Blackrock World Mining Trust PLC — Earnings Release 2014

Mar 19, 2015

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BLACKROCK WORLD MINING TRUST PLC - Final Results

PR Newswire

London, March 13

BlackRock World Mining Trust plcAnnual Results Announcementfor the year ended 31 December 2014Key points• Maintained final covered dividend at 14 pence per share payable on 8 May 2015 to shareholders on the Company’s register on 27 March 2015 (ex dividend date is 26 March 2015);• Reduced management fee which is now also on a tiered basis;• Additional guidelines for investments in royalties including enhanced restrictions on individual exposures and total exposure to a single operator; and • Change in portfolio management team – appointment of Olivia Markham as co-manager.Financial HighlightsAttributable to ordinary shareholders 31 December 2014 31 December 2013 Change %AssetsNet assets (£'000) 624,674 885,346 -29.4Net asset value per ordinary share 352.35p 499.39p -29.4- with income reinvested -26.4 -------- -------- --------Ordinary share price (mid-market) 310.35p 465.00p -33.3- with income reinvested -30.4 -------- -------- --------Euromoney Global Mining Index 405.41 466.03 -13.0Discount to net asset value 11.9% 6.9% ======== ======== ======== For the year ended For the year ended 31 December 2014 31 December 2013 Change %RevenueNet revenue return aftertaxation (£'000) 37,452 39,633 -5.5Revenue return per ordinary share 21.13p 22.36p -5.5Dividend per ordinary share- Interim 7.00p 7.00p -- Final 14.00p 14.00p - -------- -------- --------Total dividends paid and payable 21.00p 21.00p - -------- -------- --------Chairman's statementOverview2014 was a challenging year for the Company. Against a backdrop of slowingglobal growth, the Board had taken the decision in the previous year toallocate up to 20% of assets in unquoted investments including mining royalties,equities and bonds. The strategic rationale for investing in royalties was,and remains, attractive in that it allows the Company to participate in longterm production revenues by providing financing at a time of global bankingconstraint. However, the Company's exposure to the London Mining Maramparoyalty contract was impacted by two unforeseen factors: the rapid andsubstantial decline in iron ore pricing following a collapse in Chinese demandand the spread of Ebola in West Africa. Our subsequent decision to write downthe value of our investment in London Mining was taken only after carefulconsideration with our advisers.The Board is fully aware of the resultant effect on shareholders and, on behalfof my fellow Directors, I should like to offer our most sincere regret. Ourresponsibility to your Company is one we take most seriously. Accordingly, weare working closely with BlackRock to ensure that the Company continues toemploy, and refine on an ongoing basis, robust diligence and supervisoryprocesses designed to minimise the risk of such issues arising in the future,so far as it is within the power of the Board and the Investment Manager to doso. In this way, we hope to continue to capture the very significantopportunities that we believe exist in this sector with appropriatediversification of risk.Although the commodity markets remain volatile, since the year end we havebeen encouraged by the cautious approach taken by a number of reportingcompanies. Capital expenditures have been reined in to sustain dividends andthe Company remains well positioned to take advantage of an eventual recoveryin sentiment through a broad exposure to world class producers.PerformanceOver the twelve months to 31 December 2014 performance was very disappointing,with the Company's net asset value (NAV) per share declining by 26.4% and theCompany's share price declining by 30.4%. The Company's benchmark index,the Euromoney Global Mining Index, declined by 13.0% in the same period(all percentages calculated in sterling terms with income reinvested).Since the year end and up until the close of business on 17 March 2015, theCompany's NAV has declined by 2.5% compared with a decline of 1.9% in thebenchmark index.Revenue return and dividendThe Company's revenue return per share for the year to 31 December 2014amounted to 21.13p compared with 22.36p for the previous year, representing adecrease of 5.5%.The Board recommends the payment of a final dividend of 14.00p per share forthe year ended 31 December 2014 (2013: 14.00p) which, together with the interimdividend of 7.00p per share (2013: 7.00p), makes a total dividend of 21.00p pershare (2013: 21.00p). The final dividend is payable on 8 May 2015 toshareholders on the Company's register on 27 March 2015 (ex dividend date is26 March 2015).Royalties and unquoted investmentsDuring the year, the Company's performance was negatively impacted by the writedown to zero of the holding in both the London Mining Marampa royalty contractand convertible bond. In addition, the Board decided to hold the gold-linkedpreference shares in Banro Corporation at a 30% discount to the implied goldprice and the corporate bond at a 25% discount to the last traded price,following the latter's financing delay which increased the likelihood of thecompany requiring alternative sources of funding. At the end of February 2015,following details of Banro's additional financing, the Board concluded that itwas appropriate to reduce the discount on the gold-linked preference shares to15% and the discount on the corporate bond to 10%. The discount at the year endis considered appropriate as the new financing details influencing the reductionof the discount in February were not in existence at 31 December 2014. Furtherinformation on these investments can be found in the Investment Manager's Report.Going forward, the Board has refined the guidelines associated with the Company'sroyalty strategy. In August 2013, shareholders voted to allow up to 20% of theCompany's gross assets to be invested in unquoted investments including royalties(previously 10%). It is proposed to maintain the 20% maximum exposure to royaltiesbut the royalty/unquoted portfolio should itself deliver diversification acrossoperator, country and commodity. To this end, new investments into individualroyalties/unquoted investments should not exceed circa 3% of gross assets at thetime of investment. Total exposure to any single operator, including other issuedsecurities such as debt and/or equity, where greater than 30% of that operator'srevenues come from the mine over which the royalty lies, must also not be greaterthan 3% at the time of investment. In addition, the guidelines require that theInvestment Manager must manage total exposure to a single operator, via reducingexposure to that operator's listed securities if they are also held in theportfolio, in a timely manner where royalties/unquoted investments are revaluedupwards. In the jurisdictions where statutory royalties are possible (in countrieswhere mineral rights are privately owned) these will be preferred and in respectof contractual royalties (a contractual obligation entered into by the operatorand typically unsecured) the valuation must take into account the higher credit riskinvolved. Board approval will continue to be required for all royalty/unquotedinvestments.DiscountThe discount to net assets averaged 5.0% over the past year, ranging from adiscount of 13.5% to a premium of 3.9% and ended the year at a discount of11.9% (all measured on a cum income basis). The Company's discount has sincewidened to 13.3% as at the close of business on 17 March 2015.The Board recognises the importance to shareholders that the Company's sharesshould not trade at a significant discount to the underlying net asset value.In recent years, the Board has placed much greater emphasis on seeking to closethe discount through generating additional demand for the shares by increasingdividend distributions and illustrating the sustainability of thesedistributions through diversification of income. Recent events, along withmining sector weakness, have clearly impacted this strategy; however dividendsremain key to discount management although not at the expense of potentialcapital growth.The Board regularly reviews the use of the Company's share buy back powers. Theexisting authority to buy back up to 14.99% of the Company's issued share capitalwill expire at the conclusion of the 2015 Annual General Meeting and a resolutionwill be put to shareholders to renew the authority at that meeting.The BoardI am pleased to report that Judith Mosely joined the Board on 19 August 2014and is also a member of the Audit & Management Engagement Committee. Judith isBusiness Development Director for Rand Merchant Bank in London withresponsibility for developing the bank's African business with internationalmining and metals companies. She also sits on the advisory board of Women inMining and brings a wealth of mining and commercial experience.Portfolio ManagersWith effect from 30 April 2015, the Company’s investments will be co-managed byEvy Hambro and Olivia Markham. The present co-manager, Catherine Raw, has informedthe Board she is to take up a corporate position within the mining sector and willbe leaving BlackRock on 30 April. The Board would like to express its thanks toCatherine for her contribution on behalf of the Company since 2009. Olivia Markhamjoined BlackRock’s Natural Resources team in 2011. She has 11 years of industryexperience, having formerly been the head of European mining research at UBS, amining analyst at Merrill Lynch in Sydney and a member of the Mergers & Acquisitionsteam at BHP Billiton in Melbourne.Investment Management FeeFollowing a review of the investment management fee, the Board has agreed with theManager that the investment management fee (including administration and companysecretarial services) will be amended as follows:With effect from 1 July 2015 the annual fee, chargeable on the gross assets undermanagement, will be reduced from a flat fee of 130 bps to:• 120bps on the first £500 million of gross assets• 100bps on the next £500 million• 85bps on gross assets above £1 billionHowever, between 1 April 2015 and 30 June 2015 the annual fee, chargeable on thegross assets under management, will be further reduced to:• 110bps on the first £500 million of gross assets• 70bps on the next £500 million• 40bps on gross assets above £1 billionThe Board intends to keep fee rates under review. In determining the appropriaterate, particular note will continue be taken of the Manager's performance relativeto the benchmark and the views of shareholders, as well as more general trends inthe marketplace.Julian Baring Scholarship fundThe Julian Baring Scholarship Fund was created in the name of well-known fundmanager, Julian Baring, in celebration of his two great passions - mining andAfrica. The advisers to the Fund, with the support of the industry, endowannual scholarships for talented, but financially disadvantaged, Africanstudents to