BLACKROCK WORLD MINING TRUST PLC - Final Results

PR Newswire
London, February 20
                   BLACKROCK WORLD MINING TRUST plc                          ANNUAL RESULTS ANNOUNCEMENT                      for the year ended 31 December 2013Financial HighlightsAttributable to ordinary           31 December     31 December     Changeshareholders                              2013            2012          %AssetsNet assets (£'000)                     885,346       1,215,743      -27.2Net asset value per ordinaryshare                                  499.39p         685.75p      -27.2- with income reinvested                                            -24.6Ordinary share price(mid-market)                           465.00p         586.50p      -20.7- with income reinvested                                            -17.5Euromoney Global Mining Index           466.03          613.72      -24.1Discount to net asset value               6.9%           14.5%                                  For the year    For the year                                         ended           ended                                   31 December     31 December     Change                                          2013            2012          %RevenueNet revenue return aftertaxation (£'000)                        39,633          38,614       +2.6Revenue return per ordinaryshare                                   22.36p          21.78p       +2.6Dividend per ordinary share- Final                                 14.00p          14.00p          -- Interim                                7.00p           7.00p          -Chairman's StatementOverviewDespite a generally improving economic environment, mining shares suffered poorreturns in 2013. Fears of a worse than expected slowdown in China, which hasbeen the main motor for demand growth in the last decade, led to price falls inmost commodities. In addition, the breakdown in trust between mining companiesand investors on the back of poor returns on investment and excessive capitalspending, further derated mining company share prices. Accordingly, despitean otherwise strong recovery in broader equity markets generally, the miningsector has struggled.Against this backdrop, the Company's net asset value ('NAV') per share returned-24.6% and the Company's share price returned -17.5% over the twelve months to31 December 2013. The Company's benchmark index, the Euromoney Global MiningIndex (formerly the HSBC Global Mining Index) returned -24.1% in the sameperiod (all percentages calculated in sterling terms with income reinvested).Since the year end, the Company's NAV has returned 4.7% compared with a returnof 5.1% in the benchmark index.Revenue return and dividendThe Company's revenue return per share for the year to 31 December 2013amounted to 22.36p compared with 21.78p for the previous year.The Directors recommend the payment of a final dividend of 14.00p per share forthe year ended 31 December 2013 (2012: 14.00p), which together with the interimdividend of 7.00p per share (2012: 7.00p), makes a total dividend of 21.00p pershare (2012: 21.00p). The dividend will be paid on 15 May 2014 to shareholderson the register of members on 7 March 2014.Since the launch of the Company in 1993 and following the payment of theforthcoming final dividend, total dividends paid will be greater than theinitial public offering price paid on the Company's ordinary shares.DiscountYour Board recognises that it is in the long term interests of shareholdersthat the discount to NAV at which the shares trade should be minimised as faras possible and will continue to focus on attempting to narrow this margin. TheCompany's discount has narrowed considerably in the last year and averaged10.2% on a cum income NAV. Currently the shares are trading at a discount of0.8% on a cum income basis and a premium of 2.5% on a capital only basis.The BoardWe were pleased to welcome Ian Cockerill to the Board with effect from14 November 2013. Mr Cockerill has nearly 40 years' experience in the miningindustry, having previously been responsible for business development inAngloGold, and chief executive officer of both Gold Fields Ltd and AngloCoal,between 1999 and 2009.Oliver Baring, who has served on the Board since November 2004, will retire asa Director at the forthcoming Annual General Meeting.  I would like to thankOliver on behalf of the Board for his wise counsel over this period and wishhim every success for the future.Royalty investmentsIn July, shareholders approved changes to the investment policy clarifying thatthe Company may, as part of its existing authority to invest in unquotedinvestments, invest in royalties which arise from the production of metals andminerals. The limit on unquoted investments was also raised from 10% to 20% ofgross assets to allow greater exposure to metal and mining related royalties.It was announced in October that the Company had reached a non-bindingagreement on key commercial terms for a US$12 million smelter return royaltyinvestment with Avanco Resources Limited. The Company and Avanco are currentlyworking on heads of terms. Whilst this would represent a relatively smallcommitment for the Company, the Board believes that the investment will offeran attractive addition to the royalty portfolio and also diversify theCompany's existing royalty holdings by type of asset.Alternative Investment Fund Managers' DirectiveThe Alternative Investment Fund Managers' Directive (the 'Directive') is aEuropean Directive which seeks to reduce systemic risk by regulatingalternative investment fund managers ('AIFMs'). AIFMs are responsible formanaging investment products that fall within the category of AlternativeInvestment Funds ('AIFs') and investment trusts are included in this. TheDirective was implemented on 22 July 2013, although the Financial ConductAuthority will permit a transitional period of one year after that during whichUK AIFMs must seek authorisation. The Board has taken, and will continue totake, independent advice on the consequences for the Company and has decided inprinciple that BlackRock Fund Managers Limited will be appointed as its AIFM inadvance of the end of the transitional period on 22 July 2014.New reporting requirementsThere have been a number of revisions to reporting requirements for companieswith accounting periods ending on, or after, 30 September 2013. These changesare intended to increase the quality and structure of reporting and include theintroduction of a new Strategic Report which is intended to replace theBusiness Review section of the Directors' Report, providing insight into theCompany's objectives, strategy and principal risks. The Strategic Report shouldalso enable shareholders to assess how effective Directors have been inpromoting the success of the Company during the course of the year underreview. Other changes comprise additional Audit Committee reportingrequirements on the external audit process, as set out on pages 36 to 38 of theAnnual Report, and changes to the structure and voting requirements in respectof the Directors' Remuneration Report which are explained in more detail onpages 27 to 29 of the Annual Report.Annual General MeetingThe Annual General Meeting of the Company will be held at the offices ofBlackRock Investment Management (UK) Limited at 12 Throgmorton Avenue, LondonEC2N 2DL on Thursday, 8 May 2014 at 11.30 a.m. Details of the business ofmeeting are set out in the Notice of Meeting on pages 71 to 74 of the AnnualReport. The Portfolio Managers will make a presentation to shareholders on theCompany's performance and the outlook for the year ahead.Articles of AssociationAt the forthcoming Annual General Meeting, shareholders will be asked toapprove new Articles of Association in substitution for the current Articles.The Board is proposing to make these amendments to the Articles in response tothe Alternative Investment Fund Managers' Directive; details of the principalchanges are given on pages 25 and 26 of the Annual Report.OutlookThe mining industry has faced many challenges since the start of the decade.However, much progress has now been made in trimming back the unwelcomeincrease in operating costs taken on in the boom years. In addition, much ofthe previously planned expansion in capacity has now also been reassessedresulting in cut backs in the light of the harsher operating environment and aneed to reset the balance between reinvestment and shareholder returns. It ishoped that the consequence of these actions will result in a marked increase infree cash flow for the companies allowing them to better reward shareholderswith increased returns.A W LeaChairman20 February 2014Strategic reportThe Directors present the Strategic Report of the Company for the year ended31 December 2013. The aim of the Strategic Report is to provide shareholderswith the ability to assess how the Directors have performed their duty topromote the success of the Company for the collective benefit of shareholders.Principal activityThe Company carries on business as an investment trust. Its principal activityis portfolio investment and that of its subsidiary, BlackRock World MiningInvestment Company Limited (the 'Group'), is investment dealing.General MeetingThe Company held a general meeting on 21 August 2013 to amend the Company'sinvestment policy. The principal changes clarified that the Company may investin royalties derived from the production of metals and minerals as part of itspermission to invest in unquoted investments; permit the Company to invest upto 20% of its gross assets in unquoted investments including royalties(previously 10%); and enable the Company to invest in any single holding thatwould represent up to 20% of gross assets at the time of acquisition, ascompared with the previous 10%.ObjectiveThe Company's objective is to maximise total returns to shareholders through aworldwide portfolio of mining and metal securities. The Board recognises theimportance of dividends to shareholders in achieving that objective, inaddition to capital returns.Strategy, Business Model and Investment PolicyIn order to achieve its objective, it is intended that the Group will normallybe fully invested, which means at least 90% of the gross assets of the Companyand its subsidiary will be invested in stocks, shares, royalties and physicalmetals. However, if such investments are deemed to be overvalued, or if theInvestment Manager finds it difficult to identify attractively pricedopportunities for investment, then up to 25% of the portfolio may be held incash or cash equivalents.The Company's investment policy is to provide a diversified investment inmining and metal securities worldwide. While the policy is to investprincipally in quoted securities, the Company's investment policy includesinvesting in royalties derived from the production of metals and minerals, aswell as physical metals. Risk is spread by investing in a number of holdings,many of which themselves are diversified companies.The Group may occasionally utilise derivative instruments such as options,futures and contracts for difference, if it is deemed that these will, at aparticular time or for a particular period, enhance the performance of theGroup in the pursuit of its objective. The Company is permitted to enter intostock lending arrangements.The Group may invest in any single holding, of quoted or unquoted investments,that would represent up to 20% of gross assets at the time of acquisition.Although investments are principally in companies listed on recognised stockexchanges, the Company may invest up to 20% of the Group's gross assets ininvestments other than quoted securities. Such investments include unquotedequities or bonds, royalties, physical metals and derivatives. In order toafford the Company the flexibility of obtaining exposure to metal and miningrelated royalties, it is possible that, in order to diversify risk, all or partof such exposure may be obtained directly or indirectly through a holdingcompany, a fund or another investment or special purpose vehicle, which may bequoted or unquoted. The Board will seek the prior approval of shareholders toany unquoted investment in a single company, fund or special purpose vehicle orany single royalty which represents more than 10% of the Group's assets at thetime of acquisition.As at 31 December 2013, the Company held two unquoted investments. Unquotedinvestments can prove to be more risky than listed investments. The twoinvestments, the Marampa royalty contract and Banro gold-linked preferenceshares, are held at Directors' valuation.In addition, while the Company may hold shares in other listed investmentcompanies (including investment trusts) the Company will not invest more than15% of the Group's gross assets in other UK listed investment companies.The Group's financial statements are maintained in sterling. Although manyinvestments are denominated and quoted in currencies other than sterling, theBoard does not intend to employ a hedging strategy against fluctuations inexchange rates.The Investment Manager believes that tactical use of gearing can add value fromtime to time. This gearing is typically in the form of an overdraft or shortterm loan facility, which can be repaid at any time or matched by cash. Thelevel and benefit of gearing is discussed and agreed with the Board regularly.In order to provide flexibility for future royalty transactions, the Boardwould allow for gearing to increase but to no more than 25% of the Group's netassets, the limit stipulated in the Company's Articles of Association. Themaximum level of gearing used during the year was 12.8% and, at the financialreporting date, net gearing (calculated as borrowings less cash as a percentageof net assets) stood at 9.6% of shareholders' funds (2012: 7.1%). For furtherdetails on borrowings refer to note 14 on page 53 of the Annual Report.No material change will be made to the investment policy without shareholderapproval.Portfolio analysisInformation regarding the Company's investment exposures is contained withinthe ten largest investments, the investments listing and portfolio analysis.Further information regarding investment risk and activity throughout the yearcan be found in the Investment Manager's Report.Continuation of the CompanyAs agreed by shareholders in 1998, an ordinary resolution for the continuanceof the Company is proposed at each Annual General Meeting. The Company has astrong long term investment record, providing excellent returns toshareholders, and the Directors recommend that shareholders vote in support ofthe Company's continuation.PerformanceIn the year to 31 December 2013, the Company's net asset value per sharereturned -24.6% compared with a return in the Euromoney Global Mining Index of-24.1%. (The HSBC Global Mining Index was renamed on 1 October 2013.) TheCompany's share price returned -17.5% over the same period. (All figurescalculated in sterling terms with income reinvested).Results and dividendsThe results for the Company are set out in the Consolidated Statement ofComprehensive Income. The total loss for the year, after taxation, was£293,167,000 (2012: loss of £64,031,000) of which £39,633,000 (2012:£38,614,000) is revenue profit.It is the Board's intention to distribute the maximum dividend possible interms of earnings each year. The Directors recommend the payment of a finaldividend of 14.00p per share in respect of the year ended 31 December 2013(2012: 14.00p per share) which, together with the interim dividend of 7.00pper share (2012: 7.00p), makes a total of 21.00p per share in respect of theyear ended 31 December 2013 (2012: 21.00p). The dividend will be paid on15 May 2014 to shareholders on the register of members at close of businesson 7 March 2014. Dividend payments for the year ended 31 December 2013(including the interim dividend) amount to £37,230,000 (2012: £37,230,000).Key performance indicatorsThe Directors consider a number of performance measures to assess the Company'ssuccess in achieving its objectives. The key performance indicators ('KPIs')used to measure the progress and performance of the Company over time and whichare comparable to those reported by other investment trusts are set out below.                                                 