Baker Steel Resources Trust Ltd

Interim / Quarterly Report • Jun 30, 2010

Half-Yearly Report and Unaudited Condensed Interim Financial Statements

For the period from 9 March 2010 (date of incorporation) to 30 June 2010

CONTENTS	PAGE
Management and Administration	1
Chairman's Statement	3
Investment Manager's Report	5
Directors' Responsibility Statement	6
Interim Portfolio Statement	7
Condensed Interim Statement of Financial Position	8
Condensed Interim Statement of Comprehensive Income	9
Condensed Interim Statement of Changes in Equity	10
Condensed Interim Statement of Cash Flows	11
Notes to the Condensed Interim Financial Statements	12

MANAGEMENT AND ADMINISTRATION

DIRECTORS: Howard Myles (Chairman)*

Edward Flood** Charles Hansard*** Clive Newall*

Christopher Sherwell*

(all of whom are non-executive)

*Independent Directors

REGISTERED OFFICE: Arnold House

St. Julian's Avenue St. Peter Port

Guernsey Channel Islands

MANAGER: Baker Steel Capital Managers (Cayman) Limited

PO Box 309 George Town

Grand Cayman KY1-1104

Cayman Islands

INVESTMENT MANAGER: Baker Steel Capital Managers LLP

86 Jermyn Street London SW1Y 6JD

England

United Kingdom

BROKERS: RBC Capital Markets

71 Queen Victoria Street London EC4V 4DE United Kingdom

Winterflood Securities Limited

Cannon Bridge House 25 Dowgate Hill London EC4R 2GA United Kingdom

SOLICITORS TO THE COMPANY: Simmons & Simmons

(as to English law) CityPoint

One Ropemaker Street London EC2Y 9SS United Kingdom

ADVOCATES TO THE COMPANY: Ogier

(as to Guernsey law) Ogier House

St. Julian's Avenue

St. Peter Port

Guernsey GY1 1WA Channel Islands

^** Edward Flood resigned from Genus Capital Fund's Board of Directors on 12 July 2010 and from that date forward is an Independent Director

^*** Charles Hansard resigned from Genus Capital Fund's Board of Directors on 26 July 2010 and from that date forward is an Independent Director

MANAGEMENT AND ADMINISTRATION (CONTINUED)

ADMINISTRATOR & COMPANY SECRETARY: HSBC Securities Services (Guernsey) Limited

Arnold House St. Julian's Avenue St. Peter Port Guernsey GY1 3NF Channel Islands

SUB-ADMINISTRATOR TO THE COMPANY: HSBC Securities Services (Ireland) Limited

1 Grand Canal Square Grand Canal Harbour

Dublin 2 Ireland

CUSTODIAN TO THE COMPANY: HSBC Institutional Trust Services (Ireland) Limited

1 Grand Canal Square Grand Canal Harbour

Dublin 2 Ireland

AUDITORS: Ernst & Young LLP

Royal Chambers St. Julian's Avenue St. Peter Port

Guernsey GY1 4AF Channel Islands

REGISTRAR: Capita Registrars (Guernsey) Limited

Longue Hougue House

St. Sampson

Guernsey GY2 4JN Channel Islands

PRINCIPAL BANKER HSBC Bank plc

8 Canada Square London E14 5HQ United Kingdom

CHAIRMAN'S STATEMENT

For the period from 9 March 2010 (date of incorporation) to 30 June 2010

To Shareholders of Baker Steel Resources Trust Limited

The Board is pleased to present the Company's first Half-Yearly Financial Report since listing on the London Stock Exchange on 28 April 2010.

This Chairman's Statement has been produced solely to provide additional information to Shareholders as a body, as required by the UK Listing Authority's Disclosure and Transparency Rules. It should not be relied upon by Shareholders or any other party for any other purpose.

This Chairman's Statement relates to the period from the date of formation of the Company to 30 June 2010 and contains information that covers this period and up to the date of publication of this Half-Yearly Report. Please note that more up to date performance information, including the monthly report for the period ending 31 July 2010, is available on the Company's website www.bakersteelresourcestrust.com.

The objective of the Company is to seek capital growth over the long term by investing through a focused global portfolio consisting principally of the equities, or related instruments, of natural resources companies. These investments will be predominantly in private companies with strong development projects and focused management, but also in listed securities to exploit value inherent in market inefficiencies.