continue their studies and to pursue a career in the miningindustry. The Fund has awarded scholarships to over forty individuals in miningrelated faculties at South African universities with which it is associated andhas also set up joint ventures with several African-based mining companieswhich award scholarships to deserving individuals from those companies.During the year, the Company made a donation of £12,000 to the Julian BaringScholarship Fund. It is hoped that with further support both in terms offunding and corporate partnerships, the Julian Baring Scholarship Fund will beable to make an even greater contribution to the skills and resources availableto the mining industry.Annual General MeetingThe Annual General Meeting of the Company will be held at the offices ofBlackRock at 12 Throgmorton Avenue, London EC2N 2DL on Wednesday, 29 April 2015at 11.30 a.m. Details of the business of the meeting are set out in the Noticeof Meeting on pages 75 to 78 of the Annual Report and Financial Statements. ThePortfolio Managers will make a presentation to shareholders on the Company'sperformance and the outlook for the year ahead.OutlookGrowing concerns over a slowdown in the Eurozone and emerging economies, astrong US dollar and a well-supplied oil market have contributed to a weakeningof many commodity prices since the summer of 2014. This does not paint aparticularly optimistic outlook for 2015, especially as commodity markets arelikely to remain volatile, with continued concerns over emerging market growth,inflated inventory levels and a buoyant US dollar creating headwinds. It ishoped that the second half of the year may see an improvement, as capitalexpenditure reductions made in prior years take effect on the rate of supplygrowth and concerns over commodity demand growth abate. With mining companymanagement continuing to deliver operationally and with a focus oncapital discipline and improved returns to shareholders, absent a furtherdeterioration in the global macroeconomic environment, these factors should besupportive of valuations.A W LeaChairman19 March 2015Strategic reportThe Directors present the Strategic Report of the Company for the year ended31 December 2014.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.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 unquoted investments. Risk is spread by investing in a number ofholdings, 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.As agreed at a General Meeting on 21 August 2013, the Group may invest in anysingle holding of quoted or unquoted investments that would represent up to 20%of gross assets at the time of acquisition. Although investments areprincipally in companies listed on recognised stock exchanges, the Company mayinvest up to 20% of the Group's gross assets in investments other than quotedsecurities. Such investments include unquoted equities or bonds, royalties,physical metals and derivatives. In order to afford the Company the flexibilityof obtaining exposure to metal and mining related royalties, it is possiblethat, in order to diversify risk, all or part of such exposure may be obtaineddirectly or indirectly through a holding company, a fund or another investmentor special purpose vehicle, which may be quoted or unquoted. The Board willseek the prior approval of shareholders to any unquoted investment in a singlecompany, fund or special purpose vehicle or any single royalty which representsmore than 10% of the Group's assets at the time of acquisition.As noted in the Chairman's Statement, the Board has now asked the InvestmentManager to operate within tighter limits than those previously agreed inrespect of unquoted investments, including royalties. It is proposed tomaintain the 20% maximum exposure but there will be sizing for individualroyalties/unquoted investments, diversification of the royalty portfolio andmanagement of exposure to a single operator. Further details of the refinementsare detailed on page 4 of the Annual Report and Financial Statements.As at 31 December 2014, five investments were held at Directors' valuation(including one unquoted investment in the Banro gold-linked preference shares).Unquoted investments can prove to be more risky than listed investments. Theinvestment in the Banro gold-linked preference shares, Banro Corporate 10%note, Ivanhoe Mines, Romarco Minerals and Mountain Province Diamond are held atDirectors' 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.The Company may borrow up to 25% of the Group's net assets. The maximum levelof gearing used during the year was 14.8% and, at the financial reporting date,net gearing (calculated as borrowings less cash as a percentage of net assets)stood at 11.7% of shareholders' funds (2013: 9.6%). For further details onborrowings refer to note 14 on page 55 of the Annual Report and FinancialStatements.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 continuationof the Company is proposed at each Annual General Meeting. The Directorsrecommend that shareholders vote in support of the Company's continuation.PerformanceIn the year to 31 December 2014, the Company's net asset value per sharedeclined by 26.4% compared with a decline in the Euromoney Global Mining Indexof 13.0%. The Company's share price declined by 30.4% over the same period.(All figures calculated 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£223,442,000 (2013: loss of £293,167,000) of which £37,452,000 (2013:£39,633,000) 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 as set out in the Chairman's Statement. Dividend payments for the yearended 31 December 2014 (including the interim dividend) amount to £37,230,000(2013: £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) usedto measure the progress and performance of the Company over time and which arecomparable to those reported by other investment trusts are as follows. 2014 2013Net asset value per share 352.35p 499.39pShare price 310.35p 465.00pDiscount to net asset value 11.9% 6.9%Revenue earnings per share 21.13p 22.36pOngoing charges* 1.4% 1.4% -------- --------* Ongoing charges represent the management fee and all other operatingexpenses, excluding finance costs and taxation, 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.DiscountDetails of the Company's share price discount to NAV are given in theChairman's Statement.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 income 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 57 to 68 of the Annual Report and Financial Statements, 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. Following authorisation under the Alternative Investment Fund Managers' Directive (AIFMD) the Company and its appointed Alternative Investment Fund Manager (AIFM or Manager) are subject to the risks that the requirements of the Directive are not correctly complied with. The Board and the Manager also monitor changes in government policy and legislation which may have an impact on the Company.- 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 Manager, BNY Mellon Trust & Depositary (UK) Limited (the Depositary) and the Bank of New York Mellon (International) Limited (the administrator), who maintain the Company's accounting records. The security 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 which is evidenced through their Service Organisation Control (SOC 1) Reports which are reported on by their service auditors and give assurance regarding the design and effective operation of controls. The Board also considers business continuity arrangements for the Company's key service providers.- 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 reviewed regularly 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 discussed inboth the Chairman's Statement and the Investment Manager's Report.Social, community and human rights issuesAs an investment trust with no employees, the Company has no direct social orcommunity responsibilities or impact on the environment. However, the Companybelieves that it is in shareholders' interests to consider environmental,social and governance factors, and human rights issues, when selecting andretaining investments. Details of the Company's policy on socially responsibleinvestment are set out on pages 31 and 32 of the Annual Report and FinancialStatements.Directors, gender representation and employeesThe Directors of the Company on 31 December 2014 are set out in the governancestructure and Directors' biographies on page 20 of the Annual Report andFinancial Statements. The Board consists of six male Directors and one femaleDirector. The Company does not have any employees.The information set out on pages 10 to 19 of the Annual Report and FinancialStatements, including the Investment Manager's Report, forms part of thisStrategic Report. The Strategic Report was approved by the Board at its meetingon 19 March 2015.By order of the BoardBlackRock Investment Management (UK) LimitedCompany Secretary19 March 2015Transactions with the AIFM and the Investment ManagerBlackRock Investment Management (UK) Limited (BIM (UK)) provided management andadministration services to the Company under a contract which was terminatedwith effect from 2 July 2014. BlackRock Fund Managers Limited (BFM) wasappointed as the Company's AIFM with effect from 2 July 2014. BFM has (with theCompany's consent) delegated certain portfolio and risk management services,and other ancillary services, to BIM (UK). The transactions and relationshipdetails are set out in the Directors' report on page 21 of the Annual Reportand Financial Statements.The investment management fee due to BIM (UK) and BFM for the year ended31 December 2014 amounted to £10,493,000 (2013: £12,656,000). At the year end,£2,061,000 (2013: £20,752,000) was outstanding in respect of the management fee.The management fee was until 1 July 2014 payable to BIM (UK) and thereafter toBFM.In addition to the above services, with effect from 1 November 2013, BlackRockhas provided the Company with marketing services. The total fees paid orpayable for these services for the year ended 31 December 2014 amounted to£256,000 excluding VAT (2013: £43,000). Marketing fees of £299,000 (2013:£43,000) were outstanding at 31 December 2014.Related party transactionsThe Board consists of seven non-executive Directors all of whom are consideredto be independent by the Board. None of the Directors has a service contractwith the Company. With effect from 1 October 2013 the Chairman receives anannual fee of £45,000, the Chairman of the Audit & Management EngagementCommittee and Senior Independent Director receives an annual fee of £37,500,and each other Director receives an annual fee of £30,000. All seven members ofthe Board hold shares in the Company. Mr Lea holds 12,000 ordinary shares,Mr Barby 25,000 ordinary shares, Mr Buchan 29,000 ordinary shares, Mr Cheyne24,000 ordinary shares, Mr Cockerill 18,136 ordinary shares, Mr Edey 7,000ordinary shares and Ms Mosely 7,400 ordinary shares. The amount of Directorsfees outstanding at 31 December 2014 was £19,375 (2013: £16,875).Statement of directors' responsibilities in respect of the Annual Report andFinancial StatementsThe Directors are responsible for preparing the Annual Report and FinancialStatements in accordance with applicable law and regulations. Company lawrequires the Directors to prepare financial statements for each financial year.Under that law, the Directors are required to prepare the financial statementsunder IFRS as adopted by the European Union.Under Company law the Directors must not approve the financial statementsunless they are satisfied that they give a true and fair view of the state ofaffairs of the Company and of the profit or loss of the Company for thatperiod. 