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Financial
highlights
as at 31 December 2022
688.35p
NAV per ordinary share
+10.6%
£1,299.3m
Net assets
+13.7%
40.00p
Total dividends
+17.7%
2,4
NAV total return
MSCI ACWI Metals and Mining
30% Buffer 10/40 Index +11.5%
4
FTSE All-Share Index +0.3%
4
FTSE 100 +4.7%
4
CPI
5
+9.2%
697.00p
1
Ordinary share price
+18.3%
40.68p
Revenue return per
ordinary share
-6.7%
5.7%
2,3
Yield
+26.0%
2,4
Share price total return
MSCI ACWI Metals and Mining
30% Buffer 10/40 Index +11.5%
4
FTSE All-Share Index +0.3%
4
FTSE 100 +4.7%
4
The above financial highlights are at 31 December 2022 and percentage comparisons are year-on-year
against 31 December 2021.
¹
Mid-market.
2
Alternative Performance Measures. See Glossary on pages 148 to 151.
3
Based on dividends paid and declared for the year ended 31 December 2022 and a share price of 697.00p
as at 31 December 2022.
4
Performance figures are calculated in sterling terms with dividends reinvested.
5
Consumer Price Index.
Section 1: Overview and performance
1
In early 2022 the Company also made an investment into mining technology company
Jetti Resources which has developed a new catalyst that appears to improve copper
recovery from primary copper sulphides. If the technology is proven to work at scale,
we see material valuation upside with Jetti Resources sharing in the economics of
additional copper volumes recovered. Jetti Resources has two commercial contracts at
mines operated
by Freeport-McMoRan.
PHOTO COURTESY OF JETTI RESOURCES
2
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Why BlackRock
World Mining
Trust plc?
Investment policy
The Company’s investment policy is to provide a diversified investment in mining and
metal assets worldwide, actively managed with the objective of maximising total returns.
While the policy is to invest principally in quoted securities, the Company’s investment
policy includes investing in royalties derived from the production of metals and minerals
as well as physical metals. Up to 10% of gross assets may be held in physical metals and
up to 20% may be invested in unquoted investments.
Reasons to invest
Conviction
A conviction-led approach to adding
value by truly understanding and
comparing companies in the mining
sector, rather than by betting on the
short-term direction of commodity
prices. Unconstrained by market cap,
sub-sector or region, the Investment
Manager can invest in a wide range of
opportunities.
Yield
The Company offers an attractive 5.7%
yield for the year ended 31 December
2022. Whilst mainly invested in equities,
the Company makes use of fixed income
and unquoted instruments to enhance
income. The Company’s global remit
means that the majority of its holdings
generate earnings from around the
world.
Flexibility
The Company provides a diversified
exposure to the mining sector, with a
total return approach. The Investment
Manager has the ability to use
investment tools such as option writing
and gearing.
Opportunity
There is an increased focus on
sustainability and, globally, regulation
is stepping up as the world looks to
crack down on pollution and carbon
emissions. As part of its portfolio,
the Company seeks opportunities
in mining companies that produce
materials required for the technology
underpinning the carbon/energy
transition.
Expertise
The Company is managed by
BlackRock’s Sectors and Thematics
team, one of the largest investors in
natural resources. The team has the
resources to undertake extensive,
proprietary, on-the-ground research
and is best placed to assess capability
and reliability of management of the
companies in which they invest.
A member of the Association of Investment Companies
Further details about the Company including the latest annual and half-yearly financial reports, fact sheets
and stock exchange announcements are available on the website at www.blackrock.com/uk/brwm
Section 1: Overview and performance
3
Contents
Section 1: Overview and performance
Financial highlights
1
Why BlackRock World Mining Trust plc?
2
Performance record
4
Chairman’s Statement
5
Investment Manager’s Report
9
Section 2: Portfolio
Ten largest investments
29
Investments
31
Portfolio analysis
34
Section 3: Governance
Governance structure
38
Directors’ biographies
39
Strategic Report
41
Directors’ Report
58
Directors’ Remuneration Report
65
Directors’ Remuneration Policy
68
Corporate Governance Statement
70
Report of the Audit Committee
76
Statement of Directors’ Responsibilities in respect of the Annual Report
and Financial Statements
81
Section 4: Financial statements
Independent auditors’ report
84
Consolidated Statement of Comprehensive Income
92
Consolidated Statement of Changes in Equity
93
Parent Company Statement of Changes in Equity
94
Consolidated and Parent Company Statements of Financial Position
95
Consolidated and Parent Company Cash Flow Statements
96
Notes to the financial statements
97
Section 5: Additional information
Shareholder information
136
Analysis of ordinary shareholders
139
Historical record (unaudited)
140
Management and other service providers
141
AIFM Report on Remuneration (unaudited)
142
Other AIFMD disclosures (unaudited)
146
Information to be disclosed in accordance with Listing Rule 9.8.4
147
Glossary
148
Section 6: Annual General Meeting
Notice of Annual General Meeting
154
Share fraud warning
158
COVER PHOTO:
Copper is a clear beneficiary of the energy transition with
more than 65% of copper used for applications that deliver electricity.
Freeport-McMoRan
operates 9% of the world’s copper production and
has been awarded the Copper Mark at all twelve of its eligible copper
producing sites globally, as referenced in this year’s cover photograph.
The independently-verified Copper Mark ensures producers adhere to
internationally recognised responsible operating practices.
PHOTO COURTESY OF
FREEPORT-MCMORAN
4
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Performance record
As at
31 December
2022
As at
31 December
2021
Net assets (£’000)¹
1,299,285
1,142,874
Net asset value per ordinary share (NAV) (pence)
688.35
622.21
Ordinary share price (mid-market) (pence)
697.00
589.00
Reference Index
2
– net total return
5,863.32
5,258.16
Premium/(discount) to net asset value
3
1.3%
(5.3)%
Performance (with dividends reinvested)
Net asset value per share
3
+17.7%
+20.7%
Ordinary share price
3
+26.0%
+17.5%
Reference Index
2
+11.5%
+15.1%
Performance since inception (with dividends reinvested)
Net asset value per share
3
+1,413.6%
+1,187.8%
Ordinary share price
3
+1,535.8%
+1,198.1%
Reference Index
2
+979.6%
+868.2%
For the
year ended
31 December
2022
For the
year ended
31 December
2021
Change
%
Revenue
Net revenue profit after taxation (£’000)
76,013
78,910
-3.7
Revenue return per ordinary share (pence)
4
40.68
43.59
-6.7
Dividends per ordinary share (pence)
– 1st interim
5.50
4.50
+22.2
– 2nd interim
5.50
5.50
–
– 3rd interim
5.50
5.50
–
– Final
23.50
27.00
-13.0
Total dividends paid and payable
40.00
42.50
-5.9
Rebased to 100
2022
2021
2020
2018
2019
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1993
1994
•
Capital only share price
•
Dividend reinvested share price returns
0
100
200
300
400
500
600
700
800
900
1000
1100
1200
1300
1400
1500
1600
1700
1800
Long-term capital and dividend returns
1
The change in net assets reflects portfolio movements, share reissues and dividends paid during the year.
2
MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (net total return). With effect from 31 December 2019, the reference index changed to the MSCI ACWI Metals
& Mining 30% Buffer 10/40 Index (net total return). Prior to 31 December 2019, the reference index was the EMIX Global Mining Index (net total return). The
performance returns of the reference index since inception have been blended to reflect this change.
3
Alternative Performance Measures, see Glossary on pages 148 to 151.
4
Further details are given in the Glossary on page
151.
Section 1: Overview and performance
5
Dear
Shareholder
Highlights
•
NAV per share +17.7%
1
(with dividends reinvested)
•
Share price +26.0%
1
(with dividends reinvested)
•
Total dividends of 40.00p per share
David Cheyne
Chairman
Performance
I am pleased to report that your
Company has reported another year of
excellent performance. Over the twelve
months to 31 December 2022, the
Company’s net asset value per share
(NAV) returned +17.7%
1
and the share
price +26.0%
1
. In comparison, over the
same period, the Company’s reference
index, the MSCI ACWI Metals & Mining
30% Buffer 10/40 Index (net total
return), returned +11.5%, the FTSE All-
Share Index returned +0.3% and the UK
Consumer Price Index (CPI) increased by
9.2%.
Overview
As the Company’s financial year began,
the mining sector held up better than
broader equity markets, which recorded
their worst month since March 2020,
when more widespread public health
measures were introduced following the
outbreak of the COVID-19 pandemic.
Supply constraints, coupled with
increasing demand as post-COVID-19
economic activity restarted, caused
inflation to rise sharply and the
geopolitical events of early 2022, with
Russia’s unprovoked invasion of Ukraine,
exacerbated an already challenging
market environment. For much of the
previous decade, markets have been
characterised by low inflation and very
low interest rates, but the resulting rise in
energy and food prices pushed inflation
in the UK to a 41-year high in October
2022. This, when added to higher
interest rates, had a pronounced impact
on equity markets and caused a deep fall
in households’ real disposable incomes.
Given the aforementioned headwinds,
it is extremely impressive that the
mining sector delivered such strong
gains in absolute terms and when
compared with the wider market. It is
also important to remember that China,
the world’s largest consumer of mined
commodities, remained in varying
stages of lockdowns for most of the
year. Miners should be applauded for
being responsible in capital allocation
and balance sheet discipline during the
prevailing market environment. Whilst
this practice is encouraging, companies
will be compelled to invest in growth in
the medium to long term. The sector
was also aided by supply constraints
across a number of commodities
which kept prices higher and the
continued growth in demand for mined
commodities for the transition to net
zero carbon emissions. Encouragingly,
the Company’s mining holdings
outperformed during the year, including
the contribution from our unquoted
investments.
Chairman’s Statement
1
Alternative Performance Measures. All percentages calculated in sterling terms with dividends reinvested.
Further details of the calculation of performance with dividends reinvested are given in the Glossary on
page 149.
6
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Revenue return and
dividends
This year was the second best year in the
Company’s history for income and only
marginally short of last year’s record.
Collectively, the balance sheets of mining
companies have never been stronger,
reflecting tight financial discipline
and strength in commodity prices.
By prioritising financial stability and
investor returns over growth, the mining
sector has enabled investors to continue
to share in the fundamentals benefiting
the underlying companies.
The Company’s revenue return per
share for the year amounted to 40.68p
compared with 43.59p for the previous
year, representing a slight decrease of
6.7%. During the year, three quarterly
interim dividends of 5.50p per share
were paid on 30 June 2022, 30
September 2022 and 22 December
2022. The Board is proposing a final
dividend payment of 23.50p per share
for the year ended 31 December 2022.
This, together with the quarterly interim
dividends, makes a total of 40.00p
per share (2021: 42.50p per share)
representing a small decrease of 5.9%
on payments made in the previous
financial year. As in past years, all
dividends are fully covered by income.
In accordance with the Board’s stated
policy, the total dividends represent
substantially all of the year’s available
income.
Subject to approval at the Annual
General Meeting, the final dividend
will be paid on 26 April 2023 to
shareholders on the Company’s register
on 10 March 2023, the ex-dividend date
being 9 March 2023. It remains the
Board’s intention to seek to distribute
substantially all of the Company’s
available income along similar lines in
the future.
Gearing
The Company operates a flexible
gearing policy which takes into account
prevailing market conditions. It is not
intended that gearing will exceed 25%
of the net assets of the Group. Gearing at
31 December 2022 was 9.6%. Average
gearing over the year to 31 December
2022 was 11.2%.
Management of share rating
The Board recognises the importance
to investors that the market price of the
Company’s shares should not trade at a
significant premium or discount to the
underlying NAV. Accordingly, in normal
market conditions, the Board may use
the Company’s share buyback, sale of
shares from treasury and share issuance
powers to ensure that the share price
is broadly in line with the NAV, if it is
deemed to be in shareholders’ interests.
I am pleased to report that during the
year the Company reissued 5,071,920
ordinary shares from treasury for a
net consideration of £34,902,000, at
an average price of 688.14p per share
and an average 1.3% premium to
NAV. Since the year end up to 2 March
2023, a further 150,000 shares have
been reissued from treasury at an
average premium over NAV of 1.5%,
at an average price of 717.50p for a
total consideration of £1,086,000. As at
28 February 2023 the discount stood
at 0.2%.
Resolutions to renew the authorities to
issue and buy back shares will be put to
shareholders at the forthcoming Annual
General Meeting.
Board composition
Russell Edey has informed the Board
of his intention to retire as a Director
of the Company following the Annual
General Meeting in April 2023 and,
accordingly, will not be seeking
re-election. Russell joined the Board in
May 2014 and has acted as Chairman of
the Audit Committee and Management
Engagement Committee and Senior
Independent Director since May 2020.
The Board would like to express its strong
appreciation for Russell’s wise counsel
and invaluable contribution to the
Company.
The Board has commenced a search
to identify a new Director and a further
announcement will be made in due
course. Following Mr Edey’s retirement,
Mr Venkatakrishnan will be appointed
as Chairman of the Audit Committee.
Ms Lewis will become Chair of the
Management Engagement Committee
and Ms Mosely will become the
Company’s Senior Independent Director.
Annual General Meeting
The Company’s Annual General Meeting
(AGM) will be held at the offices of
BlackRock at 12 Throgmorton Avenue,
London EC2N 2DL on Tuesday, 18 April
2023 at 11.30 a.m. Details of the
business of the meeting are set out in the
Notice of Meeting on pages 154 to 157
of this Annual Report.
Shareholders who intend to attend
the AGM should ensure that they
have read and understood the venue
requirements for entry to the AGM.
These requirements, along with further
arrangements for the AGM, can be found
in the Directors’ Report on page
62.
In the absence of any reimposition of
COVID-19 restrictions, the Board very
much looks forward to meeting with
shareholders at the AGM.
Outlook
The impact of the COVID-19 pandemic
has receded, but the recovery of the
global economy has been hindered by
geopolitical tensions and rising interest
rates. Since recognising the urgent
need for policy tightening to combat
inflationary pressures on the back of
soaring prices, the US Federal Reserve
has raised interest rates at the fastest
pace in more than three decades, with
most other major developed central
banks following suit. High inflation has
sparked cost-of-living crises and slowing
global growth and, although central
banks are forecast to slow the rate of
interest rate increases, the possibility of
recession for developed markets looms.
Section 1: Overview and performance
7
Whilst the macro environment in
developed market economies continues
to present near-term headwinds for
commodity markets, the structural
backdrop with low inventories, limited
investment in new production and
a more rapid recovery in China than
expected, are supportive tailwinds.
The energy transition will require
enormous scale of investment by mining
companies over the coming decades.
Mining companies are in an excellent
financial position, with high levels of free
cash flow and solid balance sheets and
these factors combined with the above
potential tailwinds could be a major
factor in how 2023 shapes up for the
sector.
Against this backdrop, our Investment
Manager remains cautiously optimistic
for the mining sector. The Board is also
confident that the Company remains
well-placed to benefit from the transition
to net zero carbon emissions which
will continue to create investment
opportunities in those companies that
service the associated supply chains.
David Cheyne
Chairman
2 March 2023
Section 1: Overview and performance
9
Investment
Manager’s
Report
Evy Hambro
Olivia Markham
Portfolio performance
We are pleased to report another strong year of absolute returns for the Company
in 2022. The year also marked a record in terms of another all-time high in NAV and
share price total returns as, since the Initial Public Offering (IPO) of the Company
in 1993 at 100p per share, the shares have delivered a NAV total return of 1412.5%
and a share price total return of 1535.8% against a reference index total return
of 979.6%. In addition, the year was also significant for income after the record-
breaking numbers in 2021. Despite not quite matching last year’s record, the total
was well in excess of expectations with all parts of the strategy contributing. Also, like
last year, the performance was split into distinct periods with excellent gains made
during the first four months, followed by falls during the summer before a decent
rally in the final quarter. This volatility allowed us to take advantage of opportunities
by adjusting holdings, as well as selling volatility out to the market using options.
It is also important to remember that the Company delivered these gains against a
broader market backdrop of strongly negative returns across not just equities but
also fixed income making the relative return very valuable to investors.
Performance of the Company versus MSCI World markets and Fixed
Income returns during 2022
17.7%
-9.3%
-8.0%
NAV total return
Source: BlackRock.
MSCI World Index (£)
FTSE World Government
Bond Index (£)
2022 performance (%) (GBP)
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
The standout commodity for the year was lithium, as electric vehicle adoption rates
soared across the world. The Company added to its lithium holdings in late 2021,
establishing a position in SQM and Sigma Lithium, both of which have performed well
in this environment.
