Final Results

Merrill Lynch World Mining Tst PLC 10 February 2006 FOR IMMEDIATE RELEASE 10 February 2006 MERRILL LYNCH WORLD MINING TRUST plc Preliminary announcement of results in respect of the year ended 31 December 2005 Performance to 31 December 2005 1 year 3 years 5 years (with net income reinvested) Undiluted net asset value per share +63.9% +173.3% +286.8% Ordinary share price +63.0% +179.9% +319.1% HSBC Global Mining Index* +58.6% +151.7% +179.4% *adjusted for exchange rates relative to sterling. Performance based on mid-market values with net income reinvested on ex-dividend date. Source: Merrill Lynch Investment Managers, Datastream. • The undiluted net asset value per share at 31 December 2005 was 397.03p (2004: 244.55p restated for IFRS). • The Company's share price reached a new high of 351.5p (2004: 218.0p) over the period, an increase of 63%. Subsequent to the year end the share price has attained 417.25p. • Since inception the Company's dividends have increased by 134% and by 264% with the inclusion of special dividends. The Directors recommend the payment of a final dividend of 1.80p, (an increase of 3% on last year) and a special dividend of 1.00p (an increase of 33% on last year), payable on 24 March 2006 to shareholders on the register on 24 February 2006. For further information please contact the following: Jonathan Ruck Keene 020 7743 2178 Managing Director, Investment Trust Division Merrill Lynch Investment Managers Graham Birch 020 7743 2690 Fund Manager Merrill Lynch Investment Managers Nigel Webb 020 7743 5938 Public Relations Merrill Lynch Investment Managers William Clutterbuck 020 7379 5151 Maitland Consultancy The Chairman, Peter Wilmot-Sitwell, comments: 'Performance It gives me considerable pleasure in my final report to you as Chairman to record that the Net Asset Value of your Company on a total return basis has risen by 48.6% since the interim stage, making for an increase over the full reporting year of 63.9%. This is our fifth consecutive year of growth, with the share price rising by 63% over the period on a total return basis. By comparison, the benchmark index appreciated by 58.6%. The two most significant countries for commodities demand, the USA and China, continued to experience strong economic growth throughout 2005, leading to further upward pressure in the metals and minerals markets. Additional support came through investors generally increasing their appetite for this asset class. 'Financial statements For accounting periods commencing on or after 1 January 2005, all UK listed groups are required by EU law to present their financial statements in accordance with International Financial Reporting Standards ('IFRS'). Consequently these are the first annual results for the Company prepared under IFRS, and the most significant change is the movement from mid to bid price for the valuation of investments. The net impact of this on the Company's net asset value at 31 December 2005 was a decrease of 0.8 pence. Further information and full reconciliations between the restated comparative numbers and the previously reported UK GAAP amounts are given in the notes to the financial statements. IFRS will not make any difference to the operating practices of the Company. 'Earnings Revenue return per share amounted to 3.39p as against 3.01p for the previous year, an uplift of 12.6%. These have once again profited from some investment trading. The dividend, which has increased for each of the last 7 years, will this year rise to 1.80p plus a special dividend of 1.00p. I am also very pleased to note that since the inception of the Company in 1993 and my appointment as its Chairman, ordinary dividends have increased by 134% and if special dividends are included, by a massive 264%. 'Discount, warrant issues During the year the shares traded at a discount to NAV of between 16.8% and 8%, ending the year at 11.5%. Your Board continues to be mindful of the discount, which it believes would be diminished through a higher capital base. As I mentioned in my interim statement, it was very disappointing that given market circumstances shareholders largely declined to exercise their warrants last April at a share price of 219p. Despite the very significant increase from that level, the outlook for the sector remains favourable, as discussed in the Investment Manager's Report. Merrill Lynch Investment Managers has submitted a proposal for a further bonus warrant issue, albeit one with different characteristics from its predecessor. The Board is in favour of the proposal, details of which are set out in the circular enclosed with this report. The issue is subject to shareholders approval and you will have the opportunity to vote upon it at the Extraordinary General Meeting to be held immediately following the conclusion of the Annual General Meeting. 'Award We were especially pleased that the Company was recently honoured as the Bloomberg Money Specialist Investment Trust of the year. 