2013                  2012Net asset value per share                     499.39p               685.75pShare price                                   465.00p               586.50pDiscount to net asset value                      6.9%                 14.5%Revenue earnings per share                     22.36p                21.78pOngoing charges\*                                 1.4%                  1.4%\* Ongoing charges represent the management fee and all other operatingexpenses excluding interest as a % of average shareholders' funds.The Board monitors the above KPIs on a regular basis. Additionally, itregularly reviews a number of indices and ratios to understand the impact onthe Company's relative performance of the various components such as assetallocation and stock selection.DiscountThe Directors recognise that it is in the long term interests of shareholdersthat shares do not trade at a significant discount to their prevailing netasset value. In the year under review, the Company's shares traded at adiscount to net asset value of between 5.4% and 15.8%, with the average being10.2%. The shares ended the year at a discount of 6.9%.Principal risksThe key risks faced by the Company are set out below. The Board regularlyreviews and agrees policies for managing each risk, as summarised below:-  Performance risk - The Board is responsible for deciding the investment   strategy to fulfil the Company's objectives and for monitoring the   performance of the Investment Manager and implementation of the strategy.   An inappropriate strategy may lead to underperformance, against the   benchmark index. To manage this risk the Investment Manager provides an   explanation of significant stock selection decisions and the rationale for   the composition of the investment portfolio. The Board monitors and   mandates an adequate spread of investments in order to minimise the risks   associated with particular countries or factors specific to particular   sectors, based on the diversification requirements inherent in the   Company's investment policy. The Board also receives and reviews regular   reports showing an analysis of the Company's performance against the   Euromoney Global Mining Index and other similar indices, including the   performance of major companies in the sector. Past performance is not   necessarily a guide to future performance and the value of an investment in   the Company and the income from it can fluctuate as the value of the   underlying investments fluctuate.-  Income/dividend risk - The amount of dividends and future dividend growth   will depend on the Company's underlying portfolio and investment activity.   Any change in the tax treatment of the dividends or interest received by   the Company (including as a result of withholding taxes or exchange   controls imposed by jurisdictions in which the Company invests) may reduce   the level of dividends received by shareholders. The Board monitors this   risk through the receipt of income forecasts and considers the level of   income at each meeting.-  Market risk - Market risk arises from volatility in the prices of the   Company's investments. It represents the potential loss the Company might   suffer through realising investments in the face of negative market   movements. Changes in general economic and market conditions, such as   interest rates, rates of inflation, industry conditions, tax laws,   political events and trends can also substantially and adversely affect the   securities and, as a consequence, the Company's prospects and share price.   The Board considers asset allocation, stock selection and levels of gearing   on a regular basis and has set investment restrictions and guidelines which   are monitored and reported on by the Investment Manager. The Board monitors   the implementation and results of the investment process with the   Investment Manager.-  Financial risk - The Company's investment activities expose it to a variety   of financial risks which include market risk, currency risk, interest rate   risk, market price risk, liquidity risk and credit risk. Further details   are disclosed in note 18 on pages 55 to 63 of the Annual Report, together   with a summary of the policies for managing these risks.-  Regulatory risk - The Company operates as an investment trust in accordance   with the requirements of Chapter 4 of Part 24 of the Corporation Tax Act   2010. As such, the Company is exempt from capital gains tax on the profits   realised from the sale of its investments. The Investment Manager monitors   investment movements, the level and type of forecast income and expenditure   and the amount of proposed dividends, if any, to ensure that the provisions   of Chapter 4 of Part 24 of the Corporation Tax Act 2010 are not breached   and the results are reported to the Board at each meeting. The Board and   the Investment Manager also monitor changes in government policy and   legislation which may have an impact on the Company. The Company must also   comply with the provisions of the Companies Act 2006 and, as its shares are   admitted to the Official List, the UKLA Listing Rules, the Disclosure and   Transparency Rules and the Prospectus Rules. A breach of the Companies Act   2006 could result in the Company and/or the Directors being fined or the   subject of criminal proceedings. A breach of the UKLA Listing Rules could   result in the Company's shares being suspended from listing, which in turn   would breach the requirements of Chapter 4 of Part 24 of the Corporation   Tax Act 2010.-  The Board relies on the services of its professional advisers and its   Company Secretary to ensure compliance with all relevant regulations. The   Company Secretary has stringent compliance procedures in place and monitors   regulatory developments and changes. Following authorisation under the   Alternative Investment Fund Managers' Directive (the 'Directive') the   Company and its appointed AIFM will be subject to the risk that the   requirements of the Directive are not correctly complied with.-  Operational risk - In common with most other investment trust companies,   the Company has no employees. The Company therefore relies upon the   services provided by third parties and is dependent on the control systems   of the Investment Manager and the Company's other service providers. The   security, for example, of the Company's assets, dealing procedures,   accounting records and maintenance of regulatory and legal requirements,   depend on the effective operation of these systems. These have been   regularly tested and monitored and an internal controls report, which   includes an assessment of risks together with procedures to mitigate such   risks, is prepared by the Investment Manager and reviewed by the Audit &   Management Engagement Committee at least twice a year. The Investment   Manager, the custodian and the fund accountant also produce regular Service   Organisation Control reports (SOC 1) or AAF 01/06 reports which are   reviewed by their reporting accountants and give assurance regarding the   design and effective operation of controls.-  Resource risk - The quality of the investment management team employed by   the Investment Manager is a crucial factor in delivering good performance   and the loss by the management of key staff could affect investment   returns. The Investment Manager has training and development programmes in   place for its employees and its recruitment and remuneration packages are   developed in order to retain key staff.-  Gearing risk - The Company has the power to borrow money (gearing) and does   so when the Investment Manager is confident that market conditions and   opportunities exist to enhance investment returns. However, if the   investments fall in value, any borrowings will magnify the extent of   this loss. All borrowings require the approval of the Board and gearing   levels are discussed by the Board and Investment Manager.Future prospectsThe Board's main focus is to maximise total returns over the longer term. Thefuture performance of the Company is much dependent upon the success of theinvestment strategy and, to a large degree, on the performance of financialmarkets. The outlook for the Company in the next twelve months is discussedin both the Chairman's Statement and the Investment Manager's Report.Social, community and human rights issuesAs an investment trust, the Company has no direct social or communityresponsibilities. However, the Company believes that it is in shareholders'interests to consider environmental, social and governance factors and humanrights issues when selecting and retaining investments. Details of theCompany's policy on socially responsible investment are set out on page 33 ofthe Annual Report.Directors, employees and gender representationThe Directors of the Company on 31 December 2013 are set out in the Directors'biographies on page 21 of the Annual Report. The Board consists of six maleDirectors and no female Directors. The Company does not have any employees.By order of the BoardBlackRock Investment Management (UK) LimitedSecretary20 February 2014Related party transactionsThe investment management fee for the year (including secretarial andadministration fees) was £12,656,000 (2012: £16,185,000). At the year end, thefollowing amount was outstanding in respect of the investment management fee:£20,752,000 (2012: £8,096,000).In addition to the above services, BlackRock has provided the Company withmarketing services. The total fees paid or payable for these services for theyear ended 31 December 2013 amounted to £51,200 including VAT (2012: nil), ofwhich £51,200 (2012: nil) was outstanding at 31 December 2013.The Board consists of six non-executive Directors all of whom are considered tobe independent by the Board. None of the Directors has a service contract withthe Company. With effect from 1 October 2013 the Chairman receives an annualfee of £45,000, the Chairman of the Audit & Management Engagement Committeereceives an annual fee of £37,500, and each other Director receives an annualfee of £30,000. All six members of the Board hold shares in the Company. Mr Leaholds 6,000 ordinary shares, Mr Barby 25,000 ordinary shares, Mr Buchan 24,000ordinary shares, Mr Baring 3,000 ordinary shares, Mr Cheyne 4,000 ordinaryshares and Mr Cockerill 17,630 ordinary shares. The amount of Directors feesoutstanding at 31 December 2013 was £72,000 (2012: £29,000).Statement of Directors' ResponsibilitiesThe Directors are responsible for preparing the Annual Report, the Directors'Remuneration Report and the financial statements in accordance with applicableUnited Kingdom law and regulations.Company law requires the Directors to prepare financial statements for eachfinancial year. Under that law, the Directors are required to prepare thefinancial statements under IFRS as adopted by the European Union. Under Companylaw the Directors must not approve the financial statements unless they aresatisfied that they give a true and fair view of the state of affairs of theCompany and of the profit or loss of the Company for that period.In preparing these financial statements, the Directors are required to:- present fairly the financial position, financial performance and cash flows  of the Company;- select suitable accounting policies in accordance with IAS 8: Accounting  Policies, Changes in Accounting Estimates and Errors and then apply them  consistently;- present information, including accounting policies, in a manner that provides  relevant, reliable, comparable and understandable information;- make judgements and estimates that are reasonable and prudent;- state whether the financial statements have been prepared in accordance with  IFRS as adopted by the European Union, subject to any material departures  disclosed and explained in the financial statements;- provide additional disclosures when compliance with the specific requirements  in IFRS as adopted by the European Union is insufficient to enable users to  understand the impact of particular transactions, other events and conditions  on the Company's financial position and financial performance; and- prepare the financial statements on the going concern basis unless it is  inappropriate to presume that the Company will continue in business.The Directors are responsible for keeping adequate accounting records that aresufficient to show and explain the Company's transactions and disclose withreasonable accuracy at any time the financial position of the Company andenable them to ensure that the financial statements comply with the CompaniesAct 2006.They are also responsible for safeguarding the assets of the Company and hencefor taking reasonable steps for the prevention and detection of fraud and otherirregularities. The Directors are also responsible for preparing the StrategicReport, Directors' Report, the Directors' Remuneration Report, the CorporateGovernance Statement and the Report of the Audit & Management EngagementCommittee in accordance with the Companies Act 2006 and applicable regulations,including the requirements of the Listing Rules and the Disclosure andTransparency Rules. The Directors have delegated responsibility to theInvestment Manager for the maintenance and integrity of the Company's corporateand financial information included on the Investment Manager's website.Legislation in the United Kingdom governing the preparation and disseminationof financial statements may differ from legislation in other jurisdictions.Each of the Directors at the date of this report, whose names are listed onpage 21 of the Annual Report, confirm to the best of their knowledge that:- the financial statements, which have been prepared in accordance with IFRS as  adopted by the European Union, give a true and fair view of the assets,  liabilities, financial position and net return of the Company; and- the Annual Report includes a fair review of the development