PHOTO COURTESY OF SQM
10
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Looking at the year more broadly,
it was driven by a shifting macro
backdrop and a sharp uptick in
geopolitical tensions. The former saw
interest rates rise across the world
causing equities to derate on the back
of both a higher cost of capital but
also fears of recessionary impacts
to profit margins. These issues were
further compounded by the invasion
of Ukraine by Russia which triggered a
range of consequences from spikes in
oil prices, huge volatility in European
power costs and shortages of natural
resources from oil/gas/metals/
fertilizers etc. China was also impacted
by their zero COVID
-19
policy which
badly damaged their economic growth.
Given all of the above it is even more
remarkable that the mining sector
not only managed to navigate its
way through this unscathed, but also
posted such a strong year of gains
and dividends. Credit must go to the
executive teams who have stayed the
course of disciplined capital allocation
and strong balance sheets, as without
this the sector would surely have
come unstuck given the huge macro
challenges.
It would be remiss not to highlight the
contribution from the investments in
illiquid assets during 2022. During
the year two companies, Ivanhoe
Electric and Bravo Mining, completed
successful IPOs at big premiums to
the entry prices paid by the Company.
This happened despite the difficult
conditions in financial markets
and is testament to the quality of
the opportunities each company
has exposure to. In addition, Jetti
Resources completed a successful
capital raise at a substantial premium
to their last round and with more trial
projects moving into commercial
discussion the outlook remains
encouraging. There is more detail on
the illiquid portfolio later in this report.
For the year as a whole, the NAV of
the Company was up by 17.7% with
income reinvested and the share price
total return was 26.0%. This compares
to the FTSE 100 rising 4.7%, the
Consumer Price Index up by 9.2%
and the reference index (MSCI ACWI
Metals & Mining 30% Buffer 10/40
Index net total return) up by 11.5%
(all percentages calculated in sterling
terms with dividends reinvested).
For the year as a
whole, the NAV of
the Company was
up by 17.7% with
income reinvested
and the share
price total return
was 26.0%
Commodity price moves
31 December 2022
% Change in 2022
% Change average
prices 2022 vs 2021
Commodity
Gold US$/oz
1,815.6
-0.4%
+0.1%
Silver US$/oz
23.75
2.1%
-13.3%
Platinum US$/oz
1,065
11.1%
-11.8%
Palladium US$/oz
1,788
-9.4%
-12.1%
Copper US$/lb
3.79
-14.1%
-5.2%
Nickel US$/lb
13.56
+43.3%
+42.1%
Aluminium US$/lb
1.07
-16.3%
+9.3%
Zinc US$/lb
1.36
-16.3%
+16.0%
Lead US$/lb
1.06
-0.1%
-2.1%
Tin US$/lb
11.23
-37.1%
-3.3%
Baltic Freight Rate
1,515
-31.7%
-33.7%
West Texas Intermediate Oil (Cushing) US$/barrel
80.2
+6.7%
+39.5%
Iron Ore fines 62% US$/t
118
-3.7%
-24.5%
Thermal Coal US$/t
145.16
+18.5%
+110.6%
Metallurgical Coal US$/t
279.45
-24.5%
+63.4%
Lithium US$/lb
191.5
+101.6%
+274.0%
Sources: Datastream and Bloomberg, December 2022.
Section 1: Overview and performance
11
Pressure building
2022 was a complicated year for the
mining sector in many ways. If one
had known beforehand about the
big macro headwinds such as slower
growth in China, rising rates and
recessionary conditions across the
developed world, most people would
have expected mining shares to have
delivered negative returns for the year.
Therefore, to see the leading sectoral
gains in financial markets for the year
coming from natural resources shares,
with energy leading the way on the
back of supply disruption following
Russia’s invasion of Ukraine, makes
it easy to understand why generalist
investors missed the opportunity. It is
also easy to understand their reticence
to buy after such a long period of
outperformance.
It is our belief that the trends of prior
years, such as capital discipline and
strong balance sheets, have built
strong foundations for the sector
and it is these factors that drove the
outperformance in 2022. For example,
if mining companies had gone into the
year with large capital spending plans
and high levels of debt, share prices
would have fallen as sharply as in
similar periods from the past. The work
that has been done to entrench capital
discipline, combined with keeping
stronger balance sheets, in our view
saved the day in 2022.
Another output of the improved capital
allocation decisions has been a lower
level of reinvestment into production.
This has allowed free cash flow to grow,
but, more importantly, it has meant
limited new supply growth across the
industry. Given that the world economy
now needs commodities to build the
projects for the energy transition,
the absence of new supply has left
commodity markets extremely tight. In
fact, at the end of 2022, inventories at
London Metal Exchange warehouses
were at 25-year lows. Available
inventories for aluminium, copper,
nickel and zinc decreased by over two-
thirds during the year. The low levels
of stockpiles reflect a tension that has
kept traders and consumers gripped
as demand weakened (due to China
economic slowdown and recessionary
fears in developed markets), but
constrained supplies kept prices at
levels higher than expected.
It is our expectation that the supply
constraints are unlikely to ease during
the next few years due to the scarcity
of “shovel ready” projects and high
permitting barriers. This has left
companies focused on growth needing
to revisit mergers and acquisitions
(M&A), as producing assets valued in
the equity markets often trade below
the cost of building new capacity. In
Australia, BHP managed to agree terms
to buy OZ Minerals after many months
of discussions. The deal looks set to
complete in 2023 and the Company
has benefited materially from this deal
due to having a large holding in OZ
Minerals. It is hard to see other deals
happening due to the small number of
listed copper producers and fears of
resource nationalism that continue to
add risk to moving capital into more
remote regions e.g. the threat of closing
First Quantum’s new Cobre de Panama
mine.
Outside of sector specific issues,
the geo-political tensions caused by
Russia’s invasion of Ukraine further
tightened markets due to the sanctions
imposed by other countries. This
disrupted commodity supply chains
at a time when markets were already
tight, further supporting prices at a
time when economic weakness would
normally have seen them fall. As the
year developed, prices did cool during
the summer, only to recover in Q4 2022
as China started to ease
COVID-19
restrictions. It will be interesting to see
the impact that post
COVID-19
Chinese
demand has on metals markets.
ESG issues and the social
license to operate
Information on the way in which the
Company seeks to manage risks related
to ESG (Environmental, Social and
Governance) and the social license
to operate is covered in further detail
on pages 53 to 57 in the Strategic
Report. The Investment Manager also
seeks to understand the ESG risks
and opportunities facing companies
and industries in the portfolio. As
an extractive industry, the mining
sector naturally faces a number of
ESG challenges given its dependence
on water, carbon emissions and
geographical location of assets.
However, we consider that the sector
can provide critical infrastructure, taxes
and employment to local communities,
as well as materials essential to
technological development, enabling
the carbon transition through the
production of the metals required for
the technology underpinning that
transition.
The Investment Manager considers
ESG insights and data, including
sustainability risks, within the total set
of information in its research process
and makes a determination as to
the materiality of such information
as part of the investment process
used to build and manage the
portfolio. Further information on the
Investment Manager’s approach to
ESG integration is set out in the AIFMD
Fund Disclosures in respect of the
Company, available on the Company’s
website. ESG insights are not the sole
consideration when making investment
decisions but, in most cases, the
Company will not invest in companies
which have high ESG risks (risks that
affect a company’s financial position
or operating performance) and which
have no plans to address existing
deficiencies.
•
The Investment Manager is also
engaging with the executives of
portfolio companies in which the
Company invests to understand
how their current business plans
are compatible with achieving a net
zero carbon emissions economy by
2050.
•
There will be cases where a serious
event has occurred and, in that
case, the Investment Manager
will assess whether the relevant
portfolio company is taking
appropriate action to resolve
matters before deciding what to do.
12
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Annual Report and Financial Statements 31 December 2022
•
There will be companies which
have derated (the downward
adjustment of multiples) as a result
of an adverse ESG event or due
to generally poor ESG practices
where there may consequently
be opportunities to invest at a
discounted price. However, the
Company will only invest in these
value-based opportunities if the
Investment Manager is satisfied
that there is real evidence that the
relevant company’s culture has
changed and that better operating
practices have been put in place.
•
Given the activities that mining
companies undertake, negative
ESG events can occur. However,
there were very few company-
specific events in 2022. This
meant that ongoing engagement
focused mainly on the Company’s
holdings approach to the energy
transition and how they plan to not
only benefit from the opportunities
but also how they are going to
decarbonise their own operations.
During the year the main areas of focus
in relation to ESG risks and issues
remained on Rio Tinto and Vale. By
way of an update, at Rio Tinto work
is ongoing with historical owners,
including the establishment of the
Juukan Gorge Legacy Foundation,
which will support major cultural and
social projects. At Vale, the company
has continued its journey to raise its
ESG profile following the tragic tailings
related events from the last decade.
Further changes have also been made
to the Vale board and its operating
structure. The company was also
upgraded by Fitch on the back of the
work they have done to improve their
ESG track record.
Price weakness but strong
margins
2022 saw prices generally down for
the year as a whole, as well as lower
average prices versus the prior year.
However, it is important not just to look
at the moves in isolation. For example,
the average price of copper in 2022
was down 5.2% compared with 2021
but the actual level of US$4.2/lb was
the second highest average price ever,
leaving companies enjoying healthy
margins. The opposite is true for nickel
where the prices were up year-on-
year but the average price was not as
high as it had been in the past, but
still at extremely profitable levels for
producers.
In precious metals, gold was the
standout as the average price was
flat for the year compared to silver,
platinum and palladium which were
all lower. However, gold companies
seem to have suffered more from cost
inflation as they did not go into the
inflationary environment with levels of
profitability as high as their industrial
peers.
The standout commodity for the year
was lithium, as the price soared driven
by demand exceeding estimates as
electric vehicle (EV) adoption rates
increased across the world. In fact, the
whole battery material suite looks set
to see strong demand as the transition
away from the combustion engine
gathers pace.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Expansionary capital expenditure
Sustaining capital expenditure
Source: RBC Capital Markets.
2002
2003
2004
Sustaining capital expenditure represents 80% of the global mining sector expenditure
Section 1: Overview and performance
13
Do not forget the income
In 2021 the Company received record
levels of income as the underlying
investments paid surplus cash back
to their investors. Despite fearing
that this would be a peak and 2022
might be less favourable for investors,
we are delighted to report that once
again companies honoured their
commitments and continued with a
strategy of distributions. The chart
above compares the payments received
in 2021 and 2022 versus the average
payments received by the Company in
prior years. It is clear just how much
higher these last two years have been
and it is testament to the hard work
done during earlier years that has left
the companies in a position to deliver
this.
It is also important to note how the
portfolio investments have generally
moved to a more shareholder
friendly strategy. In 2021 82% of the
Company’s assets were exposed to
companies paying dividends versus
only 68% in 2013. Part of this change
has been due to changes in the
portfolio, but by far the majority has
come from more and more companies
moving to dividend paying mode
as project capital expenditure and
debt repayment needs declined. In
summary, the combination of more
companies paying dividends, combined
with diversification into royalties,
should build in some resilience to
general economic risks.
Income breakdown
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
55000
60000
65000
Ordinary dividends
Source: BlackRock.
Special dividends
Fixed income securities
Royalty
Option premium and
other income
2014
2015
2016
2017
2018
2019
2020
2021
2022
Income (£)
14
BlackRock World Mining Trust plc
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Annual Report and Financial Statements 31 December 2022
It is also essential
for mining
companies to
embrace the need
to decarbonise
their own
operations as
future demand
is likely to seek
out supply from
companies that
do not just meet
quality but also
have green
credentials
The energy transition
As alluded to earlier, the energy
transition continues to gather pace.
EVs are taking market share away from
combustion engine vehicles at levels
well in excess of expectations. The roll
out of renewable power projects and
related infrastructure is happening far
quicker than planned. This has in part
been driven by a desire by European
countries to diversify away from
Russian supplied fossil fuels and the
fact that with fossil fuel prices so high
renewable power is substantially more
cost effective, not to mention helping
countries/companies to meet their net
zero commitments.
Despite the positive news from 2022,
it is clear that we remain very close
to the start of the energy transition
cycle given the enormous scale of
investment that is going to be needed
over the coming decades. Looking
at the data for renewable power, it is
increasingly obvious how much more
resource intensive it is (see charts on
page 15). On top of this there will also
be commodity demand from battery
storage needs and the buildout of the
hydrogen economy.
It is also essential for mining
companies to embrace the need to
decarbonise their own operations as
future demand is likely to seek out
supply from companies that do not
just meet quality but also have green
credentials. This move from “Brown to
Green” presents a range of investment
opportunities for the Company both
in trying to reduce the heavy discount
rates applied to carbon intensive
production techniques, as well as
new technologies that could solve
some of the more damaging historical
processes.
Source: Issues in Science and Technology, The Hard Math of Minerals Report, 27/02/22. For illustrative purposes only.
Impact of switching from natural gas-fired turbines to wind turbines
Section 1: Overview and performance
15
Base metals
It was a volatile year for base metals
with prices starting the year well on
strong western world demand and
risks around supply amplified with the
invasion of Ukraine. However, as we
approached the middle of the year, the
macro-outlook began to deteriorate
with COVID-19 lockdowns in China,
further weakness in the Chinese
property market and interest rate
increases to tame inflation which led
to concerns around global growth,
particularly in Europe as energy prices
became an increasing toll on consumer
and economic activity. This resulted in
peak to trough declines of 30% to 40%
across the base metal complex, which
combined with supply challenges,
cost inflation and royalty increases
created a difficult environment for the
producers. Given this, share prices
fared far better than might have been
expected, a reflection of the balance
sheet strength of the producers and
improving outlook for demand.
Encouragingly, as we approached the
year end, several measures announced
by the Chinese government to support
the economy, including relaxation of
its zero COVID
-19
policies, buoyed
sentiment with prices rallying from
their Q3 lows. Interestingly, when we
look at the overall price performance
for the year as shown in the table on
page 10, while the majority of base
metal prices finished the year lower,
with the exception of nickel, the
average price received in 2022 was
higher than the prior year, supporting
earnings for the producers. As we look
forward into 2023 and the potential
impact of China re-opening, not only
do we expect to see a year-on-year
pick-up in underlying demand, but
also a re-stocking of commodities such
as copper and aluminium assuming
China reverts back to its pre-COVID-19
levels of inventory cover. Given the
tightness in physical markets and low
level of base metal inventories today,
this creates upside risk to commodity
prices over the next two years if
Chinese growth stabilises and the
slowdown in the US economy is not
protracted.
The copper price started the year
strongly reaching US$4.85/lb in early
March, to subsequently trade between
US$3.25/lb to US$3.70/lb for much
of the second half before rallying to
US$3.79/lb at the end of the year as
China looked to stabilise its economy.
Whilst the absolute copper price is
high versus history, the cumulative
impact of cost inflation over the last
five years has seen a step change in
the operating cost base of the industry
with several mines operating at cash
breakeven levels during the low copper
prices of Q3.
Copper is a clear beneficiary of the
energy transition with more than 65%
of copper used for applications that
deliver electricity, whilst at the same
time the industry is facing mine supply
0
50
100
150
200
250
Wind power capacity addition in 2022
Estimated wind power capacity additions
(2023 - 2025 inclusive)
Over the next 3 years,
this would require:
46.80 million tonnes of
iron ore
To make:
29.25 million tonnes of
steel
Gigawatts
0
200
400
600
800
1000
1200
1400
Solar power capacity addition in 2022
Estimated solar power capacity additions
(2023 - 2026 inclusive)
Over the next 4 years,
this would require:
75.71 million tonnes of
iron ore
To make:
47.32 million tonnes of
steel
Gigawatts
Source: IEA Statista, ArcelorMittal, BHP 16/12/2022. There is no guarantee that forecasts made will come to pass.
Renewable energy - resource intensity
16
BlackRock World Mining Trust plc
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Annual Report and Financial Statements 31 December 2022
challenges resulting in a material
deficit in the market longer term. This
is driven by a lack of new greenfield
copper projects, as well as deteriorating
performance at existing assets,
particularly in Chile. The expectation
was for 2022 to deliver a step-up in
copper supply with new projects such as
QB2 (Teck Resources) and Qualleveco
(Anglo American) due to come online.
However, as we approached the year
end, a swathe of production cuts has
delayed growth until 2023/2024,
leaving the physical market tight
with a lack of inventory becoming an
increasing issue for industrial users.
Given the significant copper supply
gap estimated longer term (3.5Mt gap
estimated by Macquarie Bank by 2030),
we continue to believe that copper
prices need to remain above incentive
prices to induce new supply into the
market which is an attractive position
for existing low-cost producers.
As at the end of December 2022,
the Company had 22.0% of the
portfolio exposed to copper producing
companies which modestly detracted
from performance for the year. The
Company’s second largest copper
exposure Freeport-McMoRan (4.