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 Companyand hence for taking reasonable steps for the prevention and detection of fraudand other irregularities.The Directors are also responsible for preparing the Strategic Report,Directors' Report, the Directors' Remuneration Report, the Corporate GovernanceStatement and the Report of the Audit & Management Engagement Committee inaccordance with the Companies Act 2006 and applicable regulations, includingthe requirements of the Listing Rules and the Disclosure and TransparencyRules. The Directors have delegated responsibility to the Manager for themaintenance and integrity of the Company's corporate and financial informationincluded on the BlackRock website. Legislation in the United Kingdom governingthe preparation and dissemination of financial statements may differ fromlegislation in other jurisdictions.Each of the Directors at the date of this report, whose names are listed onpage 20 of the Annual Report and Financial Statements, confirm to the best oftheir 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 Strategic Report contained in the Annual Report and Financial Statements 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 33to 35 of the Annual Report and Financial Statements. As a result, the Board hasconcluded that the Annual Report and Financial Statements for the year ended31 December 2014, taken as a whole, are fair, balanced and understandable andprovide the information necessary for shareholders to assess the Company'sperformance, business model and strategy.For and on behalf of the BoardA W LeaChairman19 March 2015Investment manager's reportPortfolio performance2014 was a further year of negative returns for mining shares. The sector hasnow underperformed broader markets for four consecutive years, the first timethis has happened since the Company was formed. Despite positive steps taken bymining companies to reduce costs and curtail excessive capital investment,share prices fell on the back of underlying commodity price falls, especiallyin the second half of the year. The year was a reversal of 2013 which saw shareprices perform well in the second half after a poor start. This year all of thegains made in the first half were more than offset by falls in the second half.For the calendar year 2014, the Company's net asset value (NAV) and share pricefell by 26.4% and 30.4% respectively, in sterling terms with income reinvested.In capital only terms, the NAV fell by 29.4% and the share price by 33.3%. Bycomparison, in sterling terms, the Euromoney Global Mining Index fell by 15.6%(capital only) and 13.0% (with income reinvested). The underperformance wasalmost entirely driven by the Company's exposure to iron ore and, inparticular, the extremely disappointing failure of the royalty investment inthe Marampa iron ore mine. There is further detail on this investment in theunquoted section of this report.Mining sector overviewAfter the changes put in place in 2013, the mining sector started the year withstrong momentum behind it. The capital discipline plans initiated by the newmanagement teams bolstered hopes for further gains in the sector after therecovery in share prices in the second half of 2013. Company results for 2013were mostly ahead of expectations and the prospect of increased returns boostedshare prices early on in the year. From the low in July 2013 to the high inJuly 2014 the sector was up 20.4% (in sterling terms) and, as noted, this wasdriven by the belief that the 'self-help' strategies put in place by miningcompanies would realise value for shareholders.However, as the summer ended, commodity prices started to fall and it was notlong before falling prices for iron ore, nickel and copper started to putpressure on companies to defer the capital management plans announced at thestart of the year. Nowhere was this impact felt more severely than when BHPBilliton failed to meet shareholder expectations for a share buyback in August.In the final quarter of the year, as the US ended its Quantitative Easingprogramme, the negative momentum intensified. The price of oil collapsed soseverely that it spilt over into the base metal suite taking prices of mostmetals down with it. The scale and rapidity of the fall in oil took the marketby surprise and, when OPEC decided not to intervene, the fall accelerated tolevels not seen since 2009.Commodity demand held up better than the price falls implied. The US economycontinued to beat growth expectations and, with the bears on China yet againdisappointed not to see a collapse in domestic activity, demand for metalsremained reasonably buoyant (although at annual growth levels well below thepeaks seen in the prior decade). Although Europe started the year showing earlysigns of economic recovery, these had faltered by the second half leavingEuropean metals demand generally weak for the year as a whole. The problem formetal prices was not so much on the demand side but from the growth in supply.Despite capital investment now falling, commodities markets have been saddledwith the weight of new supply finally arriving from capacity that has beenunder construction for the last five years. The wave of additional materialoverwhelmed prices during the year and caused them to reset to lower levels,impacting long-established cost curves. With input costs also falling, such asthe oil price and weaker producer currencies, investors started to reassesswhere the new cost curves for metals and minerals production would be. Thisresulted in further downward pressure on metal prices especially during thelast quarter.In such an environment it is no surprise that M&A activity was subdued duringthe year. Most companies prioritised the repayment of debt and dividends ratherthan venturing above the parapet to look at M&A. However, a number of assetsales were concluded and this saw mid-size producers able to grow theirproduction base as majors sold non-core assets. The exception to this was thesale of the Las Bambas mine by Glencore to China MinMetals for US$7 billion.This transaction had been expected by the market and, with the benefit ofhindsight, it looks like a positive deal for Glencore. Another strategy back infashion is for larger companies to 'spinout' non-core assets to their existingshareholders on a pro rata basis. This was first mentioned by BHP Billiton withthe creation of 'South 32' which will hold their aluminium, manganese and subscale base metal assets. The company expects to conclude this during the firsthalf of 2015. Vale is also considering a similar process for their entire basemetals division which should see it listed separately during the third quarterof 2015.Gold shares performed better in 2014, in contrast to 2013 when they wereadversely impacted by a fall in the gold price. The gold price was range boundduring the year as central bank buying and jewellery demand acted to provide afloor, outweighing the much lower rate of gold ETF liquidation. As a result,gold company share prices were driven more by their own fundamentals and thisled to huge dispersion in performance within the sector. The larger ex-growthcompanies with weak balance sheets performed poorly, whilst the mid-sizecompanies with fully financed growth outperformed. The Company was wellpositioned to take advantage of this, leading to strong relative performance inthis sub sector of mining.Base metalsIn 2014 the performance of base metals was mixed. The best performer wasnickel, which managed to hold on to part of the gains made in the first half ofthe year on the back of the curtailment of exports from Indonesia. Pricesrallied strongly in the first few months of the year, but once these strongerprice levels encouraged other producers to lift production (the Philippines inparticular), nickel soon gave back its stellar gains made earlier in the year.Nickel company share prices followed the moves in the underlying price and somehad given back all of the gains by the year end. However, those that werefortunate to see their domestic currencies weaken versus the US dollar, namelyAustralian and Russian based producers, fared better. For the Company, theholding in the Russian company Norilsk was a source of both good performanceand substantial income despite the political turmoil surrounding Crimea andUkraine.Zinc and aluminium prices also closed the year higher as their respectivemarkets shifted from surplus to deficit. Both metals seemed to have turned thecorner, especially when compared to other commodities which, as previouslymentioned, are still suffering from oversupply. The Company had minimal directexposure to aluminium for most of the year but, in the second half, initiated aposition in Alumina Limited on the back of better prices and a weaker localcurrency. In zinc, the main exposure during the year was a futures contractwhich performed well and profits were taken during the second half of the year.Zinc equity exposure was limited to smaller holdings such as Nyrstar (0.2% ofthe portfolio) and indirect exposure via Lundin Mining (4.6% of the portfolio),Hudbay Minerals (2.3% of the portfolio), Boliden (1.5% of the portfolio),Volcan (0.1% of the portfolio) and Sociedad Minera El Brocal (0.1% of theportfolio). With the closure of the large Century mine in Australia scheduledfor the second half of 2015, the prospects for zinc continue to look positive.Selected commodity price changes during 2014 % change Price % change average 31 December 2014 over 12 months 2014 vs. 2013Nickel (US$/lb) 6.84 +9.0 +12.4Zinc (US$/lb) 0.98 +5.6 +13.1Aluminium (US$/lb) 0.83 +4.0 +1.1Uranium (US$/lb) 35.5 +2.9 -13.6Gold (US$/oz) 1,186.3 -1.8 -10.4Platinum (US$/oz) 1,206 -11.1 -6.9Tin (US$/lb) 8.81 -13.0 -1.8Copper (US$/lb) 2.89 -13.7 -6.4Lead (US$/lb) 0.84 -15.9 -2.1Hard Coking Coal (US$/tonne) 111 -16.5 -23.0Silver (US$/oz) 15.75 -19.2 -15.9Thermal Coal (US$/tonne) 64.8 -24.9 -16.7Iron Ore - fines 62% Fe ChinaImport (US$/tonne) 68 -48.9 -26.2Baltic Freight Rate Index (US$) 782 -65.7 -9.1 ======== ======== ========Sources: Datastream and Bloomberg.Copper was once again the largest single base metals exposure within theCompany. The rationale for this positive view again played out during