'Board changes Having reached 70, I will be stepping down as Chairman immediately on the conclusion of the forthcoming Annual General Meeting. It is with more than a little satisfaction that I consider your Board to be of such strength that any member would make an excellent successor. 'I discussed the situation individually with all the Directors and I decided that the consensus of opinion was that we should invite Tony Lea to take on this role. He has just retired as the Finance Director of Anglo American plc and has already proved a great asset on this Board to which he was appointed at the end of July 2005. I am delighted to report that he has agreed to accept this invitation and I wish him every success. 'I hope he enjoys it as much as I have done these past 12 years. Shareholders, Directors and fund managers have all shown me great courtesy and support throughout this time, for which I will remain profoundly grateful. 'Outlook The outlook appears to be more of the same - China will be key for the fifth consecutive year and US growth should continue to hold up. With the prospects of higher dividends, further share buy backs and continued corporate activity, the sector may well maintain its outperformance of the global equity indices.' Commenting upon the outlook for the Company, Graham Birch of Merrill Lynch Investment Managers, the Investment Manager, notes: 'At the interim stage last year we argued that 2005 would be another record year for the mining industry and this has proved to be the case. 2006 has started off well and commodity price averages so far this year point to more records being broken in due course. 'Scarcity of capital equipment, together with skills shortages and higher funding requirements, have delayed the supply-side response to higher commodity prices that many analysts predicted. As a result, we believe that global economic growth in 2006 will be sufficiently robust to ensure that supply/demand balances in the metals and minerals markets remain favourable, with positive implications for the duration and magnitude of the current commodity cycle. If we are right about the pricing environment then most companies in the portfolio will see cash accumulate on the balance sheet at a quicker rate than it can be deployed on new projects. Given that balance sheets had already strengthened markedly during 2005 there is a likelihood that these strong cash flows will translate into another year of higher dividends and more share buy backs. There is also the possibility of additional 'corporate activity' providing further support for the market as, despite the price rises in mining equities, the cash flow multiples remain modest. 'For the fifth year running we expect China to be a key theme in the commodity markets. Although economists often question the economic growth assumptions for China there is little doubt that its rank in the global economy will continue to increase. There is a possibility that China will enter the market as a strategic buyer of commodities as a part of its reserves diversification strategy. 'The other key market for commodities will be the USA where despite the interest rate rises of 2005 growth remains robust. If, as seems possible, the US dollar weakens in 2006 then this will help to reinforce the positive trend of headline commodity prices, perhaps attracting fresh investment demand from institutional investors. 'We expect to see a continuation of the uptrend in gold. Mine supply is likely to remain stagnant while investment demand is growing and net Central Bank sales may even decline. This is a good environment for gold especially if the dollar weakens again and the Federal Reserve decides that it has raised rates enough. 'The main risks to this rosy scenario in the short-term are either economic deceleration (especially in China and the USA) or an external shock to the global economy such as one might see if 'bird flu' was to take hold or there were a major terrorist atrocity. These uncertainties always help to create the volatility characteristic of the sector. 'Our portfolio strategy at the start of 2006 is three pronged: '1) Fully invested portfolio. Continuing emphasis on companies with strong cash flow and the potential to lift returns to shareholders through higher dividends and share buy backs. '2) Continuing emphasis on companies producing those commodities in short supply in China i.e. iron ore and base metals. '3) Tactical use of gearing. 