Financial Performance

The unaudited net asset value ("NAV") per Ordinary Share as at 30 June 2010 was 95.5p per share, down 2.5% from the Company's first NAV calculated on 30 April 2010. During this period the HSBC World Mining Index was down approximately 15%.

For the purpose of calculating the NAV per share, unquoted investments are carried at fair value as at 30 June 2010 as determined by the Directors and quoted investments are carried at last traded price as at 30 June 2010.

Net assets at 30 June 2010 comprised the following:

	£m	% net assets
Unquoted Investments	39.1	62.0
Quoted Investments	0.4	0.6
Net Current Assets	23.6	37.4
	63.1	100.0

Issue of Shares

The Company was admitted to trading on the London Stock Exchange on 28 April 2010. On that date, 30,468,865 Ordinary Shares and 6,093,772 Subscription Shares were issued pursuant to a placing and offer for subscription and 35,554,224 Ordinary Shares and 7,110,822 Subscription Shares were issued pursuant to a scheme of reorganisation of Genus Capital Fund.

In addition 10,000 Management Ordinary Shares were issued. On 9 March 2010, 1 Management Ordinary Share was issued and on 26 March 2010, 9,999 Management Ordinary Shares were issued.

No further Ordinary Shares or Subscription Shares have been issued since that time and as a result, the Company has 66,033,089 Ordinary Shares and 13,204,594 Subscription Shares in issue.

Going Concern

The Directors have made an assessment of the Company's ability to continue as a going concern and are satisfied that it has the resources to continue in business for the foreseeable future. Furthermore, the Directors are not aware of any material uncertainties that may cast significant doubt upon the Company's ability to continue as a going concern. Therefore, the financial statements have been prepared on a going concern basis.

CHAIRMAN'S STATEMENT (CONTINUED)

For the period from 9 March 2010 (date of incorporation) to 30 June 2010

Related Party Transactions

Transactions with related parties are based on terms equivalent to those that prevail in an arm's length transaction. The following transactions with related parties took place for the period ended 30 June 2010.

On 30 March 2010 the Company agreed to acquire the majority of the non- cash assets of Genus Capital Fund as set out in the Prospectus issued by the Company dated 31 March 2010. Charles Hansard and Edward Flood were also directors of Genus Capital Fund and so had an actual or potential conflict of interest. Edward Flood and Charles Hansard resigned from Genus Capital Fund's Board of Directors on 12 July 2010 and on 26 July 2010 respectively.

Directors' Interests

The Directors' interests in the share capital of the Company at 30 June 2010 were as follows:

	Number of	Number of
	Ordinary Shares	Subscription Shares
Edward Flood	65,000	13,000
Christopher Sherwell	25,000	5,000
Clive Newall	25,000	5,000

Howard Myles Chairman 31 August 2010

INVESTMENT MANAGER'S REPORT

For the period from 9 March 2010 (date of incorporation) to 30 June 2010

Investment Update

Largest Investments

	% of NAV
Ferrous Resources Limited	19.5%
Ivanhoe Nickel and Platinum Limited	18.1%
Gobi Coal & Energy Limited	11.0%
Copperbelt Minerals Limited	5.7%
First Coal Corporation	3.5%
Other Investments	4.8%

Events of note occurred with two of the Company's portfolio companies during the period. Ferrous Resources announced its decision to float on the London Stock Exchange, which might have seen it enter the FTSE 100 Index. However, due to "volatile markets" the listing was postponed and the Investment Manager is engaging with Ferrous management to ascertain their plans for the company. Following postponement of the IPO, it was decided that it would be appropriate to reduce the carrying value from US\$3.50 per share to US\$3.00 per share, which had a 3% negative effect on NAV.

Copperbelt Minerals has agreed an all cash offer from a consortium of Chinese investors, valuing the company at US\$26.50 per share compared with the carrying value of US\$20/share at 30 June 2010. This is awaiting approval by the Congolese government. The date to conclude the offer has been extended to 31 August 2010.

Outlook

The market environment which saw the postponement of the Ferrous float has also meant that other companies have struggled to float or raise equity. This has provided a number of new opportunities for the Company and the Investment Manager is evaluating potential investments in gold, silver and coal mining companies. Additional precious metals mining exposure would be welcome to balance Baker Steel Resources Trust's commodity exposure.

