Half-yearly Report
BlackRock World Mining Trust plc
Half Yearly Financial Report 30 June 2012
Performance to 30 June 2012 Six months Five years
Net asset value per share:
- capital only -12.0% -2.6%
- with income reinvested -10.5% +2.7%
Ordinary share price:
- capital only -10.1% -0.4%
- with income reinvested -8.3% +6.0%
HSBC Global Mining Index*:
- capital only -11.1% +3.7%
- with income reinvested -10.0% +14.0%
* Adjusted for exchange rates relative to sterling.
A dividend of 14.00p per share went ex-dividend on 7 March 2012. Where
performance has income included, it is re-invested on the ex-dividend date.
Sources: BlackRock and Datastream.
Chairman's Statement
Overview
Stock markets remained volatile during the first half of the year. Recurring
concerns over the strength of the global economy undermined investor
confidence. In particular, the stability of the Eurozone was of major concern
with the market focusing first on the restructuring of Greek sovereign debt and
latterly on the deterioration of the Spanish banking sector.
The global economy maintained modest growth overall despite sluggish activity
in Europe. The US economy fared better than expected in the first quarter of
the year acting to buoy equity markets. The pace of recovery has since slowed
and attention has now turned to how any future administration might tackle the
long term overhang of government debt following the forthcoming presidential
election. Elsewhere, markets also remained nervous about the extent of the
economic slowdown in China and the uncertain progress towards democratic
governments in the Middle East.
In the six months ended 30 June 2012, the Company's net asset value fell by
10.5% and the share price declined by 8.3% (both calculated in sterling terms
with income reinvested). During the same period, the Company's benchmark the
HSBC Global Mining Index, decreased by 10.0%. Further details on the Company's
performance are set out in the Investment Manager's Report.
Since the period end, the Company's net asset value has increased by 1.6%
compared to a rise of 2.0% in the benchmark index (both calculated in sterling
terms with income reinvested).
Earnings and dividends
Revenue earnings per share for the period to 30 June 2012 amounted to 11.83p.
At the Annual General Meeting in April the Board announced that, in future, the
Company would pay both interim and final dividends annually. Accordingly, I am
pleased to report that the Board has declared an interim dividend of 7.00p per
share. This dividend will be paid on 21 September 2012 to shareholders on the
register on 24 August 2012.
On 30 July 2012, we announced that we had entered into an agreement with London
Mining Plc to acquire a 2% royalty on any iron ore production over the life of
its Marampa mine in Sierra Leone. For some time we had been reviewing a range
of ways to invest in mining royalties and this deal meets our investment
objective of providing exposure to growth in production and commodity prices
whilst at the same time further increasing income for the portfolio.
Board changes
We were very pleased to welcome David Cheyne to the Board on 1 June 2012. David
is a qualified lawyer and throughout his distinguished career at Linklaters
played a central role in a wide range of corporate transactions, including M&A
deals, joint ventures, flotations and corporate finance work. In particular, he
advised on a number of large mining transactions, experience that should prove
invaluable to the Board.
After serving for more than eleven years as a Director, Gordon Sage steps down
from the Board today. In recent years he has also been Senior Independent
Director. I wish to express the heartfelt thanks and appreciation of the Board
for his wise advice and his important contribution over this period and wish
him every success in the future. The Board has appointed Colin Buchan as Senior
Independent Director.
Outlook
Investor sentiment is extremely fragile given the uncertain economic
environment. Markets are looking to government policy to set direction, but a
lack of consensus and limited options in Europe, or political will in the US,
means China is likely to be the most effective in taking action to support
economic growth. Growth rates in the developed world will heavily influence
investor confidence in coming months but it is important to recognise that
underlying growth from emerging markets, although lower in percentage terms
than historically, is now based on a much higher level of aggregate demand and
should therefore support commodity prices in an environment where supply
remains constrained.
Whilst the upcoming earnings season will show the impact on profit margins of
the fall in commodity prices year on year, share prices more than reflect this
in our view. Balance sheets are significantly stronger now than when the
financial crisis first struck almost five years ago, providing a sound base to
the Company's core holdings. On a more positive note, the constraints placed on
banks by their own balance sheet woes has increased the range of investment
opportunities for the Company to make use of its low-cost borrowing facilities.
The potential for increasing productivity and managing costs will be key for
mining share performance in the near term and we expect sector consolidation to
continue through the second half of 2012. It will be towards the latter part of
the year that the impact of recent actions by the Chinese government to
accelerate infrastructure development and stimulate the economy will likely be
felt, boosting investor confidence and providing renewed momentum for the
sector.
A W Lea
9 August 2012
Interim Management Report and Responsibility Statement
The Chairman's Statement and the Investment Manager's Report give details of
the important events which have occurred during the period and their impact on
the financial statements.
Principal risks and uncertainties
The principal risks faced by the Company can be divided into various areas as
follows:
- Performance;
- Income/dividend;
- Regulatory;
- Operational;
- Resource;
- Market; and
- Financial
The Board reported on the principal risks and uncertainties faced by the
Company in the Annual Report and Financial Statements for the year ended
31 December 2011. A detailed explanation can be found on pages 20 and 21 of
the Annual Report and Financial Statements which is available on the website
maintained by the Investment Manager, BlackRock Investment Management (UK)
Limited, at www.blackrock.co.uk/brwm. In the view of the Board, there have not
been any changes to the fundamental nature of these risks since the previous
report and these principal risks and uncertainties are equally applicable to
the remaining six months of the financial year as they were to the six months
under review.
In the Board's opinion, an additional uncertainty to those outlined in the
Annual Report and Financial Statements now exists. As at the date of this
document, it is unclear to what extent the economies and political structure
of the Eurozone member countries may be affected by the financial crisis
within the Eurozone or that the Euro as a currency in its current form will
continue.
Related party transactions
The Investment Manager is regarded as a related party and details of the
management fees payable are set out in note 3. The related party transactions
with the Directors are set out in note 8.
Directors' responsibility statement
The Disclosure and Transparency Rules ("DTR") of the UK Listing Authority
require the Directors to confirm their responsibilities in relation to the
preparation and publication of the Interim Management Report and Financial
Statements.
The Directors confirm to the best of their knowledge that:
- the condensed set of financial statements contained within the half yearly
financial report has been prepared in accordance with International Accounting
Standard 34 "Interim Financial Reporting"; and
- the interim management report, together with the Chairman's Statement and
Investment Manager's Report, include a fair review of the information required
by 4.2.7R and 4.2.8R of the FSA's Disclosure and Transparency Rules.
The half yearly financial report was approved by the Board on 9 August 2012 and
the above responsibility statement was signed on its behalf by the Chairman.