0%
of the portfolio) continued to deliver
operationally at Grasberg, as well
as executing on their US$3 billion
buyback which they announced in
late 2021. Among our other copper
producers, Ivanhoe Mines (1.8% of the
portfolio) have continued to surpass
the market’s expectation on the ramp-
up of Kamoa-Kakula, underpinning our
confidence in the management team’s
ability to deliver value from their other
assets including the Western Forelands
in the future. Among our mid-cap
holdings in the portfolio, there was
exceptional performance from Ivanhoe
Electric which held an IPO during
the year delivering close to a 100%
return from our pre-IPO investment,
as well as Jetti Resources which raised
US$100 million at a substantially
higher level than our entry price. Both
are discussed in detail in the unquoted
section of the report. The portfolio has
also benefited from M&A activity during
the year following BHP’s cash offer for
OZ Minerals (1.2% of the portfolio) that
was recommended by the OZ Minerals
Limited board in December 2022.
Strategically the transaction brings
significant benefits to BHP given the
proximity of OZ Minerals’ assets to
BHP’s Olympic Dam operation in South
Australia and supports the build-out of
an Australian based copper basin for
BHP in the years ahead. OZ Minerals
have been an exceptionally strong
performer over a number of years
where the Company has benefited from
the re-rating of the company as they
delivered operationally, and they also
became the operator of the OZ Minerals
Brazil Royalty when they acquired
Avanco Resources in 2018.
The aluminium price finished the year
down by 16%, facing similar global
growth headwinds as the copper
market. In the first half of the year there
were fears that Russian exports of
primary aluminium might be impacted
by sanctions which supported prices.
However, whilst certain companies
have chosen not to purchase Russian
material, there have been no sanctions
imposed directly on Russian aluminium
exports and these tonnes have still
entered the market. With power a
major cost component for aluminium
smelters, higher energy costs have
resulted in 1.2mtpa of capacity
curtailed in Europe. At an aluminium
price of US$2,500/tonne, WoodMac
estimates that 30% of smelters are
loss making on a full cost basis, which
350
400
450
500
550
600
Jan
Feb
Mar
Apr
May Jun
Jul
Aug
Sep
Oct
Nov
Dec
2016
2017
2018
2019
2020
2021
2022
Chile copper supply (1,000 metric tonnes)
Source: Trading economics, October 2022.
Global Balance Dec 21
-1000
-800
-600
-400
-200
0
200
2021
2022E
2023E
2024E
2025E
Global Balance Oct 22
GS Global Copper Balance
Kt
The copper market is likely to remain in deficit
next year
Source: Goldman Sachs, December 2022.
Section 1: Overview and performance
17
provides a level of downside protection
to the price. However, increasing
aluminium exports from China this
year has largely capped the price. As
China’s domestic demand improves
into 2023, we would expect exports to
moderate, which in turn should support
prices. The Company has exposure to
two aluminium producers Alcoa (1.2%
of the portfolio) and Norsk Hydro (2.1%
of the portfolio) both of which have
access to renewable, low cost energy
for the majority of their production,
leaving them well positioned in the
current environment of high energy
costs and longer term as the market
places a greater cost on carbon.
Nickel prices have been very volatile
this year where a short squeeze
temporarily drove prices above
US$100,000 a tonne before the LME
suspended the market and cancelled
some trades in March. Similar to
aluminium, Russia is also a significant
producer of nickel, but we are yet to
see any supply disruptions. Overall,
the nickel price finished the year up
by 43% with the market becoming
increasingly aware of the longer-
term deficit building for high grade
nickel used in batteries. In Q4 2022,
the Company made an investment in
Lifezone which announced a business
combination with a Special Purpose
Acquisition Company (SPAC) GoGreen
Investments which is listed on the New
York Stock Exchange. Lifezone has a
controlling shareholding in Kabanga,
the largest and highest-grade
undeveloped nickel project globally
located in Tanzania. The project has
significant backing from BHP the
world’s largest mining company which
has invested US$100 million into the
asset at a see-through valuation of
US$627 million to acquire 14.3% of
the project, with the option to acquire a
51% interest once the feasibility study
is completed by the end of 2023.
Bulk commodities and steel
It was a challenging year for the iron
ore market with average prices 24.5%
lower year-on-year, with demand
undermined by China’s zero COVID-19
policy and ongoing weakness in
China’s key steel intensive property
sector. Whilst the market enjoyed a
post Beijing Winter Olympics restock
in the first quarter, seeing prices hold a
healthy range between US$120-140/
tonne during the first half of the year,
they subsequently averaged below
US$100/tonne during the second
half of the year bottoming at US$80/
tonne in the third quarter as Chinese
steel margins turned negative and
uncertainty around China’s COVID-19
policy saw further de-stocking by
customers.
China’s shift in COVID-19 policy
and further support announced for
the property sector at the end of the
year, has seen prices rally back above
US$100/tonne as the market looks to
price in the impact of China re-opening.
As we look into 2023, we expect to see
a recovery in construction activity,
which combined with first quarter
seasonality in the iron ore market with
both Brazilian and Australian tonnes
exposed to weather events, it provides
a constructive backdrop for the price
during the first half of the year. Among
the ‘big 4’ producers there is modest
(~1%) growth in supply this year which
will be second half weighted and we
continue to see the producers being
disciplined around volumes which
should be supportive of the price over
the medium term. During the course
ROM stockpile at BHP’s South Flank iron ore operation
18
BlackRock World Mining Trust plc
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Annual Report and Financial Statements 31 December 2022
of the year, we had the opportunity to
visit BHP’s and Rio Tinto’s key iron ore
assets in the Pilbara Region of Western
Australia which enabled us to learn
more about the world class size and
grade of these assets, their approach
to ESG and the focus on decarbonising
their operations.
The Company’s exposure to iron ore
is in the diversified majors BHP, Vale
and Rio Tinto, which have performed
well this year returning 30%, 35%
and 19% respectively. In addition, the
Company has exposure to two pure
play high grade iron ore producers
Champion Iron and Labrador Royalty
Company which have returned 41%
and
-6
% respectively, as well as Mineral
Resources which is looking to grow its
iron ore business alongside its lithium,
mining service and gas business which
finished the year up by 45%.
Coal markets have been one of the
most interesting commodity markets
over the last couple of years with record
prices achieved for both metallurgical
and thermal coal during 2022. Thermal
coal markets have benefited from
tightness in global energy markets
particularly in Europe due to the ban
of Russian coal imports, limited supply
growth due to ESG pressures and
higher than normal levels of rainfall
in Australia which accounts for 60%
of seaborne supply. With levels of
gas storage in Europe above average
levels at the end of 2022, we have
seen European gas prices decline
which poses a risk to thermal coal
prices. However, given the tightness in
the market for high grade Australian
thermal coal, prices have held at a
record level of ~US$400/tonne at the
end of 2022. As we look into 2023,
we continue to see a tight market for
thermal coal given much of Europe’s
coal and inventory build was sourced
from Russia, but with supply from
Australia expected to recover in 2023
after record rain impacts in 2022, a
moderation in thermal coal prices from
record levels is likely.
The Company’s thermal coal exposure is
via our 7.7% position in Glencore, which
is using elevated thermal coal prices to
deleverage the business and remains
focused on decreasing its coal exposure
overtime. Glencore has indicated that
they intend to return excess cashflow
above their net debt target of US$10
billion. This implies a 15% capital return
yield for 2022 which is industry leading
and will result in a circa 10% decline
in their share capital outstanding. The
Company has no exposure to pure play
thermal coal producers.
The seaborne metallurgical coal price
reached a new all-time high during the
first half of the year at circa US$500/
tonne, supported by Russian supply
concerns (5% of global supply),
tightness in the thermal coal market,
as well as the flooding in Australia
which impacted supply. However,
as we moved into the second half of
the year, prices moderated as weaker
steel demand in Europe began to
bite with the metallurgical coal price
finishing the year at US$295/tonne
(Premium Hard Coking Coal, FOB).
During the course of the year, we saw
a number of production downgrades
announced including Anglo American
In Australia BHP agreed terms to buy OZ Minerals, an exceptionally strong performer for the portfolio over a number of years.
The BHP deal looks set to complete in 2023 and the Company has benefited materially from it.
PHOTO COURTESY OF OZ MINERALS
Section 1: Overview and performance
19
reducing volume guidance for its
Grosvenor mine in Queensland and
Teck Resources reducing guidance
at Elkview due to operational issues.
This, combined with limited investment
into new supply and seasonal weather
events, leaves the coking coal market
susceptible to upside spikes in prices
which has been a consistent feature
of this market in recent years. The
Company’s exposure to metallurgical
coal remains in the two leading
producers of BHP and Teck Resources
which have been able to generate very
strong levels of free cash flow from
their coking coal businesses to support
returns to shareholders. (All data
reported in pounds sterling terms.)
Precious metals
The last three years have seen a largely
rangebound price environment for
precious metals, with the average
annual gold price between 2020 to
2022 within 1.7% of each other in
US dollar terms. This is a remarkable
level of stability for a commodity,
with the gold price driven by two
opposing forces over the last year. On
the positive side we have seen rising
inflation, elevated geopolitical and
market risk, while on the other hand the
impact of interest rate hikes to combat
inflation which has seen real rates for
Government bonds flip from negative
to positive over the course of the year.
As we approached the year end, we saw
the gold price rally and breakthrough
US$1800/oz on the back of China’s
reopening news, the knock-on impact
from a weaker US dollar and the
potential for the Federal Reserve (the
Fed) to slow the pace of interest rate
hikes as inflation started to moderate.
With positive real interest rates in the
US and most global economies, the
appeal for non-yielding gold in the
short term is limited. The performance
of gold over the next 12 months is
likely to be driven by the Fed’s ability
to tame inflation and whether they
can effectively bring down inflation to
their targeted level, or whether inflation
remains at a structurally higher level
than in the past which should raise
inflation expectations supportive of the
gold price.
An encouraging feature of the gold
equity market over recent years
has been the increased focus on
shareholder returns, free cash flow and
dividends. However, results in 2022
have shown margin compression due
to rising labour, energy and other input
costs. Whilst the portfolio has continued
to hold a lower allocation (13.0%) to
gold companies versus a similar time
last year (16.4%) we have maintained
our strategy of focusing on high quality
producers which have an attractive
operating margin and solid production
profile and resource base. This includes
the Company’s exposure to the royalty
companies Franco Nevada (2.6% of
the portfolio) and Wheaton Precious
Metals (2.3% of the portfolio) which
outperformed the gold equities during
the year given their stronger margins
and lack of exposure to cost inflation.
In addition, the Company’s exposure
to Endeavour Mining (0.6% of the
portfolio) and Northern Star Resources
(1.2% of the portfolio), both mid-cap
growth focused gold companies, added
to performance as the benefit of volume
growth helped offset some of the cost
inflation in the sector.
As well as the diversified majors, the Company has exposure to two pure play high grade grade iron ore producers,
Champion Iron and Labrador Royalty Company. Champion Iron returned 41% during the year.
PHOTO COURTESY OF CHAMPION IRON
20
BlackRock World Mining Trust plc
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Annual Report and Financial Statements 31 December 2022
Demand for the Platinum Group Metals
(PGMs) continues to be impacted by
the weakness in global auto production
and the share gains from EVs (over
internal combustion engines) which do
not use PGMs. While Russia is a major
producer of PGMs, accounting for
40% of global palladium production,
there has been minimal impact to
Russian PGM supply. During 2022
there was mixed performance from
the PGMs with the platinum price
(+11%) outperforming the palladium
price (-9%).
We continue to remain positive on
the medium-term outlook for the
PGMs and believe the PGM basket will
remain high relative to history given
limited new supply and increasing
PGM loadings for auto catalysts to
meet rising emissions standards. The
Company has reduced its exposure to
pure play PGM producers during the
year which represented 2.0% of the
portfolio at the year end. In addition,
the Company has exposure to PGMs
via its holding in Anglo American
(5.2% the portfolio) which owns 79%
of Anglo American Platinum. The
standout performer among our PGM
exposure during the year was our
investment in Bravo Mining, a PGM
exploration company focused on the
Luanga project in Brazil which they
acquired from Vale. As outlined in the
unquoted section of the report, the
company’s IPO during the year resulted
in a 170% uplift from our pre-IPO
investment made in early 2022 and
finished the year above its IPO price
with early results from its drilling
campaign confirming and, in a number
of instances, exceeding the historical
drilling results from Vale showing
previously unidentified rhodium and
nickel sulphide mineralisation in the
assay results.
Energy transition metals
Growth in battery electric vehicles
(BEVs) continued in 2022, creating
significant demand for the materials
that enable that transition. Demand
for pure battery EVs grew 40% in 2022
to 267,000 units (16% of all new car
registrations in 2022), with demand
for plug-in hybrids also growing. This
growth has been mainly driven by
China, with Europe and the US lagging.
We expect this structural growth to
continue and accelerate particularly
in the US, driven by increased model
launches, strengthening consumer
preference due to technological
advantage and government policy.
Of particular note in 2022, was the
announcement of the US Inflation
Reduction Act. As well as other
climate change related measures, this
policy supports EV demand through
significant subsidies of up to US$7,500
per car. This is expected to support US
BEV demand in 2023. The Company
has exposure to the raw materials that
go into EV batteries and the e-motor.
Lithium is a critical component of an
EV battery and demand for lithium
has been strong this year with the
market firmly in deficit and benchmark
Chinese prices reaching all-time
highs in November, finishing 2022
up by 101.6%. The Company added
to its lithium holdings in late 2021,
establishing a position in SQM and
Sigma Lithium both of which have
performed well in this environment
returning 78% and 207% respectively
(GBP returns). We also added a new
position in relative underperformer
Albemarle in June and Mineral
Resources in October, as they too stand
to benefit from the continued tight
demand supply situation in lithium, as
well as their own volume growth. The
Company has a 2.1% position across
its lithium holdings.
A critical component of the electric
car is also the e-motor, which most
commonly uses a Praseodymium-
Neodymium (NdPr) magnet, an alloy
of two rare earth elements (REE). REEs
are commonly mined and processed
in China and have been deemed of
strategic importance by both Europe
and the US. The Company has exposure
to REEs through Lynas, a REE miner
and processor crucially based in
Malaysia and Australia. In 2022 Lynas
equity fell by 19.1%, but the company
announced in June that they had won
a contract from the US Department
of Defence to deliver a US rare earth
separation facility, underscoring the
strategic growth opportunity.
EV battery raw materials include
cobalt, where LME prices fell by
26.3% as supply increased faster than
demand; the market is moving to lower
cobalt intensity cathode materials
with higher nickel or lithium iron
phosphate chemistry (LFP). Supply
growth is set to continue with cobalt
being a by-product of many of the
Indonesian nickel projects announced
and currently ramping. In addition,
2023 may be impacted by the release
of 10,000 tonnes of stockpiled cobalt
from the Tenke mine in the Democratic
Republic of the Congo (DRC) which has
been unable to export in the second
half of 2022 due to a government
dispute. Glencore’s Mutanda mine
in the DRC ramped-up production in
2022, supporting circa 50% growth
in cobalt production in the first nine
months of the year. Glencore, in which
the Company has a 7.7% position, saw
its share price rise by 47.3% during
2022. Glencore is a globally significant
cobalt producer which produced
22% of mine production in 2020 and
this is set to increase with Mutanda’s
ramp-up.
Royalty and unquoted
investments
Over the last year the Company has
been busy growing the unquoted part
of the portfolio and we are delighted
to report that this has delivered great
performance through a combination
of IPOs, financing valuation uplifts
and strong income generation. As
mentioned in previous reports, the
focus of the unquoted investments is
to seek to generate both capital growth
and income to deliver the superior total
return goal for the portfolio. Ongoing
income from the royalty investments
has continued with the OZ Minerals
Brazil Royalty starting to benefit from
the ramp-up of the Pedra Branca mine,
whilst the Vale Debentures enjoyed
a better period of production despite
lower iron ore prices year-on-year.
Key highlights in the unquoted equity
sleeve include Ivanhoe Electric which
completed its IPO in June despite
the difficult market conditions. This
resulted in an increase in the value
of the holding of over 100% in less
Section 1: Overview and performance
21
than 10 months since the position
was acquired. Elsewhere Bravo Mining
completed its IPO in July at a valuation
170% higher than the price paid for
the shares in May 2022. Both positions
finished the year at a price higher than
IPO and will no longer be reported in
the unquoted section of the portfolio as
they are now fully tradeable securities.
Jetti Resources completed its Series
D financing, raising US$100 million
at a substantial valuation uplift to our
investment made at the beginning of
2022. OZ Minerals received a takeover
offer from BHP which has been
recommended by the OZ Minerals
board and is expected to complete in
Q2 of 2023 which will see BHP become
the operator of the mines linked to our
royalty.