'While we are not brave enough to predict that returns in 2006 will match the very strong out-turn of 2005, we would not be surprised to see the mining sector continue its outperformance against broader global equities.' CONSOLIDATED INCOME STATEMENT for the year ended 31 December 2005 Revenue Return Year ended Year ended 31 December 31 December 2005 2004 £'000 £'000 (audited) (audited) Notes Income Income from investments held at fair value through profit or loss 3 13,620 8,813 Other income 3 2,477 3,859 ---------- ---------- Total revenue 16,097 12,672 ---------- ---------- Gains on investments held at fair value through profit or loss - - Realised (losses)/gains on foreign exchange - - ---------- ---------- 16,097 12,672 Expenses Management fees 4 (6,841) (3,797) Other expenses 5 (797) (697) ---------- ---------- Profit before finance costs and tax 8,459 8,178 Finance costs 6 (1,509) (1,817) ---------- ---------- Profit before tax 6,950 6,361 Tax 7 (1,308) (1,462) ---------- ---------- Profit for the year 5,642 4,899 ---------- ---------- Return per ordinary share - basic and diluted 9 3.39p 3.01p ========== ========== For the year ended 31 December 2005, a final dividend of 1.80p per ordinary share has been proposed. The Board has declared a special dividend of 1.00p per share. Both will be paid on 24 March 2006 to shareholders on the register on 24 February 2006. CONSOLIDATED INCOME STATEMENT - continued for the year ended 31 December 2005 Capital Return (Restated see note 13) Year ended Year ended 31 December 31 December 2005 2004 £'000 £'000 (audited) (audited) Notes Income Income from investments held at fair value through profit or loss 3 - - Other income 3 - - ------------ --------- Total revenue - - ------------ --------- Gains on investments held at fair value through profit or loss 257,320 4,664 Realised (losses)/gains on foreign exchange (861) 500 ------------ --------- 256,459 5,164 Expenses Management fees 4 - - Other expenses 5 - - ------------ --------- Profit before finance costs and tax 256,459 5,164 Finance costs 6 - - ------------ --------- Profit before tax 256,459 5,164 Tax 7 - - ------------ --------- Profit for the year 256,459 5,164 ------------ --------- Return per ordinary share - basic and diluted 9 154.02p 3.17p ============ ========= CONSOLIDATED INCOME STATEMENT - continued for the year ended 31 December 2005 Total (Restated see note 13) Year ended Year ended 31 December 31 December 2005 2004 £'000 £'000 (audited) (audited) Notes Income Income from investments held at fair value through profit or loss 3 13,620 8,813 Other income 3 2,477 3,859 ------------ ----------- Total revenue 16,097 12,672 ------------ ----------- Gains on investments held at fair value through profit or loss 257,320 4,664 Realised (losses)/gains on foreign exchange (861) 500 ------------ ---------- 272,556 17,836 Expenses Management fees 4 (6,841) (3,797) Other expenses 5 (797) (697) ------------ ---------- Profit before finance costs and tax 264,918 13,342 Finance costs 6 (1,509) (1,817) ------------ ---------- Profit before tax 263,409 11,525 Tax 7 (1,308) (1,462) ------------ ---------- Profit for the year 262,101 10,063 ------------ ---------- Return per ordinary share - basic and diluted 9 157.41p 6.18p ============ ========== The total column of this statement represents the Group's Consolidated Income Statement, prepared in accordance with International Financial Reporting Standards ('IFRSs'). The supplementary revenue and capital return columns are both prepared under guidance published by the Association of Investment Trust Companies. All items in the above statement derive from continuing operations. All income is attributable to the equity holders of the Merrill Lynch World Mining Trust plc. There are no minority interests. CONSOLIDATED BALANCE SHEET as at 31 December 2005 (Restated see note 13) 31 December 31 December 2005 2004 £'000 £'000 Notes (audited) (audited) Non current assets Investments held at fair value through profit or loss 669,497 416,820 Current assets Investments 2,118 4,886 Other receivables 976 2,145 Cash and cash equivalents 30 - ----------- ----------- 3,124 7,031 ----------- ----------- Total assets 672,621 423,851 ----------- ----------- Current liabilities Other payables (4,309) (3,862) Bank overdrafts - (19,802) Financial liabilities - (1,973) ----------- ----------- (4,309) (25,637) ----------- ----------- Total assets less current liabilities 668,312 398,214 Non-current liabilities Deferred tax (110) (85) ------------ ------------ Net assets 668,202 398,129 ============ ============ Equity attributable to equity holders Ordinary share capital 10 8,415 8,140 Share premium 11,767 - Special reserve 203,244 203,244 Capital redemption reserve 22,779 22,779 Capital reserve 409,937 153,478 Retained earnings 12,060 10,488 ----------- ----------- Total equity 668,202 398,129 Net asset value per ordinary share - undiluted 11 397.03p 244.55p =========== =========== Net asset value per ordinary share - diluted 11 - 240.29p =========== =========== CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 31 December 2005 Capital Share Share Special redemption Capital Retained capital premium reserve reserve reserve earnings Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 For the year ended December 2004 At 31 December 2003 (as restated see note 12) 8,140 - 203,244 22,779 148,619 8,357 391,139 Profit for the year - - - - 5,164 4,899 10,063 Warrant issue costs - - - - (305) - (305) Dividends paid and