and performance  of the business and the position of the Company, together with a description  of the principal risks and uncertainties that it faces.The 2012 UK Corporate Governance Code also requires Directors to ensure thatthe Annual Report and Financial Statements are fair, balanced andunderstandable. In order to reach a conclusion on this matter, the Board hasrequested that the Audit & Management Engagement Committee advise on whether itconsiders that the Annual Report and Financial Statements fulfils theserequirements. The process by which the Committee has reached these conclusionsis set out in the Audit & Management Engagement Committee's Report on pages 36to 38 of the Annual Report. As a result, the Board has concluded that theAnnual Report for the year ended 31 December 2013, taken as a whole, is fair,balanced and understandable and provides the information necessary forshareholders to assess the Company's performance, business model and strategy.For and on behalf of the BoardA W LeaChairman20 February 2014Investment Manager's ReportPortfolio performance2013 marked the third year in a row of negative returns for mining shares. Overthis period a combination of moderating economic growth in China, rising metalsand minerals supply, and a reduction in the mining sector's profitability andfree cash flow weighed heavily on share prices. The mining sector had begunto respond to these changing conditions in 2012, accelerating in 2013 as newmanagement teams at the largest mining companies implemented cost-cuttingstrategies and scaled back capital expenditures. However, it was only in thesecond half of 2013 that this began to translate into improving operating andfinancial results. Increasing stability in metals and minerals prices, as wellas recognition of the widening disparity in valuations between the miningsector and other parts of the equity market, particularly with respect todividend yields, helped the mining sector to stage a somewhat muted recovery inthe second half of 2013.The Company's move to diversify its mining exposure into royalties and fixedincome helped to partially offset the poor equity performance of the highergrowth, more operationally leveraged producers within the portfolio. For thecalendar year 2013, the Company's undiluted net asset value ('NAV') and shareprice fell by 24.6% and 17.5% respectively, in sterling terms with incomereinvested. In "capital" only terms, the NAV fell by 27.1% and the share priceby 20.7%. By comparison, in sterling terms, the Euromoney Global Mining Index(formerly the HSBC Global Mining Index) fell by 26.2% (capital only) and 24.1%(with income reinvested).Mining sector overviewThe mining sector entered 2013 in the throes of change. Managements were underattack from investors to rebalance the mix between returns to shareholders andreinvestment of cash flows back into the "ground". In addition, investors werenervous about the prospects for China, the world's largest commodity consumer,as media reports debated between hard and soft landings for the economy. InNorth America the economy finished 2012 showing signs of improvement and whilstmonetary policy remained accommodative (through quantitative easing) so as notto allow economic momentum to stall, "taper talk" was already beginning tocreep into markets.During the first half of the year, the bearish commentators won the debate.Share prices fell, demand fears increased and management teams at the world'slargest mining companies were replaced with fresh blood. Write-downs in thecarrying values of assets built or purchased during the good times werecommonplace. Despite all of the negative headlines, demand for commoditiescontinued to improve during the year rather than fall. This fact seemed to gounnoticed by investors as they reached for the sell button on their holdings.In fact, the dispersion in performance between the prices of iron ore andcopper versus the respective producers of those commodities was startling. Theoverwhelming urge to sell exposure to the sector resulted in the EuromoneyGlobal Mining Index falling 24.9% in US dollar terms (26.2% in sterling termsin the first half of the year). All in all it was a sorry state of affairs.However, it looks as though the seeds of change were planted during this periodand in the second half of the year fortunes started to show signs ofimprovement. New management teams appear to have embraced the challenges facingtheir businesses. Promises to cut operating costs, cancel or delay plannedinvestments into new capacity, curtail M&A activity (after the overwhelminglypoor track record of returns from this endeavour), and when appropriateincrease returns to shareholders, were all well-received. However, until theevidence of change has enough data points to prove the cynics wrong, investorswill doubt that the leopards can change their spots. Asset sales were alsoshowcased by majors keen to reduce debt, but to date completed transactionshave not raised as much cash as had been hoped for. In fact, a number ofassets have since been withdrawn from sale due to a lack of interest at thevaluations being demanded by the vendors.Of note, though, was the ability of mid-cap mining companies to pick up growthassets that have the potential to rerate their valuation. One such deal wasdone by Lundin Mining by purchasing the Eagle nickel project from Rio Tinto.This deal was taken well by investors and the shares of Lundin significantlyoutperformed post the deal's announcement.This difficult environment provided fertile ground for the braver investors toseek out new opportunities to put capital to work. The Company was one suchinvestor with the conclusion of two royalty related transactions in gold andcopper. During the first half of the year we concluded a deal to help financeBanro in the DRC with gold linked preference shares. In the second half, weentered into a royalty agreement on the copper/gold project portfolio of Avancoin Brazil (there is more detail on these deals later in the report).In the gold equity arena troubles were severe. The average gold equity fell bygreater than 50% during the year as gold prices slumped by 27.3% (in US dollarterms). The compression of operating margins only served to add to the alreadydamaging derating that gold equities have gone through during the last twoyears. The end result was a collapse in valuations and has left many goldcompanies perilously close to the edge in terms of their futures. For example,Barrick, the world's largest gold producer, opted to raise US$3 billion in anequity placement to help restore confidence in its balance sheet. Other goldproducers have cut projects, reduced costs and many are seeking to adjustproduction profiles in order to survive at lower prices. However, for thosethat have been better guardians of shareholder capital, this price move hasplayed into their hands. During the last few months of 2013 there were a numberof smaller M&A deals done as mid-cap companies consolidated growth projectsinto their business plans. Should prices recover in the near term this strategymight easily serve them well.Just as in previous years, commodity exposure in the Company has continued tobe linked to companies that are likely to be able to generate healthy marginsand not suffer unduly from the volatility in metal prices seen elsewhere inthe commodity complex. As such, exposure in the Company during 2013 was againcentred on copper and iron ore. The prices of these commodities averaged wellabove marginal production cost levels and as a result cash generation remainedbuoyant. In fact, iron ore prices not only remained high but the average pricefor 2013 was up 4.1% (in US dollar terms) on the previous year. When added tothe movement in exchange rates during the year, for producers in Australia,Brazil and South Africa, margins should have been even better.Base metalsThe performance of base metals in 2013 reflected the fact that metalinventories ballooned to multi-year highs during the first half of the year andin the case of aluminium and nickel to record levels, primarily driven bygrowth in supply exceeding growth in demand. Unsurprisingly, aluminium andnickel were the worst performers over the year, down 14.0% and 18.6%respectively. For zinc and copper however, fears of a growing surplus in thesecond half of the year were proved wrong as consumers began to restock andinventory levels fell sharply. Combined copper exchange inventories hit a 10year high at the end of June 2013 but then began an almost unbroken run ofdaily stock declines such that by the end of 2013, inventories had fallen by45%. Zinc, used in galvanising steel and the best base metal price performer of2013, also showed impressive inventory erosion with combined exchangeinventories falling 23% from a record 1.5mt high at the end of January 2013.The zinc price was also buoyed by recognition in the market that a number oflarge zinc mines are coming to the end of their lives, as evidenced by the newsin December 2013 of the closure in 2015 of Minmetals' Century mine inAustralia, the world's third largest zinc mine. Zinc prices were flat over 2013whilst copper prices closed down by 6.7%.Selected commodity price changes during 2013                                         Price        % change        % change                                   31 December            over         average                                          2013       12 months   2013 vs. 2012Tin (USc/lb)                             10.13            -4.5            +7.9Iron Ore - fines 62% Fe ChinaImport US$/t                             134.2            -7.4            +4.1Lead (USc/lb)                             0.99            -5.4            +1.0Zinc (USc/lb)                             0.93            +0.2            -1.7Platinum (US$/troy oz)                   1,357           -11.1            -8.0Copper (USc/lb)                           3.35            -6.7            -8.8Aluminium (USc/lb)                        0.80           -14.0            -9.5Thermal Coal (US$/tonne)                  86.3            -6.5           -12.2Nickel (USc/lb)                           6.27           -18.6           -16.4Hard Coking Coal (US$/tonne)             133.0           -16.9           -22.4Gold (US$/troy oz)                    1,207.85           -27.3           -22.9Uranium (US$/lb)                         34.50           -21.1           -22.9Silver (US$/oz)                          19.50           -34.9           -32.5Sources: Datastream and Bloomberg.Copper remains the Company's largest single metal exposure, representing nearly25% of the portfolio. This is due to the strong profit margins generated byexisting producers and the metal's constructive medium to long termfundamentals. Poor scrap availability, robust demand and the scarcity ofnew discoveries have helped to keep prices firmer than many market commentatorswould have expected, despite the growth in mine production delivered in 2013and expected in 2014. The Company's second largest copper holding,Freeport-McMoRan Copper & Gold (6.5% of the portfolio), was one of thestrongest performers in the portfolio having had a poor 2012.The company rerated as management better articulated their strategy to reducedebt. The Company's other core copper holding, First Quantum Minerals (7.8% ofthe portfolio), also contributed positively to relative performance althoughthe shares began to struggle towards the end of the year as the eagerly awaitedupdate on its development project, Cobre Panama, was pushed back into Q1 2014.The Company continued to add to its smaller market-cap copper exposure with newpositions in Nevsun Resources (1.1% of the portfolio) and Tiger Resources (0.5%of the portfolio). These are both strong cash flow producers in Africa and goodillustrations of the high quality opportunities that exist in this area of themarket.Exposure to the other base metals remains limited as the metal prices sit at orbelow the marginal cost of production and profit margins for the companies arecorrespondingly low or negative. A reluctance to cut high cost capacity coupledwith strong growth in Chinese production has kept aluminium prices low,although premiums for the metal have been elevated owing to warehousebottle-necks. Whilst the Company did have a trading position in Alcoa duringthe year, it had no direct exposure to aluminium producers at the end of theyear under review. The nickel market is also suffering from severe oversupply;however, there is the potential for a price catalyst in the coming months withthe Indonesian government restricting the export of all types of unbeneficiatedore from the country including nickel-rich low grade iron ore. This issignificant for nickel as low grade nickel pig iron has become a major rawmaterial for stainless steel production in China, displacing traditional nickeldemand. Given the high level of inventories, these restrictions are unlikely tohave any near term impact on the market surplus; however, it does suggestdownside risk to the nickel price has reduced. During the year, the Companyinitiated a position in Norilsk Nickel (0.6% of the portfolio), the world'slargest nickel producer, as well as a significant producer of palladium,platinum and copper. The Company increased its zinc exposure indirectly throughthe year by adding to its position in Vedanta (1.2% of the portfolio).Gold and precious metalsPrecious metals remained under pressure in 2013 with silver the worstperformer, declining close to 35% over the year. Gold fared little betterfalling over 27%, the worst annual performance since 1981. Strong equity marketperformance, a firmer US dollar and an absence of inflationary pressures meantthe demand from institutional investors for gold, which is treated as a storeof value, diminished. Gold was particularly hard hit during the first half ofthe year as the market began to expect "tapering" (the phasing out of theFederal Reserve's bond-buying programme, or quantitative easing) and the bearsmade the most of speculation that Cyprus could have to sell part of its goldholdings (which are only 13.9 tonnes) as part of its bailout terms. Liquidationin the futures market, followed by selling in the physically-backed exchangetraded funds ('ETFs'), pushed the gold price to a low of US$1,180/oz in June2013. At these lower levels, there was a surge in retail demand for jewellery,bars and coins in the second quarter, particularly from China and India. Thesetwo countries are now expected to represent around 60% of global demand. Thechallenge for the gold market is that for now this retail demand, Chinesedemand in particular, is price sensitive, pulling back when prices nearedUS$1,300/oz. This meant during the second half of the year, the price wasrange-bound closing the year at US$1,207/oz.The sharp fall in the gold price pushed the gold industry into loss-makingterritory and the sector has been forced to take drastic action. Going forwardthe gold industry will need to adjust mine plans for the new lower gold priceenvironment in order to return to profitability. Those companies with thehighest quality