.0
218.00
4,899
3.01
2.50
2005
668,202
397.03
–
0.7
351.50
5,642
3.39
2.80
2006
868,545
516.07
503.23
0.9
444.00
14,782
8.78
4.50
2007
1,268,120
804.13
752.28
–
655.00
13,391
8.25
5.50
2008
590,927
331.39
–
0.5
252.50
9,831
5.64
5.50
2009
1,176,813
662.02
–
3.6
550.00
8,714
4.90
4.75
2010
1,708,023
962.06
–
1.8
811.00
11,667
6.57
6.00
2011
1,317,004
742.86
–
2.5
631.50
26,099
14.71
14.00
2012
1,215,743
685.75
–
7.1
586.50
38,614
21.78
21.00
2013
885,346
499.39
–
9.6
465.00
39,633
22.36
21.00
2014
624,674
352.35
–
11.7
310.35
37,452
21.13
21.00
2015
377,313
212.83
–
12.2
181.00
32,744
18.47
21.00
2016
677,546
383.98
–
12.4
336.50
23,303
13.19
13.00
2017
804,647
456.01
–
12.2
397.75
28,093
15.92
15.60
2018
685,595
388.81
–
13.5
340.50
32,013
18.15
18.00
2019
757,110
433.17
–
11.7
383.00
39,561
22.46
22.00
2020
930,825
536.34
–
12.3
522.00
35,451
20.40
20.30
2021
1,142,874
622.21
–
9.9
589.00
78,910
43.59
42.50
2022
1,299,285
688.35
–
9.6
697.00
76,013
40.68
40.00
2023
1,160,051
606.78
–
11.9
587.00
64,691
33.95
33.50
1
Diluted net asset value per ordinary share calculated for potentially dilutive securities in issue such as warrants and treasury shares.
2
Prior to 2004, financial information had been prepared under UK GAAP. From 2004 all information is prepared under IFRS as set out
in note 2 to the Financial Statements on pages 99 to 104.
Historical record
(unaudited)
144
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
Registered Office
(Registered in England, No. 2868209)
12 Throgmorton Avenue
London EC2N 2DL
Alternative Investment Fund Manager
BlackRock Fund Managers Limited*
12 Throgmorton Avenue
London EC2N 2DL
Investment Manager and Company Secretary
BlackRock Investment Management (UK) Limited*
12 Throgmorton Avenue
London EC2N 2DL
Telephone: 020 7743 3000
Email:
Depositary, Custodian, Banker and Fund Accountant
The Bank of New York Mellon (International) Limited*
160 Queen Victoria Street
London EC4V 4LA
Registrar
Computershare Investor Services PLC*
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
Telephone: 0370 707 1187
Independent Auditors
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Atria One
144 Morrison Street
Edinburgh
EH3 8EX
Stockbrokers
JPMorgan Cazenove Limited*
25 Bank Street
Canary Wharf
London E14 5JP
Winterflood Securities Limited*
The Atrium Building
Cannon Bridge
25 Dowgate Hill
London EC4R 2GA
Solicitors
Herbert Smith Freehills LLP
Exchange House
Primrose Street
London EC2A 2EG
Management and other service providers
*
Authorised and regulated by the Financial Conduct Authority.
Section 5: Additional information
145
Remuneration related disclosures in accordance with Article 22(2) of the AIFMD, Article 107
of the AIFMD Regulations and Section XIII of the ESMA Guidelines on sound remuneration
policies under the AIFMD
The below disclosures are made in respect of the remuneration policies of the BlackRock group (“BlackRock”), as they apply
to BlackRock Fund Managers Limited (the “Manager”). The disclosures are made in accordance with the provisions in the
UK implementing the Alternative Investment Fund Managers Directive (the “AIFMD”), the European Commission Delegated
Regulation supplementing the AIFMD (the “Delegated Regulation”) and the “Guidelines on sound remuneration policies under
the AIFMD” issued by the European Securities and Markets Authority.
The BlackRock AIFM Remuneration Policy (the “AIFM Remuneration Policy”) will apply to the EEA entities within the BlackRock
group authorised as a manager of alternative investment funds in accordance with the AIFMD, and will ensure compliance
with the requirements of Annex II of the AIFMD and to UK entities within the BlackRock group authorised as a manager of a UK
alternative investment fund in accordance with the UK version of the Directive.
The Manager has adopted the AIFM Remuneration Policy, a summary of which is set out below.
Quantitative Remuneration Disclosure
The Manager is required under the AIFMD to make quantitative disclosures of remuneration. These disclosures are made
in line with BlackRock’s interpretation of currently available regulatory guidance on quantitative remuneration disclosures.
As market or regulatory practice develops BlackRock may consider it appropriate to make changes to the way in which
quantitative remuneration disclosures are calculated. Where such changes are made, this may result in disclosures in relation
to a fund not being comparable to the disclosures made in the prior year, or in relation to other BlackRock fund disclosures in
that same year. BlackRock bases its proportionality approach on a combination of factors that it is entitled to take into account
based on relevant guidelines.