declared-* - - - - - (2,768) (2,768) --------- --------- ----------- ----------- ------------ ----------- ------------ At 31 December 2004 8,140 - 203,244 22,779 153,478 10,488 398,129 ===== ===== ======= ====== ======= ====== ======= For the year ended December 2005 At 31 December 2004 (as restated see note 13) 8,140 - 203,244 22,779 153,478 10,488 398,129 Profit for the year - - - - 256,459 5,642 262,101 Exercise of warrants 275 11,767 - - - - 12,042 Dividends paid and declared#* - - - - - (4,070) (4,070) --------- --------- ------------ ---------- ------------ ---------- ------------ At 31 December 2005 8,415 11,767 203,244 22,779 409,937 12,060 668,202 ========= ========= ============ ========== ============ ========== ============ -The final dividend for the year ended 31 December 2003, declared on 13 February 2004 and paid on 31 March 2004. #The final and special dividends for the year ended 31 December 2004, declared on 14 February 2005 and paid on 31 March 2005. *See Note 8. CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 December 2005 Year ended (Restated see 31 December note 13) 2005 Year ended £'000 31 December (audited) 2004 £'000 (audited) Operating activities Profit before tax 263,409 11,525 Add back interest paid 1,509 1,817 Gains on investments held at fair value through profit or loss (257,320) (4,664) Net losses/(gains) on foreign exchange 861 (500) Net sales of current asset investments by subsidiaries 4,286 2,131 (Losses)/gains on forward currency contracts (499) 1,021 Net sales of investments held at fair value through profit or 4,643 10,501 loss Increase in other receivables (297) (452) Decrease/(increase) in amounts due from brokers 1,301 (910) (Decrease)/increase in other payables (869) 2,013 Decrease in amounts due to brokers (556) (189) Dealing profits (1,518) (3,504) ---------- ---------- Net cash inflow from operating activities before interest and taxation 14,950 18,789 ---------- ---------- Interest paid (1,509) (1,817) Tax (paid)/recovered (376) (191) Tax deducted from overseas income (843) (612) ---------- ---------- Net cash inflow from operating activities 12,222 16,169 ---------- ---------- Financing activities Exercise of warrants 12,042 - Warrant issue costs - (305) Dividends paid (4,070) (2,768) ---------- ---------- Net cash inflow/(outflow) from financing activities 7,972 (3,073) ---------- ---------- Increase in cash and cash equivalents 20,194 13,096 Bank overdrafts at start of period (19,802) (32,852) Effect of foreign exchange rate changes (362) (46) ----------- ----------- Cash and cash equivalents/(bank overdrafts) at end of the year 30 (19,802) =========== =========== NOTES TO THE PRELIMINARY RESULTS 1. Principal activity The principal activity of the Company is that of an investment trust company within the meaning of section 842 of the Income and Corporation Taxes Act 1988. The principal activity of the two subsidiaries, Merrill Lynch Gold Limited and World Mining Investment Company Limited, is investment dealing. 2. Accounting Policies The Group's financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs). The Company's financial statements have been prepared in accordance with IFRSs as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 1985. The principal accounting policies adopted by the Group and by the Company are set out below. The Company has taken advantage of the exemption provided under section 230 of the Companies Act 1985 not to publish its individual income statement and related notes. (a) Basis of preparation This is the first year in which the Group has prepared its financial statements under IFRSs and the comparatives have been restated from UK Generally Accepted Accounting Practice ('UK GAAP') to comply with IFRSs. The Group issued its interim report in July 2005 incorporating its preliminary IFRS financial statements for 2004 and the reconciliations to IFRSs from the previously published UK GAAP financial statements are summarised in notes 12 and 13. The accounting policies which follow set out those policies which apply in preparing the financial statements for the year ended 31 December 2005. There are no differences between the accounting policies applied in the Group and the Company. The Group and Company financial statements are presented in sterling, which is the currency of the primary environment in which the Group operates. All values are rounded to the nearest thousand pounds (£000) except when otherwise indicated. The financial statements have been prepared in accordance with the guidance set out in the Statement of Recommended Practice ('SORP') for investment trusts issued by the Association of Investment Trust Companies ('AITC') revised in December 2005. (b) Basis of consolidation The Group financial statements consolidate the financial statements of Merrill Lynch World Mining Trust plc and the entities it controls (its subsidiaries) drawn up to 31 December each year. Subsidiaries are consolidated from the date of their acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. Control