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.

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