Principal Risks and Uncertainties

The principal risks facing the Company relate to the Company's investment activities. These risks are mainly market risk (comprising currency risk, commodity price risk and other price risks), liquidity risk, mining development risk, licensing risk, and emerging market risk. The Ordinary Shares are also subject to discount risk. An explanation of these risks is contained in the Company's prospectus dated 31 March 2010, available on the Company's website www.bakersteelresourcestrust.com.

The principal risks and uncertainties set out above have not significantly changed since the publication of the Company's prospectus and are not anticipated to change for the remainder of 2010.

Baker Steel Capital Managers LLP August 2010

DIRECTORS' RESPONSIBILITY STATEMENT

For the period from 9 March 2010 (date of incorporation) to 30 June 2010

To the best of the knowledge of the Directors:

The Chairman's Statement and the Investment Manager's Report comprise the Half-Yearly Management Report.

This Half-Yearly Management Report and Condensed Interim Financial Statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and have been prepared in accordance with International Accounting Standard (IAS) 34 Interim Financial Reporting.

The Half-Yearly Management Report includes a fair review of the information required by:

• (a) DTR 4.2.7 of the Disclosure and Transparency Rules, being an indication of important events that have occurred in the period from 9 March 2010 (date of incorporation) to 30 June 2010 and their impact on the set of financial statements; and a description of the principal risks and uncertainties for the remainder of the year; and
• (b) DTR 4.2.8 of the Disclosure and Transparency Rules, being related party transactions that have taken place in the period from 9 March 2010 (date of incorporation) to 30 June 2010 and that have materially affected the financial position or performance of the entity during that period.

Signed on behalf of the Board of Directors by:

Howard Myles Christopher Sherwell

31 August 2010

UNAUDITED PORTFOLIO STATEMENT AT 30 JUNE 2010

Shares /Warrants	Investments	Fair value £	% of Net assets
	Listed equity shares
	Canadian Dollars
358,333	MBAC Fertilizer Corporation	374,538	0.59
	Total investments in listed equity shares	374,538	0.59
	Unlisted equity shares and warrants
	Canadian Dollars
500	BacTech Mining	314,826	0.50
2,571,429	First Coal Corporation	2,218,173	3.52
		2,532,999	4.02
	Great Britain Pounds
1,594,646	Celadon Mining	297,720	0.47
		297,720	0.47
	United States Dollars
268,889	Copperbelt Minerals	3,592,852	5.70
6,123,642	Ferrous Resources	12,273,467	19.46
5,169,550	Gobi Coal and Energy	6,907,469	10.95
500,000	Ivanhoe Nickel and Platinum	2,922,902	4.63
791,666	Ivanhoe Nickel Platinum warrants 1 for 1.2 ordinary	5,553,510	8.80
507,500	Ivanhoe Nickel Platinum warrants 1 for 1 ordinary	2,966,746	4.70
6,500,000	South American Ferro Metals	2,051,877	3.25
		36,268,823	57.49
	Total investment in unlisted equity shares	39,099,542	61.98
	Financial assets held at fair value through profit or loss	39,474,080	62.57
	Other assets and liabilities	23,613,606	37.43
	Total Equity	63,087,686	100.00

CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2010

		Unaudited 30 June 2010
	Notes	£
Assets
Cash and cash equivalents	8	26,113,077
Financial assets held at fair value through profit or loss (Cost: £41,063,333)	3	39,474,080
Other receivables		4,415
Total assets		65,591,572
Liabilities
Due to broker		2,134,975
Bank overdraft	8	334
Management fees payable	7	204,514
Administration fees payable	6	8,588
Formation expenses payable		105,721
Directors' fees payable		24,867
Audit fees payable Other payables		11,429 13,458
Total liabilities		2,503,886
Equity Management Ordinary Shares	9	10,000
Ordinary Shares	9	64,641,914
Total deficit		(1,564,228)
Total equity		63,087,686
Total equity and liabilities		65,591,572
Ordinary Shares in issue		66,033,089
Net asset value per Ordinary Share (in Pence) – Basic & Diluted	4	95.5

CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD FROM 9 MARCH 2010 (DATE OF INCORPORATION) TO 30 JUNE 2010

		Unaudited period ended 30 June 2010 Revenue	Unaudited period ended 30 June 2010 Capital	Unaudited period ended 30 June 2010 Total
	Notes	£	£	£
Income Net loss on financial assets and liabilities at fair value
through profit or loss	3	-	(1,589,253)	(1,589,253)
Net foreign exchange gain		-	460,613	460,613
Net income		-	(1,128,640)	(1,128,640)
Expenses
Formation expenses		152,870	-	152,870
Management fees	7	204,514	-	204,514
Directors' fees and expenses		25,414	-	25,414
Administration fees	6	21,600	-	21,600
Audit fees		11,429	-	11,429
Custody fees		7,331	-	7,331
Other expenses		12,430	-	12,430
Total expenses		435,588	-	435,588
Total comprehensive income for the period		(435,588)	(1,128,640)	(1,564,228)
Net loss for the period per Ordinary Share: Basic (in pence)	4	(0.66)	(1.71)	(2.37)
Diluted (in pence)	4	(0.65)	(1.71)	(2.36)
Weighted Average Number of Ordinary Shares Outstanding:
Basic	4			66,033,089
Diluted	4			66,194,820

In the current period there were no gains or losses other than those recognised above.

The Directors consider all results to derive from continuing activities.

CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD FROM 9 MARCH 2010 (DATE OF INCORPORATION) TO 30 JUNE 2010

	Management			Period ended
	Ordinary	Ordinary	Total	30 June
	Shares	Shares	deficit	2010
	£	£	£	£
Balance at 9 March 2010	-	-	-	-
Proceeds on issue of Ordinary Shares	10,000	66,023,089	-	66,033,089
Share issue costs	-	(1,381,175)	-	(1,381,175)
Net loss for the period	-	-	(1,564,228)	(1,564,228)
Balance as at 30 June 2010	10,000	64,641,914	(1,564,228)	63,087,686

CONDENSED INTERIM STATEMENT OF CASH FLOWS FOR THE PERIOD FROM 9 MARCH 2010 (DATE OF INCORPORATION) TO 30 JUNE 2010

		Period ended 30 June 2010
	Notes	£
Cash flows from operating activities
Net loss for the period		(1,564,228)
Adjustments to reconcile loss for the period to net cash used in operating activities:
Net change in fair value of financial assets and at fair value through profit or loss		1,589,253
Net increase in other receivables		(4,415)
Net increase in other payables		368,577
Net cash provided by operating activities		389,187
Cash flows from investing activities
Purchase of financial assets of financial assets at fair value through profit or loss		(3,364,134)
Net cash used in investing activities		(3,364,134)
Cash flows from financing activities
Proceeds from shares issued	9	30,468,865
Share issue costs		(1,381,175)
Net cash provided from financing activities		29,087,690
Net increase in cash and cash equivalents		26,112,743
Cash and cash equivalents at the beginning of the period		-
Cash and cash equivalents at the end of the period	8	26,112,743
Represented by:
Cash and cash equivalents		26,113,077
Bank overdraft		(334)
Cash and cash equivalents at the end of the period	8	26,112,743

1. GENERAL INFORMATION

Baker Steel Resources Trust Limited (the "Company") is a closed-ended investment company with limited liability incorporated on 9 March 2010 in Guernsey under The Companies (Guernsey) Law 2008 with registration number 51576. The Company is a Registered closed-ended investment scheme registered pursuant to the POI Law and the Collective Investment Scheme Rules 2008 issued by the Guernsey Financial Services Commission (GFSC). On 28 April 2010 the Ordinary Shares and Subscription Shares of the Company were admitted to the Official List of the UK Listing Authority and to trading on the Main Market of the London Stock Exchange.

The Company is managed by Baker Steel Capital Managers (Cayman) Limited (the "Manager"). The Manager has appointed Baker Steel Capital Managers LLP (the "Investment Manager") as the investment manager to carry out certain duties. The Company's investment objective is to seek capital growth over the long-term through a focused, global portfolio consisting principally of the equities, or related instruments, of natural resources companies. The Company invests predominantly in unlisted companies (i.e. those companies that have not yet made an initial public offering or "IPO") and also in listed securities (including special situations opportunities and less liquid securities) with a view to exploiting value inherent in market inefficiencies and pricing anomalies.

These condensed interim financial statements have not been audited or reviewed by the auditors pursuant to the Auditing Practices Board Guidance on the Review of the interim financial information performed by the independent auditor of the Company.

2. SIGNIFICANT ACCOUNTING POLICIES

a) Basis of preparation

The unaudited condensed interim financial statements of the Company have been prepared in accordance with International Accounting Standards (IAS) 34: Interim Financial Reporting.