comprises the power to govern the financial and operating policies of the investee so as to obtain benefit from its activities and is achieved through direct or indirect ownership of voting rights; currently exercisable or convertible potential voting rights; or by way of contractual agreement. The financial statements of subsidiaries are prepared for the same reporting year as the parent company, using consistent accounting policies. All inter-company balances and transactions, including unrealised profits arising from them, are eliminated. (c) Presentation of Consolidated Income Statement In order to better reflect the activities of an investment trust company and in accordance with guidance issued by the AITC, supplementary information which analyses the Consolidated Income Statement between items of revenue and capital nature has been presented alongside the Consolidated Income Statement. In accordance with the Company's status as a UK investment company under section 266 of the Companies Act 1985, net capital returns may not be distributed by way of dividend. (d) Segmental reporting The Directors are of the opinion that the Group is engaged in a single segment of business being investment business. (e) Income Dividends receivable on equity shares are treated 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. Interest income is accounted for on an accruals basis. Premiums on written options are recognised as income. (f) Expenses All expenses, including interest expenses, are accounted for on an accruals basis. Expenses have been treated as revenue except as follows: - expenses which are incidental to the acquisition or disposal of an investment are treated as capital and separately identified and disclosed in the notes to the accounts; and - expenses are treated as capital where a connection with the maintenance or enhancement of the value of the investments can be demonstrated. (g) Taxation Deferred tax is recognised in respect of all temporary differences at the balance sheet date, where transactions or events that result in an obligation to pay more tax in the future or right to pay less tax in the future have occurred at the balance sheet date. This is subject to deferred tax 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 tax assets and liabilities are measured at the rates applicable to the legal jurisdictions in which they arise. (h) Investments designated as held at fair value through profit or loss Purchases of investments are recognised on a trade date basis and designated upon initial recognition as held at fair value through profit or loss. The sale of assets are recognised at the trade date of the disposal. Proceeds will be measured at fair value, which will be regarded as the proceeds of sale less any transaction costs. The fair value of the financial instruments is based on their quoted bid price at the balance sheet date, without deduction for any estimated future selling costs. Unquoted investments are valued by the Directors using primary valuation technologies such as earnings multiples, recent transactions and net assets. This policy applies to all current and non-current asset investments held by the Group. 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 Income Statement as 'Gains or losses on investments held at fair value through profit or loss'. Also included within this caption are transaction costs in relation to the purchase or sale of investments, including the difference between the purchase price of an investment and its bid price at the date of purchase. (i) Other receivables and payables Other receivables do not carry any interest and are short-term in nature and are accordingly stated at their nominal value. Other payables are non-interest bearing and are stated at their nominal value. (j) Dividends payable Final dividends are recognised from the date on which they are declared and approved by shareholders. (k) Foreign currency translation Transactions involving foreign currencies are converted at the rate ruling at the date of the transaction. Foreign currency monetary assets and liabilities are translated into sterling at the rate ruling on the balance sheet date. Foreign exchange differences arising on translation are recognised in the Consolidated Income Statement. (l) Cash and cash equivalents Cash comprises cash in hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and that are subject to minimal risk of changes in value. (m) Bank borrowings Bank overdrafts are recorded as the proceeds received, net of direct issues costs. Finance charges, including any premiums payable on settlement or redemption and direct issue costs, are accounted for on an accruals basis in the Consolidated Income Statement using the effective interest rate method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise. 3. Income 31 December 31 December 2005 2004 £'000 £'000 Investment income: UK listed dividends 2,481 1,446 Overseas listed dividends 10,299 6,592 Overseas unlisted dividends 572 481 Interest 268 294 --------- --------- 13,620 8,813 --------- --------- Other operating income: Deposit interest 54 355 Dealing profits 1,518 3,504 Other income - option premiums 905 - --------- --------- 2,477 3,859 --------- --------- Total income 16,097 12,672 ===== ===== Total income comprises: Dividends 13,352 8,519 Deposit interest 54 355 Bond interest 268 294 Other income 2,423 3,504 --------- --------- 16,097 12,672 ========= ========= Dealing profits are presented after deducting transaction costs incurred on the purchase and sale of investments. 