As at the end of 2022, the unquoted
and illiquid investments in the portfolio
amounted to 6.6% of the portfolio
and consist of the OZ Minerals Brazil
Royalty, the Vale Debentures, Jetti
Resources and MCC Mining. These,
and any future investments, will be
managed in line with the guidelines
set by the Board as outlined to
shareholders in the Strategic Report.
We continue to actively look for
opportunities to grow royalty exposure
given it is a key differentiator of the
Company and an effective mechanism
to lock-in long-term income which
further diversifies the Company’s
revenues.
OZ Minerals Brazil Royalty
contract
In July 2014 the Company signed a
binding royalty agreement with Avanco
Minerals. The Company invested
US$12 million in return for a Net
Smelter Return (net revenue after
deductions for freight, smelter and
refining charges) royalty payments
comprising 2% on copper, 25% on gold
and 2% on all other metals produced
from mines built on Avanco’s Antas
North and Pedra Branca licences. In
addition, there is a flat 2% royalty over
all metals produced from any other
discoveries within Avanco’s licence area
as at the time of the agreement.
In 2018 Avanco was successfully
acquired by OZ Minerals, an Australian
based copper and gold producer for
A$418 million, with the royalty now
assumed by OZ Minerals. Since our
initial US$12 million investment was
made, we have received US$22.1
million in royalty payments, with the
royalty achieving full payback on the
initial investment in 3½ years. As at
the end of December 2022, the royalty
was valued at £21.2 million (1.5% NAV)
which equates to a 297.1% return on
the initial US$12 million invested.
In 2021 OZ Minerals achieved a
significant milestone and commenced
mining of Pedra Branca ore. This year
we have seen the ramp-up progress
ahead of plan with Pedra Branca on
track to achieve its 2022 guidance of
10-12kt copper and 8-10koz gold, with
the company targeting production
beyond this level in 2023. We continue
to remain optimistic on the longer-term
optionality provided by the royalty via
the development of Pedra Branca West,
as well as greenfield exploration over
the licence area.
-10
-5
0
5
10
15
20
25
•
•
Royalty Payment
2015
2019
2018
2017
2016
2020
2021
•
Tranche Drawdown
•
2022
Source: BlackRock.
OZ Minerals Brazil Royalty payback
22
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
In August 2022, OZ Minerals received
an initial indicative proposal from
BHP to acquire the company in an
all-cash deal at A$25 per share. This
offer was rejected by the OZ Minerals
board with BHP submitting a revised
offer of A$28.25 per share which
was unanimously recommended in
November 2022. The deal remains
subject to approval by OZ Minerals
shareholders with the deal expected
to close in Q2 2023. This will see
BHP operate the Brazilian assets
and assume the royalty, consistent
with the mechanism used when OZ
Minerals acquired Avanco in 2018. We
believe that BHP’s strong operating
focus, balance sheet strength and
ESG credentials leaves the Brazilian
operations in a very strong set of
hands.
Vale Debentures
At the beginning of 2019, the Company
completed a significant transaction to
increase its holding in Vale Debentures.
The Debentures consist of a 1.8% net
revenue royalty over Vale’s Northern
System and Southeastern System iron
ore assets in Brazil, as well as a 1.25%
royalty over the Sossego copper mine.
We consider that the iron ore assets
are world class given their grade, cost
position, infrastructure and resource
life which is well in excess of 50 years.
As at the end of December 2022
the Company’s exposure to the Vale
Debentures was 2.6%.
Dividend payments are expected to
grow once royalty payments commence
on the Southeastern System in 2024
and volumes from S11D and Serra
Norte improve into 2023 where project
ramp-ups have been challenged in
2022 by licencing requirements. In
December, Vale reduced its longer-term
iron ore production profile in light of
licencing challenges and also a greater
focus on high grade material. This
now sees Vale target modest volume
growth from the Northern System out
to 2026, but the improvement in grade,
to the extent achieved, will aid received
pricing that the royalty will benefit
from.
Despite the decline in iron ore prices
during 2022, the Debentures continue
to offer an attractive yield of circa
10% based on the 1H-22 annualised
dividend. This is an attractive yield for
a royalty investment, with this value
opportunity recognised by other listed
royalty producers, Franco Nevada and
Sandstorm royalties, which have both
acquired stakes in the Debentures
since the sell-down occurred in 2021.
Whilst the Vale Debentures are a
royalty, they are also a listed security
on the Brazilian National Debentures
System. As we have highlighted in
previous reports, shareholders should
be aware that historically there has
been a low level of liquidity in the
Debentures and price volatility is to
be expected. However, we expect this
progressively to improve following the
sell down in April 2021.
Ivanhoe Electric
In early August 2021 the Company
made a US$20 million investment
(equivalent to 1.3% of NAV) into
Ivanhoe Electric, an exploration
and mining business focused on
identifying and developing “electric
metals” (copper, nickel, gold and silver)
required for the energy transition.
The exploration portfolio is focused
in the US where they have developed
a proprietary exploration technology
that has the ability to identify
mineral resources at greater depths
than existing methods. The team is
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2H12
1H13 2H13
1H14
2H14
1H15
2H15 1H16
2H16
1H17
2H17 1H18
2H18 1H19
2H19 1H20
Per debenture (R$)
2H20
1H21
2H21
1H22
Distribution on Vale Shareholders’ Debentures
Source: Vale, November 2022.
Section 1: Overview and performance
23
led by Robert Friedland who has a
successful track-record of identifying
and developing world class mineral
deposits such as Voisey’s Bay, Oyu
Tolgoi and Kamoa-Kukula.
In June 2022 Ivanhoe Electric (2.4% of
the portfolio) successfully completed
an IPO at US$11.75 per share. The
Company’s investment consisted of
common shares of Ivanhoe Electric,
as well as convertible notes which
convert at a discount to the IPO price
into Ivanhoe Electric shares with
a total return of 91% on our initial
investment. During the course of 2022,
the company has been focused on
exploration drilling at their Santa Cruz
asset in Arizona which is the third-
largest undeveloped copper deposit
in the US. An updated Santa Cruz
resource estimate and Preliminary
Economic Analysis report is due to be
released in the first half of 2023 and we
expect to see significant growth in the
size of the resource, based on recent
drilling success at the existing Santa
Cruz deposit, as well as new discoveries
at East Ridge and Texaco. 2023 is
set to be an exciting year for Ivanhoe
Electric with the company potentially
offering significant strategic benefit as
a future low carbon producer of copper
in the US.
Jetti Resources
In early 2022 the Company made an
investment into mining technology
company Jetti Resources which has
developed a new catalyst that appears
to improve copper recovery from
primary copper sulphides (specifically
copper contained in chalcopyrite,
which is often uneconomic) under
conventional leach conditions. Jetti
is currently trialling their technology
at 35 mines where they will look to
integrate their catalyst into existing
heap leach SX-EW mines to improve
recoveries at a low capital cost. The
technology has been demonstrated to
work at scale at the Pinto Valley copper
mine, with further trials at different
copper assets planned for this year. If
Jetti’s technology is proven to work at
scale we see material valuation upside,
with Jetti sharing in the economics of
additional copper volumes recovered
through the application of their
catalyst.
During the second half of 2022 we are
pleased to report that Jetti completed
its Series D financing to raise US$100
million at a substantially higher
valuation than when our investment
was made at the beginning of 2022.
This sees the company fully financed
to execute on their expected growth
plans in the years ahead. As at the end
of December, Jetti represented 2.1% of
the portfolio.
MCC Mining
MCC Mining (0.4% of the portfolio)
operates as a mineral exploration
company focused on exploring for
copper in Columbia. The company has
several large porphyry targets which
we believe could have significant
potential. Shareholders include other
mid to large cap copper miners, which
is another indication of the strategic
value of the company. The valuation of
the company is based on the US$170.7
million equity value implied by the
April 2022 equity raise. The money
raised will fund a drilling campaign
which commenced in Q4 2022 at their
Comita project, a joint venture with Rio
Tinto, with drilling on two other projects
The standout performer among our PGM exposure during the year was our investment in Bravo Mining, a PGM exploration company
focused on the Luanga project in Brazil.
PHOTO COURTESY OF BRAVO METALS
24
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
(Urrao and Pantanos) expected to
commence in mid-2023. Importantly,
MCC’s three projects are located in
the Forestry Reserve in Colombia
which allows for exploration drilling
in the forestry reserve based on new
regulations introduced in Colombia in
early 2022.
Bravo Mining
Bravo Mining (0.9% of the portfolio)
is a Brazil-based mineral exploration
and development company focused
on advancing the Luanga platinum
group metals/gold/nickel project in the
world-class Carajas Mineral Province
of Brazil. Due to our belief in the asset’s
potential, the Company participated
in a pre-IPO round in April 2022, at a
US$39 million valuation. The proceeds
of the raise were used to fund drilling
and survey work. Since the pre-IPO
round the company has decided to IPO,
which completed in July at C$1.75/
share. This represents a 170% return
since the Company’s investment.
During the course of 2022, Bravo
has been focused on drilling the
historical resource at Luanga which
has confirmed and, in a number of
cases, exceeded the expectations of the
original resource. With less than half
of the phase 1 drilling analysed and a
similar sized drill program scheduled
for 2023, we expect to see substantial
growth in Luanga’s resource where
recent results show rhodium and
potential for nickel sulphide which was
previously unknown. Bravo is still in the
early days of its journey and highlights
the potential value unlock available
by backing quality management in
attractive geological areas.
Derivatives activity
The Company from time to time enters
into derivatives contracts, mostly
involving the sale of “puts” and “calls”.
These are taken to revenue and are
subject to strict Board guidelines which
limit their magnitude to an aggregate
10% of the portfolio. In 2022
income generated from options was
£7.3 million in line with contributions
from prior periods. During the year
opportunities presented themselves
in the first few months and once again
during the autumn and into winter
when volatility was priced at elevated
levels. At the end of the year the
Company had 2.6% of the net assets
exposed to derivatives and the average
exposure to derivatives during the year
was less than 5%.
Gearing
At 31 December 2022, the Company
had £125.0 million of net debt, with
a gearing level of 9.6%. The debt is
held principally in US dollar rolling
short-term loans and managed against
the value of the debt securities and
the high yielding royalty positions
in the Company. During the year the
Company sought to maximise the
use of gearing against the equity
holdings rather than debt securities.
This was driven by the risk adjusted
relative value available in shares where
dividend yields were mostly in excess of
the coupons being paid on the bonds.
Since the companies in the portfolio
also have strong balance sheets, it
was opportune to gear up the equity
portfolio of the Company since we were
not adding debt to holdings that were
already heavily leveraged themselves.
Shareholders should note that the total
gearing available to the Company has
increased during the year due to the
rise in assets but remains within the
percentage limits set by the Board.
On the back of this, facilities were
refreshed with our lenders and stand at
£200 million for loans and £30 million
for the overdraft. The current average
cost of debt for the Company remains
low at 2.82% and is linked to SONIA
following the demise of LIBOR.
Outlook
At the macro level it seems likely that
the peak in the pace of interest rate
increases is behind us and, if anything,
the economic background should
become more supportive for economic
activity during the year assuming
inflation pressures start to fade. On
the geo-political front, it is very hard
to gauge what will happen, but even
if there is an end to conflict it will be
many years before sanctions are lifted
and commodity trade routes reopen
meaning that ongoing disruption to
supply will last longer than the conflict.
With the energy transition well
under way and the Chinese economy
emerging from its self-imposed
COVID
-19
related disruption, the
outlook for commodities demand
is strong. At the same time supply
remains constrained by a range of
issues from permitting, elevated capital
expenditure, delays due to ESG factors
and a scarcity of projects. It is these
factors that fuel our ongoing positive
outlook for commodity prices and the
fact that they are not yet priced into
valuations means there are plenty of
opportunities within the mining equity
market.
At the company levels, despite all of the
uncertainties at the start of the new
year, the mining sector goes forward
on a strong footing as corporate
balance sheets remain some of the
strongest of any equity sector. In
addition, profit margins continue at
very healthy levels even after adjusting
for the cost inflation seen during the
last year. However, it is worth pointing
out that free cash might easily be
impacted by capital expenditure and
decarbonisation projects as the sector
transitions to producing “greener”
commodities needed for the energy
transition. The priority to allocate cash
flow into these areas means that there
could be less available for dividends
and as such the Company might see
a lower level of distributions. In the
results announced to date in 2023,
dividends from some of our portfolio
companies have decreased.
Evy Hambro and Olivia Markham
BlackRock Investment Management
(UK) Limited
2 March 2023
Section 2: Portfolio
27
Portfolio
During the course of the year, we had the opportunity to visit BHP and Rio Tinto’s
key iron ore assets in the Pilbara Region of Western Australia. BHP was the
portfolio’s largest holding at the year end.
PHOTO COURTESY OF BHP
28
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
10
7
4
1
9
6
3
8
5
2
PHOTOS COURTESY OF BHP, VALE, GLENCORE, ANGLO AMERICAN, RIO TINTO, FIRST QUANTUM MINERALS, ARCELORMITTAL, FREEPORT
-
MCMORAN, TECK RESOURCES
AND FRANCO NEVADA.
Section 2: Portfolio
29
Ten largest
investments
1
BHP
(2021: 2nd)
Diversified mining group
Market value: £135,048,000
Share of investments: 9.5%
(2021: 7.7%)
The world’s largest diversified mining group by market
capitalisation. The group is an important global player in a
number of commodities including iron ore, copper, thermal
and metallurgical coal, manganese, nickel, silver and
diamonds.
2
Vale
1,2
(2021: 1st)
Diversified mining group
Market value: £130,476,000
Share of investments: 9.1%
(2021: 8.5%)
One of the largest mining groups in the world, with
operations in 30 countries. Vale is the world’s largest
producer of iron ore and iron ore pellets and the world’s
largest producer of nickel. The group also produces
manganese ore, ferroalloys, metallurgical and thermal coal,
copper, platinum group metals, gold, silver and cobalt.
3
Glencore
(2021: 3rd)
Diversified mining group
Market value: £109,508,000
Share of investments: 7.7%
(2021: 7.7%)
One of the world’s largest globally diversified natural
resources groups. The group’s operations include
approximately 150 mining and metallurgical sites and oil
production assets. Glencore’s mined commodity exposure
includes copper, cobalt, nickel, zinc, lead, ferroalloys,
aluminium, thermal coal,
iron ore, gold and silver.
30
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Ten largest investments
continued
4
Anglo American
3
(2021: 4th)
Diversified mining group
Market value: £73,942,000
Share of investments: 5.2%
(2021: 7.5%)
A global mining group. The group’s mining portfolio
includes bulk commodities including iron ore, manganese,
metallurgical coal, base metals including copper and nickel
and precious metals and minerals including platinum and
diamonds. Anglo American has mining operations globally,
with significant assets in Africa and South America.
5
Rio Tinto
(2021: 7th)
Diversified mining group
Market value: £63,652,000
Share of investments: 4.5%
(2021: 4.2%)
One of the world’s leading mining groups. The group’s
primary product is iron ore, but it also produces aluminium,
copper, diamonds, gold, industrial minerals and energy
products.
6
First Quantum Minerals
1
(2021: 10th)
Copper producer
Market value: £58,504,000
Share of investments: 4.1%
(2021: 2.9%)
A Canadian-based mining and metals group with principal
activities that include mineral exploration, development and
mining. Its main product is copper.
7
ArcelorMittal
1
(2021: 6th)
Steel producer
Market value: £57,127,000
Share of investments: 4.0%
(2021: 5.2%)
A multinational steel manufacturing group, with a focus on
producing safe sustainable steel. The group has operations
across the globe and is the largest steel manufacturer in
North America, South America and Europe.
8
Freeport-McMoRan
3
(2021: 5th)
Copper producer
Market value: £56,549,000
Share of investments: 4.0%
(2021: 6.2%)
A global mining group which operates large, long-lived,
geographically diverse assets with significant proven and
probable reserves of copper, gold and molybdenum.
9
Teck Resources
(2021: 8th)
Diversified mining group
Market value: £51,395,000
Share of investments: 3.6%
(2021: 3.6%)
A diversified mining group headquartered in Canada.
The company is engaged in mining and mineral development
with operations and projects in Canada, the US, Chile and
Peru. The group has exposure to copper, zinc,
metallurgical
coal and energy.
10
Franco Nevada
(2021: 14th)
Gold royalty
Market value: £37,460,000
Share of investments: 2.6%
(2021: 2.2%)
A leading gold-focused royalty and streaming group with the
largest and most diversified portfolio of cash-flow producing
assets. Its business model provides investors with gold price
and exploration optionality while limiting exposure to cost
inflation.
1
Includes fixed income securities.
2
Includes investments held at Directors’ valuation.
3
Includes options.
All percentages reflect the value of the holding as a
percentage of total investments. For this purpose, where
more than one class of securities is held, these have been
aggregated.