assets have the greatest flexibility and have already begun toannounce their new production profiles and mine plans to the market. However,those with mines that are low grade, with short lives and limited scope foradjustment, will struggle. The impact of this will only become clear in themedium term but it is our expectation that we shall see global gold productionstart to fall in coming years.The Company has been underweight gold producers for a number of years and thisremains the case. The beta of the gold sector to the gold price has returned sowe are watching carefully for an improvement in the fundamentals for gold andwill adjust our exposure accordingly. There was one significant addition to theCompany's gold exposure in the form of gold-linked preference shares issued byBanro, an African gold producer that is in the process of bringing its secondoperation online. As referred to earlier, the security's dividend isroyalty-like in nature, linked to the level of production and the prevailinggold price.Platinum and palladium, mainly used in auto catalysts, outperformed gold andsilver with platinum falling by just over 11% and palladium rising by 2%.Supply for both metals has come under pressure owing to challenges facing theworld's major producing countries. In the case of platinum, South Africarepresents approximately 72% of world supply and mine production has beenimpacted by rising costs, frequent disruptions and a highly fractious andpoliticised relationship between the management of the platinum miningcompanies and the labour unions. Russia is the largest source of primarypalladium, representing 42% of supply, with South Africa at 37%. Dwindlingstrategic stockpiles has meant the supply of Russian palladium into the markethas declined. Unlike gold and silver, platinum and palladium did not see asharp reduction in physically backed ETF holdings; palladium holdings ended2013 virtually unchanged and platinum holdings rose to record levels owingpredominantly to the launch of the South African NewPlat ETF in May 2013. Bythe end of the period under review, the NewPlat ETF represented 35% of allplatinum ETF holdings.The Company continued to reduce its overall exposure to South African platinumproducers. However, owing to the improving outlook for platinum demand and theongoing supply side challenges, the Company switched some of its exposure intoImpala Platinum, a physically backed platinum ETF (0.6% of the portfolio),giving it direct exposure to the platinum price. In addition, the Company addedto its holding in Platinum Group Metals (0.7% of the portfolio), an excitingdevelopment company with what looks to be a world-class discovery at itsWaterberg joint venture.Energy commoditiesAfter sharp declines in 2012, thermal and coking coal markets continued to bechallenged in 2013 due to oversupply. Spot thermal coal prices fell by over 6%and averaged over 12% down year-on-year. The impact of the closure of highercost US coal production capacity and some let-up in the degree of coal-to-gasswitching by the US power utilities was more than offset by growing productionelsewhere in the world. Australian coal producers have sought to reduceoperating costs through improving productivity via volume growth, adding to analready oversupplied market. In addition, a reduction in the use of higher costcontractors and a weaker Australian dollar have helped to make the Australianproducers more competitive in a global context, bringing down the overall costcurve for the industry. In December, the Company initiated a position in ChinaShenhua Energy (0.2% of the portfolio), a Chinese coal producer. The outlookfor the Chinese domestic coal market is significantly better than that for theseaborne market and the sell-off in Chinese equities provided what we believewill be an attractive entry point.After a fall of over 40% in 2012, coking coal prices ended the year down afurther 17% and average prices were down by over 22% year-on-year. Growth inseaborne supply from Australia and Canada, as well as increasing Chinesedomestic production, counteracted the stronger than expected growthin production from the Chinese steel industry, the largest source of demand forcoking coal. The Company's only major coking coal exposure is indirectlythrough the holding in Teck Resources.Uranium prices fell for a third year in a row, closing the year down over 21%.Despite universal acknowledgement that the uranium price is unsustainably low,the uncertain demand environment (with Japanese nuclear reactors still off-lineand power utilities stepping back from the market) has kept prices underpressure. The much anticipated end to the US-Russia Highly Enriched Uranium(HEU) Agreement had no obvious effect on the supply-side environment, althoughthe full impact of this will only likely be felt from 2014 onwards. Whilstmarkets today remain in balance, it is our expectation that the fundamentalsfor the sector are beginning to show some signs of improvement over comingyears as the nuclear reactors under construction in China come on-line andJapan potentially restarts at least part of their reactor fleet but with a lackof new uranium production being developed to meet that demand growth. As suchwe initiated a position in Cameco, the world's lowest cost, highest qualityproducer. Along with our existing position in the Canadian explorer UEX,uranium makes up 0.5% of the portfolio.During the second half of the year, the Company re-entered the oil sands marketby taking advantage of a failed corporate deal in producer Canadian Oil Sands.The holding provides direct exposure to the oil market as well as delivering ahigh yield, tied directly to the oil price.Royalties and illiquid investmentsMarampa royalty contract (6.6% of the portfolio) - In July 2012, the Companypurchased for US$110 million a 2% revenue-related royalty contract calculatedon any iron ore sales over the life of mine from London Mining Plc's Marampamine in Sierra Leone. The ramp-up of the Marampa operation successfullydelivered over 100% growth in production year-on-year. The mine exited the yearat a run-rate of 5.4 million tonnes per annum (mtpa). In September 2013, thecompany announced the results of its life of mine study including a JORCcompliant reserve of 539mt which supports a life of over 40 years at an annualproduction rate of over 6.5mtpa. In addition, the company is looking atpotential expansion options including 10mtpa and 16-20mtpa.Banro gold-linked preference shares (1.7% of the portfolio) - In April 2013,the Company purchased US$30 million gold-linked preference shares from BanroCorporation to help fund the development of its second gold mine, Namoya.The gold-linked preference shares provide exposure to the gold price as well asto volume growth with the principal moving in-line with the gold price and thecoupon ranging between 10-15% depending on Banro's overall level of production.The company has ramped-up quarterly gold production from Twangiza (its firstoperation) from 19.6koz in Q1 of 2013 to 22.9koz in Q4 2014 and has alsoannounced first gold production from Namoya.Avanco royalty contract - In October 2013, the Company entered into a royaltyagreement with Avanco Resources over its exploration licenses within theworld-class mineral district of Carajas in Brazil. The Company will provideUS$12 million in return for Net Smelter Return (net revenue after deductionsfor freight, smelter and refining charges) royalty payments comprising 2% oncopper, 25% on gold and 2% on all other metals that will be produced from theirAntas North and Pedra Branca (Stage 1 and Stage 2) licenses. In addition, therewill be a flat 2% royalty over all metals produced from any other discoverieswithin Avanco's licence area as at the time of the agreement. The purchase ofthe royalty is conditional on the publication of a JORC compliant reservestatement, the receipt of a mining license for Stage 1 and will only bedrawn-down in parallel with debt draw-downs. It is expected that this will takeplace from the middle of 2014.Fixed income securitiesThe Company's exposure to natural resource debt securities has been asignificant contributor to overall performance since the decision was takenpost the financial crisis to take advantage of the attractive yieldopportunities available in the market. At the start of 2013, the Companyswitched its exposure from Glencore's convertible bond into the equity, takingadvantage of the implied premium at which the bond was trading relative to theequity. As at the end of 2013, the Company had 3.7% of the portfolio inconvertible debt and 4.9% in corporate debt. The First Quantum Minerals 8.75%coupon debt was our largest single position at 3.3%.Derivatives activityThe Company sometimes holds positions in derivatives contracts with virtuallyall the activity focused on selling either puts or calls in order to increaseor decrease position sizes. These derivative positions, which are small incomparison with the size of the Company, usually have the effect of obliging usto buy or sell stock or futures at levels we believe are attractive. During2013, we primarily focused on writing short-dated calls in order to reduce someof our larger positions. The income generated by such option writing enables usto maximise the potential exit price from a position if the option isexercised. In addition to writing calls, we also took advantage of volatilityin the market occasionally to write puts. Both strategies worked well duringthe year and income from option writing increased by over 150% from £2.1 millionin 2012 to £5.4 million in 2013. At the end of 2013 we had one put optionoutstanding in the portfolio and this expired at the end of January.GearingAt 31 December 2013, the Company had net gearing (calculated as borrowings lesscash) amounting to £85.4 million, dropping from around £86.4 million as aresult of a call option exercise in December. For the most part, this gearinghas been drawn-down against the higher yielding mining company corporate debtand royalty portfolios. Gearing, which can be drawn-down or repaid at any time,is used in the portfolio to take tactical advantage of market volatility andopportunities as well as enhance overall returns during the medium to longterm. Once again the reduced risk appetite of banks around the world continuesto present numerous investment opportunities especially in the mid-size part ofthe market. With this in mind it is likely that we could end up drawing-downmore from our debt facilities during 2014.Outlook and strategy for 2014Looking into 2014 it is clear that the world economy is now in a better statethan it has been during the last few years. The overall macro picture ispointing towards synchronous global growth for the first time in years and withindustrial production expanding in most of the world's key commodity-consumingcountries the demand picture is supportive at worst. Should demand surprise tothe upside, then the enormous supply surpluses that have been forecast toarrive each year for the past two might once again fail to be realised. Thiswould certainly retire the bears into hibernation.At the mining company level we remain optimistic that management teams willcontinue to deliver a strategy built around improved capital discipline andincreased returns to shareholders. At the moment the sceptics remain convincedthat this will not be the case and the sector is largely under-owned bygeneralist investors. If momentum starts to build on the back of better thanexpected results and a supportive metal price environment, then this shouldprovide the necessary catalyst for these investors to return to the shareregisters of mining companies.Meanwhile, we continue to search for new investment opportunities not only inthe traditional equity environment but also looking to add new royalties to theportfolio as companies find it difficult to raise development capital. With themandate from shareholders to go beyond the previous 10% ceiling we are wellplaced to add new royalty deals during 2014.Evy Hambro and Catherine RawBlackRock Investment Management (UK) Limited20 February 2014Ten Largest Investments31 December 2013Set out below is a brief description by the Investment Manager of the Company'sten largest investments.Rio Tinto\* - 11.9% (2012: 10.1%) is a leading mining company by market cap. Ithas interests over a broad range of metals and minerals including iron ore,aluminium, copper, coal, industrial minerals, gold and uranium. As part of itsannual investment seminar in November 2013, Rio Tinto announced a revisedexpansion plan of its Australian iron at a significantly lower capital cost thanprevious expectations. The company continues to remain focused on deliveringgreater value for shareholders. Rio Tinto remains on track to achieve its US$5billion cost savings target by 2014; capital expenditure in 2013 was 20% lowerthan in 2012 and US$3.3 billion of divestments were announced or completedduring the year.BHP Billiton - 10.6% (2012: 9.4%) is a leading diversified natural resourcecompany, formed in 2001 from the merger of BHP and Billiton. The company is animportant global player in a number of commodities including iron ore, copper,coal, manganese, aluminium, diamonds and uranium. The company is the onlysizeable holding in the portfolio with significant oil and gas assets. InDecember 2013, the company hosted an important analyst site visit to its USPetroleum business focusing on its longer term growth potential. Productivityimprovement is a key focus at BHP with the company reducing controllable costsby US$2.7 billion at the year end in June 2013.GlencoreXstrata† - 9.9% (2012: 9.1%) is a leading, diversified naturalresources group with activities in mining, smelting, refining, processing andmarketing of metals and minerals, energy products and agricultural productsglobally. It provides financing, logistics, marketing and purchasing servicesto producers and consumers of commodities. In May 2013, Glencore announcedcompletion of the merger with Xstrata to form GlencoreXstrata. As part of itsinvestor day in September 2013, the company announced synergies of at leastUS$2 billion for 2014 via head office cuts with further benefits to come fromoperational efficiencies.First Quantum Minerals\*† - 7.8% (2012: 7.6%) is an integrated copper producerwhose principal operating assets are in Africa, but also with nickel assets inAustralia and Finland. In April 2013, the company completed its C$5.1 billionoffer for Inmet, a copper producer who is currently developing the Cobre Panamaproject in Panama. First Quantum is in the midst of a significant expansion ofthe business comprising of six major projects. The company is due to provide arevised capital cost estimate and project schedule for its Cobre Panama projectin the first quarter of 2014.In addition to the equity, the Company holds a corporate bond originally issuedby Inmet to fund the development of Cobre Panama. The bond has a coupon of8.75% and matures in 2020.Marampa Royalty Contract# - 6.6% (2012: 5.1%) is a 2% revenue-related royaltycalculated on any iron ore sales over the life of mine from