A W Lea
For and on behalf of the Board
9 August 2012
Investment Manager's Report
The last six months have been anything but easy for mining company share
prices. The turbulent financial winds that are sweeping through Europe and the
US have unsettled hopes of a resolution to the fiscal challenges faced by these
economies. At the same time, investor fears on just how strong the underlying
Chinese economy really is, has only added to nervousness on the sustainability
of mining company profit margins. However, despite the share price movements,
metal prices continue to trade at very profitable levels and the recent
divergence between share prices and those of the underlying metal prices is
startling.
Twelve months ago we wrote that Europe and the US had been struggling to deal
with the aftermath of the 2008 financial crisis and this is still the case
today. During 2012, the ECB has once again had to intervene to prevent problems
in Greece and Spain resulting in contagion across the Eurozone. In addition,
election results in France and Greece further worried markets; in fact, during
the election process, expectations on the results had a bigger influence on
equity market returns than what companies were actually reporting. At the same
time, investor appetite for risk has continued to fall, with 10 year government
bonds in Germany and the US trading at record lows in nominal terms and
negative levels in real terms. Despite all the actions taken to date we feel,
like last year, that the fragile state of the global financial system is likely
to continue to be a concern for some time to come.
Even though share prices have performed poorly, metal prices have proven
resilient as demand remained robust and supply growth has underperformed
expectations due to a variety of issues. However, the trend is far from uniform
with massive divergence amongst the base metal suite. Happily, though, for
commodities to which the Company has significant overweight exposure, prices
have remained at levels where profit margins for the producers remain strong.
Stuck record
Prior to writing this report we reread the previous two interim reports and it
is alarming how little has changed with regard to the macro factors that seem
to be driving equity market valuations. Investors continue to wait for the
tough decisions to be made that would set the US and Europe on to the path of
economic recovery. Despite all the "to-ing and fro-ing" no real progress seems
to have been made and most of the decisions appear to have been taken to
prevent short term problems from becoming unmanageable.
In Asia the key for commodity markets has been and continues to be driven by
the ability or not of China to bring its growth rate down to a sustainable
level without causing the economy to stall. In the first part of the year
economic data remained weak but over the last few months the government seems
to be starting a plan to loosen monetary policy. To date they have cut reserve
ratio requirements twice and reduced interest rates from 6.56% to 6.00%. In
addition, money supply has been increased and banks now seem to be increasing
their lending again. The latest data from the property market is also positive
with house prices in selected cities in China rising during the second quarter.
Specific data on commodity demand also reads better today than at the start of
the year. We remain convinced that Chinese demand for commodities that are
important for the Company (iron ore and copper in particular) is sound.
One pleasing trend across the sector appears to be a focus on capital
management by mining companies. First and most pleasing has been the increased
level of distributions paid by companies back to shareholders. This trend fits
well with the Company's decision last year to raise the level of dividend by
133%. In addition, most recently, companies appear to be reigning back on
capital reinvestment plans in the face of increased capital intensity and
concerns on demand. BHP Billiton is leading this trend by requiring more
detailed reviews on all of its main four growth projects. Others are now
following suit and, should this prompt more widespread delays to new projects,
this will be supportive to commodity prices over the medium to long term.
To date, M&A activity has been dominated by the proposed merger of equals
between Xstrata and Glencore. This deal was extensively speculated about in the
media during the last couple of years and in February this year terms were
finally announced. Initial responses from shareholders were for better terms
for Xstrata but as commodity prices and markets cooled shareholder demands for
a better ratio have cooled with them. Recently, however, a new shareholder in
Xstrata has taken up the challenge demanding an even bigger increase in ratio
in favour of Xstrata. There now appears to be a stalemate and it will be
interesting to see how things unfold during the coming months.
At the smaller end of the market the deterioration of availability of finance
for project development has presented a whole set of new opportunities for the
Company. These have ranged from debt financings, convertible bonds, loan notes,
equity placements and, most recently, royalty offerings. Given the low cost of
debt enjoyed by the Company we are judiciously taking advantage of these as
they come along and as such have added to the mining corporate debt investments
inside the Company.
Selected commodity price changes
% change over
Price six months to % change average
Commodity 29 June 2012 29 June 2012 H1 2012/H1 2011
Gold Bullion US$/oz 1,597.36 1.45 10.41
Iron Ore 62.5% Fines US$/t 134.00 -3.25 -10.57
Thermal Coal (Newcastle) US$/t 86.75 -22.09 -16.61
Uranium US$/t 50.75 -3.33 -17.33
Platinum US$/oz 1,428.00 5.47 -19.25
Zinc US$/lb 0.85 2.91 -20.04
Silver US$/oz 27.08 -3.90 -20.49
Copper US$/lb 3.49 1.34 -21.04
Aluminium US$/lb 0.85 -5.95 -26.08
Lead US$/lb 0.84 -8.12 -28.00
Coking Coal US$/t 221.00 -0.85 -33.05
Tin US$/lb 8.52 -1.92 -34.26
Nickel US$/lb 7.57 -10.84 -35.31
Sources: Datastream, Bloomberg and Macquarie. All spot prices.
Base metals
Although metal prices have held up well from the start of the year to the end
of the first half, the year on year average prices for the last six months
versus the first half of 2011 make for discouraging reading. It is easy to
forget just how good prices were during the first half of last year compared to
now. For example, the average price of nickel for the last six months versus
the prior period is down over 35% and many others are down over 20%. The
combination of these falls with the cost inflation that has taken place during
the last twelve months will have a negative drag on earnings across the base
metal producers.
However, we are pleased to report that the portfolio has been well positioned
to shelter from this storm. The Company had almost no exposure to pure
producers of aluminium, nickel and lead and only limited exposure to zinc
companies. Base metal exposure has been concentrated in producers of copper and
despite the lower average price for copper it remains at a very profitable
level for the miners. This is not the case for most of the other base metal
prices where current levels are actually either at or just below the marginal
cost of production. Normally this would prompt producer production cuts but to
date these have not been forthcoming. In addition, inventories for these metals
remain high and these would have to fall materially before prices can recover.
Despite the positive decision to retain a high level of exposure to copper
producers, some of the companies themselves have been through a difficult
operating period. In Indonesia, Freeport McMoRan was hit by further strikes and
resultant losses to production at its Grasberg mine. In Chile, Antofagasta
failed to deliver on the successful ramp-up of production at its Esperanza mine
and this resulted in the CEO and COO losing their jobs. However, it was not all
bad news. First Quantum, the Company's largest copper holding, reported better
than expected performance at its Ravensthorpe mine in Australia as well as
continued exploration success in Zambia. Cerro Verde announced plans to expand
production by 160% and Discovery Metals reported first production at its Boseto
project in Botswana. Direct exposure to producers of other base metals remained
limited due to the expected low margins generated at current prices.