Remuneration information at an individual AIF level is not readily available. Disclosures are provided in relation to (a) the staff
of the Manager; (b) staff who are senior management; (c) staff who have the ability to materially affect the risk profile of the
Company; and (d) staff of companies to which portfolio management and risk management has been formally delegated.
All individuals included in the aggregated figures disclosed are rewarded in line with BlackRock’s remuneration policy for their
responsibilities across the relevant BlackRock business area. As all individuals have a number of areas of responsibilities, only
the portion of remuneration for those individuals’ services attributable to the Manager is included in the aggregate figures
disclosed.
Members of staff and senior management of the Manager typically provide both AIFMD and non-AIFMD related services
in respect of multiple funds, clients and functions of the Manager and across the broader BlackRock group. Conversely,
members of staff and senior management of the broader BlackRock group may provide both AIFMD and non-AIFMD related
services in respect of multiple funds, clients and functions of the broader BlackRock group and of the Manager. Therefore,
the figures disclosed are a sum of individuals’ portion of remuneration attributable to the Manager according to an objective
apportionment methodology which acknowledges the multiple-service nature of the Manager and the broader BlackRock
group. Accordingly, the figures are not representative of any individual’s actual remuneration or their remuneration structure.
The amount of the total remuneration awarded to the Manager’s staff in respect of the Manager’s financial year ended
31 December 2023 is USD171.29 million. This figure is comprised of fixed remuneration of USD98.27 million and variable
remuneration of USD73.02 million. There were a total of 3,683 beneficiaries of the remuneration described above.
The amount of the aggregate remuneration awarded by the Manager in respect of the Manager’s financial year ending
31 December 2023, to its senior management was USD6.11 million, and to other members of its staff whose actions
potentially have a material impact on the risk profile of the Manager or its funds was USD4.20 million. These figures relate to
the entire Manager and not to the Company.
Leverage
The Company may employ leverage and borrow cash in accordance with its stated investment policy or investment strategy.
The Company may also employ leverage in its investment programme through foreign exchange forward contracts. The use of
borrowings and leverage has attendant risks and can, in certain circumstances, substantially increase the adverse impact to
which the Company’s investment portfolio may be subject.
AIFMD disclosures
(unaudited)
146
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
Consistent with its investment objective and policy, the Company may utilise a variety of exchange traded and over the counter
(OTC) derivative instruments such as covered put/call options as part of its investment policy. The use of derivatives may
expose the Company to a higher degree of risk. No derivatives were used for leverage purposes during the year.
For the purposes of this disclosure, leverage is any method by which the Company’s exposure is increased, whether through
borrowing of cash or securities, or leverage embedded in foreign exchange forward contracts or by any other means. The
AIFMD requires that each leverage ratio be expressed as the ratio between a Company’s exposure and its NAV, and prescribes
two required methodologies, the gross methodology and the commitment methodology (as set out in AIFMD Level 2
Implementation Guidance), for calculating such exposure.
Using the methodologies prescribed under the AIFMD, the leverage of the Group and Company is disclosed in the table below:
Commitment
leverage as at
31 December
2023
Gross
leverage
as at
31 December
2023
Leverage ratio
1.11
1.14
Other risk disclosures
The financial risk disclosures relating to risk framework and liquidity risk are set out in note 18 to the notes to the Financial
Statements.
Pre investment disclosures
The AIFMD requires certain information to be made available to investors in AIFs before they invest and requires that material
changes to this information be disclosed in the Annual Report of each AIF. An Investor Disclosure Document, which sets out
information on the Company’s investment strategy and policies, leverage, risk, liquidity, administration, management, fees,
conflicts of interest and other shareholder information is available on the website at
www.blackrock.com/uk/brwm
.
There have been no material changes (other than those reflected in these financial statements or previously disclosed to the
London Stock Exchange through a primary information provider) to this information requiring disclosure. Any information
requiring immediate disclosure pursuant to the AIFMD will be disclosed to the London Stock Exchange through a primary
information provider.
CAROLINE DRISCOLL
For and on behalf of
BlackRock Investment Management (UK) Limited
Company Secretary
7
March 2024
AIFMD disclosures
(unaudited) continued
Section 5: Additional information
147
The disclosures below are made in compliance with the requirements of Listing Rule 9.8.4.
9.8.4 (1) The Company has not capitalised any interest in the period under review.
9.8.4 (2) The Company has not published any unaudited financial information in a class 1 circular or prospectus or any profit
forecast or profit estimate.
9.8.4 (3) This provision has been deleted.
9.8.4 (4) The Company does not have any long-term incentive schemes in operation.
9.8.4 (5) and 9.8.4 (6) Charles Goodyear has waived his Director’s fee which in the year under review amounted to £12,228.