Together, the ten largest investments represented
54.3% of total investments of the Company’s portfolio
as at 31 December 2022 (ten largest investments as at
31 December 2021: 57.0%).
Section 2: Portfolio
31
Investments
as at 31 December 2022
Main
geographical
exposure
Market
value
£’000
% of
investments
Diversified
BHP
Global
135,048
9.5
Vale
Global
93,137
}
9.1
Vale Debentures*#^
Global
37,339
Glencore
Global
109,508
7.7
Anglo American
Global
74,626
}
5.2
Anglo American Call Option 20/01/23 GBP£31.40
Global
(684)
Rio Tinto
Global
63,652
4.5
Teck Resources
Global
51,395
3.6
Trident
Global
5,793
0.4
569,814
40.0
Copper
First Quantum Minerals*
Global
58,504
4.1
Freeport-McMoRan
Global
56,848
}
4.0
Freeport-McMoRan Put Option 20/01/23 US$37
Global
(299)
OZ Minerals Brazil Royalty#~
Latin America
21,199
}
2.7
OZ Minerals
Australasia
17,320
Ivanhoe Electric
United States
23,753
}
2.4
I-Pulse*
United States
10,727
Jetti Resources#
Global
29,873
2.1
Ivanhoe Mines
Other Africa
25,364
1.8
Sociedad Minera Cerro Verde
Latin America
17,171
1.2
Develop Global
Australasia
15,316
1.1
Solaris Resources
Latin America
8,889
0.6
Ero Copper
Latin America
6,316
0.4
Antofagasta
Latin America
6,291
0.4
MCC Mining#
Latin America
5,819
0.4
Aurubis
Global
5,139
0.4
Lundin Mining
Global
3,490
0.2
Hudbay
Global
2,371
0.2
SolGold
Latin America
346
–
314,437
22.0
Gold
Franco Nevada
Global
37,460
2.6
Barrick Gold
Global
32,994
2.3
Wheaton Precious Metals
Global
32,472
2.3
Newmont Corporation
Global
27,014
1.9
Newcrest Mining
Australasia
19,719
1.4
Northern Star Resources
Australasia
17,160
1.2
Endeavour Mining
Other Africa
9,119
0.6
Agnico Eagle Mines
Canada
6,594
0.5
Polymetal International
United Kingdom
2,306
0.2
Polyus
Russia
–
–
184,838
13.0
32
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Main
geographical
exposure
Market
value
£’000
% of
investments
Steel
ArcelorMittal*
Global
57,127
4.0
Nucor
United States
28,520
}
2.0
Nucor Call Option 20/01/23 US$136
United States
(244)
Steel Dynamics
United States
22,285
1.6
Stelco Holdings
Canada
7,457
0.5
115,145
8.1
Industrial Minerals
Sigma Lithium
Latin America
15,728
1.1
Albemarle
Global
13,936
1.0
Mineral Resources
Australasia
13,721
1.0
Sociedad Quimica y Minera ADR
Latin America
13,506
1.0
Iluka Resources
Australasia
11,973
0.8
Lynas Rare Earths
Australasia
10,191
0.7
Chalice Mining
Australasia
7,602
0.5
Sheffield Resources
Australasia
5,945
0.4
92,602
6.5
Aluminium
Norsk Hydro
Global
30,036
2.1
Alcoa
Global
16,798
1.2
46,834
3.3
Iron Ore
Labrador Iron
Canada
24,172
1.7
Champion Iron
Canada
14,546
1.0
Deterra Royalties
Australasia
5,202
0.4
Equatorial Resources
Other Africa
313
–
44,233
3.1
Platinum Group Metals
Bravo Mining
Latin America
11,827
0.9
Northam Platinum
Global
6,050
0.4
Impala Platinum
South Africa
6,011
0.4
Sibanye Stillwater
South Africa
3,768
0.3
27,656
2.0
Nickel
Nickel Mines
Indonesia
10,806
0.8
Bindura Nickel
Global
60
–
Lifezone SPAC PIPE
Commitment
#
Global
–
–
10,866
0.8
Mining Services
Epiroc
Global
6,184
0.4
6,184
0.4
Investments
continued
Section 2: Portfolio
33
Main
geographical
exposure
Market
value
£’000
% of
investments
Uranium
Cameco
Canada
5,363
0.4
5,363
0.4
Other
Woodside Energy Group
Australasia
3,638
0.3
3,638
0.3
Zinc
Titan Mining
United States
2,007
0.1
2,007
0.1
Comprising:
1,423,617
100.0
– Investments
1,424,844
100.1
– Options
(1,227)
(0.1)
1,423,617
100.0
*
Includes fixed income securities.
# Includes investments held at Directors’ valuation.
~
Mining royalty contract.
^
The investment in the Vale
Debentures
is illiquid and has been valued using secondary market pricing information provided by the Brazilian Financial and Capital
Markets Association (ANBIMA).
All investments are in equity shares unless otherwise stated.
The total number of investments as at 31 December 2022 (including options classified as liabilities on the balance sheet) was
68 (31 December 2021: 56).
As at 31 December 2022 the Company did not hold any equity interests in companies comprising more than 3% of a
company’s share capital.
34
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Portfolio analysis
as at 31 December 2022
Commodity Exposure
1
# Represents exposure at 31 December 2021.
•
2022 portfolio
•
2021
#
portfolio
•
2022 Reference Index*
0
10
20
30
40
Zinc
Other
&
Uranium
Mining Services
Nickel
Platinum Group Metals
Iron Ore
Aluminium
Industrial Minerals
Steel
Gold
Copper
Diversified
0.0%
0.9%
0.2%
0.1%
0.4%
0.4%
0.0%
0.0%
0.3%
0.4%
0.0%
0.1%
0.8%
1.4%
0.1%
2.6%
2.0%
3.1%
3.1%
3.9%
2.8%
3.3%
3.8%
3.3%
6.5%
4.1%
2.4%
8.1%
7.7%
16.5%
13.0%
16.4%
20.6%
22.0%
21.5%
9.3%
40.0%
39.5%
39.4%
*
MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (net total return).
&
Represents a very small exposure.
1
Based on index classifications.
Section 2: Portfolio
35
Geographic Exposure
1
1
Based on the principal commodity exposure and place of operation of each investment.
2
Consists of Indonesia, Russia, United Kingdom and United States.
Consists of Indonesia, Russia and United States.
3
•
Global 69.2%
•
Australasia 9.0%
•
Latin America 7.5%
•
Other
2
7.1%
•
Canada 4.1%
•
Other Africa
(ex South Africa) 2.4%
•
South Africa 0.7%
2022
2021
•
Global 69.9%
•
Latin America 8.0%
•
Other
3
7.4%
•
Australasia 6.3%
•
South Africa 3.1%
•
Canada 2.2%
•
Other Africa
(ex South Africa) 3.1%
Governance
Section 3: Governance
37
Freeport-McMoRan continued to deliver operationally at Grasberg, Indonesia, which
contains one of the world’s largest recoverable copper reserves and the largest gold
reserve. The photograph opposite shows one of the control rooms at Grasberg, where
production is expected to continue through to 2041.
PHOTO COURTESY OF FREEPORT-MCMORAN
Governance structure
Responsibility for good governance lies with the Board. The governance
framework of the Company reflects the fact that as an investment
company the Company has no employees, the Directors are all
non‑executive and investment management and administration
functions are outsourced to the Manager and other external service
providers.
The Board
5 scheduled meetings per annum
Five non-executive Directors (NEDs), all independent of the Manager
Chairman
: David Cheyne (since 2 May 2019)
Objectives:
•
To determine the Company’s investment policy, strategy, and parameters;
•
To provide leadership within a framework of prudent and effective controls
which enable risk to be assessed and managed and the Company’s assets to be
safeguarded;
•
To challenge constructively and scrutinise performance of all outsourced
activities; and
•
To determine the Company’s remuneration policy.
Other functions:
•
To carry out the duties of a Nomination Committee, including a regular review of
the Board’s structure and composition, making recommendations for any new
Board appointments.
Audit Committee
2 scheduled meetings per annum
Membership:
All NEDs excluding the Chairman of the Board
Chairman:
Russell Edey (since 1 May 2020)
Key objectives:
•
To oversee financial reporting;
•
To consider the adequacy of the control environment and review the Company’s
risk registers;
•
To review and form an opinion on the effectiveness of the external audit process;
and
•
To review the provisions relating to whistleblowing and fraud.
Management
Engagement Committee
1 scheduled meeting per annum
Membership:
All NEDs
Chairman:
Russell Edey (since 1 May 2020)
Key objectives:
•
To ensure that the provisions of the investment management agreement
follow industry practice, remain competitive and are in the best interests of
shareholders;
•
To review the performance of the Manager and Investment Manager; and
•
To review the performance of other service providers.
38
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Section 3: Governance
39
Directors’ biographies
Russell Edey
Chairman of the Audit Committee,
Management Engagement Committee
and Senior Independent Director
Appointed 8 May 2014
Russell Edey is a non‑executive
director of Fidelity Emerging Markets
Limited and a co‑opted committee
member of the Essex Community
Foundation. He retired as chairman
of Avocet Mining PLC in March 2018
having been on the board since 2010,
served as a non‑executive director of
Old Mutual PLC from June 2004 to
May 2013 and retired as chairman
of AngloGold Ashanti Limited in May
2010 having been a member of that
company’s board since 1998. In June
2014 he retired as a non‑executive
director of several companies in the
Rothschild Group which he joined in
1977. Prior to that, he worked for Anglo
American Corporation of South Africa
Limited in South Africa and Australia.
Attendance record:
Board: 5/5
Audit Committee: 2/2
Management Engagement
Committee: 1/1
David Cheyne
Chairman
Appointed 1 June 2012
David Cheyne is a senior adviser to
Akira Partners LLP and a trustee of
the RAF Benevolent Fund and Stowe
School Foundation. He retired as a
consultant at Linklaters on 31 July
2015 where he was senior partner from
2006 to 2011 and a partner from 1980.
Throughout his career at Linklaters, he
played a central role in a wide range
of corporate transactions, including
M&A deals, joint ventures, flotations
and general corporate finance work. In
particular, he advised on a number of
large mining transactions. He was also
vice chairman of Europe, Middle East
and Africa at Moelis & Company from
2011 to 2015.
Attendance record:
Board: 5/5
Management Engagement
Committee: 1/1
Jane Lewis
Appointed 28 April 2016
Jane Lewis is an investment trust
specialist who, until August 2013, was
a director of corporate finance and
broking at Winterflood Investment
Trusts. Prior to this she worked at
Henderson Global Investors and
Gartmore Investment Management
Limited in investment trust business
development and at West LB Panmure
as an investment trust broker. She
is chairman of Invesco Perpetual UK
Smaller Companies Investment Trust
plc and a non‑executive director of
CT UK Capital and Income Investment
Trust PLC, JPMorgan Global Growth &
Income plc and Majedie Investments
PLC.
Attendance record:
Board: 5/5
Audit Committee: 2/2
Management Engagement
Committee: 1/1
40
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
None of the Directors has a service contract with the Company. The terms of their appointment are detailed in a letter sent to
them when they joined the Board. These letters are available for inspection at the registered office of the Company and will be
available at the Annual General Meeting.
Judith Mosely
Appointed 19 August 2014
Judith Mosely is a non‑executive
director of Galiano Gold Inc., Eldorado
Gold Corp. and Women in Mining
(UK). She is also a trustee of the
Camborne School of Mines Trust. She
was previously Business Development
Director for Rand Merchant Bank and
head of the mining finance team at
Société Générale in London.
Attendance record:
Board: 5/5
Audit Committee: 2/2
Management Engagement
Committee: 1/1
Srinivasan Venkatakrishnan
Appointed 1 August 2021
Srinivasan Venkatakrishnan is the
Chairman of Endeavour Mining Plc
and a non‑executive director of the
Weir Group PLC. He brings a wealth
of mining and financial experience
to the Board gained through his vast
experience of leading global mining
businesses, in a career that spans
across six continents and several
metals, notably gold. He served as CEO
of Vedanta Resources plc from 2018
to 2020 and was CEO of AngloGold
Ashanti Limited between 2013 to 2018,
having previously been Chief Financial
Officer of the business from 2005, and
of Ashanti Goldfields Limited from
2000. His earlier career was as an
accountant and restructuring specialist
with Deloitte & Touche in India and the
UK.
Attendance record:
Board: 5/5
Audit Committee: 2/2
Management Engagement
Committee: 1/1
Directors’ biographies
continued
Section 3: Governance
41
Strategic Report
The Directors present the Strategic Report of BlackRock
World Mining Trust plc for the year ended 31 December
2022. The aim of the Strategic Report is to provide
shareholders with the information to assess how the
Directors have performed their duty to promote the success
of the Company for the collective benefit of shareholders.
The Chairman’s Statement together with the Investment
Manager’s Report form part of this Strategic Report. The
Strategic Report was approved by the Board at its meeting on
2 March 2023.
Principal activities
and has a premium listing on the London Stock Exchange.
Its principal activity is portfolio investment and that of its
subsidiary, BlackRock World Mining Investment Company
Limited (together the Group), is investment dealing. The
Company was incorporated in England on 28 October 1993
Investment trusts are pooled investment vehicles which allow
exposure to a diversified range of assets through a single
investment, thus spreading investment risk.
Objective
The Company’s objective is to maximise total returns to
shareholders through a worldwide portfolio of mining and
metal securities.
The Board recognises the importance of dividends to
shareholders in achieving that objective, in addition to
capital returns.
Strategy, business model and investment
policy
Strategy
The Company invests in accordance with the objective given
above. The Board is collectively responsible to shareholders
for the long‑term success of the Company and is its
governing body. There is a clear division of responsibility
between the Board and BlackRock Fund Managers Limited
(the Manager). Matters reserved for the Board include setting
the Company’s strategy, including its investment objective
and policy, setting limits on gearing (both bank borrowings
and the effect of derivatives), capital structure, governance
and appointing and monitoring of the performance of service
providers, including the Manager.
Business model
The Company’s business model follows that of an externally
managed investment trust. Therefore, the Company does
not have any employees and outsources its activities to
third party service providers including the Manager who
is the principal service provider. In accordance with the
Alternative Investment Fund Managers’ Directive (AIFMD), as
implemented, retained and onshored in the UK, the Company
is an Alternative Investment Fund (AIF). BlackRock Fund
Managers Limited is the Company’s Alternative Investment
Fund Manager.
The management of the investment portfolio and the
administration of the Company have been contractually
delegated to the Manager who in turn (with the permission
of the Company) has delegated certain investment
management and other ancillary services to BlackRock
Investment Management (UK) Limited (the Investment
Manager). The Manager, operating under guidelines
determined by the Board, has direct responsibility for the
decisions relating to the day‑to‑day running of the Company
and is accountable to the Board for the investment, financial
and operating performance of the Company.
The Company delegates fund accounting services to the
Manager, which in turn sub‑delegates these services to The
Bank of New York Mellon (International) Limited (BNYM)
(the Fund Accountant) and also sub‑delegates registration
services to the Registrar, Computershare Investor Services
PLC. Other service providers include the Depositary (also
BNYM). Details of the contractual terms with these service
providers and more details of sub‑delegation arrangements
in place governing custody services are set out in the
Directors’ Report.
Investment policy
The Company’s investment policy is to provide a diversified
investment in mining and metal securities worldwide actively
managed with the objective of maximising total returns.
While the policy is to invest principally in quoted securities,
the Company’s investment policy includes investing in
royalties derived from the production of metals and minerals
as well as physical metals. Up to 10% of gross assets may be
held in physical metals.
In order to achieve its objective, it is intended that the Group
will normally be fully invested, which means at least 90%
of the gross assets of the Company and its subsidiary will
be invested in stocks, shares, royalties and physical metals.
However, if such investments are deemed to be overvalued,
or if the Manager finds it difficult to identify attractively
priced opportunities for investment, then up to 25% of the
Group’s assets may be held in cash or cash equivalents.
Risk is spread by investing in a number of holdings, many of
which themselves are diversified businesses.
The Group may occasionally utilise derivative instruments
such as options, futures and contracts for difference, if it is
deemed that these will, at a particular time or for a particular
period, enhance the performance of the Group in the pursuit
of its objectives. The Company is also permitted to enter into
stock lending arrangements.
As approved by shareholders in August 2013, the Group
may invest in any single holding of quoted or unquoted
investments that would represent up to 20% of gross
assets at the time of acquisition. Although investments
are principally in companies listed on recognised stock
42
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
exchanges, the Company may invest up to 20% of the
Group’s gross assets in investments other than quoted
securities. Such investments include unquoted royalties,
equities or bonds. In order to afford the Company the
flexibility of obtaining exposure to metal and mining related
royalties, it is possible that, in order to diversify risk, all or
part of such exposure may be obtained directly or indirectly
through a holding company, a fund or another investment or
special purpose vehicle, which may be quoted or unquoted.