Gold and precious metals
Gold was one of the few metals to post positive gains over the first half of
the year, up nearly 1.5% in US dollar terms. Whilst physical demand for gold
bullion remained robust with further Central Bank buying, record demand from
China and a 2.5% increase in the amount of gold held within physically backed
ETFs, a weaker Indian jewellery market and a reduction in net length in the
gold futures markets kept the gold price range-bound. Easing inflationary
pressures and the uncertainty over the response, or lack thereof, by
governments' to structural issues such as the European sovereign crisis, the
"fiscal cliff" in the US and slowing economic growth in China weighed on the
price for much of the first half. Recent actions by the Chinese, European and
UK central banks suggest the second half may see stimulus measures introduced.
If so, this should be supportive of the gold price as concerns over inflation
and the impact of negative real interest rates rise to the surface once more.
As in the second half of 2011, gold equities underperformed bullion. A range
bound but volatile gold price and a heightened level of risk aversion in the
equity market acted as significant headwinds to the sector. The Company remains
underweight gold companies, with limited exposure to the largest producers
where ageing assets and challenged growth profiles are impacting cash flow
margins. The Company's largest precious metal position is through its combined
exposure to Industrias Penoles and its daughter company Fresnillo. Fresnillo is
the world's largest primary silver producer, but also a significant gold
producer in its own right. Despite a fall of more than 22% in the silver price,
both companies outperformed the rest of the precious metal sector, and the
mining sector as a whole, as a result of a high quality asset base, high levels
of profitability, a good dividend and a strong management track record.
The platinum industry continued to struggle despite a 5.5% rise in the US
dollar platinum price. A poor demand outlook as well as considerable cost
pressures facing the South African platinum producers as a result of labour
cost inflation, production disruptions and rising power costs acted as a drag
on the sector. The industry has been slow to respond to this poor outlook but
Aquarius Platinum was the first to cut production with the announced closure of
its Everest Mine in June "pending better prices and improved industrial
relations". Platinum exposure in the Company is focused primarily in Impala
Platinum, the world's second largest platinum producer, with what we believe to
be the best asset base in the industry.
Diversified mining and industrial metals
The diversified miners outperformed the mining sector as a whole in the first
half, helped by the generally stronger balance sheet positioning and healthy
margins. Rio Tinto remains our largest holding at 9.4% of the portfolio. The
company announced they had completed their share buyback, following on from a
34% increase in the dividend announced late in 2011. The key driver for Rio
Tinto's earnings in recent years has been iron ore, wherein they operate large
scale, low cost assets focused in the Pilbara, Australia. The company recently
announced details of an expansion project to increase production by 70 million
tonnes to 353 million tonnes per year. Many of these projects are likely to be
delayed in the current financial environment which should allay some concerns
about the potential for a significant amount of new iron ore supply to come
on-stream globally in the next few years. The expansion projects of Rio Tinto
stand out as being relatively low risk and with attractive capital intensity
because it is a brownfield expansion rather than a greenfield project with
associated costly new infrastructure requirements.
In previous reports we have mentioned the need for the mining industry to
return a higher proportion of their strong cash flows to shareholders,
especially considering that the return on capital for new development projects
has been falling. Pleasingly, we did see significant increases in dividends in
the first quarter and our expectation, based on Bloomberg estimates, is that we
should see total dividends for the mining sector grow by close to 50% year on
year. The focus of the market has, if anything, increased on this issue, as the
heightened uncertainty over the global economic outlook and significant capex
inflation for new projects has led investors to question the allocation of cash
flows by management teams at this stage in the cycle to large capex, long
pay-back projects. BHP Billiton came under particular scrutiny owing to its
perceived pipeline of "mega-projects" including its iron expansion through the
development of the Outer Harbour at Port Hedland, the Jansen Potash project,
and the expansion of its copper operation, Olympic Dam. The company have sought
to reassure the market that decisions on these projects are unlikely to be made
prior to 2014; in the meantime, they are looking at ways to phase the
development of these assets so as to minimise the amount of capital at risk.
Despite the downward revisions of Chinese GDP growth targets to 7.5% per annum,
domestic steel production has recovered from a slow start to the year to see
several record months of output during the first half of 2012. Approximately a
quarter of China's iron ore demand is met by domestic production, most of which
is at the top end of the cost curve and thus acts as a support level for an iron
ore price in the region of US$120 per tonne. With many greenfield projects in
places such as West Africa facing financing challenges and some existing
producers in Brazil experiencing pressures from grade decline, it is likely that
this high cost Chinese domestic production will continue to be required to
satisfy demand even in pessimistic economic scenarios. As a result, the portfolio
continues to maintain significant exposure to iron ore via the major diversified
mining companies (as discussed above) and a number of specialist producers such
as Kumba Iron Ore, Fortescue and African Minerals. In the first half of the year,
Kumba was the stand out performer with a total return of 11.7% (sterling terms)
as an established producer with a high dividend yield. The share prices of
Fortescue and African Minerals have suffered due to market concerns over their
respective mine ramp-ups; however we believe these to be exaggerated given they
are progressing down the path of de-risking both operationally and financially.
One of the best performing sectors in 2011 has been the mineral sands sector,
which produces ilmenite for use in pigments, zircon for ceramics and some other
minor materials. As mentioned in previous reports, the supply side discipline has
been a key factor in substantial price rises for these commodities. The first
half of 2012 has been challenging for these producers as demand has fallen
significantly, in particular for zircon where China is the largest consumer. This
has led to production forecasts to be sharply downgraded and the shares of the
producers have subsequently underperformed the market. However, there is some
good news - the strength of the balance sheets of the major producers, for example
Iluka, has enabled them to resist cutting prices so when demand does return, the
earnings potential is significant. This is in stark contrast to 2008 where
companies did not have this strength and were forced to accept price cuts.
In a time of fiscal pressure for many countries, governments have continued to
look for sources of revenue and the mining industry has once again come into
the crosshairs. Indonesia, a major producer of thermal coal, bauxite and tin,
has introduced a limit on the foreign ownership of mining assets. Although this
may prove positive for the price of those commodities where Indonesia is a
material source of supply as future supply is constrained by reduced investment
as a result of these capital restrictions, companies with Indonesian assets
underperformed after the policy announcement. There was also the continued high
profile dispute between Anglo American and Codelco, the Chilean state-owned
mining company, about copper assets in Chile. A final agreement has yet to be
reached between the parties but we are confident common sense will prevail.
Finally, in Argentina, the market valuation of mining assets was negatively
impacted when the government seized control of some oil assets, which raised
questions about potential interference in other resource assets in the country.
So far nothing has materialised but the uncertainty in a fragile equity market
was reflected in sharply lower share prices.
Derivatives activity
As usual, the company from time to time enters into derivatives contracts,
mostly involving the sale of "puts" and "calls". The option premia are taken to
revenue, unless the option represents a part of a larger capital transaction,
and are subject to strict Board guidelines which limit their magnitude to an
aggregate 10% of the portfolio.