9.8.4 (7) The Company has reissued a total of 2,430,000 ordinary shares from treasury during the year at a premium to NAV at
an average price of 645.72p per share for a total consideration of £15,691,000 excluding costs. Since the year end and up to
7 March 2024, no further ordinary shares have been reissued from treasury.
9.8.4 (8) The Company’s subsidiary has not allotted any equity securities for cash in the period under review.
9.8.4 (9) This provision is not applicable to the Company.
9.8.4 (10) There were no other contracts of significance subsisting during the period under review to which the Company is
a party and in which a Director of the Company is or was materially interested, or between the Company and a controlling
shareholder.
9.8.4 (11) This provision is not applicable to the Company.
9.8.4 (12) and 9.8.4 (13) There were no arrangements under which a shareholder has waived or agreed to waive any dividends
or future dividends.
9.8.4 (14) This provision is not applicable to the Company.
CAROLINE DRISCOLL
For and on behalf of
BlackRock Investment Management (UK) Limited
Company Secretary
7 March 2024
Information to be disclosed in accordance
with Listing Rule 9.8.4
148
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
Alternative Performance Measure (APM)
An APM is a measure of performance or financial position that is not defined in applicable accounting standards and cannot
be directly derived from the financial statements.
The Group’s APMs are set out below and are cross-referenced where relevant to the financial inputs used to derive them as
contained in other sections of the Annual Financial Report.
Closed-end company
An investment trust works along the same lines as a unit trust, in that it pools money from investors which is then managed
on a collective basis. The main difference is that an investment trust is a company listed on the Stock Exchange and, in most
cases, trading takes place in shares which have already been issued, rather than through the creation or redemption of units.
As the number of shares which can be issued or cancelled at any one time is limited, and requires the approval of existing
shareholders, investment trusts are known as closed-end funds or companies. This means that investment trusts are not
subject to the same liquidity constraints as open ended funds and can therefore invest in less liquid investments.
Discount and premium*
Investment trust shares can frequently trade at a discount to NAV. This occurs when the share price (based on the mid-
market share price) is less than the NAV and investors may therefore buy shares at less than the value attributable to them
by reference to the underlying assets. The discount is the difference between the share price and the NAV, expressed as a
percentage of the NAV. As at 31 December 2023, the share price was 587.00p (2022: 697.00p) and the NAV was 606.78p
(2022: 688.35p) giving a discount of 3.3% (2022: premium of 1.3%) (please see note 9 of the financial statements on page
110 for the audited inputs to the calculation).
A premium occurs when the share price (based on the mid-market share price) is more than the NAV and investors would
therefore be paying more than the value attributable to the shares by reference to the underlying assets. For example, if the
share price was 610.00p and the NAV 600.00p, the premium would be 1.7%.
Discounts and premiums are mainly the consequence of supply and demand for the shares on the stock market.
Gearing and borrowings
Investment companies can borrow to purchase additional investments. This is called ‘gearing’. It allows investment companies
to take advantage of a long-term view on a sector or to take advantage of a favourable situation or a particularly attractive stock
without having to sell existing investments.
Gearing works by magnifying a company’s performance. If a company ‘gears up’ and then markets rise and returns on the
investments outstrip the costs of borrowing, the overall returns to investors will be even greater. But if markets fall and the
performance of the assets in the portfolio is poor, then losses suffered by the investor will also be magnified.
Net gearing calculation
Page
31 December
2023
£’000
31 December
2022
£’000
Net assets
97
1,160,051
1,299,285
(a)
Borrowings
97
149,828
158,783
(b)
Total assets (a + b)
1,309,879
1,458,068
(c)
Current assets
1
97
21,749
41,539
(d)
Current liabilities (excluding borrowings)
97
(9,805)
(7,755)
(e)
Cash and cash equivalents (d + e)
11,944
33,784
(f)
Net gearing (g = (c – f – a)/ a) (%)
11.9
9.6
(g)
1
Includes cash at bank.
Gross assets
Gross assets is defined as the total of the Group’s net assets and borrowings.
Glossary
* Alternative Performance Measure.
Section 5: Additional information
149
Leverage
Leverage is defined in the AIFM Directive as ‘any method by which the AIFM increases the exposure of an AIF it manages
whether through borrowing of cash or securities, or leverage embedded in derivative positions or by any other means’.
Leverage is measured in terms of ‘exposure’ and is expressed as a ratio of net asset value:
Leverage ratio
=
Exposure
Net assets
The Directive sets out two methodologies for calculating exposure. These are the Gross Method and the Commitment Method.
The treatment of cash and cash equivalent balances in terms of calculating what constitutes an ‘exposure’ under AIFMD
differs for these two methods. The definitions for calculating the Gross Method exposures require that ‘the value of any cash
and cash equivalents which are highly liquid investments held in the base currency of the AIF, that are readily convertible to a
known amount of cash, are subject to an insignificant risk of change in value and provide a return no greater than the rate of a
three-month high quality government bond’ should be excluded from exposure calculations.