the yearas expectations of a large surplus were not accurate and copper once moreaveraged over US$3/lb for the year (the 5th consecutive year of greater thanUS$3/lb prices). Sadly, despite the market data being supportive for the price,copper equities generally moved lower due to fears of a surplus in 2015, aswell as company specific events. Freeport-McMoRan, the Company's second largestcopper equity exposure at 4.0%, did not manage to deliver on its debt reductionplans as problems in Indonesia and lower oil prices reduced cash flow, therebylimiting the company's ability to pay down debt. First Quantum Minerals (8.6%of the portfolio, including both debt and equity exposure) struggled withchanges to tax rates in Zambia and delays to the ramp-up of new capacity.The mid cap companies, such as Hudbay, Lundin and Nevsun Resources (2.0% of theportfolio), all helped performance during the year but it was not sufficient tooffset the relative underperformance from the larger holdings.Gold and precious metalsFollowing the sharp decline in the price in 2013, gold was comparativelyrange-bound in 2014, down 1.8% for the year (in US dollar terms). Throughoutthe year gold was buffeted by a number of macro factors including the end ofQuantitative Easing in the US, a structurally stronger US dollar, the conflictin Ukraine, the rise of ISIS in Northern Iraq and the collapse in oil prices inthe second half of the year. The net result was that gold ended the year almostwhere it started.The size of the physical gold market fell by 6% year-on-year for the firstthree quarters of 2014 versus the same period in 2013. Financial investorparticipation in the physical market was limited and conviction levels weregenerally low. Gold's 'tourist' investors, who got involved during the headydays of the bull market of 2010 and 2011, have almost completely exited themarket, meaning changes in gold holdings in physically-backed ETFs have had alimited influence on the gold price over the course of the year. Instead, themore established markets of China and India, as well as Central Banks, providedvital support for the gold price during the sharp sell-offs in the gold futuresmarket in the second and fourth quarters. After a relatively weak first halffor Asian gold demand year-on-year, the third quarter witnessed acceleratingdemand out of China and India and the market was positively surprised whenIndia eased restrictions on gold imports in November. Central Bank demand wasmuch stronger in 2014 than the market had expected, with Russia and the FormerSoviet countries responsible for cumulative central bank purchases for thefirst three quarters of the year which exceeded those in the equivalent periodof 2013. The Swiss referendum on its Central Bank gold holdings also helped toemphasise that gold is still very much perceived as a core reserve currency bythe public, which in turn helped to improve market sentiment towards the yellowmetal in the fourth quarter.Gold equities, as measured by the FTSE Gold Mines Index, fell by 9.9% (insterling terms). As discussed earlier, there was a significant dispersion inreturns across the gold producers; for example, of the two largest goldcompanies, RandGold Resources (1.6% of the portfolio) was up by 15.6%, whereasBarrick (not held in the portfolio) ended the year down by 34.8% in sterlingterms. The companies that performed best were those with stronger balancesheets, lower costs and organic growth, a good example of which was RandGoldResources. Royalty companies, which are not exposed to underlying costinflation, also delivered strong performance and the Company's best performinggold holding was Franco-Nevada (1.2% of the portfolio), up by 28.8% (insterling terms).Silver underperformed its more valuable cousin for the second year in a row,falling by 19.2% in US dollar terms. The bulk of the Company's silver exposureis through its holding in Fresnillo (3.0% of the portfolio) and its parentcompany, Industrias Penoles (1.6% of the portfolio). In September, Fresnilloannounced its intention to purchase Newmont's 44% stake in the Penmont jointventure, taking Fresnillo's ownership of three high quality gold mines, plustwo advanced exploration projects, to 100%. This could see the majority ofFresnillo's revenues coming from gold production once the deal completes. Ofthe other precious metals, platinum ended the year down 11.1%, wiping out thegains achieved in the first half of the year. Palladium fared better, holdingon to most of its gains in the first half to end the year up 13.3% in US dollarterms. The Company has minimal exposure to platinum producers and exited itsposition in the platinum ETF in the second half of the year. The Company hassignificant exposure indirectly to palladium through its exposure to NorilskNickel (3.4% of the portfolio), the world's largest palladium producer.Diamond exposure in the portfolio increased year-on-year with additions toholdings in Petra Diamonds and Mountain Province Diamonds. Total exposure tothe diamond sector ended the year at over 3% of the portfolio. Rough diamondprices performed well in 2014, driven by good demand growth from the US and ashortage of high quality diamonds.Energy commoditiesThere was no respite for energy commodities in 2014 with the year-on-yearaverage price for metallurgical coal down by 23.0%, thermal coal down by 24.9%and uranium down by 13.6%. The main reason for prices falling yet again was themuted supply side response. Producers either opted to increase production inorder to lower unit costs or chose to deliver into sales contracts at pricesset before the falls. This meant that supply falls did not come through fastenough to arrest the price declines. The Company was significantly underweightto US and Australian producers of coal during the year and, as such, this was asource of positive relative returns. The Company's only large coal holding wasthat of China Shenhua Energy. This holding was initiated during the latterstages of 2013 and added to throughout the year under review. The shares faredmuch better than both other coal companies and the whole mining sector due tothe company's decision to diversify its business downstream into power generationrather than just mining coal. The Company had no direct exposure to uranium.Looking forward, the prospects do not look promising. The collapse in the priceof oil and a weakened Australian dollar have lowered costs, keeping marginalproducers operating for longer than expected. In addition, China's reduced coalimports dampened demand expectations. In uranium, reports that China has takenadvantage of the low prices to build up a strategic inventory will also pushout the need for purchases as and when they finally commission their newgeneration of nuclear reactors.Unquoted/illiquid investmentsMarampa royalty contract (0.0% of the portfolio)In July 2012, the Company purchased a 2% revenue-related royalty contractcalculated on iron ore sales from London Mining plc's Marampa mine in SierraLeone. This royalty contract was with a subsidiary of London Mining plc whosesole asset was the Marampa mine. It was a contractual royalty, rather than astatutory royalty, which is attached directly to the mining licence area. InSierra Leone mineral rights are not privately owned but leased from thegovernment by the operator; as such, it is not possible for the owner of themine to attach a royalty directly to the mine area. Within the royaltycontract, there were anti-dilution clauses and other protections that ensuredthat in the case of the sale of all or part of the asset by London Mining plc,the royalty would remain whole. However, there was no security over the mineitself, this having already been part of the bank debt facility, which meant inthe event of default the Company became an unsecured creditor.The Marampa mine started production in the second half of 2011 and shipped itsfirst concentrate in January 2012. For the full year 2012, sales totalled 1.3million wet metric tonnes (wmt), increasing in 2013 by 186% to 3.7 million wmt.However, in 2014, a combination of a slower than expected ramp-up of the secondplant, a fall of over 40% in the iron ore price and the outbreak of Ebola inSierra Leone, meant that by October London Mining plc could no longer meet itsfinancial obligations.A member of the BlackRock Natural Resources Team revisited the Marampa mine inMay 2014 following first quarter results, which indicated that the ramp-up ofproduction was slower than market expectations. The improvements that had beenput in place, and the further planned modifications, indicated that thecompany's full year production target was, as at the time of the site visit,still achievable. However, following the release of London Mining's interimfinancial results in August 2014, it was clear that the financial situation ofLondon Mining plc had deteriorated owing to a slower ramp-up impacting bothrevenues and costs, compounded by the fall in the iron ore price. In addition,the company highlighted the increased risk on operations associated with theoutbreak of Ebola in Sierra Leone. The Board of the Company wrote down theholding value of the Marampa royalty contract by 30% based on the InvestmentManager's adjusted production assumptions and the increased discount rateapplied to future cash flows.At the interim results of London Mining plc, they indicated that they were inthe midst of a strategic partner search that would provide them with thenecessary funds to allow them to not only maintain production but also to fundfurther expansion. On 22 September 2014, the company announced that they werein a dispute with Glencore regarding a cash prepayment which accelerated thedecline in the company's financial position and made the need for externalfunding more urgent. On 29 September, in an update to the market, the companymaintained that strategic partner discussions were ongoing but indicated thatthis would lead to significant equity dilution at the plc level. However, on8 October, London Mining plc announced they foresaw "little or no value" in theequity of the company and that existing lenders would not provide further shortterm funding.Following the 8 October announcement, the Board concluded that the most prudentapproach was to value the Company's holdings in the London Mining Maramparoyalty contract and its holding in London Mining's convertible bond at nil andto recognise income on the royalty contract and the convertible bond only tothe extent that it had already been received. On 16 October 2014, London Miningplc was placed into administration owing to the failure of the company tosecure further funding either from their existing lenders or from a newstrategic investor. The Marampa mine was subsequently sold by the administratorand the company's equity and convertible bond were delisted. As at the date ofwriting, London Mining plc remains in administration; the Company has submittedits claim as an unsecured creditor