Gearing
At 30 June 2012, the Company had £100.2 million (7.9% of total assets) of net
debt (30 June 2011: £49.5 million; 31 December 2011: £32.9 million).
Royalty investment
Subsequent to 30 June 2012, the Company completed the purchase of a 2% revenue
related royalty calculated on any iron ore sales over the life of mine from
London Mining Plc's Marampa mine in Sierra Leone, its first investment in a
mining royalty. The royalty is payable quarterly in arrears calculated on the
amount receivable at the relevant point of sale, currently calculated with
reference to the net freight on board price received from sales of iron ore in
Sierra Leone (terms similar to that of the existing royalty payable to the
government of Sierra Leone). Given the gradual ramp up to full capacity over
the rest of the year, payments are likely to be small during 2012 but
thereafter it is expected they will increase markedly as production scales up
first to 5mtpa and then to 9mtpa. This investment has been financed by the
drawing down on unused existing credit facilities and it is expected to be
immediately accretive to income.
Outlook
During the last few years the fiscal measures taken by governments around the
world seem to have arrested any rapid deterioration in developed world
economies but to date have failed to restart the global economy. As we started
2012, there were signs that the US economy might have bottomed but recent
comments from the Federal Reserve highlight the risks of this recovery stalling
on the back of the forthcoming US "fiscal cliff" and monetary policy impotence
during the run in to the US Presidential election. However, we expect Mr
Bernanke to maintain a loose monetary policy during the rest of the year which
should prevent such a stall.
As mentioned previously, in China the government appears to have already
started to ease with recent interest rate cuts and also the rapid sanctioning
of numerous multibillion dollar infrastructure projects. The impact of this
will probably not be felt until later in the year but it bodes well for keeping
Chinese GDP growth on track.
At the time of writing we await company results for the first half of the year.
With metal prices for the current period so far below the prior period from
2011 the year-on-year data will not make for pleasant reading. However, with
strong balance sheets across the sector, healthy profit margins being enjoyed
by our favoured commodity producers, an increased focus on capital discipline
and rising dividends we feel this is overly discounted in current share prices.
Finally, with the banks reluctant to finance many of the growth companies in
the sector we are reviewing a range of opportunities to put the Company's
capital to work at what we believe are very attractive rates of return.
Evy Hambro and Catherine Raw
BlackRock Investment Management (UK) Limited
9 August 2012
Ten Largest Investments
30 June 2012
Rio Tinto* - 9.4% (2011: 9.1%) is the world's third largest mining company by
market capitalisation. It has interests over a broad range of metals and
minerals including iron ore, aluminium, copper, coal, industrial minerals, gold
and uranium. In April 2012, it announced a financing package for its joint
venture partner, Ivanhoe Mines, to underpin the development of the Oyu Tolgoi
copper-gold mine in Mongolia. The company also closed the acquisition of BHP
Billiton's stake in Richards Bay Minerals, a South Africa based mineral sands
operation. In June 2012, Rio Tinto gave further details on how it will invest
US$4.2 billion in the Pilbara, Western Australia to increase iron ore
production to 353 million tonnes per annum from 2015.
BHP Billiton - 8.3% (2011: 8.1%) is the world's largest diversified natural
resource company, formed in 2001 from the merger of BHP and Billiton. The
company is an important global player in a number of commodities including iron
ore, copper, coal, manganese, aluminium, diamonds and uranium. The company is
the only sizeable holding in the portfolio with significant oil and gas assets.
In 2011, the company has moved into US onshore shale gas through the
acquisition of Chesapeake Energy's Fayetteville Shale assets for US$4.75
billion and most recently through a friendly deal with Petrohawk worth US$12.1
billion.
Vale* - 7.3% (2011: 7.2%), formerly known as CVRD, is the world's largest
producer of iron ore. Based in Brazil, the company also has significant
interests in other commodities such as nickel, aluminium, copper, gold and
coal. In addition, Vale owns and operates transport infrastructure. The company
made a transformational acquisition in 2006, acquiring Canadian nickel miner
Inco, which considerably broadened the company's asset mix away from just iron
ore. More recently, they have ventured into the fertiliser sector, Zambian
copper and Guinean iron ore. In April 2011, the CEO Roger Agnelli resigned amid
media speculation that he was pressured to do so by the new Brazilian
government. Under the leadership of new CEO, Murilo Ferreira, Vale has revised
down its growth forecasts and in January 2012 proposed a 50% year-on-year
increase to its minimum dividend.
Glencore* - 5.7% (2011: 5.9%) is a leading, diversified natural resources group
with activities in mining, smelting, refining, processing and marketing of
metals and minerals, energy products and agricultural products globally. It
provides financing, logistics, marketing and purchasing services to producers
and consumers of commodities. These activities are supported by investments in
industrial assets operating in Glencore's core commodity areas, including a 35%
stake in Xstrata. In February, it announced a proposed merger with Xstrata,
which is currently subject to both regulatory and shareholder approval.
Teck Resources* - 4.7% (2011: 5.0%) is a Canadian diversified miner that is a
leader in the production of metallurgical coal and zinc, as well as a
significant producer of copper. Despite being hit by poor weather and strikes
at a number of its operations in 2011, the strong price environment for both
copper and metallurgical coal meant the company announced a share buyback
programme in June 2011 and a 33% dividend increase in October 2011. The company
further strengthened its financial position in March 2012 when it refinanced
relatively high cost debt that was raised during the financial crisis,
replacing it with lower cost debt and an extended maturity profile.
Minas Buenaventura†- 4.5% (2011: 4.8%) is Peru's premier precious metals
company. Its main asset is a 43.65% stake in the Yanacocha gold mine in Peru,
which it jointly owns with Newmont Mining. The company operates seven mines in
Peru, has a controlling interest in zinc miner Minera El Brocal and an 18.5%
interest in copper miner Cerro Verde. In addition, the company has a
significant exploration portfolio, including the Chucapaca project in southern
Peru which it has joint ventured with Gold Fields Limited.
First Quantum Minerals - 4.1% (2011: 4.2%) is an integrated copper producer
whose principal operating assets are in Africa, but also with nickel assets in
Australia and Finland. In January 2012, the company announced that it had
reached an agreement with ENRC to dispose of all of its residual assets in the
DRC for US$1.25 billion and settle all outstanding claims, including those
brought by the DRC government. In May 2012, the company's board approved the
start of construction of the Sentinel copper project in Zambia, a key growth
asset that already has 15 years of reserves and potential to increase this with
further exploration drilling.
Industrias Penoles - 3.6% (2011: 3.5%) is Mexico's second largest mining
company and an integrated producer of non-ferrous metals. It is the country's
largest producer of zinc and lead, as well as silver and gold through its
subsidiary Fresnillo. The company's history dates back to 1887 and the shares
have traded on the Mexican Stock Exchange since 1968.