The Board will seek the prior approval of shareholders to any
unquoted investment in a single company, fund or special
purpose vehicle or any single royalty which represents more
than 10% of the Group’s assets at the time of acquisition.
In March 2015 the Board refined the guidelines associated
with the Company’s royalty strategy and proposed to
maintain the 20% maximum exposure to royalties but the
royalty/unquoted portfolio should itself deliver diversification
across operator, country and commodity. To this end, new
investments into individual royalties/unquoted investments
should not exceed circa 3% of gross assets at the time of
investment. Total exposure to any single operator, including
other issued securities such as debt and/or equity, where
greater than 30% of that operator’s revenues come from the
mine over which the royalty lies, must also not be greater
than 3% at the time of investment. In addition, the guidelines
require that the Investment Manager must, at the time of
investment, manage total exposure to a single operator, via
reducing exposure to listed securities if they are also held in
the portfolio, in a timely manner where royalties/unquoted
investments are revalued upwards. In the jurisdictions where
statutory royalties are possible (in countries where mineral
rights are privately owned) these will be preferred and in
respect of contractual royalties (a contractual obligation
entered into by the operator and typically unsecured) the
valuation must take into account the higher credit risk
involved. Board approval will continue to be required for all
royalty/unquoted investments.
While the Company may hold shares in other listed
investment companies (including investment trusts), the
Company will not invest more than 15% of the Group’s gross
assets in other UK listed investment companies.
The Group’s financial statements are maintained in sterling.
Although many investments are denominated and quoted in
currencies other than sterling, the Board does not intend to
employ a hedging strategy against fluctuations in exchange
rates.
No material change will be made to the investment policy
without shareholder approval.
Gearing
The Investment Manager believes that tactical use of gearing
can add value from time to time. This gearing is typically in
the form of an overdraft or short‑term loan facility, which
can be repaid at any time or matched by cash. The level 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 level of gearing used during
the year was 14.7% and, at the financial reporting date,
net gearing (calculated as borrowings less cash and cash
equivalents as a percentage of net assets) stood at 9.6%
of shareholders’ funds (2021: 9.9%). For further details on
borrowings refer to note 14 in the Financial Statements and
the Alternative Performance Measure in the Glossary.
Portfolio analysis
Information regarding the Company’s investment exposures
is contained within Section 2 (Portfolio), with information
on the ten largest investments on pages 29 and 30, the
investments listed on pages 31
to 33
and portfolio analysis
on pages 34 and
35
. Further information regarding
investment risk and activity throughout the year can be
found in the Investment Manager’s Report.
As at 31 December 2022, the Level 3 unquoted investments
(see note 18 in the Financial Statements) in the OZ Minerals
Brazil Royalty contract and preferred shares and equity
shares of Jetti Resources and MCC Mining were held at
Directors’ valuation, representing a total of £56,891,000
(US$67,269,000) (2021: £33,412,000 (US$45,255,000)).
Unquoted investments can prove to be more risky than listed
investments.
Continuation vote
As agreed by shareholders in 1998, an ordinary resolution for
the continuation of the Company is proposed at each Annual
General Meeting. 2022 was another solid year with mining
companies continuing down the path of capital discipline,
balance sheets in strong shape and earnings and dividends
exceeding expectations. The Directors remain confident on
the value available in the sector and therefore recommend
that shareholders vote in support of the Company’s
continuation.
Performance
Details of the Company’s performance for the year are given
in the Chairman’s Statement. The Investment Manager’s
Report includes a review of the main developments during
the year, together with information on investment activity
within the Company’s portfolio.
Results and dividends
The results for the Company are set out in the Consolidated
Statement of Comprehensive Income. The total profit for the
year, after taxation, was £202,420,000 (2021: £192,470,000)
of which £76,013,000 (2021: £78,910,000) is revenue profit.
It is the Board’s intention to distribute substantially all of
the Company’s available income. The Directors recommend
the payment of a final dividend as set out in the Chairman’s
Statement. Dividend payments/payable for the year ended
31 December 2022 amounted to £75,405,000 (2021:
£78,331,000).
Strategic Report
continued
Section 3: Governance
43
Future prospects
The Board’s main focus is to maximise total returns over
the longer term through investment in mining and metal
assets. The outlook for the Company is discussed in both the
Chairman’s Statement and the Investment Manager’s Report.
Employees, social, community and human
rights issues
As an investment trust, the Company has no direct social or
community responsibilities or impact on the environment and
the Company has not adopted an ESG investment strategy or
exclusionary screens. However, the Directors believe that it is
important and in shareholders’ interests to consider human
rights issues and environmental, social and governance
factors when selecting and retaining investments. Details
of the Company’s approach to ESG integration are set out
on page
53
and details of the Manager’s approach to ESG
integration are set out on pages 54
to 57
.
Modern Slavery Act
As an investment vehicle, the Company does not provide
goods or services in the normal course of business and does
not have customers. The Investment Manager considers
modern slavery as part of supply chains and labour
management within the investment process. Accordingly,
the Directors consider that the Company is not required to
make any slavery or human trafficking statement under the
Modern Slavery Act 2015. In any event, the Board considers
the Company’s supply chains, dealing predominantly with
professional advisers and service providers in the financial
services industry, to be low risk in relation to this matter.
Directors, gender representation and
employees
The Directors of the Company are set out in the Directors’
Biographies on pages 39 and 40. The Board consists of three
male Directors and two female Directors. The Company’s
policy on diversity is set out on page 71. The Company does
not have any executive employees.
Key performance indicators
At each Board meeting, the Directors consider a number of
performance measures to assess the Company’s success
in achieving its objectives. The key performance indicators
(KPIs) used to measure the progress and performance
of the Company over time and which are comparable to
other investment trusts are set out below. As indicated in
the footnote to the table, some of these KPIs fall within the
definition of ‘Alternative Performance Measures’ under
guidance issued by the European Securities and Markets
Authority (ESMA) and additional information explaining
how these are calculated is set out in the Glossary on pages
148 to 151. Additionally, the Board regularly reviews the
performance of the portfolio, as well as the net asset
value and share price of the Company and compares this
against various companies and indices. Information on
the Company’s performance is given in the Chairman’s
Statement.
Year ended
31 December
2022
Year ended
31 December
2021
Net asset value total return
1,2
17.7%
20.7%
Share price total return
1,2
26.0%
17.5%
Premium/(discount) to net asset value
2
1.3%
(5.3)%
Revenue earnings per share
40.68p
43.59p
Total dividends per share
40.00
p
42.50p
Ongoing charges
2,3
0.95%
0.95%
Ongoing charges on gross assets
2,4
0.84%
0.84%
1
This measures the Company’s NAV and share price total return, which assumes dividends paid by the Company have been reinvested.
2
Alternative Performance Measures, see Glossary on pages 148
to
151.
3
Ongoing charges represent the management fee and all other operating expenses, excluding finance costs, direct transaction costs, custody
transaction charges, VAT recovered, taxation, prior year expenses written back and certain non‑recurring items, as a % of average daily net assets.
4
Ongoing charges based on gross assets represent the management fee and all other operating expenses, excluding finance costs, direct
transaction costs, custody transaction charges, VAT recovered, taxation, prior year expenses written back and certain non‑recurring items, as
a % of average daily gross assets. Gross assets are calculated based on net assets during the year before the deduction of the bank overdraft
and loans. Ongoing charges based on gross assets are considered to be an appropriate performance measure as management fees are
payable on gross assets (subject to certain adjustments and deductions).
Principal risks
The Company is exposed to a variety of risks and
uncertainties. As required by the 2018 UK Corporate
Governance Code (the UK Code), the Board has put in place
a robust ongoing process to identify, assess and monitor
the principal risks and emerging risks facing the Company
including those that would threaten its business model.
A core element of this process is the Company’s risk register
which identifies the risks facing the Company and assesses
the likelihood and potential impact of each risk and the
quality of controls operating to mitigate it. A residual risk
rating is then calculated for each risk based on the outcome
of the assessment.
The risk register, its method of preparation and the operation
of key controls in BlackRock’s and third‑party service
providers’ systems of internal control, are reviewed on a
regular basis by the Audit Committee. In order to gain a more
44
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
comprehensive understanding of BlackRock’s and other third
party service providers’ risk management processes and how
these apply to the Company’s business, BlackRock’s internal
audit department provides an annual presentation to the
Audit Committee chairs of the BlackRock investment trusts
setting out the results of testing performed in relation to
BlackRock’s internal control processes. The Audit Committee
also periodically receives and reviews internal control reports
from BlackRock and the Company’s service providers.
The Board has undertaken a robust assessment of both the
principal and emerging risks facing the Company, including
those that would threaten its business model, future
performance, solvency or liquidity. Over the course of 2020
and through to the present time, the COVID-19 pandemic
has given rise to unprecedented challenges for businesses
across the globe. Additionally, the risk that unforeseen
or unprecedented events including (but not limited to)
heightened geo‑political tensions such as the war in Ukraine,
high inflation and the current cost of living crisis has had a
significant impact on global markets. The Board has taken
into consideration the risks posed to the Company by these
events and incorporated these into the Company’s risk
register. The threat of climate change has also reinforced the
importance of more sustainable practices and environmental
responsibility for investee companies.
Emerging risks are considered by the Board as they come
into view and are incorporated into the existing review of the
Company’s risk register. They were also considered as part
of the annual evaluation process. Additionally, the Manager
considers emerging risks in numerous forums and the
BlackRock Risk and Quantitative Analysis team produces
an annual risk survey. Any material risks of relevance
to the Company through the annual risk survey will be
communicated to the Board.
The Board will continue to assess these risks on an ongoing
basis. In relation to the UK Code, the Board is confident
that the procedures that the Company has put in place are
sufficient to ensure that the necessary monitoring of risks
and controls has been carried out throughout the reporting
period.
Strategic Report
continued
The principal risks and uncertainties faced by the Company during the financial year, together with the potential effects,
controls and mitigating factors, are set out in the following table.
Principal Risk
Mitigation/Control
Counterparty
The potential loss that the Company could incur if a counterparty
is unable (or unwilling) to perform on its commitments.
Due diligence is undertaken before contracts are entered into and
exposures are diversified across a number of counterparties.
The Depositary is liable for restitution for the loss of financial
instruments held in custody unless able to demonstrate the loss
was a result of an event beyond its reasonable control.
Investment performance
The returns achieved are reliant primarily upon the performance
of the portfolio.
The Board is responsible for:
•
deciding the investment strategy to fulfil the Company’s
objective; and
•
monitoring the performance of the Investment Manager and
the implementation of the investment strategy.
An inappropriate investment policy may lead to:
•
underperformance compared to the reference index;
•
a reduction or permanent loss of capital; and
•
dissatisfied shareholders and reputational damage.
The Board is also cognisant of the long‑term risk to performance
from inadequate attention to ESG issues and in particular the
impact of climate change.
To manage this risk the Board:
•
regularly reviews the Company’s investment mandate and long‑
term strategy;
•
has set investment restrictions and guidelines which the
Investment Manager monitors and regularly reports on;
•
receives from the Investment Manager a regular explanation of
stock selection decisions, portfolio exposure, gearing and any
changes in gearing, and the rationale for the composition of the
investment portfolio;
•
oversees the maintenance of 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
investment policy; and
•
receives and reviews regular reports showing an analysis of the
Company’s performance against other indices, including the
performance of major companies in the sector.
ESG analysis is integrated into the Manager’s investment process
as set out on pages 54
to 57
. This is overseen by the Board.
Section 3: Governance
45
Principal Risk
Mitigation/Control
Legal and regulatory compliance
The Company has been approved by HM Revenue & Customs as
an investment trust, subject to continuing to meet the relevant
eligibility conditions, and operates as an investment trust in
accordance with Chapter 4 of Part 24 of the Corporation Tax
Act 2010. As such, the Company is exempt from corporation tax
on capital gains tax on the profits realised from the sale of its
investments.
Any breach of the relevant eligibility conditions could lead to the
Company losing investment trust status and being subject to
corporation tax on capital gains realised within the Company’s
portfolio. In such event, the investment returns of the Company
may be adversely affected.
A serious breach could result in the Company and/or the
Directors being fined or the subject of criminal proceedings or
the suspension of the Company’s shares which would in turn
lead to a breach of the Corporation Tax Act 2010.
Amongst other relevant laws, the Company is required to comply
with the provisions of the Companies Act 2006, the Alternative
Investment Fund Managers’ Directive as implemented,
retained and onshored in the UK (AIFMD), the UK Listing Rules,
Disclosure Guidance and Transparency Rules and the Market
Abuse Regulation (as retained and onshored in the UK).
The Investment Manager monitors investment movements, the
level and type of forecast income and expenditure and the amount
of proposed dividends to ensure that the provisions of Chapter 4
of Part 24 of the Corporation Tax Act 2010 are not breached. The
results are reported to the Board at each meeting.
Compliance with the accounting rules affecting investment trusts
is also carefully and regularly monitored.
The Company Secretary, Manager and the Company’s
professional advisers provide regular reports to the Board in
respect of compliance with all applicable rules and regulations.
The Board and the Manager also monitor changes in government
policy and legislation which may have an impact on the Company.
The Company’s Investment Manager, BlackRock, at all times
complies with the sanctions administered by the UK Office of
Financial Sanctions Implementation, the United States Treasury’s
Office of Foreign Assets Control, the United Nations, European
Union member states and any other applicable regimes.
Market
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 currency exchange rates, 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.
Market risk includes the potential impact of events which are
outside the Company’s control, including (but not limited to)
heightened geo‑political tensions and military conflict, a global
pandemic and high inflation.
Companies operating in the sectors in which the Company
invests may be impacted by new legislation governing climate
change and environmental issues, which may have a negative
impact on their valuation and share price.
The Board considers the diversification of the portfolio, 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.
The Board also recognises the benefits of a closed‑end fund
structure in extremely volatile markets such as those experienced
as a consequence of the COVID-19 pandemic and the Russia/
Ukraine conflict. Unlike open‑ended counterparts, closed‑end
funds are not obliged to sell‑down portfolio holdings at low
valuations to meet liquidity requirements for redemptions.
During times of elevated volatility and market stress, the ability
of a closed‑end fund structure to remain invested for the long
term enables the Investment Manager to adhere to disciplined
fundamental analysis from a bottom‑up perspective and be ready
to respond to dislocations in the market as opportunities present
themselves.
The Investment Manager
seeks to understand the Environmental,
Social and Governance (ESG) risks and opportunities facing
companies and industries in the portfolio. The Company has
not adopted an ESG investment strategy and does not exclude
investment in stocks based on ESG criteria, but the Investment
Manager considers ESG information when conducting research
and due diligence on new investments and again when
monitoring investments in the portfolio. Further information on
BlackRock’s approach to ESG integration can be found on pages
54
to 57
.
46
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Principal Risk
Mitigation/Control
Operational
In common with most other investment trust companies, the
Company has no employees. The Company therefore relies
on the services provided by third parties and is dependent on
the control systems of the Manager, the Depositary and Fund
Accountant which maintain the Company’s assets, dealing
procedures and accounting records.
The security of the Company’s assets, dealing procedures,
accounting records and adherence to regulatory and legal
requirements depend on the effective operation of the systems
of these third party service providers. There is a risk that a major
disaster, such as floods, fire, a global pandemic, or terrorist
activity, renders the Company’s service providers unable to
conduct business at normal operating effectiveness.
Failure by any service provider to carry out its obligations to the
Company could have a material adverse effect on the Company’s
performance. Disruption to the accounting, payment systems or
custody records (including cyber security risk) could prevent the
accurate reporting and monitoring of the Company’s financial
position.
Due diligence is undertaken before contracts are entered into with
third‑party service providers. Thereafter, the performance of the
provider is subject to regular review and reported to the Board.
The Board reviews on a regular basis an assessment of the fraud
risks that the Company could potentially be exposed to and also a
summary of the controls put in place by the Manager, Depositary,
Custodian, Fund Accountant and Registrar specifically to mitigate
these risks.
Most third‑party service providers produce Service Organisation
Control (SOC 1) reports to provide assurance regarding the
effective operation of internal controls as reported on by their
reporting accountants. These reports are provided to the Audit
Committee for review. The Committee would seek further
representations from service providers if not satisfied with the
effectiveness of their control environment.
The Company’s financial instruments held in custody are subject
to a strict liability regime and, in the event of a loss of such
financial instruments, the Depositary must return financial
assets of an identical type or the corresponding amount, unless
able to demonstrate the loss was a result of an event beyond its
reasonable control.
The Board reviews the overall performance of the Manager,
Investment Manager and all other third‑party service providers on
a regular basis and compliance with the Investment Management
Agreement annually.