London Mining Plc'sMarampa mine in Sierra Leone. The royalty is payable quarterly in arrearscalculated on the amount receivable at the relevant point of sale, currentlycalculated with reference to the net freight on board price received from salesof iron ore in Sierra Leone (terms similar to that of the existing royaltypayable to the Government of Sierra Leone). In September 2013, the companyannounced the results of the Marampa Life of Mine study which shows that theasset is capable of supporting a 40 year operation at 6mtpa, with the potentialfor further expansions over time.Freeport-McMoRan Copper & Gold - 6.5% (2012: 3.8%) is a leading copper producer,accounting for 9% of global mined copper production annually. It is also a majorproducer of gold and molybdenum from mines in North and South America, as well asIndonesia and the DRC. Its Grasberg mine in Indonesia contains the world'slargest recoverable copper and gold reserves. In May 2013, the mine wastemporarily shut down following an underground incident which reduced 2013production by 115mlbs copper and 115koz gold. In June 2013, the company announcedthe completion of the acquisition of Plains Exploration & Production and McMoRanExploration to enter into US oil & gas.Vale\* - 4.1% (2012: 3.5%) is a leading producer of iron ore. Based in Brazil, thecompany also has significant interests in other commodities such as nickel,aluminium, copper, gold and coal. In addition, Vale owns and operates transportinfrastructure. The company made a transformational acquisition in 2006, acquiringCanadian nickel miner Inco, which considerably broadened the company's asset mixaway from just iron ore. More recently they have ventured into the fertilisersector, Zambian copper and Guinean iron ore. Since 2011, under the leadership ofnew CEO Murilo Ferreira, Vale has revised down its capital expenditure and growthforecasts. At its most recent annual investor day in November 2013, the companyannounced a capital expenditure budget of US$14.8 billion for 2014, 18% lower thanits peak in 2011.Cerro Verde - 2.5% (2012: 3.0%) is a copper and molybdenum operation inPeru operated by Freeport-McMoRan Copper & Gold where they maintain a 53.6%ownership in the company. During the first quarter of 2013 constructionactivities commenced on the US$4.4 billion large-scale expansion of the assetto triple production at the concentrator facilities and provide an incremental600mlbs of copper and 15mlbs of molybdenum from 2016.Banro\*# - 2.5% (2012: 0.8%) is a Canadian listed gold company that is operatingand developing assets in the DRC. The Company has a position in a preferenceshare that is royalty-like in its return profile in that the coupon varies withthe amount of gold produced and the gold price in each quarter and theprincipal due at maturity also varies with the gold price. In addition, theCompany holds a position in a 10% coupon 2017 corporate bond. Although at thehigher end of the geo-political risk spectrum, the assets are geologically highquality with the potential to operate towards the lower end of the cost curve.There is also a high degree of exploration potential across the large landpackage over which the company has licenses.Antofagasta - 2.3% (2012: 3.0%) is a Chilean-based copper company withinterests in energy, transport and water distribution. The company is 65% ownedby the Luksic family of Chile with the remaining 35% free float listed on theLondon Stock Exchange. Antofagasta is expected to produce 700kt of copperduring 2013, with additional growth via the already approved Antucoya expansionproject, as well as yet to be approved expansions at Los Pelambres and theCentinela District.\* Includes fixed interest securities.# Investments held at Directors' valuation.All percentages reflect the value of the holding as a percentage of totalinvestments. Percentages in brackets represent the value of the holding as at31 December 2012. Together, the ten largest investments represent 64.7% oftotal investments (ten largest investments as at 31 December 2012: 53.6%).† 2012 percentages reflects Glencore and Xstrata combined and First QuantumMinerals and Inmet Mining combined.Investments31 December 2013                                                 Main         Market            %                                         geographical          value           of                                             exposure          £'000  investmentsDiversifiedRio Tinto\*                                     Global        117,010         11.9BHP Billiton                                   Global        104,664         10.6GlencoreXstrata                                Global         97,875          9.9Vale\*                                          Global         40,191          4.1Teck Resources                                 Global         19,612          2.0Vedanta                                        Global         11,669          1.2African Rainbow Minerals                 South Africa         10,866          1.1Lundin Mining                                  Global          8,849          0.9                                                             -------         ----                                                             410,736         41.7                                                             -------         ----CopperFirst Quantum Minerals\*                        Global         77,341          7.8Freeport-McMoRan Copper & Gold                 Global         63,802          6.5Cerro Verde                                      Peru         24,408          2.5Antofagasta                                     Chile         23,072          2.3Southern Copper                                  Peru         14,729          1.5Nevsun Resources                              Eritrea         11,108          1.1Imperial Metals                                Canada          4,540          0.5Tiger Resources                                   DRC          4,481          0.5Katanga Mining                                    DRC          2,813          0.3Ivanhoe Mines                                     DRC          2,573          0.2Avanco Resources                               Brazil          2,470          0.2Oz Minerals                                 Australia          1,272          0.1Nevada Copper                                     USA            756          0.1Mawson West                                       DRC            620          0.1                                                             -------         ----                                                             233,985         23.7                                                             -------         ----Iron OreMarampa Royalty Contract#                Sierra Leone         65,342          6.6African Minerals\*~                       Sierra Leone         22,259          2.3London Mining convertible                Sierra Leone         14,151          1.4Kumba Iron Ore                           South Africa         12,653          1.3Fortescue Metals                            Australia          6,266          0.6IRC                                            Russia          1,493          0.2Equatorial Resources                Republic of Congo          1,360          0.1                                                             -------         ----                                                             123,524         12.5                                                             -------         ----GoldBanro\*+#                                          DRC         24,398          2.5Franco Nevada                                  Global          7,325          0.7Randgold Resources                               Mali          6,633          0.7Polymetal International                        Russia          6,372          0.6Eldorado Gold                                  Global          4,618          0.5Newcrest Mining                             Australia          4,424          0.4Yamana Gold                                    Global          3,636          0.4New Gold                                       Global          2,985          0.3Minas Buenaventura                               Peru          2,915          0.3Shanta Gold convertible                      Tanzania          2,777          0.3G Resources                                 Indonesia          2,370          0.2Barrick Gold                                   Global          1,702          0.2Stratex                                      Ethiopia          1,237          0.1Pacific Niugini                      Papua New Guinea             36          0.0                                                              ------          ---                                                              71,428          7.2                                                              ------          ---Silver & DiamondsFresnillo                                      Mexico         21,620          2.2Industrias Penoles                             Mexico         20,226          2.1Dominion Diamond                               Canada          4,267          0.4Gem Diamonds                                  Lesotho          4,247          0.4Tahoe Resources                             Guatemala          3,984          0.4Lucara Diamond                               Botswana          2,753          0.3Petra Diamonds                           South Africa          2,660          0.3Sierra Metals                                    Peru          2,069          0.2Volcan                                           Peru          1,404          0.1                                                              ------          ---                                                              63,230          6.4                                                              ------          ---Industrial MineralsIluka Resources                             Australia         20,113          2.0Kenmare Resources                          Mozambique          9,125          0.9Sirocco Mining                                  Chile          1,698          0.2Mineral Deposits                              Senegal          1,420          0.2                                                              ------          ---                                                              32,356          3.3                                                              ------          ---PlatinumPlatinum Group Metals                    South Africa          6,478          0.7Impala Platinum                          South Africa          5,311          0.6Source Physical Platinum MAPlatinum P-ETC                                 Global          4,056          0.4Aquarius Platinum 4% 18/12/15convertible                              South Africa          2,414          0.2                                                              ------          ---                                                              18,259          1.9                                                              ------          ---CoalChina Shenhua Energy                Peoples' Republic                                             of China          2,291          0.2China Shenhua Energy put option     Peoples' Republic                                             of China           (276)         0.0                                                                -----         ---                                                                2,015         0.2                                                                -----         ---OtherMinsur sa 'I'                                    Peru          6,982          0.7Canadian Oil Sands                             Canada          6,809          0.7Norilsk Nickel                                 Russia          6,010          0.6Potash Corp of Saskatchewan                    Canada          3,980          0.4Cameco                                         Canada          2,881          0.3UEX                                            Canada          1,939          0.2Metals X                                    Australia          1,111          0.1Soc Min El Brocal                                Peru            563          0.1Bindura Nickel                               Zimbabwe             38          0.0                                                              ------          ---                                                              30,313          3.1                                                             -------        -----Portfolio                                                    985,846        100.0                                                             =======        =====\* Includes fixed interest investments.# Investments held at Directors' valuation.+ Includes Banro Gold-Linked preference shares.~ Includes group holdings.All investments are in equity shares unless otherwise stated.The total number of investments (including options classified asliabilities on the balance sheet) as at 31 December 2013 was 71(31 December 2012: 77).Portfolio analysis31 December 2013Commodity Exposure\*               BlackRock World Mining Trust plc   Euromoney Global Mining Index                           2013            2012                            2013                              %               %                               %Aluminium                   0.0             0.0                             3.2Coal                        0.2             0.0                             6.1Platinum                    1.9             2.8                             1.8Industrial Minerals         3.3             3.0                             1.0Silver & Diamonds           6.4             9.3                             2.5Gold                        7.2            10.4                            14.9Iron Ore                   12.5            12.9                             1.1Copper                     23.7            21.9                            12.4Diversified                41.7            38.1                            55.2Other                       3.1             1.6                             1.8Geographical Exposure\*                               2013                   2012                                  %                      %Global                         57.4                   51.2Africa (ex SA)                 18.1                   13.1Latin America                  12.4                   20.3South Africa                    4.1                    5.5Australia                       3.2                    6.9Canada                          2.5                    0.5Other                           2.2\*\*\*                 2.0\*\*USA                             0.1\*\*                  0.5\* Based on the principal commodity exposure and place of operation of eachinvestment.\*\* Consists of Indonesia, Kazakhstan, Mongolia, Oman, Papua New Guinea andRussia.