Fresnillo - 3.6% (2011: 4.0%) is the world's largest primary silver producer
and Mexico's second largest gold producer. The company has three producing
operations and a portfolio of high quality development and exploration
projects. Industrias Penoles, one of Mexico's leading mining companies, owns
77% of the company; the remainder is publicly listed on the London Stock
Exchange.
Freeport McMoRan - 3.4% (2011: 3.5%) is the world's second largest copper
producer, accounting for 9% of global mined copper production annually. It is
also a major producer of gold and molybdenum from mines in North and South
America, as well as Indonesia and the DRC. Its Grasberg mine in Indonesia
contains the world's largest recoverable copper and gold reserves. Despite a
number of labour related disputes in 2011, the company has continued
development of the block cave underground operation, which is set to replace
the open pit production from 2016. In February 2012, Freeport McMoRan announced
a 25% increase to its quarterly regular dividend; in 2010 and 2011 it also paid
a special dividend.
* Includes fixed interest securities.
†Includes group holdings.
All percentages reflect the value of the holding as a percentage of total
investments. Percentages in brackets represent the value of the holding as at
31 December 2011.
Portfolio Analysis
30 June 2012
Commodity Exposure*
BlackRock World Mining Trust plc HSBC Global Mining Index
30 June 2012 31 December 2011 30 June 2012
% % %
Nickel 0.0 0.0 0.5
Zinc/Lead 0.0 0.0 0.7
Uranium 0.0 0.0 1.2
Aluminium 0.0 0.0 2.5
Coal 0.8 2.4 7.4
Platinum 2.7 3.4 1.7
Industrial Minerals 4.2 5.2 0.7
Iron Ore 8.6 7.8 1.6
Silver & Diamonds 8.9 8.6 3.2
Gold 10.9 9.5 22.4
Copper 19.2 18.1 7.9
Diversified 42.3 42.1 48.6
Other 2.4 2.9 1.6
Geographical Exposure*
30 June 2012 31 December 2011
% %
Global 48 46
Latin America 20 20
Australia 10 12
South Africa 6 6
USA 1 1
Canada 1 1
Other 14 *** 14 **
* Based on the principal commodity exposure and place of operation of each
investment.
** Consists of Botswana, Republic of Congo, DRC, Eritrea, Indonesia,
Kazakhstan, Lesotho, Mongolia, Mozambique, Oman, Papua New Guinea, Russia,
Senegal, Sierre Leone, Zambia and Zimbabwe.
*** Consists of Botswana, Republic of Congo, DRC, Eritrea, Indonesia,
Kazakhstan, Lesotho, Mali, Mongolia, Mozambique, Oman, Papua New Guinea,
Russia, Senegal, Sierre Leone, Tanzania, Turkey, Zambia and Zimbabwe.
Source: BlackRock.
Investments
30 June 2012
Main Market
geographical value % of
exposure £'000 investments
Diversified
Rio Tinto* Global 118,983 9.4
BHP Billiton Global 104,748 8.3
Vale* Global 92,222 7.3
Glencore* Global 71,727 5.7
Teck Resources* Global 59,588 4.7
African Rainbow Minerals South Africa 25,702 2.0
Xstrata Global 23,958 1.9
Anglo American Global 20,233 1.6
Vedanta Global 8,406 0.7
Eramet USA 5,506 0.4
Eurasian Natural Resources Kazakhstan 2,077 0.2
Lundin Mining Global 1,316 0.1
Grafton Resources# Global 189 0.0
------- ----
534,655 42.3
------- ----
Copper
First Quantum Minerals Zambia 51,240 4.1
Freeport McMoRan Global 43,419 3.4
Cerro Verde Peru 38,965 3.1
Inmet Mining* Global 36,726 2.9
Antofagasta Chile 32,640 2.6
OZ Minerals Australia 12,826 1.0
Ivanhoe Nickel & Platinum# DRC 7,655 0.6
Kazakhmys Kazakhstan 7,215 0.6
Discovery Metals Botswana 3,805 0.3
Katanga Mining DRC 3,100 0.2
Rex Minerals Australia 1,780 0.1
Ivanhoe Mines Mongolia 1,328 0.1
Metminco Peru 668 0.1
Mawson West DRC 660 0.1
Gentor Resources Oman 375 0.0
------- ----
242,402 19.2
------- ----
Gold
Minas Buenaventura†Peru 56,922 4.5
Newcrest Mining Australia 27,877 2.2
Banro Corporation* DRC 12,793 1.0
IAMGOLD Global 11,248 0.9
Allied Nevada* USA 6,791 0.5
Rangold Resources Mali 5,735 0.5
G Resources Indonesia 3,711 0.3
Kinross Gold Global 3,378 0.3
Shanta Gold Tanzania 3,188 0.3
Eldorado Gold Global 3,125 0.2
Stratex Turkey 1,624 0.1
Minera IRL Peru 1,310 0.1
Sunridge Gold Eritrea 172 0.0
Pacific Niugini Papua New Guinea 131 0.0
------- ----
138,005 10.9
------- ----
Silver & Diamonds
Industrias Penoles Mexico 46,097 3.7
Fresnillo Mexico 45,896 3.6
GEM Diamonds Lesotho 5,880 0.5
Harry Winston Diamond Corp. Canada 4,334 0.3
Volcan Peru 3,731 0.3
Dia Bras Exploration Peru 2,557 0.2
Petra Diamonds South Africa 1,992 0.2
Lucara Diamond Botswana 1,212 0.1
------- ---
111,699 8.9
------- ---
Iron Ore
African Minerals†* Sierra Leone 27,609 2.2
Fortescue Metals* Australia 22,436 1.8
London Mining Sierra Leone 16,853 1.3
Atlas Iron Australia 13,136 1.0
Kumba Iron Ore South Africa 12,830 1.0
Zanaga Republic of Congo 6,577 0.5
Equatorial Resources Republic of Congo 5,469 0.4
Cape Lambert Resources Sierra Leone 2,591 0.2
IRC Russia 1,842 0.2
------- ---
109,343 8.6
------- ---
Industrial Minerals
Iluka Resources Australia 40,582 3.2
Kenmare Resources Mozambique 9,875 0.8
Mineral Deposits†Senegal 2,666 0.2
------ ---
53,123 4.2
------ ---
Platinum
Impala Platinum South Africa 31,301 2.5
Aquarius Platinum South Africa 1,881 0.2
------ ---
33,182 2.7
------ ---
Coal
Aquila Resources Australia 3,817 0.3
Australian Energy# Australia 3,497 0.3
Petmin South Africa 1,367 0.1
Coal of Africa South Africa 1,125 0.1
Cokal Australia 268 0.0
------ ---
10,074 0.8
------ ---
Other
Minsur sa 'I' Peru 15,151 1.2
Nyrstar Global 8,796 0.7
UEX Canada 3,040 0.2
Soc Min El Brocal Peru 2,128 0.2
Metals X Australia 1,290 0.1
Karmin Exploration Brazil 375 0.0
Bindura Nickel Zimbabwe 70 0.0
------ ---
30,850 2.4
--------- -----
Portfolio 1,263,333 100.0
========= =====
* Includes fixed interest investments.