and the administrator is working to realiseany residual value from the company's remaining assets on behalf of itscreditors.Banro gold-linked preference shares (1.6% of the portfolio) and Banro Corporate10% note (1.0% of the portfolio)In April 2013, the Company purchased US$30 million gold-linked preferenceshares from Banro Corporation to help fund the development of its second goldmine, Namoya. The gold-linked preference shares provide exposure to the goldprice, as well as to volume growth, with the principal moving in line withthe gold price and the dividend ranging between 10-15% depending on Banro'soverall level of production.In late July 2014, Banro reported that, during the commissioning of theirNamoya mine, it had become evident that the plant was not able to process thehigher than expected fines content of the ore and modifications were requiredto meet the designed throughput rate. The company engaged an independenttechnical consultant to help evaluate options for optimisation of the plant, aswell as appointing financial advisers to assist in assessing the company'sconsequent financial requirements. On 18 August, Banro announced they hadsecured funding to cover the short term capital programme at Namoya, as well asto reduce accounts payable and for general working capital purposes.In addition, it announced the signing of a memorandum of understanding withGold Holding Ltd for a US$41 million gold forward sale over the Twangizaproduction and a US$80 million gold streaming transaction over the Namoya minefor a total of US$121 million of new capital. On 4 November, a definitiveagreement was subsequently signed over the first US$41 million with theexpectation that the deal would close in a few weeks.Towards late November the deal had still not closed and the uncertainty overthe timing of the closure of this transaction, coupled with a balance sheetupdate provided in the Banro's Q3 results released on 11 November, meant theBoard concluded it was appropriate to hold the Banro gold-linked preferenceshares at a 30% discount to the implied gold price used in the valuation of thepreference shares. In December the Board noted the lack of recent tradingactivity in Banro's 10% Note (March 2017) and, coupled with the ongoingfinancing uncertainty, concluded it was prudent to value the Company'sinvestment in the Banro Corporate 10% note at a 25% discount to its last tradedprice on 21 November 2014.On 5 January 2015, after the financial year end, Banro confirmed that thetransaction with Gold Holding Ltd had been delayed and, as a result, thecompany was progressing with alternative funding solutions and focusing oncareful cash management. As part of the company's cash management, Banroelected to accrue the fourth quarter 2014 dividends on the company'sgold-linked preference shares.On 27 February 2015, Banro announced details of a US$100 million financingwhich included the forward sale of 44,496 ounces of gold from their Twangizaoperation deliverable over the next three years and a life-of mine goldstreaming transaction relating to their Namoya mine. Banro advised that the useof proceeds from this financing included the payment of the upcoming interestdue on the company's Corporate 10% note and payment of the accrued dividends onthe company's gold-linked preference shares.Following Banro's news release and on a recommendation from BlackRock's PricingCommittee, the Board concluded that it would be appropriate to reduce thediscount on the gold-linked preference shares to 15% and the discount on theCorporate 10% note to 10%. As at 2 March 2015, the Company's total exposure toBanro Corporation stood at 3.3% of the portfolio, of which the gold-linkedpreference shares represent 2.2% and the 10% Corporate note represents 1.1%.Avanco Resources royalty contract (0.0% of the unquoted/illiquid portfolio and1.1% of the listed portfolio)In October 2013, the Company signed a non-binding memorandum of understandingwith Avanco Resources for a contractual royalty covering its explorationlicenses within the world-class mineral district of Carajas in Brazil. Abinding royalty agreement was subsequently signed in July 2014 in whichthe Company will provide US$12 million in return for Net Smelter Return (netrevenue after deductions for freight, smelter and refining charges) royaltypayments comprising 2% on copper, 25% on gold and 2% on all other metals thatwill be produced from their Antas North and Pedra Branca (Stage 1 and Stage 2)licenses. In addition, there will be a flat 2% royalty over all metals producedfrom any other discoveries within Avanco's licence area as at the time of theagreement.The purchase of the royalty is conditional on the publication of a Joint OreReserves Committee (JORC) compliant reserve statement, the receipt of a mininglicense for Stage 1, and on the company securing debt financing. As at the timeof writing, the company had fulfilled the first two conditions; it received itsmining licence on 11 September 2014 and published a JORC compliant reservestatement on 14 September which was ahead of BlackRock's initial assumptionsand extended the mine life of Stage 1 to over 9 years versus our assumption of7 years. The company is progressing with debt financing discussions havingagreed terms for a US$58 million secured debt facility with Banco Votorantim.The drawdown of the Company's US$12 million is conditional on this debt beingin place and, as such, is not yet a holding in the portfolio.Fixed income securitiesThe Company continues to have a significant part of the portfolio allocated tofixed income securities. As at the end of 2014, it had 10.5% of the portfolioin such securities. First Quantum debt made up the largest exposure to a singleissuer at 4.8% of the Company's portfolio.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 obligingus to buy or sell stock or futures at levels we believe are attractive. During2014, we again primarily focused on writing short dated calls to generatepremium income. The income generated by such option writing enables us tomaximise the potential exit price from a position if the option is exercised.In addition to writing calls, we also took advantage of volatility in themarket to occasionally write puts as well. Both strategies worked well duringthe year and income from option writing increased again year-on-year. The bulkof the option deals were done in the second half following the increase involatility which made the trades more worthwhile. At the end of 2014, theCompany had two put options and one call option in the portfolio. The putoptions expired worthless in January and the covered call option expired inFebruary.GearingAt 31 December 2014, the Company had debt net of group cash amounting to £73.3million (2013: £85.4 million), representing gearing of 11.7% (2013: 9.6%). Forthe most part, this gearing has been drawn down against the higher yieldingmining company corporate bonds and is predominantly denominated in the samecurrency as the bonds. 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.Outlook and strategy for 2015Last year we had expected an improving world economy to support commoditydemand, and in turn, commodity prices. Sadly, supply growth managed tooverwhelm demand and resulted in many commodity prices falling sharply. Thisyear we are faced with a more sombre tone to the demand outlook but, thanks tocontinued under-investment, the industry is edging towards a time when metalsmarkets will move into deficit.At the same time, mining companies are doing more to improve returns forshareholders. The under-investment in new capacity bodes well for allstakeholders in the sector and, most importantly, for the Company and thecompanies in which we invest. In the near term, recent falls in metal pricesmight take some of the momentum out of expectations for increased dividends,but if we can look past this towards the end of the decade then we see a farmore supportive market.Evy Hambro and Catherine RawBlackRock Investment Management (UK) Limited19 March 2015Ten Largest Investments31 December 2014Set out below is a brief description by the Investment Manager of the Company'sten largest investments.BHP Billiton - 10.8% (2013: 10.6%) is the world's largest mining company bymarket cap. The company is an important global player in a number ofcommodities including iron ore, copper, coal, manganese, aluminium, diamondsand uranium. The company is the only sizeable holding in the portfolio withsignificant oil and gas assets. The market was disappointed in the second halfof 2014 by an anticipated share buyback that failed to materialise. Inaddition, the sharp fall in the oil price significantly impacted future cashflow expectations for the company towards the end of the year. In theirproduction results in January 2015, the company indicated a reduction in rigcount which should translate into lower capital expenditure for the rest of thefinancial year compared to the original forecast.Rio Tinto - 10.8% (2013: 11.9%) is the world's second largest mining company bymarket cap. It has interests over a broad range of metals and mineralsincluding iron ore, aluminium, copper, coal, industrial minerals, gold anduranium. The company is midway through expanding its world class Pilbara ironoperations to 360mtpa. With falling capital expenditure, growing volumes anddeclining operating costs, Rio Tinto generates strong free cash flows even inthe face of lower iron ore prices.First Quantum Minerals* - 8.6% (2013: 7.8%) is an integrated copper producerwhose principal operating assets are in Zambia, but also with nickel assets inAustralia and Finland. In April 2013, the company completed its C$5.1 billionoffer for Inmet, a copper producer whose major development project was theCobre Panama mine in Panama. First Quantum is in the midst of a significantexpansion of the business comprising of six major projects. The change infiscal regime in Zambia from profit-related taxation to a royalty system hasled to significant uncertainty regarding the impact this will have on miningcompanies' cash flows that operate in the country, compounded by the death ofthe President in October 2014. Presidential elections in Zambia were held inJanuary 2015.In addition, the Company holds corporate bonds issued by First Quantum.The company refinanced bonds originally issued by Inmet to fund the developmentof Cobre Panama in February 2014. The bonds have coupons of 6.75% and 7%respectively.Glencore - 8.4% (2013: 9.9%) is the world's third largest mining company bymarket cap. It has activities in mining, smelting, refining, processing andmarketing of metals and minerals, energy products and agricultural productsglobally. In addition, the company provides financing, logistics, marketing andpurchasing services to producers and consumers of commodities. In May 2013,Glencore merged with Xstrata. In April 2014, the company announced the sale ofthe Las Bambas copper mine for US$5.85 billion plus capital costs