\*\*\* Consists of Guatemala, Indonesia, Papua New Guinea, People's Republic ofChina and Russia.Consolidated Statement of Comprehensive Incomefor the year ended 31 December 2013                               Revenue    Revenue    Capital    Capital      Total      Total                                  2013       2012       2013       2012       2013       2012                       Notes     £'000      £'000      £'000      £'000      £'000      £'000Income frominvestments held atfair value throughprofit or loss             3    42,865     42,508          -          -     42,865     42,508Other income               3     5,937      2,553          -          -      5,937      2,553                                ------     ------   --------    -------     ------     ------Total revenue                   48,802     45,061          -          -     48,802     45,061                                ------     ------   --------    -------     ------     ------Losses on investmentsheld at fair valuethrough profit orloss                                 -          -   (324,228)   (93,808)  (324,228)   (93,808)Realised (losses)/gains on foreignexchange                             -          -       (718)     1,705       (718)     1,705                                ------     ------   --------    -------   --------    -------                                48,802     45,061   (324,946)   (92,103)  (276,144)   (47,042)                                ------     ------   --------    -------   --------    -------ExpensesInvestment managementfees                       4    (3,164)    (4,046)    (9,492)   (12,139)   (12,656)   (16,185)Other expenses             5      (975)      (902)         -       (766)      (975)    (1,668)                                ------     ------   --------    -------     ------    -------Total operatingexpenses                        (4,139)    (4,948)    (9,492)   (12,905)   (13,631)   (17,853)                                ------     ------   --------    -------    -------    -------Net profit/(loss)before finance costsand taxation                    44,663     40,113   (334,438)  (105,008)  (289,775)   (64,895)                                ------     ------   --------   --------   --------    -------Finance costs              6      (391)      (299)    (1,175)      (895)    (1,566)    (1,194)                                ------     ------   --------   --------   --------    -------Net profit/(loss) onordinary activitiesbefore taxation                 44,272     39,814   (335,613)  (105,903)  (291,341)   (66,089)                                ------     ------   --------   --------   --------    -------Taxation                        (4,639)    (1,200)     2,813      3,258     (1,826)     2,058                                ------     ------   --------   --------   --------    -------Net profit/(loss) forthe year                        39,633     38,614   (332,800)  (102,645)  (293,167)   (64,031)                                ------     ------   --------   --------   --------    -------Earnings/(loss) perordinary share             8    22.36p     21.78p   (187.72p)   (57.90p)  (165.36p)   (36.12p)                                ======     ======   ========    =======   ========    =======The total column of this statement represents the Consolidated Statement ofComprehensive Income, prepared in accordance with International FinancialReporting Standards ('IFRS'), as adopted by the European Union. Thesupplementary revenue and capital columns are both prepared under guidancepublished by the Association of Investment Companies ('AIC'). All items in theabove statement derive from continuing operations. No operations were acquiredor discontinued during the year. All income is attributable to the equityholders of BlackRock World Mining Trust plc. There were no minority interests.The net loss of the Company for the year was £293,167,000 (2012: loss of£64,031,000).The Group does not have any other comprehensive income. The net return for theyear disclosed above represents the Group's comprehensive income.Statements of Changes in Equityfor the year ended 31 December 2013                          Ordinary     Share              Capital                             share   premium   Special redemption   Capital    Revenue                           capital   account   reserve    reserve  reserves    reserve      TotalGroup               Note     £'000     £'000     £'000      £'000     £'000      £'000      £'000For the year ended31 December 2012At 31 December2011                         9,651   127,155   116,471     22,779   994,236     46,712  1,317,004Totalcomprehensiveincome:(Loss)/profit forthe year                         -         -         -          -  (102,645)    38,614    (64,031)Transactions withowners:Dividend paid          7         -         -         -          -         -    (37,230)   (37,230)                             -----   -------   -------     ------   -------    -------    -------At 31 December2012                         9,651   127,155   116,471     22,779   891,591     48,096  1,215,743                             =====   =======   =======     ======   =======     ======  =========For the year ended31 December 2013At 31 December2012                         9,651   127,155   116,471     22,779   891,591     48,096  1,215,743Totalcomprehensiveincome:(Loss)/profit forthe year                         -         -         -          -  (332,800)    39,633   (293,167)Transactions withowners:Dividend paid          7         -         -         -          -         -    (37,230)   (37,230)                             -----   -------   -------     ------   -------    -------    -------At 31 December2013                         9,651   127,155   116,471     22,779   558,791     50,499    885,346                             =====   =======   =======     ======   =======     ======    =======                          Ordinary     Share              Capital                             share   premium   Special redemption   Capital    Revenue                           capital   account   reserve    reserve  reserves    reserve      TotalCompany             Note     £'000     £'000     £'000      £'000     £'000      £'000      £'000For the year ended31 December 2012At 31 December2011                         9,651   127,155   116,471     22,779 1,005,137     35,811  1,317,004Totalcomprehensiveincome:(Loss)/profit forthe year                         -         -         -          -  (102,640)    38,609    (64,031)Transactions withowners:Dividend paid          7         -         -         -          -         -    (37,230)   (37,230)                             -----   -------   -------     ------   -------    -------   --------At 31 December2012                         9,651   127,155   116,471     22,779   902,497     37,190  1,215,743                             =====   =======   =======     ======   =======     ======  =========For the year ended31 December 2013At 31 December2012                         9,651   127,155   116,471     22,779   902,497     37,190  1,215,743Totalcomprehensiveincome:(Loss)/profit forthe year                         -         -         -          -  (332,792)    39,625   (293,167)Transactions withowners:Dividend paid          7         -         -         -          -         -    (37,230)   (37,230)                             -----   -------   -------     ------   -------    -------    -------At 31 December2013                         9,651   127,155   116,471     22,779   569,705     39,585    885,346                             -----   -------   -------     ------   -------     ------    -------Statements of Financial Positionas at 31 December 2013                                               2013       2013       2012       2012                                              Group    Company      Group    Company                                   Notes      £'000      £'000      £'000      £'000Non current assetsInvestments held at fair valuethrough profit or loss                      986,122    998,536  1,318,360  1,330,766Deferred tax asset                            1,795      1,795      3,002      3,002                                            -------  ---------  ---------  ---------                                            987,917  1,000,331  1,321,362  1,333,768                                            -------  ---------  ---------  ---------Current assetsCash and cash equivalents                    16,553      5,273     14,493      3,224Other receivables                             6,293      6,293      3,693      3,693                                            -------     ------     ------     ------                                             22,846     11,566     18,186      6,917                                          ---------     ------     ------     ------Total assets                              1,010,763  1,011,897  1,339,548  1,340,685                                          ---------  ---------  ---------  ---------Current liabilitiesOther payables                              (22,949)   (24,083)   (21,672)   (22,809)Derivative financial instruments -written options                                (276)      (276)      (250)      (250)Bank loans and bank overdrafts             (101,915)  (101,915)  (100,892)  (100,892)                                           --------   --------   --------   --------                                           (125,140)  (126,274)  (122,814)  (123,951)                                           --------   --------   --------   --------Total assets less currentliabilities                                 885,623    885,623  1,216,734  1,216,734Non current liabilitiesDeferred tax liabilities                       (277)      (277)      (991)      (991)                                            -------    -------  ---------  ---------Net assets                                  885,346    885,346  1,215,743  1,215,743                                            =======    =======  =========  =========Equity attributable to equityholdersOrdinary share capital                  9     9,651      9,651      9,651      9,651Share premium account                       127,155    127,155    127,155    127,155Special reserve                             116,471    116,471    116,471    116,471Capital redemption reserve                   22,779     22,779     22,779     22,779Capital reserves                            558,791    569,705    891,591    902,497Revenue reserve                              50,499     39,585     48,096     37,190                                            -------    -------  ---------  ---------Total equity                                885,346    885,346  1,215,743  1,215,743                                            =======    =======  =========  =========Net asset value per ordinary share      8   499.39p    499.39p    685.75p    685.75p                                            =======    =======    =======    =======Cash Flow Statementsfor the year ended 31 December 2013                                              2013       2013       2012       2012                                             Group    Company      Group    Company                                             £'000      £'000      £'000      £'000Operating activitiesLoss before taxation                      (291,341)  (291,344)   (66,089)   (66,091)Add back interest paid                       1,566      1,566      1,194      1,194Losses on investments held at fair valuethrough profit or loss includingtransaction costs                          324,228    324,220     93,808     93,803Net losses/(gains) on foreign exchange         718        718     (1,705)    (1,705)Sales of investments held at fair valuethrough profit or loss                     317,195    317,195    281,719    281,719Purchases of investments held at fairvalue through profit or loss              (309,159)  (309,159)  (340,539)  (340,539)Increase in other receivables                  (94)       (94)      (138)      (138)Increase in amounts due from brokers        (2,610)    (2,610)      (189)      (189)(Decrease)/increase in amounts due tobrokers                                    (11,125)   (11,125)    12,462     12,462Increase in other payables                  12,399     12,399      3,927      3,927                                            ------     ------     ------     ------Net cash inflow/(outflow) from operatingactivities before interest and taxation     41,777     41,766    (15,550)   (15,557)                                            ------     ------    -------    -------Interest paid                               (1,566)    (1,566)    (1,194)    (1,194)Taxation paid                                    -          -        (40)       (40)Taxation on overseas income                 (1,226)    (1,226)    (1,144)    (1,144)                                            ------     ------     ------     ------Net cash inflow/(outflow) from operatingactivities before financing activities      38,985     38,974    (17,928)   (17,935)                                            ------     ------    -------    -------Financing activitiesDrawdown of loan                               168        168     40,624     40,624Dividend paid                              (37,230)   (37,230)   (37,230)   (37,230)                                           -------    -------    -------    -------Net cash (outflow)/inflow from financingactivities                                 (37,062)   (37,062)     3,394      3,394                                           -------    -------     ------     ------Increase/(decrease) in cash and cashequivalents                                  1,923      1,912    (14,534)   (14,541)                                            ------     ------    -------    -------Effect of foreign exchange rate changes        137        137     (1,086)    (1,086)                                            ------     ------     ------     ------Change in cash and cash equivalents          2,060      2,049    (15,620)   (15,627)Cash and cash equivalents at start ofyear                                        14,493      3,224     30,113     18,851                                            ------     ------     ------     ------Cash and cash equivalents at end of year    16,553      5,273     14,493      3,224                                            ======     ======     ======     ======Comprised of:Cash                                        15,261      3,981     13,325      2,056Collateral pledged for written optioncontracts                                    1,292      1,292      1,168      1,168                                            ------     ------     ------     ------                                            16,553      5,273     14,493      3,224                                            ======     ======     ======     ======Notes to the Financial Statements1. Principal activityThe principal activity of the Company is that of an investment trust companywithin the meaning of section 1158 of the Corporation Tax Act 2010.The principal activity of the subsidiary, BlackRock World Mining InvestmentCompany Limited, is investment dealing.2. Accounting policiesThe principal accounting policies adopted by the Group and the Company are setout below.