# Investments held at Directors' valuation.
†Includes group holdings.
All investments are in equity shares unless otherwise stated.
The total number of investments as at 30 June 2012 was 76
(31 December 2011: 70).
Consolidated Statement of Comprehensive Income
for the six months ended 30 June 2012
Revenue £'000 Capital '000 Total £'000
Year Year Year
Six months ended ended Six months ended ended Six months ended ended
30.06.12 30.06.11 31.12.11 30.06.12 30.06.11 31.12.11 30.06.12 30.06.11 31.12.11
Notes (unaudited) (unaudited) (audited) (unaudited) (unaudited) (audited) (unaudited) (unaudited) (audited)
Income
from
investments
held at
fair value
through
profit or
loss 2 23,302 19,665 43,450 - - - 23,302 19,665 43,450
Other
income 2 998 1,649 4,663 - - - 998 1,649 4,663
------ ------ ------ --- --- --- ------ ------ ------
Total
revenue 24,300 21,314 48,113 - - - 24,300 21,314 48,113
------ ------ ------ --- --- --- ------ ------ ------
Losses on
investments
held at
fair value
through
profit or
loss - - - (147,111) (80,536) (405,420) (147,111) (80,536) (405,420)
Realised
losses on
foreign
exchange - - - (997) (2) (2,038) (997) (2) (2,038)
------ ------ ------ ------- ------ ------- ------- ------ -------
24,300 21,314 48,113 (148,108) (80,538) (407,458) (123,808) (59,224) (359,345)
------ ------ ------ ------- ------ ------- ------- ------ -------
Expenses
Investment
management
fees 3 (2,028) (10,513) (18,907) (6,085) - - (8,113) (10,513) (18,907)
Other
expenses 4 (431) (494) (908) (622) - - (1,053) (494) (908)
------ ------ ------ ----- ----- ----- ----- ------ ------
Total
operating
expenses (2,459) (11,007) (19,815) (6,707) - - (9,166) (11,007) (19,815)
----- ------ ------ ----- ----- ----- ----- ------ ------
Net profit/
(loss) before
finance costs
and taxation 21,841 10,307 28,298 (154,815) (80,538) (407,458) (132,974) (70,231) (379,160)
------ ------ ------ ------- ------ ------- ------- ------ -------
Finance costs (124) (287) (742) (371) - - (495) (287) (742)
------ ------ ------ ------- ------ ------- ------- ------ -------
Net profit/
(loss) on
ordinary
activities
before
taxation 21,717 10,020 27,556 (155,186) (80,538) (407,458) (133,469) (70,518) (379,902)
------ ------ ------ ------- ------ ------- ------- ------ -------
Taxation (751) (779) (1,457) 268 2,838 2,731 (483) 2,059 1,274
------ ------ ------ ------- ------ ------- ------- ------ -------
Net profit/
(loss) for
the period 6 20,966 9,241 26,099 (154,918) (77,700) (404,727) (133,952) (68,459) (378,628)
------ ----- ------ ------- ------ ------- ------- ------ -------
Earnings/
(loss) per
ordinary
share 6 11.83p 5.21p 14.71p (87.39p) (43.77p) (228.08p) (75.56p) (38.56p) (213.37p)
====== ===== ====== ======= ======= ======== ======= ======= ========
The total column of this statement represents the Consolidated Statement of
Comprehensive Income, prepared in accordance with International Financial
Reporting Standards ("IFRS"), as adopted by the European Union ("EU"). The
supplementary revenue and capital columns 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 disposed of during the periods. All income is attributable to the equity
holders of BlackRock World Mining Trust plc. There were no minority interests.
The final dividend of 14.00p per share in respect of the year ended
31 December 2011 was declared on 23 February 2012 and paid on 26 April 2012.
This can be found in the Consolidated Statement of Changes in Equity for the
six months ended 30 June 2012. The net loss of the Company for the period was
£133,952,000 (six months ended 30 June 2011: loss of £68,459,000; year ended
31 December 2011: loss of £378,628,000). The Group does not have any other
recognised gains or losses. The net profit/(loss) for the periods disclosed
above represents the Group's total comprehensive income.
Consolidated Statement of Changes in Equity
for the six months ended 30 June 2012
Called up Share Capital
share premium Special redemption Capital Revenue
capital account reserve reserve reserves reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
For the six
months ended
30 June 2012
(unaudited)
At
31 December 2011 9,651 127,155 116,471 22,779 994,236 46,712 1,317,004
Total
comprehensive
income:
Net (loss)/
profit for the
period - - - - (154,918) 20,966 (133,952)
Transactions
with owners:
Dividend paid
of 14.00p per
share (a) - - - - - (24,820) (24,820)
----- ------- ------- ------- ------- ------- ---------
At 30 June 2012 9,651 127,155 116,471 22,779 839,318 42,858 1,158,232
===== ======= ======= ======= ======= ======= =========
For the six
months ended
30 June 2011
(unaudited)
At
31 December 2010 9,651 127,155 118,210 22,779 1,398,963 31,265 1,708,023
Total
comprehensive
income:
Net (loss)/
profit for the
period - - - - (77,700) 9,241 (68,459)
Transactions
with owners:
Dividend paid
of 6.00p per
share (b) - - - - - (10,653) (10,653)
----- ----- ------ ------ ------ ------ ------
At
30 June 2011 9,651 127,155 118,210 22,779 1,321,263 29,853 1,628,911
===== ======= ======= ====== ========= ====== =========
For the year
ended
31 December 2011
(audited)
At
31 December 2010 9,651 127,155 118,210 22,779 1,398,963 31,265 1,708,023
Total
comprehensive
income:
Net (loss)/
profit for the
year - - - - (404,727) 26,099 (378,628)
Transactions
with owners:
Shares purchased
during the
year (c) - - (1,739) - - - (1,739)
Dividend paid
of 6.00p per
share (b) - - - - - (10,652) (10,652)
----- ----- ----- ----- ----- ------ ------
At
31 December 2011 9,651 127,155 116,471 22,779 994,236 46,712 1,317,004
===== ======= ======= ====== ======= ====== =========
(a) The final dividend for the year ended 31 December 2011, declared on
23 February 2012 and paid on 26 April 2012.
(b) The final dividend for the year ended 31 December 2010, declared on
24 February 2011 and paid on 11 May 2011.
(c) Held in treasury.