NAV and share price return (with dividends reinvested)*
Performance statistics enable the investor to make performance comparisons between investment trusts with different
dividend policies. The performance measures the combined effect of any dividends paid, together with the rise or fall in
the share price or NAV. This is calculated by the movement in the share price or NAV plus the dividends paid by the Group
assuming these are reinvested in the Group at the prevailing NAV/share price (please see note 9 of the financial statements for
the audited inputs to the calculations).
NAV total return – Sterling
Page
31 December
2023
31 December
2022
Closing NAV per share (pence)
110
606.78
688.35
Add back interim and final dividends (pence)
109
40.00
43.50
Effect of dividend reinvestment (pence)
(1.36)
0.58
Adjusted closing NAV (pence)
645.42
732.43
(a)
Opening NAV per share (pence)
110
688.35
622.21
(b)
NAV total return (c = ((a - b)/b)) (%)
(6.2)
17.7
(c)
Share price total return – Sterling
Page
31 December
2023
31 December
2022
Closing share price (pence)
110
587.00
697.00
Add back interim and final dividends (pence)
109
40.00
43.50
Effect of dividend reinvestment (pence)
(2.40)
1.75
Adjusted closing share price (pence)
624.60
742.25
(a)
Opening share price (pence)
110
697.00
589.00
(b)
Share price total return (c = ((a - b)/b)) (%)
(10.4)
26.0
(c)
Net asset value per share (Cum income NAV)
This is the value of the Group’s assets attributable to one ordinary share. It is calculated by dividing ‘equity shareholders’
funds’ by the total number of ordinary shares in issue (excluding treasury shares). For example, as at 31 December 2023,
equity shareholders’ funds were worth £1,160,051,000
(2022: £1,299,285,000) and there were 191,183,036 ordinary shares
in issue (excluding treasury shares) (2022: 188,753,036); the undiluted NAV was therefore 606.78p per ordinary share (2022:
688.35p) (please see note 9 of the financial statements for the audited inputs to the calculations).
Equity shareholders’ funds are calculated by deducting from the Group’s total assets, its current and long-term liabilities and
any provision for liabilities and charges.
* Alternative Performance Measure.
150
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
Net asset value per share (Capital only NAV)*
This NAV focuses on the value of the Group’s assets disregarding the current period revenue income, on the basis that most
trusts will distribute substantially all of their income in any financial period. It is also the measure adopted by the Association
of Investment Companies for preparation of statistical data. It is calculated by dividing ‘equity shareholders’ funds’ (excluding
current period revenue) by the total number of ordinary shares in issue.
As at 31 December 2023, equity shareholders’ funds less the current year net revenue return (after interim dividends)
amounted to £1,126,875,000
(2022: £1,254,285,000) and there were 191,183,036 ordinary shares in issue (2022:
188,753,036) (excluding treasury shares); therefore the capital only NAV was 589.42p (2022: 664.51p).
Equity shareholders’ funds (excluding current period revenue) of £1,126,875,000
(2022: £1,254,285,000) are calculated
by deducting from the Group’s net assets (£1,160,051,000) (2022: £1,299,285,000) its current period revenue (2022:
£64,691,000) (2022: £76,013,000) and adding back the interim dividends paid from revenue (£31,515,000) (2022:
£31,013,000).
Ongoing charges ratio*
Ongoing charges (%)
=
Annualised ongoing charges
Average undiluted net asset value
in the period
Ongoing charges are those expenses of a type which are likely to recur in the foreseeable future, whether charged to capital
or revenue, and which relate to the operation of the investment company as a collective fund. Ongoing charges are based on
costs incurred in the year as being the best estimate of future costs and include the annual management charge.
As recommended by the AIC in its guidance, ongoing charges are calculated using the Group’s annualised recurring revenue
and capital expenses (excluding finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation,
prior year expenses written back and certain non-recurring items) expressed as a percentage of the average daily net assets of
the Group during the year.
The inputs that have been used to calculate the ongoing charges percentage are set out in the following table.
Ongoing charges calculation on net assets
Page
31 December
2023
£’000
31 December
2022
£’000
Management fee
106
9,691
10,646
Other operating expenses
1
107
1,278
1,092
Total management fee and other operating expenses
10,969
11,738
(a)
Average daily net assets in the year
1,203,977
1,232,043
(b)
Ongoing charges on net assets (c = a/b) (%)
0.91
0.95
(c)
1
Excluding prior year expenses of £55,000 written off during the year ended 31 December 2022.
Ongoing charges calculation on gross assets
Page
31 December
2023
31 December
2022
Management fee
106
9,691
10,646
Other operating expenses
1
107
1,278
1,092
Total management fee and other operating expenses
10,969
11,738
(a)
Average daily gross assets in the year
1,359,094
1,403,426
(b)
Ongoing charges on gross assets (c = a/b) (%)
0.81
0.84
(c)
1
Excluding prior year expenses of £55,000 written off during the year ended 31 December 2022.
Glossary
continued
* Alternative Performance Measure.