(a) Basis of preparationThe Group and Parent Company financial statements have been prepared inaccordance with International Financial Reporting Standards ('IFRS') as adoptedby the European Union and as applied in accordance with the provisions of theCompanies Act 2006. The Group has taken advantage of the exemption providedunder section 408 of the Companies Act 2006 not to publish its individualincome statement and related notes.The Group's financial statements are presented in sterling, which is thecurrency of the primary economic environment in which the Group operates. Allvalues are rounded to the nearest thousand pounds (£'000) except whereotherwise indicated.New standards, amendments to standards and interpretations effective for annualperiods beginning after 1 January 2013 that have been adopted by the Group inpreparing these financial statements are:IFRS 13 - "Fair Value Measurement" (effective 1 January 2013) establishes asingle source of guidance under IFRS for all fair value measurements. It doesnot change when an entity is required to use fair value, but rather providesguidance on how to measure fair value under IFRS when fair value is required orpermitted. IFRS 13 defines fair value as an exit price. The standard does nothave any impact on the classification and/or valuation of the Group andCompany's financial instruments. IFRS 13 also requires additional disclosures,and these are provided in Note 18 on pages 55 to 63 of the Annual Report.IFRS 7 (amendment), Financial Instruments - Disclosures (effective for periodsbeginning on or after 1 January 2013) - amendments enhancing disclosures aboutoffsetting financial assets and financial liabilities. The disclosures requiredby this standard are given in Note 18 on pages 56 to 64 of the Annual Report.A number of new standards, amendments to standards and interpretations areeffective for annual periods beginning after 1 January 2014, and have not beenapplied in preparing these financial statements. None of these are expected tohave a significant effect on the measurement of the amounts recognised in thefinancial statements of the Company; however, additional disclosures will berequired. However, IFRS 9 "Financial Instruments" issued in November 2009 willchange the classification of financial assets, but is not expected to have animpact on the measurement basis of the financial assets since the majority ofthe Company's financial assets are measured at fair value through profit orloss.IFRS 9 - "Financial Instruments" deals with classification and measurement offinancial assets and its requirements represent a significant change from theexisting requirements in IAS 39 in respect of financial assets. The standardcontains two primary measurement categories for financial assets: at amortisedcost and fair value. A financial asset would be measured at amortised cost ifit is held within a business model whose objective is to hold assets in orderto collect contractual cash flows, and the asset's contractual terms give riseon specified dates to cash flows that are solely payments of principal andinterest on the principal outstanding. All other financial assets would bemeasured at fair value. The standard eliminates the existing IAS 39 categoriesof "held to maturity", "available for sale" and "loans and receivables".The standard is not yet approved by the EU.IFRS 10 - "Consolidated Financial Statements" (effective 1 January 2014)establishes a single control model that applies to all entities includingspecial purpose entities. The changes introduced by IFRS 10 will requiremanagement to exercise significant judgement to determine which entities arecontrolled, and therefore are required to be consolidated by a parent. Thestandard is not likely to have any impact on the Group.IFRS 11 - "Joint Arrangements" (effective 1 January 2014) removes the option toaccount for jointly controlled entities (JCEs) using proportionateconsolidation. This is not applicable to the Group as it holds no interests injoint arrangements.IFRS 12 - "Disclosure of Involvement with Other Entities" (effective1 January 2014) now requires additional disclosures that relate to an entity'sinterests in subsidiaries, joint arrangements, associates and structuredentities.This standard is not expected to apply to the Group as it does not invest instructured entities.Insofar as the Statement of Recommended Practice ('SORP') for investment trustsand venture capital trusts issued by the Association of Investment Companies('AIC'), revised in January 2009 is compatible with IFRS, the financialstatements have been prepared in accordance with the guidance set out in theSORP.(b) Basis of consolidationThe Group financial statements consolidate the financial statements of theCompany and its wholly owned subsidiary, BlackRock World Mining InvestmentCompany Limited, which are registered and operate in England and Wales.(c) Presentation of the Consolidated Statement of Comprehensive IncomeIn order to better reflect the activities of an investment trust company and inaccordance with guidance issued by the AIC, supplementary information whichanalyses the Consolidated Statement of Comprehensive Income between items of arevenue and a capital nature has been presented alongside the ConsolidatedStatement of Comprehensive Income.(d) Segmental reportingThe Directors are of the opinion that the Group is engaged in a single segmentof business being investment business.(e) IncomeDividends receivable on equity shares are recognised on an ex-dividend basis.Where no ex-dividend date is available, dividends receivable on or before theyear end are treated as revenue for the year. Provision is made for anydividends not expected to be received. Interest income is accounted for on anaccruals basis.Income from contractual rights is measured at the fair value of theconsideration received or receivable where the Investment Manager can reliablyestimate the amount, pursuant to the terms of the agreement. Income fromcontractual rights received comprise of a return of income and a return ofcapital based on the underlying cost of the contract and, accordingly, thereturn of income element is taken to the revenue account and the return ofcapital element is taken to the capital account. These amounts are disclosed inthe Consolidated Statement of Comprehensive Income within income frominvestments and gains/losses on investments held at fair value through profitor loss, respectively.The useful life of the contractual rights will be determined by reference tothe contractual arrangements, the planned mine life on commencement of miningand the underlying cost of the contractual rights will be revalued on asystematic basis using the units of production method over the life of thecontractual rights which is estimated using available estimated proved andprobable reserves specifically associated with the mine. The Investment Managerrelies on public disclosures for information on proven and probable reservesfrom the operators of the mine. Amortisation rates are adjusted on aprospective basis for all changes to estimates of the life of contractualrights and iron ore reserves. These are disclosed in the Consolidated Statementof Comprehensive Income within gains/losses on investments held at fair valuethrough profit or loss.Option premium income is recognised as revenue evenly over the life of theoption contract and included in the revenue column of the ConsolidatedStatement of Comprehensive Income unless the option has been written for themaintenance and enhancement of the Company's investment portfolio andrepresents an incidental part of a larger capital transaction, in which caseany premia arising are allocated to the capital column of the ConsolidatedStatement of Comprehensive Income. When an option is closed out or exercisedthe gain or loss is accounted for as capital.(f) ExpensesAll expenses, including finance costs, are accounted for on an accruals basis.Expenses have been charged wholly to the revenue column of the ConsolidatedStatement of Comprehensive Income, except as follows:- expenses which are incidental to the acquisition of an investment are  included within the cost of the investment. Details of transaction costs on  the purchases and sales of investments are disclosed in Note 10 on page 52 of  the Annual Report.- effective 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;- expenses are treated as capital where a connection with the maintenance or  enhancement of the value of the investments can be demonstrated.(g) TaxationDeferred taxation is recognised in respect of all temporary differences thathave originated but not reversed at the financial reporting date, wheretransactions or events that result in an obligation to pay more tax in thefuture or right to pay less tax in the future have occurred at the financialreporting date. This is subject to deferred tax assets only being recognised ifit is considered more likely than not that there will be suitable profits fromwhich the future reversal of the temporary differences can be deducted.Deferred tax assets and liabilities are measured at the rates applicable to thelegal jurisdictions in which they arise.(h) Investments held at fair value through profit or lossThe Company's investments, including contractual rights, are classified as heldat fair value through profit or loss in accordance with IAS 39 - "FinancialInstruments: Recognition and Measurement" and are managed and evaluated on afair value basis in accordance with its investment strategy.All investments, including contractual rights, are designated upon initialrecognition as held at fair value through profit or loss. Purchases ofinvestments are recognised on a trade date basis. The sales of assets arerecognised at the trade date of the disposal. Proceeds are measured at fairvalue which will be regarded as the proceeds of sale less any transactioncosts. Contractual rights are recognised on the completion date, where apurchase of the rights is under a contract, and is initially measured at fairvalue excluding transaction costs.The fair value of the financial investments is based on their quoted bid priceat the financial reporting date, without deduction for the estimated sellingcosts. For all financial instruments not traded in an active market, the fairvalue is determined by using valuation techniques deemed by the Board to beappropriate in the circumstances. Valuation techniques include the marketapproach (i.e., using recent arm's length market transactions adjusted asnecessary and reference to the current market value of another instrument thatis substantially the same) and the income approach (i.e., discounted cash flowanalysis and option pricing models making as much use of available andsupportable market data as possible).Gains and losses arising from changes in fair value of investments and ondisposal of investments are recognised directly in the Consolidated Statementof Comprehensive Income. The gains and losses from changes in fair value ofcontractual rights are taken to the Consolidated Statement of ComprehensiveIncome and arise as a result of the revaluation of the underlying cost of thecontractual rights, changes in commodity prices and changes in estimates ofproven and probable reserves specifically associated with the mine.In order to improve the disclosure of how companies measure the fair value oftheir financial investments, the disclosure requirements in IFRS 13 have beenextended to include a fair value hierarchy. The fair value hierarchy consistsof the following three levels:Level 1 - quoted prices (unadjusted) in active markets for identical assets orliabilities;Level 2 - valued by reference to valuation techniques using market observableinputs such as quoted prices;Level 3 - inputs for the asset or liability that are not based on observablemarket data.Under IFRS, the investment in the subsidiary is fair valued which is deemed tobe the net asset value of the subsidiary. Changes in the fair value ofinvestments held at fair value through profit or loss and gains and losses ondisposal are recognised in the Consolidated Statement of Comprehensive Incomeas "Gains or losses on investments held at fair value through profit or loss".Also included within this heading are transaction costs in relation to thepurchase or sale of investments.Financial assets and financial liabilities are offset and the net amountreported in the statements of financial position if there is a currentlyenforceable legal right to offset the recognised amounts and there is anintention to settle on a net basis, or to realise the asset and settle theliability simultaneously.(i) Other receivables and other payablesOther receivables and other payables do not carry any interest and are shortterm in nature and are accordingly stated at their nominal value.(j) Dividends payableUnder IFRS, final dividends should not be accrued in the financial statementsunless they have been approved by shareholders before the financial reportingdate. Interim dividends should not be accrued in the financial statementsunless they have been paid.Dividends payable to equity shareholders are recognised in the Statements ofChanges in Equity when they have been approved by shareholders in the case of afinal dividend, or paid in the case of an interim dividend, and have become aliability of the Group.(k) Foreign currency translationTransactions involving foreign currencies are converted at the rate ruling atthe date of the transaction. Foreign currency monetary assets and liabilitiesare translated into sterling at the rate ruling on the financial reportingdate. Foreign exchange differences arising on translation are recognised in theConsolidated Statement of Comprehensive Income.(l) Cash and cash equivalentsCash comprises cash in hand and on demand deposits. Cash equivalents are shortterm, highly liquid investments that are readily convertible to known amountsof cash and that are subject to an insignificant risk of changes in value.(m) Bank borrowingsBank overdrafts and loans are recorded as the proceeds received. Financecharges, including any premia payable on settlement or redemption and directissue costs, are accounted for on an accruals basis in the ConsolidatedStatement of Comprehensive Income using the effective interest rate method andare added to the carrying amount of the instrument to the extent that they arenot settled in the period in which they arise.