The Board also considers the business continuity arrangements
of the Company’s key service providers on an ongoing basis and
reviews these as part of its review of the Company’s risk register. In
respect of the risks which were posed by the COVID-19 pandemic
in terms of the ability of service providers to function effectively,
the Board received reports from key service providers setting out
the measures that they had put in place to address the crisis, in
addition to their existing business continuity framework. Having
considered these arrangements and reviewed service levels, the
Board is confident that a good level of service has been and will be
maintained.
Financial
The Company’s investment activities expose it to a variety of
financial risks which include market risk, counterparty credit risk,
liquidity risk and the valuation of financial instruments.
Details of these risks are disclosed in note 18 to the Financial
Statements, together with a summary of the policies for managing
these risks.
In the view of the Board, there have not been any changes to the fundamental nature of these risks and these principal risks
and uncertainties are equally applicable for the current financial year.
Strategic Report
continued
Section 3: Governance
47
Viability statement
In accordance with provision 31 of the 2018 UK Corporate
Governance Code, the Directors have assessed the prospects
of the Company over a longer period than the twelve months
referred to by the ‘Going Concern’ guidelines. The Company
is an investment trust with the objective of providing an
attractive level of income return together with capital
appreciation over the long term.
The Directors expect the Company to continue for the
foreseeable future and have therefore conducted this review
for a period up to the Annual General Meeting in 2026. The
Directors assess viability over a rolling three‑year period
as they believe it best balances the Company’s long‑term
objective, its financial flexibility and scope, with the difficulty
in forecasting economic conditions which could affect
both the Company and its shareholders. The Company also
undertakes a continuation vote every year with the next one
taking place at the forthcoming Annual General Meeting.
In making an assessment on the viability of the Company, the
Board has considered the following:
•
the impact of a significant fall in commodity markets on
the value of the Company’s investment portfolio;
•
the ongoing relevance of the Company’s investment
objective, business model and investment policy in the
prevailing market;
•
the principal and emerging risks and uncertainties, as set
out above, and their potential impact;
•
the level of ongoing demand for the Company’s shares;
•
the Company’s share price discount/premium to NAV;
•
the liquidity of the Company’s portfolio; and
•
the level of income generated by the Company and future
income and expenditure forecasts.
The Directors have concluded that there is a reasonable
expectation that the Company will continue in operation and
meet its liabilities as they fall due over the period of their
assessment based on the following considerations:
•
the Investment Manager’s compliance with the investment
objective and policy, its investment strategy and asset
allocation;
•
the portfolio is liquid and mainly comprises readily
realisable assets which continue to offer a range of
investment opportunities for shareholders as part of a
balanced investment portfolio;
•
the operational resilience of the Company and its key
service providers and their ability to continue to provide a
good level of service for the foreseeable future;
•
the effectiveness of business continuity plans in place for
the Company and its key service providers;
•
the ongoing processes for monitoring operating costs
and income which are considered to be reasonable in
comparison to the Company’s total assets;
•
the Board’s discount management policy; and
•
the Company is a closed‑end investment company and
therefore does not suffer from the liquidity issues arising
from unexpected redemptions.
In addition, the Board’s assessment of the Company’s ability
to operate in the foreseeable future is included in the Going
Concern Statement which can be found on page 60 in the
Directors’ Report.
48
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Section 172 statement: Promoting the success of the Company
The Companies (Miscellaneous Reporting) Regulations 2018 require directors of large companies to explain more fully
how they have discharged their duties under Section 172(1) of the Companies Act 2006 in promoting the success of their
companies for the benefit of members as a whole. This includes the likely consequences of their decisions in the longer term
and how they have taken wider stakeholders’ needs into account.
The disclosure that follows covers how the Board has engaged with and understands the views of stakeholders and how
stakeholders’ needs have been taken into account, the outcome of this engagement and the impact that it has had on the
Board’s decisions. The Board considers the main stakeholders in the Company to be the Manager, Investment Manager and
the shareholders. In addition to this, the Board considers investee companies and key service providers of the Company to be
stakeholders; the latter comprise the Company’s Depositary, Registrar, Fund Accountants and Brokers.
Stakeholders
Shareholders
Manager and Investment
Manager
Other key service providers
Investee companies
Continued shareholder support
and engagement are critical to
the continued existence of the
Company and the successful
delivery of its long‑term
strategy. The Board is focused
on fostering good working
relationships with shareholders
and on understanding the
views of shareholders in order
to incorporate them into the
Board’s strategy and objective
in maximising total returns
to shareholders through a
worldwide portfolio of mining
and metal securities.
The Board’s main working
relationship is with the
Manager, who is responsible
for the Company’s portfolio
management (including
asset allocation, stock and
sector selection) and risk
management, as well as
ancillary functions such as
administration, secretarial,
accounting and marketing
services. The Manager has
sub‑delegated portfolio
management to the Investment
Manager. Successful
management of shareholders’
assets by the Investment
Manager is critical for the
Company to successfully
deliver its investment strategy
and meet its objective. The
Company is also reliant on the
Manager as AIFM to provide
support in meeting relevant
regulatory obligations under
the AIFMD and other relevant
legislation.
In order for the Company to
function as an investment trust
with a listing on the premium
segment of the official list
of the Financial Conduct
Authority (FCA) and trade on
the London Stock Exchange’s
(LSE) main market for listed
securities, the Board relies on
a diverse range of advisors for
support in meeting relevant
obligations and safeguarding
the Company’s assets. For this
reason, the Board considers
the Company’s Depositary,
Registrar, Fund Accountants
and Brokers to be stakeholders.
The Board maintains regular
contact with its key external
service providers and receives
regular reporting from them
through the Board and
Committee meetings, as well as
outside of the regular meeting
cycle.
Portfolio holdings are
ultimately shareholders’
assets and the Board
recognises the importance
of good stewardship and
communication with investee
companies in meeting the
Company’s investment
objective and strategy. The
Board monitors the Manager’s
stewardship arrangements
and receives regular feedback
from the Manager in respect of
meetings with the management
of investee companies.
A summary of the key areas of engagement undertaken by the Board with its key stakeholders in the year under review and
how Directors have acted upon this to promote the long‑term success of the Company are set out in the table below.
Area of Engagement
Issue
Engagement
Impact
Investment mandate
and objective
The Board is committed to
promoting the role and success
of the Company in delivering
on its investment mandate to
shareholders over the long term.
The Board also has responsibility
to shareholders to ensure that
the Company’s portfolio of assets
is invested in line with the stated
investment objective and in a way
that ensures an appropriate balance
between spread of risk and portfolio
returns.
The Board worked closely
with the Investment Manager
throughout the year in further
developing investment strategy
and underlying policies, not
simply for the purpose of
achieving the Company’s
investment objective but in the
interests of shareholders and
future investors. In addition the
Company continues to seek out
new unquoted investments which
could add long‑term value.
The portfolio activities undertaken
by the Investment Manager can
be found in their Report. The
Investment Manager continues to
actively look for opportunities to
grow royalty exposure given it is a
key differentiator of the Company
and an effective mechanism to
lock‑in long‑term income which
further diversifies the Company’s
revenues.
Details regarding the Company’s
NAV and share price performance
can be found in the Chairman’s
Statement and in this Strategic
Report.
Strategic Report
continued
Section 3: Governance
49
Area of Engagement
Issue
Engagement
Impact
Responsible
investing
More than ever, the importance of
good governance and sustainability
practices are key factors in making
investment decisions. Climate
change is becoming a defining
factor in companies’ long‑term
prospects across the investment
spectrum with significant and
lasting implications for economic
growth and prosperity. The mining
industries in which the Company’s
investment universe operate are
facing ethical and sustainability
issues that cannot be ignored by
asset managers and investment
companies alike.
The Board works closely with
the Investment Manager to
regularly review the Company’s
performance, investment policy
and strategy to seek to ensure
that the Company’s investment
objective continues to be met in
an effective and responsible way
in the interests of shareholders
and future investors. The
Company has not adopted an ESG
investment strategy and does
not exclude investment in stocks
based on ESG criteria, but the
Board believes that responsible
investment and sustainability
are integral to the longer‑term
delivery of the Company’s success.
The Investment Manager’s
approach to the consideration
of ESG factors in respect of the
Company’s portfolio, as well
as the Investment Manager’s
engagement with investee
companies to encourage sound
corporate governance practices,
are kept under review by the
Board. The Board also expects to
be informed by the Investment
Manager of any sensitive voting
issues involving the Company’s
investments.
The Investment Manager reports
to the Board in respect of its
approach to ESG integration;
a summary of BlackRock’s
approach to ESG integration is
set out on pages 54
to 57
. The
Investment Manager’s approach
to engagement with investee
companies and voting guidelines
is summarised on page 60 and
further detail is available on the
BlackRock website.
The Board and the Investment
Manager believe there is likely
to be a positive correlation
between strong ESG practices
and investment performance
over time. This is especially
important in mining given the
long investment cycle and the
impact of ESG practices on the
ability of a mining company to
maintain its social licence to
operate. ESG is one of the many
factors that we look at and site
visits to companies’ operations
(when circumstances permit)
provide valuable insights into their
ESG practices. The Investment
Manager has continued to
engage with investee companies
virtually and has, where necessary,
conducted virtual site visits.
In 2020, BlackRock exited its
active public debt and equity
investment in businesses
generating greater than 25% of
their revenue from thermal coal
production due to the heightened
risks associated with their
economic activity. During the year
under review, the Company has
had no exposure to companies
whose principal activity is the
extraction of thermal coal.
Within the parameters of the
Company’s existing investment
policy, the Investment Manager
is continuing to look for
opportunities to deploy capital in
growth investments that should
benefit from the energy transition.
It is likely that this area will
become a more significant part of
the portfolio.
50
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Area of Engagement
Issue
Engagement
Impact
Shareholders
Continued shareholder support
and engagement are critical to
the continued existence of the
Company and the successful
delivery of its long‑term strategy.
The Board is committed to
maintaining open channels of
communication and to engage
with shareholders. The Company
welcomes and encourages
attendance and participation
from shareholders at its Annual
General Meetings. Shareholders
will have the opportunity to meet
the Directors and Investment
Manager and to address
questions to them directly. The
Investment Manager will also
provide a presentation on the
Company’s performance and the
outlook for the mining sector.
The Annual Report and Half Yearly
Financial Report are available on
the BlackRock website and are
also circulated to shareholders
either in printed copy or via
electronic communications. In
addition, regular updates on
performance, monthly factsheets,
the daily NAV and other
information are also published
on the website at www.blackrock.
com/uk/brwm.
The Board also works closely
with the Manager to develop the
Company’s marketing strategy
with the aim of ensuring effective
communication with shareholders.
Unlike trading companies, one‑
to‑one shareholder meetings
normally take the form of a
meeting with the Investment
Manager as opposed to members
of the Board. The Company’s
willingness to enter into
discussions with institutional
shareholders is also demonstrated
by the programmes of institutional
presentations by the Investment
Manager.
If shareholders wish to raise
issues or concerns with the Board,
they are welcome to do so at any
time. The Chairman is available to
meet directly with shareholders
periodically to understand their
views on governance and the
Company’s performance where
they wish to do so. He may be
contacted via the Company
Secretary whose details are given
on page 141.
The Board values any feedback
and questions from shareholders
ahead of and during Annual
General Meetings in order to
gain an understanding of their
views and will take action when
and as appropriate. Feedback
and questions will also help the
Company evolve its reporting,
aiming to make reports more
transparent and understandable.
Feedback from all substantive
meetings between the Investment
Manager and shareholders will
be shared with the Board. The
Directors will also receive updates
from the Company’s broker and
Kepler, marketing consultants, on
any feedback from shareholders,
as well as share trading activity,
share price performance and
an update from the Investment
Manager.
The portfolio management team
attended a number of professional
investor meetings (many by video
conference) and held discussions
with a number of wealth
management desks and offices
in respect of the Company during
the year under review.
Portfolio holdings are ultimately
shareholders’ assets and the
Board recognises the importance
of good stewardship and
communication with investee
companies in meeting the
Company’s investment objective
and strategy. The Board monitors
the Manager’s stewardship
arrangements and receives
regular feedback from the
Investment Manager in respect of
meetings with the management of
portfolio companies.
Strategic Report
continued
Section 3: Governance
51
Area of Engagement
Issue
Engagement
Impact
Management of
share rating
The Board recognises the
importance to shareholders that
the market price of the Company’s
shares should not trade at either
a significant discount or premium
to their prevailing NAV. The Board
believes this may be achieved by the
use of share buyback powers and
the issue of shares.
The Board monitors the
Company’s discount on an
ongoing basis and receives
regular updates from the
Manager and the Company’s
Brokers regarding the level of
discount. The Board believes that
the best way of maintaining the
share rating at an optimal level
over the long term is to create
demand for the shares in the
secondary market. To this end, the
Investment Manager is devoting
considerable effort to broadening
the awareness of the Company,
particularly to wealth managers
and to the wider retail market.
In addition, the Board has worked
closely with the Manager to
develop the Company’s marketing
strategy, with the aim of ensuring
effective communication with
existing shareholders and to
attract new shareholders to the
Company in order to improve
liquidity in the Company’s shares
and to sustain the share rating of
the Company.
The Board continues to monitor
the Company’s premium/discount
to NAV and will look to issue or buy
back shares if it is deemed to be in
the interests of shareholders as a
whole. The Company participates
in a focused investment trust
sales and marketing initiative
operated by the Manager on
behalf of the investment trusts
under its management. Further
details are set out on page 59.
During the financial year the
Company reissued 5,071,920
shares from treasury. A further
150,000 shares have been
reissued from treasury since
the year end. As at 28 February
2023 the Company’s shares were
trading at a discount of 0.2% to
the cum income NAV.
Service levels
of third party
providers
The Board acknowledges the
importance of ensuring that the
Company’s principal suppliers
are providing a suitable level of
service, including the Investment
Manager in respect of investment
performance and delivering on the
Company’s investment mandate;
the Custodian and Depositary in
respect of their duties towards
safeguarding the Company’s assets;
the Registrar in its maintenance of
the Company’s share register and
dealing with investor queries; and
the Company’s Brokers in respect
of the provision of advice and
acting as a market maker for the
Company’s shares.
The Manager reports to the Board
on the Company’s performance on
a regular basis. The Board carries
out a robust annual evaluation
of the Manager’s performance,
their commitment and available
resources.
The Board performs an annual
review of the service levels of all
third‑party service providers and
concludes on their suitability to
continue in their role. The Board
receives regular updates from the
AIFM, Depositary, Registrar and
Brokers on an ongoing basis.
The Board has also worked closely
with the Manager to gain comfort
that relevant business continuity
plans are operating effectively for
all of the Company’s key service
providers.
All performance evaluations were
performed on a timely basis and
the Board concluded that all
third‑party service providers,
including the Manager and
Investment Manager, were
operating effectively and
providing a good level of service.
The Board has received updates
in respect of business continuity
planning from the Company’s
Manager, Custodian, Depositary,
Fund Accountant, Registrar and
Printer and is confident that
arrangements are in place to
ensure a good level of service will
continue to be provided and that
measures are in place so that
working remotely, which occurred
during the COVID-19 pandemic,
can be reinstated.
52
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Area of Engagement
Issue
Engagement
Impact
Board composition
The Board is committed to ensuring
that its own composition brings an
appropriate balance of knowledge,
experience and skills, and that it
is compliant with best corporate
governance practice under the UK
Code, including guidance on tenure
and the composition of the Board’s
committees.
All Directors are subject to a
formal evaluation process on
an annual basis (more details
and the conclusions of the 2022
evaluation process are given
on page 72). All Directors stand
for re‑election by shareholders
annually.
Shareholders may attend the
Annual General Meeting and
raise any queries in respect of
Board composition or individual
Directors in person or may
contact the Company Secretary
or the Chairman using the details
provided on page 141 with any
issues.
As at the date of this report, the
Board was comprised of three
men and two women. Under the
AIC Code the tenure of a director
who is elevated to Chairman
may be extended by three years.
The Board has decided that
this extension should apply to
Mr Cheyne’s tenure which will
therefore be extended until the
Annual General Meeting in the
Spring of 2024.
Mr Edey, who
will be reaching his nine year
tenure in May, will not be seeking
re‑election at the forthcoming
Annual General Meeting. The
Board is currently undertaking
a review of succession planning
arrangements having identified
the need for a new Director
when Mr Edey retires. Details
of each Director’s contribution
to the success and promotion
of the Company are set out in
the Directors’ Report on page
63 and details of the Directors’
biographies can be found on
pages 39 and 40.
The Directors are not aware
of any issues that have been
raised directly by shareholders
in respect of Board composition
in the year under review. Details
for the proxy voting results in
favour and against individual
Directors’ re‑election at the 2022
Annual General Meeting are given
on the Manager’s website at
www.blackrock.com/uk/brwm.