The financial statements have been prepared on a historic cost basis except for financial assets and financial liabilities at fair value through profit or loss, which are designated at fair value through profit or loss.

The Company has adopted the United Kingdom pound sterling ("£") as its presentation currency, being the currency in which its Ordinary Shares and Subscription Shares are issued. The presentation currency is the same as the functional currency.

The statement of comprehensive income is presented in accordance with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued in January 2009 by the Association of Investment Companies, to the extent that it does not conflict with International Financial Reporting Standards (IFRS).

Significant accounting judgements and estimates

The preparation of the Company's financial statements requires Directors to make judgements, estimates and assumptions that affect the amounts recognised in the financial statements. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future. The most significant judgement relates to the valuation of the Company's unlisted investments.

b) Financial assets and liabilities at fair value through profit or loss

The Company designates its investments other than derivatives at fair value through profit or loss, at initial recognition. All derivatives are classified as held for trading and included in financial assets at fair value through profit or loss.

Recognition and derecognition

The Company recognises financial assets and financial liabilities on the date it becomes a party to the contractual provisions of the instruments. Routine purchases and sales of investments are accounted for on the trade date.

Financial assets and financial liabilities at fair value through profit or loss are initially recognised at fair value. Transaction costs are expensed in the Statement of Comprehensive Income. Subsequent to initial recognition, all financial assets and financial liabilities at fair value through profit or loss are measured at fair value. Gains and losses arising from changes in the fair value of the 'financial assets or financial liabilities at fair value through profit or loss' are recognised in the Statement of Comprehensive Income in the period in which they arise.

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

b) Financial assets and liabilities at fair value through profit or loss (continued)

Recognition and derecognition (continued)

A financial asset is derecognised when the Company no longer has control over the contractual rights that comprise that asset. This occurs when the rights are realised, expired or are surrendered. A financial liability is derecognised when it is extinguished or when the obligation specified in the contract is discharged, cancelled or expired.

Determination of fair value

Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length transaction.

The fair value for financial instruments traded in active markets at the reporting date is based on their quoted price or binding dealer price quotations (bid price for long positions and ask price for short positions), without any deduction for transaction costs.

For all other financial instruments not traded in an active market, the fair value is determined by using appropriate valuation techniques. Valuation techniques include: using recent arm's length market transactions; reference to the current market value of another instrument that is substantially the same; discounted cash flow analysis and option pricing models making as much use of available and supportable market data as possible. An analysis of fair values of financial instruments and further details as to how they are measured are provided in note 3.

c) Interest income and expense

Bank interest income and interest expense is recognised on an accrual basis based on the effective interest method.

d) Cash and cash equivalents, margin accounts with brokers and cash overdrawn

Cash and cash equivalents comprise cash balances held at banks. For cash flow statement purposes cash and cash equivalents includes bank overdrafts. The bank overdrafts are repayable on demand and form an integral part of the Company's cash management.

e) Expenses

All expenses are recognised on an accruals basis.

f) Translation of foreign currencies

Foreign currency transactions during the period are translated into £ at the rate of exchange ruling at the dates of the transaction. Assets and liabilities denominated in foreign currencies are translated into £ at the rate of exchange ruling at the Statement of Financial Position date. Exchange differences are included in the Statement of Comprehensive Income.

g) Segment information

IFRS 8 'Operating Segments' was issued by the IASB in November 2006 and is effective for annual periods beginning on or after 1 January 2009, with early application permitted. This standard requires disclosures on the financial performance of the operating segments of the entity. The Directors are of the opinion that the Company is engaged in a single segment of business, being investing in natural resources companies.

h) Net asset value per share

Net Asset Value per share disclosed on the face of the Statement of Financial Position is calculated in accordance with the Company's Prospectus by dividing the net assets of the Company on the Statement of Financial Position date by the number of Ordinary Shares outstanding at that date.

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

i) New accounting pronouncements not yet effective

The following standards, amendments and interpretations are not effective. No assessment of the impact on the financial position or performance of the Company has yet been made:

IFRS 9 Financial Instruments: Classification and Measurement

The IASB issued IFRS 9 Financial Instruments in November 2009 which is effective for annual periods beginning on or after 1 January 2013 with early adoption permitted starting in 2009. The issue of this standard represents the completion of the first part of a three-part project to replace IAS 39 Financial Instruments: Recognition and Measurement with a new standard—IFRS 9 Financial Instruments.