Section 5: Additional information
151
Options and options overwriting strategy
An option is a contract that offers the buyer the right, but not the obligation, to buy (call) or sell (put) a security or other
financial asset at an agreed-upon price (the strike price) during a certain period of time or on a specific date (exercise date) for
a fee (the premium). The sale of call or put options on stocks that are believed to be overpriced or underpriced, based on the
assumption that the options will not be exercised, is referred to as an ‘options overwriting’ strategy.
The seller of the option collects a premium but, if the option subsequently expires without being exercised, there will be no
down side for the seller. However, if the stock rises above the exercise price the holder of the option is likely to exercise the
option and this strategy can reduce returns in a rising market.
The Company employs an options overwriting strategy but seeks to mitigate risk by utilising predominantly covered call
options (meaning that call options are only written in respect of stocks already owned within the Company’s portfolio such
that, if the options are exercised, the Company does not need to purchase stock externally at fluctuating market prices to
meet its obligations under the options contract). Any use of derivatives for efficient portfolio management and options for
investment purposes will be made on the basis of the same principles of risk spreading and diversification that apply to the
Company’s direct investments.
Physical metals
Metals such as copper, zinc and nickel.
Quoted securities and unquoted investments
Securities that trade on an exchange for which there is a publicly quoted price. Unquoted securities are financial securities
that do not trade on an exchange for which there is not a publicly quoted price.
Reference index – MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (MSCI ACWI)
The MSCI ACWI Index is designed to be less concentrated and more diversified than other indices by constraining the
exposure to any single issuer to 10% of the index value, with a 30% buffer applied, and the sum of the weights of all exposures
to single issuers at more than 5% of the index at 40%, also with a 30% buffer applied.
The 30% buffer operates to ensure that the index does not have to be rebalanced constantly to retain its diversification
characteristics due to the market movement of the index constituents. The buffer is applied at the quarterly rebalancing of the
index taking the maximum weight of any index security to 7% (10% reduced by 30%) and the sum of the weights of securities
representing more than 3.5% (5% reduced by 30%) to 28% (40% reduced by 30%).
If, due to market moves, any security breaches a 9% position, or the sum of all securities over 4.5% breach 36%, (which is
equivalent to a 10% buffer applied to the 5 and 40 levels) there is an extraordinary rebalance prior to the quarter end taking
the index back to the 30% buffer levels as described.
Revenue profit and revenue reserve
Revenue profit is the net revenue income earned after deduction of fees and expenses allocated to the revenue account
and taxation suffered by the Group. The revenue reserve is the undistributed income that the Group keeps as reserves.
Investment trusts do not have to distribute all the income they generate, after expenses. They may retain up to 15% of revenue
generated which will be held in a revenue reserve. This reserve can be used at a later date to supplement dividend payments to
shareholders.
Royalties
Contracts that involve one party giving capital (funding) to a mining company in return for a percentage share of the revenues
from one or more of the company’s assets.
Treasury shares
Treasury shares are shares that a company keeps in its own treasury which are not currently issued to the public. These
shares do not pay dividends, have no voting rights and are not included in a company’s total issued share capital amount for
calculating percentage ownership. Treasury stock may have come from a repurchase or buy back from shareholders, or it may
never have been issued to the public in the first place. Treasury shares may be reissued from treasury to the public to meet
demand for a company’s shares in certain circumstances.
* Alternative Performance Measure.
152
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
Total dividends and yield*
Total dividends represent total quarterly and final dividends declared by the Company for a particular year. The yield is the
amount of cash (in percentage terms) that is returned to the owners of the security, in the form of interest or dividends
received from it. Normally, it does not include the price variations, distinguishing it from the total return.
Page
31 December
2023
31 December
2022
Interim and final dividends paid/payable (pence)
1
109
33.50
40.00
(a)
Ordinary share price (pence)
110
587.00
697.00
(b)
Yield (c = a/b) (%)
5.7
5.7
(c)
1
Comprising dividends declared/paid for the twelve months to 31 December.
Glossary
continued
Section 5: Additional information
153
Section 6: Notice of annual general meeting
155
Annual
General
Meeting
Foran Mining delivered exciting exploration results at McIlvenna Bay and its Tesla
Discovery in Canada.
PHOTO COURTESY OF FORAN MINING
156
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
Notice is hereby given that the thirtieth Annual General Meeting of BlackRock World Mining Trust plc will be held at the
offices of BlackRock at 12 Throgmorton Avenue, London EC2N 2DL on Thursday, 9 May 2024 at 11.30 a.m. to consider and, if
thought fit, pass resolutions 1 to 11 as ordinary resolutions and resolutions 12 and 13 as special resolutions.
More information in respect of the contribution of each Director to support their re-election is given in the Directors’ Report on
page 61.
Ordinary business
1.
To receive the report of the Directors and the financial statements for the year ended 31 December 2023, together with the
report of the auditors thereon.
2.
To approve the Directors’ Remuneration Report for the year ended 31 December 2023, excluding any content relating to
the remuneration policy of the Company.