incurred inthe year to date. In the same month, they announced the purchase of CaracalEnergy Inc for US$1.35 billion, the majority owner of West African oil assetsin which Glencore already owned a 25% stake.Lundin Mining* - 4.6% (2013: 0.9%) is a base metals producer with operations inChile, Europe and the US. In addition, it holds a 24% minority stake in theTenke copper-cobalt mine in the DRC. In July 2013, Lundin purchased the Eaglenickel/copper mine from Rio Tinto for US$375 million. In October 2014, thecompany announced that it had agreed to purchase Freeport-McMoRan's 80%interest in the Candaleria copper mine in Chile for US$1.8 billion. To fundthis purchase the company raised US$674 million in equity and issued US$1billion of senior secured notes. The Company holds both the equity and the7.875% senior secured notes due 2022.Freeport-McMoRan Copper & Gold - 4.0% (2013: 6.5%) is one of the world'slargest copper producers. It is also a major producer of gold and molybdenumfrom mines in North and South America, as well as Indonesia and the DRC. ItsGrasberg mine in Indonesia contains the world's largest recoverable copper andgold reserves. In June 2013, the company completed the acquisition of PlainsExploration & Production and McMoRan Exploration giving it significant US oiland gas exposure. The company's Grasberg copper-gold mine was negativelyimpacted by the Indonesia ban on concentrate exports in the first half of theyear. Exports recommenced in the second half of the year following Freeport'scommitment to support new smelting capacity in Indonesia. Weak oil and copperprices in the second half of the year meant the company has been unable toreduce the debt taken on in the acquisition of the oil assets and the companyhad guided to write-downs associated with these oil and gas assets in theirupcoming financial results.Cerro Verde - 3.6% (2013: 2.5%) is a copper and molybdenum operation in Peruoperated 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.Norilsk Nickel - 3.4% (2013: 0.6%) is the world's largest nickel and palladiumproducer also with significant platinum and copper production. It is a Russiancompany whose core assets are located in northern Siberia, within the ArcticCircle. In 2014, the company has benefited from a combination of strongernickel and palladium prices (in US dollar terms), as well as a significantweakening in the Russian rouble, which together have significantly increasedcash flow generation year-on-year. The company also embarked on an assetdivestment programme selling its African operations in October to BCL Ltdfor US$337 million, as well as a number of its smaller Australian assets.China Shenhua Energy - 3.2% (2013: 0.2%) is a Hong Kong and Shanghai listedcoal-based integrated energy company with exposure to coal mining, powergeneration, coal chemicals and transport. It has the largest coal reserves andis the largest coal supplier in China. Whilst exposed to Chinese domestic coalprices, increasingly the company's earnings are driven by its down-streambusinesses.Vale - 3.2% (2013: 4.1%) is the world's largest producer of iron ore. Based inBrazil, the company also has significant interests in other commodities such asnickel, aluminium, copper, gold and coal. In addition, Vale owns and operatestransport infrastructure. The company made a transformational acquisition in2006, acquiring Canadian nickel miner Inco, which considerably broadened thecompany's asset mix away from just iron ore. In its capital markets day inDecember 2014, the company announced that it is considering an IPO of its basemetals division, potentially in the second half of 2015.* Includes fixed interest securities.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 2013. Together, the ten largest investments represent 60.6% oftotal investments (31 December 2013: 64.7%).Investments31 December 2014 Main Market % geographical value of exposure £'000 investmentsDiversifiedBHP Billiton Global 74,979 10.8Rio Tinto Global 74,975 10.8Glencore Global 58,246 8.4Lundin Mining* Global 32,257 4.6Norilsk Nickel Russia 23,528 3.4Vale Global 22,360 3.2Hudbay Minerals* Canada 16,173 2.3Boliden Sweden 10,282 1.5Teck Resources Global 9,642 1.4Teck Resources Call Option 20/02/15 Global (152) -African Rainbow Minerals South Africa 5,428 0.8Anglo American Global 2,881 0.4 -------- -------- 330,599 47.6 -------- --------CopperFirst Quantum Minerals* Global 59,688 8.6Freeport-McMoRan Copper & Gold Global 27,704 4.0Cerro Verde Peru 24,889 3.6Nevsun Resources Eritrea 13,762 2.0Avanco Resources Brazil 7,618 1.1Antofagasta Chile 6,956 1.0Southern Copper Peru 6,436 1.0OZ Minerals Australia 5,081 0.7Cobre Del Mayo - 10.75% 15/11/18 Mexico 2,950 0.4Katanga Mining DRC 2,180 0.3Reservoir Minerals Serbia 1,631 0.2Ivanhoe Mines# DRC 848 0.1 -------- -------- 159,743 23.0 -------- --------GoldBanro*+# DRC 17,864 2.6Randgold Resources Mali 11,104 1.6Northern Star Resources Australia 10,132 1.5Gold Fields South Africa 9,152 1.3Eldorado Gold Global 8,600 1.2Franco-Nevada Global 8,548 1.2Newcrest Mining Australia 5,957 0.9Shanta Gold convertible Tanzania 2,950 0.4Minas Buenaventura Peru 2,820 0.4G-Resources Indonesia 2,490 0.4Romarco Minerals# USA 2,020 0.3Metals X Australia 1,246 0.2Sirius Resources Australia 866 0.1Stratex International Turkey 611 0.1Cordoba Minerals Colombia 108 - -------- -------- 84,468 12.2 -------- --------Silver & DiamondsFresnillo Mexico 21,038 3.0Industrias Penoles Mexico 11,221 1.6Petra Diamonds South Africa 6,759 1.0Dominion Diamond Canada 5,748 0.9Mountain Province Diamonds# Canada 3,741 0.5Lucara Diamond Botswana 3,393 0.5Tahoe Resources Guatemala 2,894 0.4Sierra Metals Peru 1,505 0.2Volcan Peru 973 0.1 -------- -------- 57,272 8.2 -------- --------CoalChina Shenhua Energy People's Republic of China 22,676 3.2 -------- -------- 22,676 3.2 -------- --------Industrial MineralsIluka Resources Australia 13,561 1.9Kenmare Resources Mozambique 781 0.1Mosaic Put Option 17/01/15 USA (46) -Potash Put Option 17/01/15 Canada (86) - -------- -------- 14,210 2.0 -------- --------Iron OreKumba Iron Ore South Africa 6,650 0.9IRC Russia 721 0.1Equatorial Resources Republic of Congo 378 0.1 -------- -------- 7,749 1.1 -------- --------AluminiumAlumina Australia 4,228 0.6Century Aluminium USA 2,502 0.4 -------- -------- 6,730 1.0 -------- --------PlatinumPlatinum Group Metals South Africa 2,705 0.4 -------- -------- 2,705 0.4 -------- --------OtherCanadian Oil Sands Canada 5,742 0.8Western Areas Australia 1,297 0.2Nyrstar Global 1,244 0.2Sociedad Minera El Brocal Peru 473 0.1Bindura Nickel Zimbabwe 129 - -------- -------- 8,885 1.3 -------- --------Portfolio 695,037 100.0 ======== ========* Includes fixed interest investments.# Investments held at Directors' valuation.+ Includes Banro gold-linked preference shares.All investments are in equity shares unless otherwise stated.The total number of investments as at 31 December 2014 (including optionsclassified as liabilities on the balance sheet) was 64 (31 December 2013: 71).As at 31 December 2014, the Company held equity interests in six companiescomprising more than 3% of a company's share capital as detailed in note 10 ofthe Annual Report and Financial Statements.Portfolio analysis31 December 2014Commodity Exposure* BlackRock World BlackRock World Euromoney Global Mining Trust plc Mining Trust plc Mining Index 2014 2013 2014Platinum 0.4% 1.9% 1.6%Aluminium 1.0% 0.0% 2.8%Iron Ore 1.1% 12.5% 0.0%Industrial Minerals 2.0% 3.3% 0.8%Coal/Energy Minerals 3.2% 0.2% 6.9%Silver & Diamonds 8.2% 6.4% 3.7%Gold 12.2% 7.2% 16.4%Copper/Base Metals 23.0% 23.7% 11.6%Diversified 47.6% 41.7% 54.2%Other 1.3% 3.1% 2.0%Geographical Exposure* 2014 2013Global 54.8% 57.4%Latin America 12.5% 12.4%Other 9.3% *** 2.2% **Africa (ex SA) 7.7% 18.1%Australia 6.1% 3.2%Canada 4.5% 2.5%South Africa 4.4% 4.1%USA 0.7% 0.1%* Based on the principal commodity exposure and place of operation of eachinvestment.** Consists of Guatemala, Indonesia, Papua New Guinea, People's Republic ofChina and Russia.*** Consists of Guatemala, Indonesia, People's Republic of China, Russia,Serbia, Sweden and Turkey.Consolidated Statement of Comprehensive Incomefor the year ended 31 December 2014 Revenue Revenue Capital Capital Total Total 2014 2013 2014 2013 2014 2013 Notes £'000 £'000 £'000 £'000 £'000 £'000Income from investmentsheld at fair valuethrough profit or loss 3 37,051 42,865 - - 37,051 42,865Other income 3 9,244 5,937 - - 9,244 5,937 -------- -------- -------- -------- -------- --------Total revenue 46,295 48,802 - - 46,295 48,802 -------- -------- -------- -------- -------- --------Losses on investmentsheld at fair valuethrough profit or loss - - (248,160) (324,228) (248,160) (324,228)Realised losses onforeign exchange - - (5,163) (718) (5,163) (718) -------- -------- -------- -------- -------- -------- - - (253,323) (324,946) (207,028) (276,144) -------- -------- -------- -------- -------- --------ExpensesInvestment managementfees 4 (2,623) (3,164) (7,870) (9,492) (10,493) (12,656)Other operatingexpenses 5 (1,030) (975) (15) - (1,045) (975) -------- -------- -------- -------- -------- --------Total operatingexpenses (3,653) (4,139) (7,885) (9,492) (11,538) (13,631) -------- -------- -------- -------- -------- --------Net profit/(loss)before finance costsand taxation 42,642 44,663 (261,208) (334,438) (218,566) (289,775) -------- -------- -------- -------- -------- --------Finance costs 6 (407) (391) (1,223) (1,175) (1,630) (1,566) -------- -------- -------- -------- -------- --------Net profit/(loss) onordinary activitiesbefore taxation 42,235 44,272 (262,431) (335,613) (220,196) (291,341) -------- -------- -------- -------- -------- --------Taxation (4,783) (4,639) 1,537 2,813 (3,246) (1,826) -------- -------- -------- -------- -------- --------Net profit/(loss) forthe year 37,452 39,633 (260,894) (332,800) (223,442) (293,167) -------- -------- -------- -------- -------- --------Earnings/(loss) perordinary share 8 21.13p 22.36p (147.16p) (187.72p) (126.03p) (165.36p) ======== ======== ======== ======== ======== ========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. The supplementaryrevenue and capital columns are both prepared under guidance published by theAssociation of Investment Companies (AIC). All items in the above statementderive from continuing operations. No operations were acquired or discontinuedduring the year. All income is attributable to the equity holders of BlackRockWorld Mining Trust plc. There were no minority interests.The net loss of the Company for the year was £223,442,000 (2013: £293,167,000).The Group does not have any other comprehensive income. The net profit/(loss)for the year disclosed above represents the Group's comprehensive income/(loss).Statements of Changes in Equityfor the year ended 31 December 2014 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 2014At 31 December 2013 9,651 127,155 116,471 22,779 558,791 50,499 885,346Total comprehensiveincome:Net (loss)/profit forthe year - - - - (260,894) 37,452 (223,442)Transactions withowners, recordeddirectly to equity:Dividends paid 7 - - - - - (37,230) (37,230) -------- -------- -------- -------- -------- -------- --------At 31 December 2014 9,651 127,155 116,471 22,779 297,897 50,721 624,674 ======== ======== ======== ======== ======== ======== ========For the year ended31 December 2013At 31 December 2012 9,651 127,155 116,471 22,779 891,591 48,096 1,215,743Total comprehensiveincome:Net (loss)/profit forthe year - - - - (332,800) 39,633 (293,167)Transactions withowners, recordeddirectly to equity:Dividends paid 7 - - - - - (37,230) (37,230) -------- -------- -------- -------- -------- -------- --------At 31 December 2013 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 2014At 31 December 2013 9,651 127,155 116,471 22,779 569,705 39,585 885,346Total comprehensiveincome:Net (loss)/profit forthe year - - - - (260,359) 36,917 (223,442)Transactions withowners, recordeddirectly to equity:Dividends paid 7 - - - - - (37,230) (37,230) -------- -------- -------- -------- -------- -------- --------At 31 December 2014 9,651 127,155 116,471 22,779 309,346 39,272 624,674 ======== ======== ======== ======== ======== ======== ========For the year ended31 December 2013At 31 December 2012 9,651 127,155 116,471 22,779 902,497 37,190 1,215,743Total comprehensiveincome:Net (loss)/profit forthe year - - - - (332,792) 39,625 (293,167)Transactions withowners, recordeddirectly to equity:Dividends paid 7 - - - - - (37,230) (37,230) -------- -------- -------- -------- -------- -------- --------At 31 December 2013 9,651 127,155 116,471 22,779 569,705 39,585 885,346 -------- -------- -------- -------- -------- -------- --------Statements of Financial Positionas at 31 December 2014 2014 2014 2013 2013 Group Company Group Company Note £'000 £'000 £'000 £'000Non current assetsInvestments designated as held atfair value through profit or loss 695,322 708,271 986,122 998,536Deferred tax asset 449 449 1,795 1,795 -------- -------- -------- -------- 695,771 708,720 987,917 1,000,331 -------- -------- -------- --------Current assetsCash and cash equivalents 31,054 19,825 15,261 3,981Collateral pledged for writtenoption contracts 1,684 1,620 1,292 1,292Other receivables 6,002 5,332 6,293 6,293 -------- -------- -------- -------- 38,740 26,777 22,846 11,566 -------- -------- -------- --------Total assets 734,511 735,497 1,010,763 1,011,897 -------- -------- -------- --------Current liabilitiesOther payables (3,494) (4,480) (22,949) (24,083)Derivative financial instruments -written options (285) (285) (276) (276)Bank loans and bank overdraft (106,047) (106,047) (101,915) (101,915) -------- -------- -------- -------- (109,826) (110,812) (125,140) (126,274) -------- -------- -------- --------Total assets less currentliabilities 624,685 624,685 885,623 885,623 -------- -------- -------- --------Non current liabilitiesDeferred tax liabilities (11) (11) (277) (277) -------- -------- -------- --------Net assets 624,674 624,674 885,346 885,346 ======== ======== ======== ========Equity attributable to equityholdersOrdinary share capital 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 297,897 309,346 558,791 569,705Revenue reserve 50,721 39,272 50,499 39,585 -------- -------- -------- --------Total equity 624,674 624,674 885,346 885,346 ======== ======== ======== ========Net asset value per ordinary share 8 352.35p 352.35p 499.39p 499.39p ======== ======== ======== ========Cash Flow Statementsfor the year ended 31 December 2014 2014 2014 2013 2013 Group Company Group Company £'000 £'000 £'000 £'000Operating activitiesLoss before taxation (220,196) (220,343) (291,341) (291,344)Add back interest paid 1,630 1,630 1,566 1,566Losses on investments held at fair valuethrough profit or loss includingtransaction costs 248,160 247,625 324,228 324,220Net losses on foreign exchange 5,163 5,163 718 718Sales of investments held at fair valuethrough profit or loss 336,903 336,903 317,195 317,195Purchases of investments held at fairvalue through profit or loss (294,254) (294,254) (309,159) (309,159)Increase in other receivables (2,495) (1,825) (94) (94)Decrease/(increase) in amounts due frombrokers 2,787 2,787 (2,610) (2,610)Cash collateral paid to counterparties (392) (328) (124) (124)Decrease in amounts due to brokers (1,346) (1,346) (11,125) (11,125)(Decrease)/increase in other payables (18,462) (18,466) 12,399 12,399 -------- -------- -------- --------Net cash inflow from operatingactivities before interest and taxation 57,498 57,546 41,653 41,642 -------- -------- -------- --------Interest paid (1,630) (1,630) (1,566) (1,566)Taxation paid (236) (233) - -Taxation on overseas income (1,578) (1,578) (1,226) (1,226) -------- -------- -------- --------Net cash inflow from operatingactivities before financing activities 54,054 54,105 38,861 38,850 -------- -------- -------- --------Financing activities(Repayment)/drawdown of loan (693) (693) 168 168Dividends paid (37,230) (37,230) (37,230) (37,230) -------- -------- -------- --------Net cash outflow from financingactivities (37,923) (37,923) (37,062) (37,062) -------- -------- -------- --------Increase in cash and cash equivalents 16,131 16,182 1,799 1,788 -------- -------- -------- --------Effect of foreign exchange rate changes (338) (338) 137 137 -------- -------- -------- --------Change in cash and cash equivalents 15,793 15,844 1,936 1,925Cash and cash equivalents at start ofthe year 15,261 3,981 13,325 2,056 -------- -------- -------- --------Cash and cash equivalents at end of year 31,054 19,825 15,261 3,981 ======== ======== ======== ========Comprised of:Cash 31,054 19,825 15,261 3,981 -------- -------- -------- -------- 31,054 19,825 15,261 3,981 ======== ======== ======== ========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 2010.2. Accounting policiesThe principal accounting policies adopted by the Group and Company are set outbelow.(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. These comprise standards and interpretations of theInternational Accounting Standards and Standard Interpretations Committee asapproved by the International Accounting Standards Committee that remain ineffect, to the extent that IFRS have been adopted by the European Union. TheCompany has taken advantage of the exemption provided under section 408 of theCompanies Act 2006 not to publish its individual income statement and relatednotes. All of the Group's operations are of a continuing nature.Insofar as the Statement of Recommended Practice (SORP) for investment trustcompanies and venture capital trusts issued by the Association of InvestmentCompanies (AIC), revised in January 2009, is compatible with IFRS, thefinancial statements have been prepared in accordance with the guidance set outin the SORP.The AIC SORP was revised and reissued in November 2014 (effective 1 January 2015)and where compatible with IFRS will be applied to financial statements insubsequent reporting periods.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 2014 that have been adopted by the Group inpreparing these financial statements are:IFRS 10 - Consolidated Financial Statements Investment Entities amendments(effective 1 January 2014) establish a single control model that applies to allentities including special purpose entities. The changes introduced by theInvestment Entities amendments require management to exercise significantjudgement to determine which entities are controlled and therefore are requiredto be consolidated by a parent. The Directors, having assessed the criteria,believe the Parent Company meets the criteria to be an investment entity underIFRS 10 and that this accounting treatment reflects the Company's activities asan investment trust. Therefore any investments in subsidiaries may be carriedat fair value through profit and loss in accordance IAS 39. However, theprincipal activity of the subsidiary, BlackRock World Mining Investment CompanyLimited (which is controlled by the Company), is investment dealing activitiesand therefore this entity is considered to provide investment related servicesto the Company and is required to be consolidated under the Investment Entitiesamendment.IFRS 11 - Joint Arrangements removes the option to account for jointlycontrolled entities (JCEs) using proportionate consolidation. The Group doesnot have any joint arrangements and therefore the provisions of theseamendments did not have any impact on the Group.IFRS 12 - Disclosure of Involvement with Other Entities requires additionaldisclosures that relate to an entity's interests in subsidiaries, jointarrangements, associates and structured entities. The amendments to IFRS 12introduce new disclosure requirements related to interests in subsidiaries whichhave been set out in note 11 of the Annual Report and Financial Statements;however, these amendments have not had any impact on the financial position orresults of operations of the Group.A number of new standards, amendments to standards and interpretations areeffective for annual periods beginning on or after 1 January 2015 and have notbeen applied in preparing these financial statements. None of these areexpected to have a significant effect on the measurement of the amountsrecognised in the financial statements of the Group and Parent Company.IFRS 9 - Financial Instruments (2014) replaces IAS 39 and deals with a packageof improvements including principally a revised model for classification andmeasurement of financial instruments, a forward looking expected lossimpairment model and a revised framework for hedge accounting. In terms ofclassification and measurement, the revised standard is principles baseddepending on the business model and nature of cash flows. Under this approach,instruments are measured at either amortised cost or fair value, though thestandard retains the fair value option allowing designation of debt instrumentsat initial recognition to be measured at fair value.The standard is effective from 1 January 2018 with earlier applicationpermitted but has not yet been endorsed by the European Commission. The Groupdoes not plan to early adopt this standard and expects the eventual impact tobe insignificant for its current investment portfolio, which is substantiallycomprised of quoted investments.IFRS 14 - Regulatory Deferral Accounts (effective 1 January 2016) allows firsttime IFRS adopters to continue to account for 'regulatory deferral accountbalances' in accordance with previous GAAP.As the Company has already adopted IFRS, the provisions of this standard arenot applicable.IFRS 15 - Revenue from Contracts with Customers (effective 1 January 2017)specifies how and when an entity should recognise revenue and enhances thenature of revenue disclosures.Given the nature of the Company's revenue streams from financial instruments,the provisions of this standard are not expected to be applicable.