4. Management fees 31 December 31 December 2005 2004 £'000 £'000 Investment management fees 6,342 3,631 Irrecoverable VAT thereon 499 166 --------- --------- 6,841 3,797 ========= ========= The investment management fee is levied quarterly, based on the value of the gross assets on the last day of each quarter. All investment management fees are charged to revenue. 5. Other Expenses 31 December 31 December 2005 2004 £'000 £'000 Custody fee 173 209 Administration fee 327 225 Auditors' remuneration: - audit services 18 17 - non audit services 27 14 Registrar's fee 49 40 Directors' remuneration 92 74 Other administrative costs 111 118 -------- -------- 797 697 ======== ======== 31 December 31 December 2005 2004 The Company's total expense ratio, calculated as a percentage of average net assets, and using expenses, excluding interest costs, after relief from taxation, was: 1.0% 0.8% ======== ======== 6. Finance costs 31 December 31 December 2005 2004 £'000 £'000 Interest on bank overdrafts 1,509 1,817 ======== ======== 7. Taxation 31 December 31 December 2005 2004 £'000 £'000 Corporation tax 1,263 1,372 Double taxation relief (739) (546) --------- --------- 524 826 Overseas tax 759 569 Prior year adjustment - (8) --------- --------- Total current tax 1,283 1,387 Deferred tax 25 75 --------- --------- Total tax 1,308 1,462 ========= ========= The tax assessed for the period is lower than the standard rate of corporation tax of 30% (2004 - 30%). The differences are explained below: 31 December 31 December 2005 2004 £'000 £'000 Income from operations before tax 263,409 11,525 ------------ ----------- Return on ordinary activities multiplied by standard rate of corporation tax (30%) 79,023 3,457 Effects of: Non taxable UK dividends (736) (428) Withholding tax suffered 759 569 Double taxation relief (739) (546) Gains on investments held at fair value through profit or loss not taxable (76,938) (1,549) Income taxable in different periods (86) (108) Prior year adjustment - (8) --------- --------- Current tax charge 1,283 1,387 ========= ========= Deferred tax 25 75 --------- --------- Total tax charge 1,308 1,462 ========= ========= Investment trusts are exempt from corporation tax on capital gains provided the Company obtains agreement from HM Revenue & Customs that s842 ICTA tests have been met. 8. Dividends 31 December 31 December 2005 2004 £'000 £'000 (audited) (audited) Dividends on equity shares: Proposed final ordinary dividend 1.80p (2004: 1.75p) 3,029 2,849 Declared special dividend of 1.00p (2004: 0.75p) 1,683 1,221 -------- -------- 4,712 4,070 -------- -------- Under IFRS, final dividends and special dividends are not recognised as a liability until approved by shareholders. They are also debited directly to reserves. Therefore, the Consolidated Statement of Changes in Equity for the year ended 31 December 2005 reflects the final (1.75p) and special (0.75p) dividends for the year ended 31 December 2004 which were approved by shareholders on 17 March 2005. For the year ended 31 December 2005, a final dividend of 1.80p per ordinary share has been proposed and a special dividend of 1.00p per share has been declared. The final and special dividends will be paid on 24 March 2006, to shareholders on the register on 24 February 2006, and will be marked ex-dividend on 22 February 2006. 9. Return per ordinary share 31 December 31 December 2005 2004 Net revenue attributable to ordinary shareholders (£'000) 5,642 4,899 Net capital gains attributable to ordinary shareholders (£'000) 256,459 5,164* ------------ ---------- Total return attributable to ordinary shareholders 262,101 10,063 ------------ ---------- The weighted average number of ordinary shares in issue during each year, on which the return per ordinary share was calculated, was 166,506,112 162,800,000 Revenue return per share (basic and diluted) 3.39p 3.01p Capital return per share (basic and diluted) 154.02p 3.17p Total return per share (basic and diluted) 157.41p 6.18p *restated - see note 13. 10. Share capital 31 December 2005 31 December 2004 Number £'000 Number £'000 Authorised share capital comprised: Ordinary shares of 5p each 750,000,000 37,500 750,000,000 37,500 Allotted, issued and fully paid: Ordinary shares of 5p each 168,298,906 8,415 162,800,000 8,140 During the year, 5,498,906 warrants were exercised at a price of 219p. This resulted in the issue of 5,498,906 ordinary shares for total consideration of £12,042,000. The remaining 27,060,658 warrants lapsed. 