IFRIC Interpretation 19 Extinguishing Financial Liabilities and Equity Instruments

The IFRIC issued IFRIC Interpretation 19 in November 2009. IFRIC 19 provides guidance on how to account for the extinguishment of a financial liability by the issue of equity instruments. An entity shall apply this Interpretation for annual periods beginning on or after 1 July 2010 with earlier application permitted.

Amendment to IAS 24 Related Party Disclosures

The revised standard was issued in November 2009 and is effective for annual periods beginning on or after 1 January 2011. The revised standard simplifies the disclosure requirements for entities that are controlled, jointly controlled or significantly influenced by a government (referred to as government related entities) and clarifies the definition of a related party.

Amendments to IFRIC 14 - Prepayments of a Minimum Funding Requirement

The amendment was issued in November 2009 and is effective for annual periods beginning on or after 1 January 2011 with earlier application permitted. The amendments correct an unintended consequence of IFRIC 14 IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction.

3. FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS

30 June 2010	Listed equity shares £	Unlisted equity shares £	Warrants £	Total £
Financial assets at fair value through profit or loss
Cost	567,717	32,087,429	8,408,187	41,063,333
Unrealised (loss)/gain	(193,179)	(1,508,142)	112,068	(1,589,253)
Market value at 30 June 2010	374,538	30,579,287	8,520,255	39,474,080

The following table analyses investments by type and by level within the fair valuation hierarchy at 30 June 2010.

	Quoted prices in active markets Level 1 £	Quoted market based observables Level 2 £	Unobservable inputs Level 3 £	Total £
Financial assets at fair value through profit or loss
Listed equity shares	374,538	-	-	374,538
Unlisted equity shares	-	-	30,579,287	30,579,287
Warrants	-	-	8,520,255	8,520,255
	374,538	-	39,099,542	39,474,080

3. FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)

The movement in investments for the period ended 30 June 2010 is as below

	Listed equity shares	Unlisted equity shares	Warrants	Total
		£	£	£
Balance at beginning of period	-	-	-	-
Purchases during the period	567,717	32,087,429	8,408,187	41,063,333
Unrealised (loss)/gains	(193,179)	(1,508,142)	112,068	(1,589,253)
Closing balance	374,538	30,579,287	8,520,255	39,474,080

Investments

In determining an investment's placement within the fair value hierarchy, the Directors take into consideration the following.

Investments whose values are based on quoted market prices in active markets, and are therefore classified within level 1, include listed equities. The Directors do not adjust the quoted price for such instruments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price.

Investments that trade in markets that are not considered to be active, but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within level 2. These include certain less liquid listed equities. As level 2 investments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information. The Company did not hold any such investments at 30 June 2010.

Investments classified within level 3 have significant unobservable inputs. They include unlisted equity shares and warrants. Level 3 investments are valued using valuation techniques explained in the Company's accounting policies. The inputs used by the Directors in estimating the value of level 3 investments include the original transaction price, recent transactions in the same or similar instruments, completed or pending third-party transactions in the underlying investment or comparable issuers, subsequent rounds of financing, recapitalisations and other transactions across the capital structure, offerings in the equity or debt capital markets, and changes in financial ratios or cash flows. Level 3 investments may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the Directors in the absence of market information.

4. NET ASSET VALUE PER SHARE AND EARNING PER SHARE

Basic net asset value per share is based on the net assets of £63,087,686 and 66,033,089 Ordinary Shares, being the number of shares in issue at the period end. Diluted net asset value is the same as the basic net asset value, as the exercise price of the Subscription Shares is above the net asset value at the period end.

The calculation for basic net asset value is as below:-

	Ordinary	Subscription
30 June 2010	Shares	Shares
Net assets at the period end (£)	63,087,686	13,204,594
Number of shares	66,033,089	13,204,594
Basic net asset value per share (in pence)	95.5

The basic earnings per share is based on the net loss for the period of the Company of £1,564,228 and on 66,033,089 Ordinary Shares, being the weighted average number of shares in issue during the period. Diluted earnings per ordinary share is calculated by adjusting basic earnings per ordinary share to reflect the notional exercise of the number of dilutive subscription shares outstanding during the period, using a weighted average calculation based on the average market price per ordinary share during the period. The diluted earnings per share figure is similar to the basic earnings per share figure because the average market share price during the period of 101.24p is only 1.24% greater than the exercise price. This calculation is done in accordance with the IFRS.