(b) Basis of consolidationThe consolidated financial statements are made up to 31 December each year andincorporate the financial statements of the Company and its wholly-ownedsubsidiary, BlackRock World Mining Investment Company Limited. Subsidiaries areconsolidated from the date of their acquisition, being the date on which theCompany obtains control, and continue to be consolidated until the date thatsuch control ceases. The financial statements of subsidiaries used in thepreparation of the consolidated financial statements are based on consistentaccounting policies. All intra-group balances and transactions, includingunrealised profits arising therefrom, are eliminated.(c) Presentation of the Consolidated Statement of Comprehensive IncomeIn order to reflect better 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 theperiod end are treated as revenue for the year. Provision is made for anydividends not expected to be received. Special dividends, if any, are treatedas a capital or a revenue receipt depending on the facts or circumstances ofeach particular case. The return on a debt security is recognised on a timeapportionment basis so as to reflect the effective yield on the debt security.Interest income is recognised on an accruals basis.Royalty 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. Royalty incomefrom contractual 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 premium 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 charged to the capital column of the Statement of Comprehensive Income. Details of transaction costs on the purchases and sales of investments are disclosed in note 10 on page 54 of the Annual Report and Financial Statements;- 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 taxation in thefuture or right to pay less taxation in the future have occurred at thefinancial reporting date. This is subject to deferred taxation assets onlybeing recognised if it is considered more likely than not that there will besuitable profits from which the future reversal of the temporary differencescan be deducted. Deferred taxation assets and liabilities are measured at therates applicable to the legal 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. Ths sales of assets arerecognised at the trade date of the disposal. Proceeds are measured at fairvalue, which is regarded as the proceeds of sale less any transaction costs.Contractual rights are recognised on the completion date, where a purchase ofthe rights is under a contract and is initially measured at fair valueexcluding 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.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 as a revenue or capital itemdepending on the income or expense to which they relate.(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) DerivativesDerivatives are held at fair value based on the bid/offer prices of the optionswritten to which the Group is exposed. The value of the option is subsequentlymarked to market to reflect the fair value of the option based on tradedprices. Where the premium is taken to revenue, an appropriate amount is shownas capital return such that the total return reflects the overall change in thefair value of the option. When an option is closed out or exercised the gain orloss is accounted for as a capital gain or loss.(o) 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 isassessed by an independent valuer with a recognised and relevant professionalqualification. The inputs to these models are taken from observable marketswhere possible, but where this is not feasible, estimation is required inestablishing fair values. The estimates include considerations of productionprofiles, commodity prices, cash flows and discount rates. Changes inassumptions about these factors could affect the reported fair value offinancial instruments in the Statements of Financial Position and the levelwhere the instruments are disclosed in the fair value hierarchy. To assess thesignificance of a particular input to the entire measurement, the externalvaluer performs sensitivity analysis. The key assumptions used to determine thefair value of the contractual rights and sensitivity analyses are provided innote 18 of the Annual Report and Financial Statements.3. Income 2014 2013 £'000 £'000Investment income:UK listed dividends 8,911 10,870Overseas listed dividends 16,651 15,209Special dividends 3,602 4,130Income from contractual rights 485 2,984Fixed interest income 7,402 9,672 -------- -------- 37,051 42,865 -------- --------Other income:Option premiums 8,007 5,440Deposit interest 26 22Profit on futures 670 -Underwriting commission and other income 541 475 -------- -------- 9,244 5,937 -------- --------Total income 46,295 48,802 ======== ========Total income comprises:Dividends 29,164 30,209Deposit interest 26 22Option premiums 8,007 5,440Income from contractual rights 485 2,984Fixed interest income 7,402 9,672Profit on futures 670 -Other income 541 475 -------- -------- 46,295 48,802 ======== ========The Company considers the treatment of premium arising on option transactionson a case-by-case basis. During the year ended 31 December 2014, the optionpremium income of £8,247,000 (2013: £5,521,000) received by the Company wasfrom options written for income purposes of which £8,007,000 (2013: £5,440,000)has been credited to the revenue column of the Consolidated Statement ofComprehensive Income and is recognised evenly over the life of the optioncontract.4. Management fee 2014 2013 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000Investment management fee 2,623 7,870 10,493 3,164 9,492 12,656 ===== ===== ====== ===== ===== ======Until 31 March 2015, the investment management fee was levied quarterly at arate of 1.3% per annum, based on the value of gross assets on the last day ofeach quarter. With effect from 1 July 2015 the annual management fee will beas follows:• 120bps on the first £500 million of gross assets• 100bps on the next £500 million• 85bps on gross assets above £1 billionHowever, between 1 April 2015 and 30 June 2015, the annual fee will be furtherreduced to:• 110bps on the first £500 million of gross assets• 70bps on the next £500 million• 40bps on gross assets above £1 billion75% of investment management fees are allocated to the capital column and 25% to therevenue column of the Consolidated Statement of Comprehensive Income.5. Other expenses 2014 2013 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000Custody fee 109 - 109 183 - 183Auditor'sremuneration:- audit services 28 - 28 28 - 28- other assurance services* 6 - 6 6 - 6Registrar's fee 72 - 72 98 - 98Directors' emoluments** 225 - 225 138 - 138Marketing fees 256 - 256 43 - 43Other administrativecosts 334 15 349 479 - 479 -------- -------- -------- -------- -------- -------- 1,030 15 1,045 975 - 975 -------- -------- -------- -------- -------- -------- 2014 2013The Company's ongoing charges, calculated as apercentage of average net assets and usingexpenses, excluding finance costs and taxation were: 1.4% 1.4% -------- --------* Fees paid to the auditor for other assurance services of £6,250 excluding VAT(2013: £6,000) relate to the review of the half yearly financial statements.** Details of the Director's emoluments are given in the Directors'Remuneration Report on page 27 of the Annual Report and Financial Statements.The emoluments of the Chairman, who was also the highest paid Director, were£45,000 (2013: £33,750).6. Finance costs 2014 2013 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000Interest on bankloans 405 1,218 1,623 390 1,172 1,562Interest on bankoverdrafts 2 5 7 1 3 4 -------- -------- -------- -------- -------- --------Total 407 1,223 1,630 391 1,175 1,566 ======== ======== ======== ======== ======== ========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 year to 31 December were asfollows: 2014 2013 £'000 £'000Interim ordinary dividend in respect of the year ended31 December 2014 of 7.00p per share, declared on14 August 2014 12,410 12,410Final ordinary dividend in respect of the year ended31 December 2013 of 14.00p per share, approved byshareholders on 8 May 2014 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. 2014 2013 £'000 £'000Dividends paid or proposed on equity shares:Interim ordinary dividend paid of 7.00p (2013: 7.00p) 12,410 12,410Proposed final ordinary dividend of 14.00p per share(2013: 14.00p)* 24,820 24,820 -------- -------- 37,230 37,230 -------- --------* Based on 177,287,242 (2013: 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: 2014 2013Net revenue profit attributable to ordinary shareholders(£'000) 37,452 39,633Net capital loss attributable to ordinary shareholders(£'000) (260,894) (332,800) -------- --------Total loss attributable to ordinary shareholders (£'000) (223,442) (293,167) ======== ========Total equity attributable to ordinary shareholders(£'000) 624,674 885,346 ======== ========The weighted average number of ordinary shares in issueduring the year, on which the return per ordinary sharewas calculated was: 177,287,242 177,287,242The actual number of ordinary shares in issue at theyear end, on which the net asset value per ordinaryshare was calculated was: 177,287,242 177,287,242 ----------- -----------Revenue earnings per share 21.13p 22.36pCapital loss per share (147.16p) (187.72p) -------- --------Total loss per share (126.03p) (165.36p) -------- --------Net asset value per share 352.35p 499.39pShare price 310.35p 465.00p ======== ========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 eachAt 1 January 2014 177,287,242 15,724,600 193,011,842 9,651 ---------- --------- ---------- -----At 31 December 2014 177,287,242 15,724,600 193,011,842 9,651 ========== ======== ========== =====During the year, no shares (2013: nil) were repurchased.10. Contingent liabilitiesThere were no contingent liabilities at 31 December 2014 (2013: 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 2014 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 2014 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 2013, 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 Report and Financial StatementsCopies of the Annual Report and Financial Statements will be published shortlyand will be available from the registered office, c/o The Company Secretary,BlackRock World Mining Trust plc, 12 Throgmorton Avenue, London EC2N 2DL.13. Annual General MeetingThe Annual General Meeting of the Company will be held at 12 Throgmorton Avenue,London EC2N 2DL on Wednesday, 29 April 2015 at 11.30 a.m.ENDSThe Annual Report and Financial Statements will also be available on theBlackRock website at www.blackrock.co.uk/brwm. Neither the contents of thewebsite nor the contents of any website accessible from hyperlinks on thewebsite (or any other website) is incorporated into, or forms part of, thisannouncement.For further information, please contact:Jonathan Ruck Keene, Head of Closed End Funds 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 292219 March 201512 Throgmorton AvenueLondon EC2N 2DL