11. Net Asset Value per ordinary share 31 December 31 December 2005 2004 Net assets attributable to ordinary shareholders (£'000) 668,202 398,129* The actual number of ordinary shares in issue at the end of each year, on which the return per ordinary share calculated, was 168,298,906 162,800,000 Number of ordinary shares in issue for diluted NAV - 195,359,564 Net asset value per ordinary share - undiluted 397.03p 244.55p* Net asset value per ordinary share - diluted - 240.29p* Share price 351.50p 218.00p The fully diluted Net Asset Value per share at 31 December 2004 of 240.29p is calculated by adjusting net assets attributable to ordinary shareholders for considerations receivable on the exercise of all warrants and dividing by the total number of shares that would have been in issue at 31 December 2004 had all warrants been exercised. There was no dilution at 31 December 2005 as all the warrants were either exercised or lapsed during the year. * restated - see note 13. 12. Restatement of opening balances at 1 January 2004 The Company has adopted International Financial Reporting Standards in respect of the year ended 31 December 2005. In accordance with IFRS 1 First Time Adoption of Financial Reporting Standards the following is a reconciliation of the figures at 31 December 2003, the date of the Group's transition to IFRS, which were previously reported under the applicable UK Accounting Standards and with the Statement of Recommended Practice. Previously reported Restated 31 December 31 December 2003 Adjustments 2003 Notes £'000 £'000 £'000 Fixed assets Investments 1 423,530 (873) 422,657 Current assets 4,767 - 4,767 Creditors: amounts falling due within one year 2 (39,043) 2,768 (36,275) ------------ --------- ------------ Total assets less current liabilities 389,254 1,895 391,149 Provision for liabilities and charges (10) - (10) ----------- -------- ----------- 389,244 1,895 391,139 ----------- ------- ----------- Capital and reserves Ordinary called up share capital 8,140 - 8,140 Special reserve 203,244 - 203,244 Capital redemption reserve 22,779 - 22,779 Other capital reserves 1 149,492 (873) 148,619 Retained earnings 2 5,589 2,768 8,357 ------------ -------- ------------- 389,244 1,895 391,139 ------------ -------- ------------ Net asset value per share - undiluted 239.09p 1.17p 240.26p ------------ -------- ------------ Net asset value per share - diluted N/A N/A N/A ------------ -------- ------------ Notes to the reconciliation (1) Investments are all classified as held at fair value under IFRS and are now carried at bid prices which equates to their fair value of £422,657,000 at 31 December 2003. They were carried at mid prices previously. The resultant difference of £873,000 for the Group is included in other capital reserves. The Company's investment in the subsidiary undertakings, previously carried at cost, are also now fair valued under IFRS. In this case, fair value equates to the net asset value of each of the subsidiary undertakings. The effect of this is to increase the valuation of investments by £1,442,000. The resultant difference is also included within other capital reserves. (2) No provision has been made for the final dividend on ordinary shares for the year ended 31 December 2003 of £2,768,000. Under IFRS dividends are not recognised until they are declared and approved by shareholders. This is therefore added to retained earnings and eliminated from other payables. 13. Restatement of primary financial statements for the year ended 31 December 2004 The Company adopted International Financial Reporting Standards in respect of the year ended 31 December 2005. In accordance with IFRS 1 First Time Adoption of Financial Reporting Standards the following is a reconciliation of the figures at 31 December 2004 previously reported under the applicable UK Accounting Standards and with the Statement of Recommended Practice. Previously reported Restated 31 December 31 December 2004 Adjustments 2004 Notes £'000 £'000 £'000 Fixed assets Investments 1 418,118 (1,298) 416,820 Current assets 7,031 - 7,031 Creditors: amounts falling due within one year 2 (29,707) 4,070 (25,637) ------------ --------- ------------ Total assets less current liabilities 395,442 2,772 398,214 Provision for liabilities and charges (85) - (85) ----------- -------- ----------- 395,357 2,772 398,129 ----------- -------- ----------- Capital and reserves Ordinary called up share capital 8,140 - 8,140 Special reserve 203,244 - 203,244 Capital redemption reserve 22,779 - 22,779 Other capital reserves 1 154,776 (1,298) 153,478 Retained earnings 2 6,418 4,070 10,488 ------------ -------- ------------- 395,357 2,772 398,129 ------------ -------- ------------ Net asset value per share - undiluted 242.85p 1.70p 244.55p ------------ -------- ------------ Net asset value per share - diluted 238.87p 1.42p 240.29p ------------ -------- ------------ Notes to the reconciliation (1) Investments