5. TAXATION

The Company is a Guernsey Exempt Company and is therefore not subject to taxation on its income under the Income Tax (Exempt Bodies) (Guernsey) Ordinance, 1989. An annual exempt fee of £600 has been paid.

6. ADMINISTRATION FEES

The Administrator, HSBC Securities Services (Guernsey) Limited, is paid fees for acting as administrator of the Company at the rate of 7 basis points of gross asset value up to US\$250 million, the rate reduces to 5 basis points of gross asset value above US\$250 million, subject to a minimum of €48,000 per annum or such other amount as may be agreed with the Company from time to time in accordance with the Administration Agreement. The Administrator is also reimbursed by the Company for reasonable out-of-pocket expenses. These fees accrue and are calculated as at the last Business Day of each month and paid monthly in arrears.

The Administrator is also entitled to a fee for its provision of corporate secretarial services provided to the Company on a time spent basis and subject to a minimum annual fee of £40,000. The Company is also responsible for any subadministration fees as agreed in writing from time to time, and reasonable out-of-pocket expenses.The Administrator is also entitled to fees of €5,000 for preparation of the financial statements of the Company.

The administration fees paid for the period ended 30 June 2010 were £21,600 of which £8,588 was payable at 30 June 2010.

7. MANAGEMENT AND PERFORMANCE FEES

The Manager was appointed pursuant to a management agreement with the Company dated 31 March 2010 (the "Management Agreement"). The Company pays to the Manager a 'base fee' which is equal to 1/12th of 1.75% of the Net Asset Value per month. The management fee is calculated and accrued as at the last Business Day of each month and is paid monthly in arrears.

The Manager may in certain circumstances also be entitled to be paid a performance fee if the Net Asset Value at the end of any Performance Period exceeds the Hurdle as at the end of the Performance Period. For this purpose the "Hurdle" means an amount equal to the Issue Price of £1 multiplied by the number of shares in issue as at Admission, as increased at a rate of 8% per annum compounded to the end of the relevant Performance Period. In respect of the first Performance Period and any other Performance Period which is less than a full 12 months, the Hurdle will be applied pro rata. The performance fee is subject to adjustments for any issue and/or repurchase of Ordinary Shares.

The amount of the performance fee (if any) will be 15 per cent. of the total increase in the Net Asset Value at the end of the relevant Performance Period over the highest previously recorded Net Asset Value as at the end of a Performance Period in respect of which a performance fee was last accrued, (or the Issue Price multiplied by the number of shares in issue as at Admission, if no performance fee has been so accrued), having made adjustments for numbers of Ordinary Shares issued and/or repurchased as described above.

The first performance period commenced on the date of Admission and ends on 31 December 2010 and thereafter, is each 12 month period ending on 31 December in each year (the "Performance Period"). The last Performance Period will end on the date on which the Management Agreement is terminated or the Company is wound up.

The Manager's base fees paid for the period ended 30 June 2010 were £204,514 all of which was outstanding at the period end.

8. CASH AND CASH EQUIVALENTS

	30 June 2010
Cash and cash equivalents Bank overdraft	£ 26,113,077 (334)
Total	26,112,743
Represented by:
Cash and cash equivalents
HSBC Bank plc	26,113,077
Bank overdraft*
HSBC Bank plc	(334)
* Bank overdrafts represent negative cash balances in non £ brokerage accounts.

9. SHARE CAPITAL

The authorised share capital of the Company on incorporation was represented by an unlimited number of Ordinary Shares of no par value. The Company raised £30,468,865 through the issue of 30,468,865 Ordinary Shares and 6,093,772 Subscription Shares via a Placing and Offer. In addition, the Company issued 35,554,224 Ordinary Shares and 7,110,822 Subscription Shares to the holders of shares in Genus Capital Fund pursuant to a scheme of reorganisation of Genus Capital Fund, in exchange for substantially all the non-cash assets of Genus Capital Fund which are detailed below:

Quantity	Investments	Transfer value £
	Listed equity shares
358,333	MBAC Fertilizer Corporation	567,717
		567,717
	Unlisted equity shares and warrants
500	BacTech Mining	328,699
1,594,646	Celadon Mining	297,720
268,889	Copperbelt Minerals	3,545,594
6,123,642	Ferrous Resources	14,130,705
2,571,429	First Coal Corporation	2,315,920
3,350,285	Gobi Coal and Energy	4,417,716
500,000	Ivanhoe Nickel and Platinum	2,884,457
791,666	Ivanhoe Nickel Platinum warrants 1 for 1.2 ordinary	5,480,463
306,980	Ivanhoe Nickel Platinum warrants 1 for 1 ordinary	1,770,941
6,500,000	South American Ferro Metals	2,024,889
		37,197,104
	Total assets transferred	37,764,821
	Less Cash	(2,210,597)
	Value of shares issued	35,554,224

9. SHARE CAPITAL (CONTINUED)

The Company has in issue 66,023,089 Ordinary Shares and 13,204,594 Subscription Shares denominated in Sterling.

The subscription rights conferred by the Subscription Shares are exercisable every six months from 30 September 2010 until 31 March 2013. Each Subscription Share carries the right to subscribe for one Ordinary Share at a price of 100 pence.

On 28 April 2010 the Ordinary Shares and Subscription Shares were admitted to the Official List of the UK Listing Authority and to trading on the Main Market of the London Stock Exchange.

In addition, the Company has 10,000 Management Ordinary Shares in issue, which are held by the Investment Manager. No application has been or will be made to have the Management Ordinary Shares admitted to listing on the Official List or to trading on the London Stock Exchange's Main Market for listed securities.

Holders of Ordinary Shares will have the right to receive notice of and to attend and vote at general meetings of the Company. Each holder of Ordinary Shares being present in person or by proxy at a meeting will, upon a show of hands, have one vote and upon a poll each such holder of Ordinary Shares present in person or by proxy will have one vote for each Ordinary Share held by him.

Holders of Management Ordinary Shares will have the right to receive notice of and to attend and vote at general meetings of the Company, except that the holders of Management Ordinary Shares will not be entitled to vote on any resolution relating to Reserved Matters. Each holder of Management Ordinary Shares being present in person or by proxy at a meeting will, upon a show of hands, have one vote and upon a poll each such holder of Management Ordinary Shares present in person or by proxy will have one vote for each Management Ordinary Share held by him.

Holders of Subscription Shares are not entitled to attend or vote at meetings of Shareholders.

Holders of Ordinary Shares and Management Ordinary Shares are entitled to receive, and participate in, any dividends or other distributions out of the profits of the Company available for dividend and resolved to be distributed in respect of any accounting period or other income or right to participate therein. The Subscription Shares carry no right to any dividend or other distribution by the Company.

The details of issued share capital of the Company are as follows:

	30 June 2010
Issued and fully paid share capital
Ordinary Shares of no par value	66,023,089
Subscription Shares of no par value	13,204,594

The issue of Ordinary Shares during the period ended 30 June 2010 took place as follows:

	Ordinary Shares*	Subscription Shares
Issued during the period via Placing and Offer	30,468,865	6,093,772
Issued during the period to holders of Genus Capital Fund	35,554,224	7,110,822
Balance at 30 June 2010	66,023,089	13,204,594

^* In addition 10,000 Management Ordinary Shares were issued. On 9 March 2010, 1 Management Ordinary Share was issued and on 26 March 2010, 9,999 Management Ordinary Shares were issued.

10. RELATED PARTY TRANSACTIONS

Transactions with related parties are based on terms equivalent to those that prevail in an arm's length transaction. The following transactions with related parties took place for the period ended 30 June 2010.

On 30 March 2010 the Company agreed to acquire the majority of the non-cash assets of Genus Capital Fund as set out in the Prospectus issued by the Company dated 31 March 2010. Charles Hansard and Edward Flood were also directors of Genus Capital Fund and so had an actual or potential conflict of interest. Edward Flood and Charles Hansard resigned from Genus Capital Fund's Board of Directors on 12 July 2010 and on 26 July 2010 respectively.

11. DIRECTORS' INTERESTS

The Directors' interests in the share capital of the Company at 30 June 2010 were as follows:

	Number of	Number of
	Ordinary Shares	Subscription Shares
Edward Flood	65,000	13,000
Christopher Sherwell	25,000	5,000
Clive Newall	25,000	5,000

12. SUBSEQUENT EVENTS

There were no significant subsequent events since the period end.

13. APPROVAL OF HALF-YEARLY REPORT AND UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS

The Half-Yearly Report and Unaudited Condensed Interim Financial Statements to 30 June 2010 were approved by the Board of Directors on 31 August 2010.