(n) Critical accounting estimates and judgementsThe Group makes estimates and assumptions concerning the future. The resultingaccounting estimates and assumptions will, by definition, seldom equal therelated actual results. Estimates and judgements are regularly evaluated andare based on historical experience and other factors, including expectations offuture events that are believed to be reasonable under the circumstances. Theestimates and assumptions that have a significant risk of causing a materialadjustment to the carrying amounts of assets and liabilities within the nextfinancial year are addressed below.Fair value of financial instrumentsWhen the fair values of financial assets and financial liabilities recorded inthe Statements of Financial Position cannot be derived from active markets,their fair value is determined using a variety of valuation techniques thatinclude the use of valuation models. The fair value of contractual rights wasassessed by IMC Group Consulting Limited, an independent valuer with arecognised and relevant professional qualification. The inputs to these modelsare taken from observable markets where possible, but where this is notfeasible, estimation is required in establishing fair values. The estimatesinclude considerations of production profiles, commodity prices, cash flows anddiscount rates. Changes in assumptions about these factors could affect thereported fair value of financial instruments in the Statements of FinancialPosition and the level where the instruments are disclosed in the fair valuehierarchy. To assess the significance of a particular input to the entiremeasurement, the external valuer performs sensitivity analysis. The keyassumptions used to determine the fair value of the contractual rights andsensitivity analyses are provided in note 18 of the Annual Report.3. Income                                                                 2013      2012                                                                £'000     £'000Investment income:UK listed dividends                                            10,870     9,264Overseas listed dividends                                      15,209    20,759Overseas listed special dividends                               4,130       446Income from contractual rights                                  2,984       266Fixed interest income                                           9,672    11,773                                                               ------    ------                                                               42,865    42,508                                                               ------    ------Other income:Option premiums                                                 5,440     2,114Deposit interest                                                   22        21Underwriting commission and other income                          475       418                                                               ------    ------                                                                5,937     2,553                                                               ------    ------Total income                                                   48,802    45,061                                                               ======    ======Total income comprises:Dividends                                                      30,209    30,469Deposit interest                                                   22        21Option premiums                                                 5,440     2,114Income from contractual rights                                  2,984       266Fixed interest income                                           9,672    11,773Other income                                                      475       418                                                               ------    ------                                                               48,802    45,061                                                               ======    ======The Company considers the treatment of premium arising on option transactionson a case-by-case basis. During the year ended 31 December 2013, the optionpremium income of £5,521,000 (2012: £2,114,000) received by the Company wasfrom options written for income purposes of which £5,440,000 has been creditedto the revenue column of the Consolidated Statement of Comprehensive Income asit is recognised evenly over the life of the option contract.4. Management fee                                    2013                       2012                          Revenue  Capital    Total  Revenue  Capital    Total                            £'000    £'000    £'000    £'000    £'000    £'000Investment managementfee                         3,164    9,492   12,656    4,046   12,139   16,185                            =====    =====   ======    =====   ======   ======The investment management fee is levied quarterly at a rate of 1.3% per annum,based on the value of gross assets on the last day of each quarter and,effective from 1 January 2012, 75% of investment management fees are allocatedto the capital column and 25% to the revenue column of the ConsolidatedStatement of Comprehensive Income.5. Other expenses                                     2013                          2012                           Revenue   Capital     Total   Revenue   Capital     Total                             £'000     £'000     £'000     £'000     £'000     £'000Custody fee                    183         -       183       379         -       379Auditor's remuneration:- audit services                28         -        28        39         -        39- other assurance  services\*#                     6         -         6         6       198       204Registrar's fee                 98         -        98        72         -        72Directors' emoluments\*\*        133         -       133       119         -       119Other administrativecosts#                         527         -       527       287       568       855                               ---       ---       ---       ---       ---     -----                               975         -       975       902       766     1,668                               ---       ---       ---       ---       ---     -----                                                                      2013      2012The Company's ongoingcharges, calculated as apercentage of averagenet assets for the yearand using expenses,excluding finance costswere:                                                                 1.4%      1.4%                                                                      ----      ----\* Other assurance services relate to the review of the half yearly financialstatements.\*\* The emoluments of the Chairman, who was also the highest paid Director, were£33,750 (2012: £30,000).# In 2012, expenses charged to capital include £198,000 paid to the auditorsrelating to tax and structuring services and £568,000 paid to legal andcorporate finance advisers relating to advice provided for a proposed but notcompleted corporate acquisition.6. Finance costs                                    2013                          2012                          Revenue   Capital     Total   Revenue   Capital     Total                            £'000     £'000     £'000     £'000     £'000     £'000Interest on bank loans        390     1,172     1,562       297       890     1,187Interest on bankoverdrafts                      1         3         4         2         5         7                              ---     -----     -----       ---       ---     -----                              391     1,175     1,566       299       895     1,194                              ===     =====     =====       ===       ===     =====7. DividendsUnder IFRS, final dividends are not recognised until they are approved byshareholders, and special and interim dividends are not recognised until theyare paid. They are also debited directly to reserves. Amounts recognised asdistributable to ordinary shareholders for the period to 31 December were asfollows:                                                                 2013      2012                                                                £'000     £'000Interim ordinary dividend in respect of the year ended31 December 2013 of 7.00p per share, declared on21 August 2013                                                 12,410    12,410Final ordinary dividend in respect of the year ended31 December 2012 of 14.00p per share, approved byshareholders on 25 April 2013                                  24,820    24,820                                                               ------    ------                                                               37,230    37,230                                                               ======    ======The total dividends payable in respect of the year which form the basis ofsection 1158 of the Corporation Tax Act 2010 and section 833 of the CompaniesAct 2006, and the amounts proposed, meet the relevant requirements as set outin this legislation.                                                                  2013      2012                                                                 £'000     £'000Dividends paid or proposed on equity shares:Interim ordinary dividend paid of 7.00p (2012: 7.00p)\*          12,410    12,410Proposed final ordinary dividend of 14.00p per share(2012: 14.00p)\*                                                 24,820    24,820                                                                ------    ------                                                                37,230    37,230                                                                ------    ------\* Based on 177,287,242 (2012: 177,287,242) ordinary shares.8. Consolidated earnings and net asset value per ordinary shareRevenue and capital returns per share and net asset value per share are shownbelow and have been calculated using the following:                                                               2013         2012Net revenue profit attributable to ordinaryshareholders (£'000)                                         39,633       38,614Net capital loss attributable to ordinary shareholders(£'000)                                                    (332,800)    (102,645)                                                           --------     --------Total loss attributable to ordinary shareholders(£'000)                                                    (293,167)     (64,031)                                                           ========     ========Total equity attributable to ordinary shareholders(£'000)                                                     885,346    1,215,743                                                           ========     ========The weighted average number of ordinary shares inissue during each year, on which the return perordinary share was calculated was:                      177,287,242  177,287,242The number of ordinary shares in issue at the yearend, on which the net asset value per ordinary sharewas calculated was:                                     177,287,242  177,287,242                                                        -----------  -----------Revenue earnings per share                                   22.36p       21.78pCapital loss per share                                     (187.72p)     (57.90p)                                                           --------     --------Total loss per share                                       (165.36p)     (36.12p)                                                           --------     --------Net asset value per share                                   499.39p      685.75pShare price                                                 465.00p      586.50p                                                           ========     ========At 31 December 2013, the 15,724,600 (2012: 15,724,600) shares held in treasurywere not dilutive to earnings per share, as the share price was below the net assetvalue.9. Share capital                                        Ordinary    Treasury                                          shares      shares                                          number      number        Total                                       (nominal)   (nominal)       shares  £'000Allotted, called up and fully paidshare capital comprised:Ordinary shares of 5p each                                     -----------  ----------  -----------  -----At 1 January 2013                    177,287,242  15,724,600  193,011,842  9,651                                     -----------  ----------  -----------  -----At 31 December 2013                  177,287,242  15,724,600  193,011,842  9,651                                     ===========  ==========  ===========  =====During the year, no shares (2012: nil) were repurchased (2012: cost of £nil).10. Contingent liabilitiesThere were no contingent liabilities at 31 December 2013 (2012: nil).11. Publication of non statutory accountsThe financial information contained in this announcement does not constitutestatutory accounts as defined in the Companies Act 2006. The annual report andfinancial statements for the year ended 31 December 2013 will be filed with theRegistrar of Companies after the Annual General Meeting.The figures set out above have been reported upon by the Auditor, whose reportfor the year ended 31 December 2013 contains no qualification or statementunder section 498(2) or (3) of the Companies Act 2006.The comparative figures are extracts from the audited financial statements ofBlackRock World Mining Trust plc and its subsidiary for the year ended31 December 2012, which have been filed with the Registrar of Companies. Thereport of the Auditor on those financial statements contained no qualificationor statement under section 498 of the Companies Act 2006.12. Annual ReportCopies of the annual report will be published shortly and will be availablefrom the registered office, c/o The Company Secretary, BlackRock World MiningTrust plc, 12 Throgmorton Avenue, London EC2N 2DL.13. Annual General MeetingThe Annual General Meeting of the Company will be held at 12 ThrogmortonAvenue, London EC2N 2DL on Thursday, 8 May 2014 at 11.30 a.m.ENDSThe Annual Report will also be available on the BlackRock Investment Managementwebsite at www.blackrock.co.uk/brwm. Neither the contents of the Manager'swebsite nor the contents of any website accessible from hyperlinks on theManager's website (or any other website) is incorporated into, or forms partof, this announcement.For further information, please contact:Jonathan Ruck Keene, Chairman, Specialist Client Group,BlackRock Investment Management (UK) Limited - Tel: 020 7743 2178Evy Hambro, Fund Manager,BlackRock Investment Management (UK) Limited - Tel: 020 7743 4511Emma Phillips, Media & Communications,BlackRock Investment Management (UK) Limited - Tel: 020 7743 292220 February 201412 Throgmorton AvenueLondon EC2N 2DL
AI assistant

Blackrock World Mining Trust PLC Earnings Release 2013

5281_10-k_2014-02-20_85f05cf1-c600-45b2-b57f-ef8811346334.html

You don't have Javascript enabled. For full functionality this page requires javascript to be enabled.

BLACKROCK WORLD MINING TRUST PLC - Final Results

AI assistant

Blackrock World Mining Trust PLC — Earnings Release 2013

5281_10-k_2014-02-20_85f05cf1-c600-45b2-b57f-ef8811346334.html

You don't have Javascript enabled. For full functionality this page requires javascript to be enabled.

BLACKROCK WORLD MINING TRUST PLC - Final Results

More from Blackrock World Mining Trust PLC

Blackrock World Mining Trust PLC Earnings Release 2013