are all classified as held at fair value under IFRS and are now carried at bid prices which equates to their fair value of £416,820,000 at 31 December 2004. They were carried at mid prices previously. The resultant difference of £1,298,000 for the Group is included in other capital reserves. The Company's investment in the subsidiary undertakings, previously carried at cost, are also now fair valued under IFRS. In this case, fair value equates to the net asset value of each of the subsidiary undertakings. The effect of this is to increase the valuation of investments by £3,802,000. The resultant difference is also included within other capital reserves. (2) No provision has been made for the final and special dividends on ordinary shares for the year ended 31 December 2004 of £4,070,000. Under IFRS dividends are not recognised until they are declared and approved by shareholders. This is therefore added to retained earnings and eliminated from other payables. Reconciliation of the Consolidated Statement of Total Return to the Consolidated Income Statement for the year ended 31 December 2004 Under IFRS the Consolidated Income Statement is the equivalent of the Consolidated Revenue Account and Statement of Total Return as reported previously. 31 December 2004 Per Notes £'000 share Return on ordinary activities after taxation 10,183 6.26p Change from mid to bid basis at 31 December 2003 1 873 0.53p Change from mid to bid basis at 31 December 2004 1 (1,298) (0.80p) Add back warrant costs now shown in the Consolidated Statement of Changes in Equity 2 305 0.19p ---------- --------- Net profit per Consolidated Income Statement 10,063 6.18p ---------- -------- Notes to the reconciliation (1) The portfolio valuation at 31 December 2003 and 31 December 2004 are required to be valued at fair value under IFRSs. These values differ from the previous valuations by £873,000 and £1,298,000 respectively. (2) Under IFRS the warrant issue costs are now shown in the Consolidated Statement of Changes in Equity. Reconciliation of the Consolidated Cash Flow Statement for the year ended 31 December 2004* Previously reported Effect of Adjusted Cash flows transition to Cash flows 2004 IFRSs 2004 Notes £'000 £'000 £'000 Net cash inflow from operating activities 1, 2 & 3 7,824 8,345 16,169 Returns on investments and servicing of finance 1 (1,817) 1,817 - Taxation paid 2 (261) 261 - Net cash inflow from capital expenditure and financial investment 3 10,377 (10,377) - Equity dividends paid 4 (2,768) 2,768 - ------------ --------- ------------ Net cash inflow before financing 13,355 2,814 16,169 Financing 4 (305) (2,768) (3,073) ----------- -------- ----------- Increase in cash 13,050 46 13,096 Transfer of foreign exchange movements to Reconciliation of Cash (46) and Cash equivalents 5 - (46) ----------- ------- ----------- Total 13,050 - 13,050 ----------- ------- ----------- * The reconciliation of the Consolidated Cash Flow Statement is only being shown to illustrate reclassification of balances under IFRS format (which differs to that of FRS1 under UK GAAP) but no amounts have been restated. Notes to reconciliation (1) Bank interest paid is now shown under operating activities rather than serving of finance. (2) Taxation paid is now disclosed under operating activities. (3) Purchase and sales of investments are now disclosed under operating activities. (4) Dividends paid are now disclosed under financing as there is no longer a separate heading for equity dividends. (5) Foreign exchange movements now appear at the foot of the Consolidated Cash Flow Statement within the Reconciliation of Cash and Cash Equivalents. 14. Publication of non-statutory accounts The financial information contained in this preliminary statement does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The figures set out above have been reported upon by the auditor. The comparative figures (as restated for IFRS) are extracts from the audited financial statements of the Group for the year ended 31 December 2004, which have been filed with the Registrar of Companies. The report of the auditor for the years ended 31 December 2004 and 2005 contain no qualification or statement under section 237(2) or (3) of the Companies Act 1985. The 2005 annual report will be filed with the Registrar of Companies after the Annual General Meeting. Copies of the annual report will be sent to members shortly and will be available from the registered office, c/o The Company Secretary, Merrill Lynch World Mining Trust plc, 33 King William Street, London EC4R 9AS. This report will also be available on the Merrill Lynch Investment Manager's website at www.mlim.co.uk/its. The Annual General Meeting of the Company will be held at 33 King William Street, London EC4R 9AS on Friday 17 March 2006 at 2.30pm. 10 February 2006 33 King William Street London EC4R 9AS This information is provided by RNS The company news service from the London Stock Exchange

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