The transaction costs incurred on the acquisition and disposal of investments
are included within the capital reserves. Purchase and sale costs amounted to
£97,000 and £115,000 respectively for the period ended 30 June 2012 (six months
ended 30 June 2011: £376,000 and £260,000; year ended 31 December 2011: £628,000
and £427,000).
Consolidated Statement of Financial Position
as at 30 June 2012
30 June 30 June 31 December
2012 2011 2011
£'000 £'000 £'000
Notes (unaudited) (unaudited) (audited)
Non current assets
Investments held at fair value
through profit or loss 1,263,333 1,684,054 1,353,098
--------- --------- ---------
Current assets
Cash and cash equivalents - 11,584 30,113
Other receivables 4,955 1,810 3,445
Amounts due from brokers - - 6
--------- --------- ---------
4,955 13,394 33,564
--------- --------- ---------
Total assets 1,268,288 1,697,448 1,386,662
--------- --------- ---------
Current liabilities
Other payables (8,880) (5,959) (5,274)
Amounts due to brokers - (312) (9)
Taxation payable - (132) -
Bank loans (100,099) (61,042) (63,059)
Bank overdrafts (70) - -
-------- ------- -------
(109,049) (67,445) (68,342)
-------- ------- -------
Total assets less current
liabilities 1,159,239 1,630,003 1,318,320
Non current liabilities
Deferred tax (1,007) (1,092) (1,316)
--------- --------- ---------
Net assets 1,158,232 1,628,911 1,317,004
========= ========= =========
Equity attributable to equity
holders
Called up share capital 7 9,651 9,651 9,651
Share premium account 127,155 127,155 127,155
Special reserve 116,471 118,210 116,471
Capital redemption reserve 22,779 22,779 22,779
Capital reserves 839,318 1,321,263 994,236
Revenue reserve 42,858 29,853 46,712
--------- --------- ---------
Total equity 1,158,232 1,628,911 1,317,004
========= ========= =========
Net asset value per ordinary
share 6 653.31p 917.50p 742.86p
======= ======= =======
Consolidated Cash Flow Statement
for the six months ended 30 June 2012
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2012 2011 2011
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Net cash (outflow)/inflow from operating
activities before financing (41,406) (7,983) 12,303
------- ------ ------
Financing activities
Purchase of ordinary shares - - (1,739)
Drawdown of loans 35,519 36,079 37,707
Dividends paid (24,820) (10,653) (10,652)
------- ------- -------
Net cash inflow from financing activities 10,699 25,426 25,316
------- ------- ------
(Decrease)/increase in cash and cash
equivalents (30,707) 17,443 37,619
Effect of foreign exchange rate changes 524 51 (1,596)
------- ------- ------
Change in cash and cash equivalents (30,183) 17,494 36,023
Cash and cash equivalents at start of
period/year 30,113 (5,910) (5,910)
------- ------- ------
Net (debt)/cash and cash equivalents at
end of period/year (70) 11,584 30,113
==== ====== ======
Reconciliation of Net Income before Finance Costs and Taxation to Net Cash Flow
from Operating Activities
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2012 2011 2011
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Operating activities
Loss before taxation (133,469) (70,518) (379,902)
Add back interest paid 495 287 742
Losses on investments held at fair
value through profit or loss including
transaction costs 147,111 80,536 405,420
Net losses on foreign exchange 997 2 2,038
Net movement of current asset
investment held by subsidiary - - 532
Sales of investments held at fair
value through profit or loss 110,847 134,289 236,648
Purchases of investments held at fair
value through profit or loss (168,193) (140,606) (236,892)
Increase in other receivables (1,584) (494) (2,101)
Increase/(decrease) in amounts due
from brokers 6 - (6)
Decrease in amounts due to brokers (9) (10,287) (10,590)
Increase/(decrease) in other payables 3,606 (109) (794)
Dealing profits - - (532)
------- ------- -------
Net cash (outflow)/inflow from
operating activities before interest
and taxation (40,193) (6,900) 14,563
------- ------ ------
Interest paid (495) (287) (742)
Taxation paid (41) - (16)
Taxation on overseas income (677) (796) (1,502)
------- ------ ------
Net cash (outflow)/inflow from
operating activities before financing (41,406) (7,983) 12,303
======= ====== ======
Notes to the Half Yearly Financial Statements
1. Principal activity and basis of preparation
The principal activity of the Company is that of an investment trust company
within the meaning of sub-sections 1158-1165 of the Corporation Tax Act 2010.
The principal activity of its subsidiary, BlackRock World Mining Investment
Company Limited, is investment dealing.
The half yearly financial statements have been prepared using the same
accounting policies as set out in the Group's Annual Report and Financial
Statements for the year ended 31 December 2011 (which were prepared in
accordance with International Financial Reporting Standards ("IFRS") as adopted
by the EU and applied in accordance with the provisions of the Companies Act
2006) and in accordance with International Accounting Standard 34, 'Interim
Financial Reporting'. Insofar as the Statement of Recommended Practice ("SORP")
for investment trust companies and venture capital trusts issued by the
Association of Investment Companies ("AIC"), revised in January 2009 is
compatible with IFRS, the financial statements have been prepared in accordance
with guidance set out in the SORP.
With effect from 1 January 2012, the investment management fee and finance
costs have been allocated 75% to the capital column and 25% to the revenue
column of the Consolidated Statement of Comprehensive Income in line with the
Board's expected long term split of returns, in the form of capital gains and
income respectively, from the investment portfolio. The Group had previously
allocated the investment management fee and finance costs to the revenue column
and the comparative figures for the six month period ended 30 June 2011 and for
the year ended 31 December 2011 were prepared on this basis. The comparative
figures have not been restated.
2. Income
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2012 2011 2011
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Investment income:
UK listed dividends 5,064 3,830 8,535
Overseas listed dividends 12,264 7,982 17,876
Overseas listed special dividends 446 3,394 7,646
Fixed interest 5,528 4,459 9,393
------ ------ ------
23,302 19,665 43,450
------ ------ ------
Other income:
Option premiums 988 1,438 3,775
Deposit interest 10 7 24
Dealing profits - - 532
Underwriting commission - 204 332
------ ------ ------
998 1,649 4,663
------ ------ ------
Total 24,300 21,314 48,113
====== ====== ======
The Group considers the treatment of premiums arising on option transactions on
a case by case basis. During the six month period ended 30 June 2012, the
option premium income of £988,000 (six months ended 30 June 2011: £1,438,000;
year ended 31 December 2011: £3,775,000) received by the Group was from options
written for income purposes and has therefore been credited to the revenue
column of the Consolidated Statement of Comprehensive Income.