3.
To declare a final dividend of 17.00p per ordinary share for the year ended 31 December 2023.
4.
To elect Mr C W Goodyear as a Director.
5.
To re-elect Ms J Lewis as a Director.
6.
To re-elect Ms J Mosely as a Director.
7.
To re-elect Mr S Venkatakrishnan as a Director.
8.
To reappoint PricewaterhouseCoopers LLP as auditors of the Company to hold office until the conclusion of the next
Annual General Meeting of the Company.
9.
To authorise the Audit Committee to determine the auditors’ remuneration.
Special business
Ordinary resolutions
10.
That the Company shall continue in being as an investment trust.
11.
That in substitution for all existing authorities, the Directors of the Company be and they are hereby generally and
unconditionally authorised pursuant to section 551 of the Companies Act 2006 (the Act), to exercise all the powers of the
Company to allot relevant securities in the Company (as described in that section) up to an aggregate nominal amount
of £955,915 (being 10% of the aggregate nominal amount of the issued share capital, excluding treasury shares, of the
Company at the date of this notice) provided that this authority shall (unless previously revoked) expire at the conclusion
of the Company’s Annual General Meeting to be held in 2025, but the Company shall be entitled to make offers or
agreements before the expiry of this authority which would or might require relevant securities to be allotted after such
expiry and the Directors may allot such securities pursuant to any such offer or agreement as if the power conferred hereby
had not expired.
Special resolutions
12.
That in substitution for all existing authorities and subject to the passing of resolution numbered 11 above, the Directors of
the Company be and are hereby empowered pursuant to sections 570 and 573 of the Companies Act 2006 (the Act) to allot
equity securities (as defined in section 560 of the Act) and to sell equity securities held by the Company as treasury shares
(as defined in section 724 of the Act) for cash pursuant to the authority granted by the resolution numbered 11 above, as if
section 561(1) of the Act did not apply to any such allotments and sales of equity securities, provided that this power:
(a)
shall expire at the conclusion of the next Annual General Meeting of the Company to be held in 2025, except that the
Company may before such expiry make offers or agreements which would or might require equity securities to be
allotted or sold after such expiry and notwithstanding such expiry the Directors may allot and sell equity securities in
pursuance of such offers or agreements;
(b)
shall be limited to the allotment of equity securities and/or the sale of equity securities held in treasury for cash up to
an aggregate nominal amount of £955,915 (representing 10% of the aggregate nominal amount of the issued share
capital, excluding treasury shares, of the Company at the date of this notice); and
Notice of Annual General Meeting
Section 6: Notice of annual general meeting
157
(c)
shall be limited to the allotment and/or sale of equity securities at a price of not less than the net asset value per
share as close as practicable to the allotment or sale.
13.
That in substitution for the Company’s existing authority to make market purchases of ordinary shares of 5p each in
the Company (Shares), the Company be and is hereby generally and, subject as hereinafter appears, unconditionally
authorised in accordance with section 701 of the Companies Act 2006 (the Act) to make market purchases of Shares
(within the meaning of section 693 of the Act) provided that:
(a)
the maximum number of Shares hereby authorised to be purchased shall be 28,658,337, or if less, that number of
Shares which is equal to 14.99% of the Company’s issued share capital (excluding treasury shares) as at 9 May 2024;
(b)
the minimum price (exclusive of expenses) which may be paid for any such Share shall be 5p being the nominal value
per share;
(c)
the maximum price (exclusive of expenses) which may be paid for any such Share shall be the higher of (i) 105%
of the average of the middle market quotations (as derived from the Official List) of the Shares for the five dealing
days prior to the date on which the market purchase is made and (ii) the higher of the price quoted for (a) the last
independent trade of and (b) the highest independent bid for, any number of Shares on the trading venue where the
purchase is carried out; and
(d)
unless renewed, the authority hereby conferred shall expire at the conclusion of the next Annual General Meeting
of the Company in 2025 save that the Company may, prior to such expiry, enter into a contract to purchase
Shares under the authority hereby conferred and may make a purchase of Shares pursuant to any such contract
notwithstanding such expiry.
All Shares purchased pursuant to the above authority shall be either:
(i)
held, sold, transferred or otherwise dealt with as treasury shares in accordance with the provisions of the Act; or
(ii)
cancelled immediately upon completion of the purchase.
By order of the Board
CAROLINE DRISCOLL
For and on behalf of
BlackRock Investment Management (UK) Limited
Company Secretary
7
March 2024
Registered Office:
158
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2023
Notes:
1.
A member entitled to attend and vote at the meeting convened by the above Notice is entitled to appoint one or more proxies
to exercise all or any of the rights of the member to attend, speak and vote in his place. A proxy need not be a member of the
Company. If a member appoints more than one proxy to attend the meeting, each proxy must be appointed to exercise the rights
attached to a different share or shares held by the member.
2.
To appoint a proxy, you may use the Form of Proxy enclosed with this Annual Report. To be valid, the Form of Proxy, together with
the power of attorney or other authority (if any) under which it is signed or a notarially certified or office copy of the same, must
be completed and returned to the office of the Company’s registrar in accordance with the instructions printed thereon as soon
as possible and in any event by not later than 11.30 a.m. on 7 May 2024. Amended instructions must also be received by the
Company’s registrar by the deadline for receipt of proxies. Alternatively, you can vote or appoint a proxy electronically by visiting
www.eproxyappointment.com
. You will be asked to enter the Control Number, the Shareholder Reference Number and PIN which
are printed on the Form of Proxy. The latest time for the submission of proxy votes electronically is 11.30 a.m. on 7 May 2024.
3.
Completion and return of the Form of Proxy will not prevent a member from attending the meeting and voting in person.
4.
Proxymity Voting – If you are an institutional investor you may also be able to appoint a proxy electronically via the Proxymity
platform, a process which has been agreed by the Company and approved by the Registrar. For further information regarding
Proxymity, please go to
www.proxymity.io
. Your proxy must be lodged by 11.30 a.m. on 7 May 2024 in order to be considered valid.
Before you can appoint a proxy via this process you will need to have agreed to Proxymity’s associated terms and conditions. It is
important that you read these carefully as you will be bound by them and they will govern the electronic appointment of your proxy.
5.
Any person receiving a copy of this Notice as a person nominated by a member to enjoy information rights under section 146
of the Companies Act 2006 (a Nominated Person) should note that the provisions in Notes 1 and 2 above concerning the
appointment of a proxy or proxies to attend the meeting in place of a member, do not apply to a Nominated Person as only
shareholders have the right to appoint a proxy. However, a Nominated Person may have a right under an agreement between the
Nominated Person and the member by whom he or she was nominated to be appointed, or to have someone else appointed, as
proxy for the meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may have
a right under such agreement to give instructions to the member as to the exercise of voting rights at the meeting.
6.
Nominated Persons should also remember that their main point of contact in terms of their investment in the Company remains
the member who nominated the Nominated Person to enjoy the information rights (or perhaps the custodian or broker who
administers the investment on their behalf). Nominated Persons should continue to contact that member, custodian or broker
(and not the Company) regarding any changes or queries relating to the Nominated Person’s personal details and interest in the
Company (including any administrative matter). The only exception to this is where the Company expressly requests a response
from the Nominated Person.
7.
Pursuant to regulation 41 of the Uncertificated Securities Regulations 2001, only shareholders registered in the register of
members of the Company by not later than 6.00 p.m. on 7 May 2024 shall be entitled to attend and vote at the meeting in respect
of the number of shares registered in their name at such time. If the meeting is adjourned, the time by which a person must be
entered on the register of members of the Company in order to have the right to attend and vote at the adjourned meeting is
6.00 p.m. two days prior to the time of the adjournment. Changes to the register of members after the relevant times shall be
disregarded in determining the rights of any person to attend and vote at the meeting.
8.
In the case of joint holders, the vote of the senior holder who tenders a vote whether in person or by proxy shall be accepted to the
exclusion of the votes of the other joint holders and, for this purpose, seniority will be determined by the order in which the names
stand in the register of members of the Company in respect of the relevant joint holding.
9.
Shareholders who hold their shares electronically may submit their votes through CREST, by submitting the appropriate and
authenticated CREST message so as to be received by the Company’s registrar not later than 11.30 a.m. on 7 May 2024.
Instructions on how to vote through CREST can be found by accessing the following website:
www.euroclear.com/CREST
.
Shareholders are advised that CREST and the internet are the only methods by which completed proxies can be submitted
electronically.
10.
If you are a CREST system user (including a CREST personal member) you can appoint one or more proxies or give an instruction
to a proxy by having an appropriate CREST message transmitted. To appoint one or more proxies or to give an instruction to a
proxy (whether previously appointed or otherwise) via the CREST system, CREST messages must be received by Computershare
(ID number 3RA50) not later than 11.30 a.m. on 7 May 2024. For this purpose, the time of receipt will be taken to be the time (as
determined by the timestamp generated by the CREST system) from which Computershare is able to retrieve the message. CREST
personal members or other CREST sponsored members should contact their CREST sponsor for assistance with appointing
proxies via CREST. For further information on CREST procedures, limitations and system timings please refer to the CREST
manual. The Company may treat as invalid a proxy appointment sent by CREST in the circumstances set out in Regulation 35(5)(a)
of the Uncertificated Securities Regulations 2001.
11.
If the Chairman, as a result of any proxy appointments, is given discretion as to how the votes subject of those proxies are cast and
voting rights in respect of those discretionary proxies, when added to the interest in the Company’s securities already held by the
Chairman, result in the Chairman holding such number of voting rights that he has a notifiable obligation under the Disclosure
Guidance and Transparency Rules, the Chairman will make the necessary notifications to the Company and the Financial
Conduct Authority. As a result, any member holding 3% or more of the voting rights in the Company, who grants the Chairman a
discretionary proxy in respect of some or all of those voting rights and so would otherwise have a notification obligation under the
Disclosure Guidance and Transparency Rules, need not make a separate notification to the Company and the Financial Conduct
Authority.