3. Investment management fees
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2012 2011 2011
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Investment management fees:
- Allocated to capital 6,085 - -
- Allocated to revenue 2,028 10,513 18,907
----- ------ ------
8,113 10,513 18,907
===== ====== ======
The investment management fee is levied quarterly at a rate of 1.3% per annum,
based on the value of the gross assets on the last day of each quarter, and
with effect from 1 January 2012 75% of investment management fees are allocated
to the capital column and 25% to the revenue column of the Consolidated
Statement of Comprehensive Income.
4. Other expenses
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2012 2011 2011
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Custody fee 202 273 465
Registrar's fees and other administrative
costs 172 164 328
Directors' emoluments 57 57 115
--- ---- ---
431 494 908
=== === ===
5. Dividends
The final dividend of 14.00p per share for the year ended 31 December 2011 was
paid on 26 April 2012. The Board has declared an interim dividend of 7.00p per
share for the period ended 30 June 2012 and will be paid on 21 September 2012
to shareholders on the register on 24 August 2012. This dividend has not been
accrued in the financial statements for the six months ended 30 June 2012, as
under IFRS, interim dividends are not recognised until paid. Dividends are
debited directly to reserves.
6. Consolidated earnings/(loss) and net asset value per ordinary share
Total revenue and capital returns per share are shown below and have been
calculated using the following:
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2012 2011 2011
(unaudited) (unaudited) (audited)
Net revenue profit attributable
to ordinary shareholders (£'000) 20,966 9,241 26,099
Net capital loss attributable to
ordinary shareholders (£'000) (154,918) (77,700) (404,727)
-------- ------- --------
Total loss attributable to
ordinary shareholders (£'000) (133,952) (68,459) (378,628)
======== ======= ========
Equity shareholders' funds
(£'000) 1,158,232 1,628,911 1,317,004
--------- --------- ---------
The weighted average number of
ordinary shares in issue during
each period, on which the return
per ordinary share was
calculated, was: 177,287,242 177,537,242 177,450,256
The actual number of ordinary
shares in issue at the end of
each period, on which the net
asset value was calculated, was: 177,287,242 177,537,242 177,287,242
Revenue earnings per share 11.83p 5.21p 14.71p
Capital loss per share (87.39p) (43.77p) (228.08p)
------- ------- --------
Total loss per share (75.56p) (38.56p) (213.37p)
======= ======= ========
Net asset value per share 653.31p 917.50p 742.86p
Share price 567.50p 756.50p 631.50p
======= ======= =======
There were no dilutive securities during any of the periods.
7. Called up share capital
Ordinary Treasury
shares shares
number number Total
(nominal) (nominal) shares £'000
Allotted, called up
and fully paid share
capital comprised:
Ordinary shares of
5p each
----------- ---------- ----------- -----
At 1 January 2012
and 30 June 2012 177,287,242 15,724,600 193,011,842 9,651
=========== ========== =========== =====
8. Related party disclosure
The related party transaction with BlackRock is set out in note 3. The fee due
to the Investment Manager for the six months ended 30 June 2012 amounted to
£8,113,000 (six months ended 30 June 2011: £10,513,000; year ended
31 December 2011: £18,907,000). At the period end, £8,113,000 was outstanding
in respect of management fees (six months ended 30 June 2011: £5,249,000; year
ended 31 December 2011: £4,431,000).
The Board currently consists of six non-executive Directors all of whom are
considered to be independent by the Board. None of the Directors has a service
contract with the Company. The Chairman receives an annual fee of £30,000, the
Chairman of the Audit and Management Engagement Committee receives an annual
fee of £25,000, and each other Director receives an annual fee of £20,000. All
members of the Board hold shares in the Company. Mr Lea holds 6,000 shares,
Mr Barby 25,000 shares, Mr Baring 3,000 shares, Mr Buchan 24,000 shares,
Mr Cheyne 4,000 shares and Mr Sage 12,000 shares.
9. Contingent liabilities
There were no contingent liabilities at 30 June 2012 (30 June 2011 and
31 December 2011: nil).
10. Publication of non-statutory accounts
The financial information contained in this half yearly financial report does
not constitute statutory accounts, as defined in section 435 of the Companies
Act 2006. The financial information for the six months ended 30 June 2012 and
2011 has not been audited.
The information for the year ended 31 December 2011 has been extracted from the
latest published audited financial statements which have been filed with the
Registrar of Companies. The report of the auditor on those financial statements
contained no qualification or statement under sections 498(2) or (3) of the
Companies Act 2006.
11. Annual results
The Board expects to announce the annual results for the year ended
31 December 2012, in mid February 2013. Copies of the results announcement can
be obtained from the Secretary on 020 7743 3000. The annual report should be
available by the end of February 2013, with the Annual General Meeting being
held in April 2013.
12 Throgmorton Avenue
London
EC2N 2DL
9 August 2012
Independent Review Report
to BlackRock World Mining Trust plc
Introduction
We have been engaged by the Company to review the condensed set of financial
statements in the half yearly financial report for the six months ended
30 June 2012 which comprises the Consolidated Statement of Comprehensive
Income, Consolidated Statement of Changes in Equity, Consolidated Statement of
Financial Position, Consolidated Cash Flow Statement, Reconciliation of Net
Income before Taxation to Net Cash Flow from Operating Activities, and the
related notes 1 to 11. We have read the other information contained in the half
yearly financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the condensed set of financial
statements.
This report is made solely to the Company in accordance with guidance contained
in International Standard on Review Engagements 2410 (UK and Ireland) "Review
of Interim Financial Information Performed by the Independent Auditor of the
Entity" issued by the Auditing Practices Board. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone other than the
Company, for our work, for this report, or for the conclusions we have formed.
Directors' responsibilities
The half yearly financial report is the responsibility of, and has been
approved by, the Directors. The Directors are responsible for preparing the
half yearly financial report in accordance with the Listing Rules of the
Financial Services Authority.
As disclosed in note 1, the annual financial statements of the Company are
prepared in accordance with International Financial Reporting Standards
("IFRS") as adopted by the European Union and as applied in accordance with the
provisions of the Companies Act 2006. The condensed set of financial statements
included in this half yearly financial report has been prepared in accordance
with the Accounting Standards Board Statement "Half Yearly Financial Reports".
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half yearly financial report based on our
review.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements 2410 (UK and Ireland), "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half yearly
financial report for the six months ended 30 June 2012 is not prepared, in all
material respects, in accordance with the Accounting Standards Board Statement
"Half Yearly Financial Reports" and the Disclosure and Transparency Rules of
the United Kingdom's Financial Services Authority.
Ernst & Young LLP
London
9 August 2012
The Half Yearly Financial Report will also be available on the BlackRock
Investment Management website at www.blackrock.co.uk/brwm. Neither the contents
of the Manager's website nor the contents of any website accessible from
hyperlinks on the Manager's website (or any other website) is incorporated
into, or forms part of, this announcement.