Notice of Annual General Meeting
continued
Section 6: Notice of annual general meeting
159
12.
Any question relevant to the business of the meeting may be asked at the meeting by anyone permitted to speak at the meeting.
A shareholder may alternatively submit a question in advance by a letter addressed to the Company Secretary at the Company’s
registered office. Under section 319A of the Companies Act 2006, the Company must answer any question a shareholder asks
relating to the business being dealt with at the meeting, unless (i) answering the question would interfere unduly with the
preparation for the meeting or involve the disclosure of confidential information; (ii) the answer had already been given on a
website in the form of an answer to a question; or (iii) it is undesirable in the interests of the Company or the good order of the
meeting that the question be answered.
13.
Any corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all of its
powers as a member provided that, if it is appointing more than one corporate representative, it does not do so in relation to the
same shares. It is therefore no longer necessary to nominate a designated corporate representative. Representatives should bring
to the meeting evidence of their appointment, including any authority under which it is signed.
14.
Under section 527 of the Companies Act 2006, members meeting the threshold requirements set out in that section have the right
to require the Company to publish on a website a statement setting out any matter relating to:
(i)
the audit of the Company’s accounts (including the auditors’ report and the conduct of the audit) that are laid before the
meeting; or
(ii)
any circumstance connected with an auditors of the Company ceasing to hold office since the previous meeting at which
annual accounts and reports were laid in accordance with section 437 of the Companies Act 2006.
The Company may not require the members requesting such website publication to pay its expenses in complying with sections
527 or 528 of the Companies Act 2006. Where the Company is required to place a statement on a website under section 527 of the
Companies Act 2006, it must forward the statement to the Company’s auditors not later than the time when it makes the statement
available on the website. The business which may be dealt with at the meeting includes any statement that the Company has been
required under section 527 of the Companies Act 2006 to publish on a website.
15.
Under sections 338 and 338A of the Companies Act 2006, members meeting the threshold requirements in those sections have
the right to require the Company:
(i)
to give, to members of the Company entitled to receive notice of the meeting, notice of a resolution which may properly be
moved and is intended to be moved at the meeting; and/or
(ii)
to include in the business to be dealt with at the meeting any matter (other than a proposed resolution) which may be properly
included in the business.
A resolution may properly be moved or a matter may properly be included in the business unless:
(a)
(in the case of a resolution only) it would, if passed, be ineffective (whether by reason of inconsistency with any enactment or
the Company’s constitution or otherwise);
(b)
it is defamatory of any person; or
(c)
it is frivolous or vexatious.
Such a request may be in hard copy form or in electronic form and must identify the resolution of which notice is to be given or the
matter to be included in the business, must be authorised by the person or persons making it, must be received by the Company
not later than 27 March 2024, being the date six weeks clear before the meeting and (in the case of a matter to be included in the
business only) must be accompanied by a statement setting out the grounds for the request.
16.
Further information regarding the meeting which the Company is required by section 311A of the Companies Act 2006 to publish
on a website in advance of the meeting (including this Notice), can be accessed at
www.blackrock.com/uk/brw
m
.
17.
As at the date of this report, the Company’s issued share capital comprised 191,183,036 ordinary shares of 5 pence each,
excluding shares held in treasury. Each ordinary share carries the right to one vote and therefore the total number of voting rights
in the Company on 7 March 2024 is 191,183,036.
18.
No service contracts exist between the Company and any of the Directors, who hold office in accordance with letters of
appointment and the Articles of Association.
160
BlackRock World Mining Trust plc
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Annual Report and Financial Statements 31 December 2023
Be ScamSmart
Investment scams are designed
to look like genuine investments
Spot the warning signs
Have you been:
•
contacted out of the blue
•
promised tempting returns and told the investment is safe
•
called repeatedly, or
•
told the offer is only available for a limited time?
If so, you might have been contacted by fraudsters.
Avoid investment fraud
Reject cold calls
Check the FCA Warning List
Get impartial advice
you hand over any money. Seek advice from someone
Report a scam
Find out more at
www.fca.org.uk/scamsmart
1
2
3
Remember: if it sounds too good to
be true, it probably is!
The FCA Warning List is a list of firms and individuals we
know are operating without our authorisation.
If you’ve received unsolicited contact about an investment
opportunity, chances are it’s a high risk investment or a
scam. You should treat the call with extreme caution.
The safest thing to do is to hang up.
If you suspect that you have been approached by
fraudsters please tell the FCA using the reporting form at
www.fca.org.uk/consumers
. You can also call the
FCA Consumer Helpline on
0800 111 6768
If you have lost money to investment fraud, you should
report it to Action Fraud on 0300 123 2040 or online at
www.actionfraud.police.uk
SGN001
Share fraud warning
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