Strategic Report
continued
Section 3: Governance
53
Environmental, Social and Governance issues and approach
The Board’s approach
Environmental, Social and Governance (ESG) issues can present both opportunities and threats to long‑term investment
performance. The Company’s investment universe comprises sectors that are undergoing significant structural change and
are likely to be highly impacted by increasing regulation as a result of climate change and other social and governance factors.
Your Board is committed to ensuring that we have appointed a Manager that integrates ESG considerations into its investment
process and has the skill to navigate the structural transition that the Company’s investment universe is undergoing.
The Board believes effective engagement with company management is, in most cases, the most effective way of driving
meaningful change in the behaviour of investee company management. While the Company does not have an ESG or impact
focused investment strategy or apply exclusionary screens, as in most cases the Company will not invest in companies which
have high ESG risks and no plans to address existing deficiencies. Where the Board is not satisfied that an investee company
is taking steps to address matters of an ESG nature, it may discuss with the Manager how this situation might be resolved,
including potentially by a full disposal of shares.
ESG integration does not change the Company’s investment objective or constrain the Investment Manager’s investable
universe, and does not mean that an ESG or impact focused investment strategy or any exclusionary screens have been or will
be adopted by the Company. Similarly, ESG integration does not determine the extent to which the Company may be impacted
by sustainability risks. More information on BlackRock’s global approach to ESG integration, as well as activity specific to the
BlackRock World Mining Trust plc portfolio is set out below.
The Company does not meet the criteria for Article 8 or 9 products under the EU Sustainable Finance Disclosure Regulation
(SFDR) and the investments underlying this financial product do not take into account the EU criteria for environmentally
sustainable economic activities. The Investment Manager has access to a range of data sources, including principal adverse
indicator (PAI) data, when making decisions on the selection of investments. However, whilst BlackRock considers ESG risks
for all portfolios and these risks may coincide with environmental or social themes associated with the PAIs, the Company
does not commit to considering PAIs in driving the selection of its investments. Additional information on ESG integration,
sustainability risk and SFDR is set out in the AIFMD Fund Disclosures available on the Company’s website.
BlackRock World Mining Trust plc – BlackRock Investment Stewardship engagement with
portfolio companies in 2022
Given the Board’s belief in the importance of engagement and communication with portfolio companies, they receive regular
updates from the Investment Manager in respect of activity undertaken for the year under review. The Investment Manager
engages with company management teams and undertakes company meetings to identify the best management teams
with the ability to create value for shareholders over the long term. In addition, BlackRock also has a separate BlackRock
Investment Stewardship (BIS) team. Consistent with BlackRock’s fiduciary duty as an asset manager, BIS seeks to support
investee companies in their efforts to deliver long‑term durable financial performance on behalf of BlackRock’s clients. BIS
engages with investee companies to build its understanding of these companies’ approach to addressing material risks and
opportunities. The Board notes that over the year to 31 December 2022, 58 total company engagements were held with the
management teams of 37 portfolio companies representing 55% of the portfolio by value at 31 December 2022. To put this
into context, there were 69 companies in the BlackRock World Mining Trust plc portfolio at 31 December 2022. Additional
information is set out in the table and charts below and overleaf, as well as the key engagement themes for the meetings held
in respect of the Company’s portfolio holdings.
Year ended
31 December
2022
Number of engagements held
58
Number of companies met
37
% of equity investments covered
55
Shareholder meetings voted at
61
Number of proposals voted on
648
Number of votes against management
36
% of total votes represented by votes against management
5.2
Source: Institutional Shareholder Services as at 31 December 2022.
54
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Environmental engagement topics¹
Climate Risk Management
Board Composition and Effectiveness
Business Oversight/Risk Management
Corporate Strategy
Remuneration
Human Capital Management
66%
57%
47%
48%
41%
38%
38%
33%
34%
Social Risks and Opportunities
Executive Management
Governance Structure
Governance
Social
Environmental
84%
59%
81%
Engagement themes¹
84%
59%
81%
1
Engagements include multiple company meetings during the year with the same company. Most engagement conversations cover multiple
topics and are based on BlackRock vote guidelines and BlackRock’s engagement priorities can be found at: www.blackrock.com/corporate/
about‑us/investment‑stewardship#engagement‑priorities.
Percentages reflect the number of meetings held in respect of the Company’s portfolio holdings at which a particular topic is discussed as a
percentage of the total meetings held; as more than one topic is discussed at each meeting the total will not add up to 100%.
The importance and challenges of considering ESG when investing in
the Natural Resources Sector and BlackRock’s approach to ESG
Integration
Environmental
Social
Corporate Governance
Impact
As well as the longer‑term contribution to
carbon emissions and the impact on the
environment, the activities undertaken
by many companies in the portfolio such
as digging mines will inevitably have
an impact on local surroundings. It is
important how companies manage this
process and ensure that an appropriate
risk oversight framework is in place, with
consideration given to all stakeholders.
The significant fall in the market
cap of companies like Vale, after the
Brumadinho dam collapse, highlights
the key role that ESG has on share price
performance.
BlackRock’s approach to climate risk
and opportunities and the global energy
transition is based on our role as a
fiduciary to our clients. As the world
works toward a transition to a low‑
carbon economy, we are interested in
hearing from companies about their
strategies and plans for responding
to the challenges and capturing the
opportunities that this transition creates.
When companies consider climate‑
related risks, it is likely that they will also
assess their impact and dependence on
natural capital.
BlackRock believes it is vital that natural
resources companies maintain their
social licence to operate. BIS’ Global
Principles underscore our belief that
companies are best placed to deliver
value for long‑term shareholders like
BlackRock’s clients when they also
consider the interests of their other
key stakeholders, which generally will
include workers, business partners (such
as suppliers and distributors), clients
and consumers, government and the
communities in which they operate.
In our experience, companies that
build strong relationships with their
stakeholders are more likely to meet
their own strategic objectives, while
poor relationships may create adverse
impacts that expose a company to legal,
regulatory, operational and reputational
risks and jeopardise their ability to
deliver sustainable, long‑term financial
performance.
As with all companies, good corporate
governance is especially critical for
natural resources companies. The
performance and effectiveness of
the board is critical to the success
of a company, the protection of
shareholders’ interests, and long‑term
shareholder value creation. Governance
issues, including the management
of material sustainability issues that
have a significant impact for natural
resources companies, all require
effective leadership and oversight from a
company’s board.
We believe companies with experienced,
engaged and diverse directors, who
are effective in actively advising and
overseeing management as a board,
are well‑positioned to deliver long‑term
value creation.
Strategic Report
continued
Section 3: Governance
55
Environmental
Social
Corporate Governance
BIS – Examples of approach to voting and engagement across ESG categories
(year ended 30 June 2022)
1
BIS held 2,058 engagements on climate
and natural capital topics.
BIS voted to signal concerns about
climate action or disclosure at 234
companies (321 last year). BIS did not
support the election of 176 directors for
climate‑related concerns (254 last year).
In the year to 30 June 2022, BIS
continued to focus its stewardship
efforts where the energy transition is
likely to materially impact a company’s
performance. To that end, the BIS
Climate Focus Universe, which includes
over 1,000 carbon‑intensive public
companies, represents nearly 90% of
the global scope 1 and 2 GHG emissions
of the companies in which BlackRock
invests on behalf of our clients. More
detail can be found at www.blackrock.
com/corporate/literature/publication/
blk‑climate‑focus‑universe.pdf.
BIS held 1,283 engagements related to
company impacts on people.
In the year to 30 June 2022, BIS voted
on 200 shareholder proposals related
to social issues. BIS supported 38
shareholder proposals relating to
company impacts on people (social‑
related proposals) out of 200, i.e.,
approximately 19%.
BIS centers our stewardship work in
corporate governance. That is why board
quality and effectiveness remain a top
engagement priority and a key factor in
the majority of votes cast on behalf of
clients.
BIS held 2,326 engagements on board
quality and effectiveness; 2,115 focused
on strategy, purpose and financial
resilience; and 1,352 on incentives
aligned with value creation.
Like last year, the leading reasons for
BIS not supporting director elections
in the year to 30 June 2022 — and
management proposals more broadly
— were governance‑related: 1) lack of
board independence, 2) lack of board
diversity, 3) directors having too many
board commitments and 4) executive
compensation that was not aligned
with company strategy or long‑term
performance.
BIS did not support 1,521 companies
globally over concerns about board
independence.
BIS did not support 936 companies
globally for concerns related to board
diversity.
BIS did not support 661 companies
globally for concerns related to
overcommitment.
BIS did not support 576 companies due
to concerns over compensation.
1
The data in this table applies to BIS’ engagements globally. Most engagement conversations cover multiple topics. BIS’ engagement
statistics reflect the primary topics discussed during the meeting. More detail can be found at: www.blackrock.com/corporate‑literature/
publication/2022‑investment‑stewardship‑voting‑spotlight.pdf
BIS held 3,693 engagements with 2,464 unique companies globally between 1 July 2021 and 30 June 2022. Globally, BIS
voted on behalf of those clients who authorised us to do so, at more than 18,000 shareholder meetings on more than 173,000
proposals. Similar to previous years, shareholder proposals represented less than 1% of the total proposals BIS voted on
during in the year to 30 June 2022. More detail can be found at: www.blackrock.com/corporate/literature/publication/2022-
investment‑stewardship‑voting‑spotlight.pdf
56
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
BlackRock’s approach to ESG integration
BlackRock believes that sustainability risk – and climate
risk in particular – now equates to investment risk, and this
will drive a profound reassessment of risk and asset values
as investors seek to react to the impact of climate policy
changes. This in turn (in BlackRock’s view) is likely to drive
a significant reallocation of capital away from traditional
carbon intensive industries over the next decade. BlackRock
believes that carbon‑intensive companies will play an
integral role in unlocking the full potential of the energy
transition, and to do this, they must be prepared to adapt,
innovate and pivot their strategies towards a low carbon
economy.
As part of BlackRock’s structured investment process, ESG
risks and opportunities (including sustainability/climate
risk) are considered within the portfolio management team’s
fundamental analysis of companies and industries. ESG
factors are an important consideration of the BlackRock
Sectors and Thematics team’s investment process and the
Company’s portfolio managers work closely with BIS to
assess the governance quality of companies and understand
any potential issues, risks or opportunities.
As part of their approach to ESG integration, the portfolio
managers use ESG information when conducting research
and due diligence on new investments and again when
monitoring investments in the portfolio. In particular,
portfolio managers now have access to 1,200 key ESG
performance indicators in Aladdin (BlackRock’s proprietary
trading system) from third‑party data providers. BlackRock’s
internal sustainability research framework scoring is also
available alongside third‑party ESG scores in core portfolio
management tools. BlackRock’s analysts’ sector expertise
and local market knowledge allows it to engage with
companies through direct interaction with management
teams and conducting site visits. In conjunction with the
portfolio management team, BIS meets with boards of
companies frequently to evaluate how they are strategically
managing their longer‑term issues, including those
surrounding ESG and the potential impact these may have
on company financials. BIS’s and the portfolio management
team’s understanding of ESG issues is further supported
by BlackRock’s Sustainable and Transition Solutions (STS)
function. STS looks to advance ESG research and integration,
active engagement and the development of sustainable
investment solutions across the firm.
Investment stewardship
Consistent with BlackRock’s fiduciary duty as an asset
manager, BIS seeks to support investee companies in their
efforts to deliver long‑term durable financial performance
on behalf of our clients. These clients include public and
private pension plans, governments, insurance companies,
endowments, universities, charities and, ultimately, individual
investors, among others. BIS serves as an important link
between BlackRock’s clients and the companies they
invest in. Clients depend on BlackRock to help them meet
their investment goals; the business and governance
decisions that companies make will have a direct impact on
BlackRock’s clients’ long‑term investment outcomes and
financial well‑being.
Global principles
BlackRock’s approach to corporate governance and
stewardship is comprised in BIS’ Global Principles and
market‑specific voting guidelines. BIS’ policies set out
the core elements of corporate governance that guide its
investment stewardship activities globally and within each
regional market, including when voting at shareholder
meetings for those clients who have authorised BIS to
vote on their behalf. Each year, BIS reviews its policies and
updates them as necessary to reflect changes in market
standards and regulations, insights gained over the year
through third‑party and its own research, and feedback from
clients and companies. BIS’ Global Principles are available on
its website at www.blackrock.com/corporate/literature/fact‑
sheet/blk‑responsible‑investment‑engprinciples‑global.pdf
Market-specific proxy voting guidelines
BIS’ voting guidelines are intended to help clients and
companies understand its thinking on key governance
matters. They are the benchmark against which it assesses a
company’s approach to corporate governance and the items
on the agenda to be voted on at a shareholder meeting. BIS
applies its guidelines pragmatically, taking into account a
company’s unique circumstances where relevant. BlackRock
informs voting decisions through research and engages as
necessary. BIS reviews its voting guidelines annually and
updates them as necessary to reflect changes in market
standards, evolving governance practice and insights gained
from engagement over the prior year.
BIS’ market‑specific voting guidelines are available on
its website at www.blackrock.com/corporate/about‑us/
investment‑stewardship#stewardship‑policies
BlackRock is committed to transparency in terms of
disclosure on its stewardship activities on behalf of clients.
BIS publishes its stewardship policies – such as the Global
Principles, engagement priorities, and voting guidelines –
to help BlackRock’s clients understand its work to advance
their interests as long‑term investors in public companies.
Additionally, BIS published both annual and quarterly reports
detailing its stewardship activities, as well as vote bulletins
that describe its rationale for certain votes at high profile
shareholder meetings.
More detail in respect of BIS reporting can be found at
www.blackrock.com/corporate/about‑us/investment‑
stewardship
Strategic Report
continued
Section 3: Governance
57
BlackRock’s reporting and disclosures
In terms of its own reporting, BlackRock believes that the
Sustainability Accounting Standards Board provides a clear
set of standards for reporting sustainability information
across a wide range of issues, from labour practices to data
privacy to business ethics. For evaluating and reporting
climate‑related risks, as well as the related governance
issues that are essential to managing them, the Task Force
on Climate‑related Financial Disclosures (TCFD) provides
a valuable framework. BlackRock recognises that reporting
to these standards requires significant time, analysis, and
effort. BlackRock’s 2021 TCFD report can be found at www.
blackrock.com/corporate/literature/continuous‑disclosure‑
and‑important‑information/tcfd‑report-2021‑blkinc.pdf
By order of the Board
CAROLINE DRISCOLL
For and on behalf of
BlackRock Investment Management (UK) Limited
Company Secretary
2 March 2023
58
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
The Directors present the audited Annual Report and
Financial Statements of the Company and its subsidiary
(together the Group) prepared in accordance with section
415 (2) of the Companies Act 2006 for the year ended
31 December 2022.
Status of the Company
The Company is domiciled in the United Kingdom
Company is a public company limited by shares and is also
an investment company under section 833 of the Companies
Act 2006 and operates as such. It is not a close company and
has no employees.
The Company has been approved by HM Revenue & Customs
(HMRC) as an investment trust in accordance with sections
1158 and 1159 of the Corporation Tax Act 2010, subject to
the Company continuing to meet eligibility conditions. The
Directors are of the opinion that the Company has conducted
its affairs in a manner which will satisfy the conditions for
continued approval.
As an investment company that is managed and marketed
in the United Kingdom, the Company is an Alternative
Investment Fund (AIF) falling within the scope of, and subject
to the requirements of, the Alternative Investment Fund
Managers’ Directive (AIFMD), as implemented, retained
and onshored in the UK. The Company is governed by the
provisions of
T
he Alternative Investment Fund Managers
Regulations 2013 (the Regulations). It must comply with
a number of obligations, including the appointment of
an Alternative Investment Fund Manager (AIFM) and a
depositary to carry out certain functions. The Company must
also comply with the Regulations in respect of leverage,
outsourcing, conflicts of interest, risk management,
valuation, remuneration and capital requirements and must
also make additional disclosures to both shareholders and
the FCA. Further details are set out in the AIFMD disclosures
section and in the notes to the Financial Statements.
The Company’s shares are eligible for inclusion in the stocks
and shares component of an Individual Savings Account
(ISA).
Information to be disclosed in accordance
with Listing Rule 9.8.4 (information to be
included in annual report and financial
statements)
Disclosures in respect of how the Company has complied
with Listing Rule 9.8.4 are set out on page 147.
Facilitating retail investments
The Company currently conducts its affairs so that the
shares issued by the Company can be recommended by
independent financial advisers to ordinary retail investors
in accordance with the FCA’s rules in relation to non-
mainstream pooled investments and intends to continue to
do so for the foreseeable future.
In the context of the implementation of RDR (Retail
Distribution Review) and the growing popularity of
investment trusts on platforms, it is worth noting that the
Company’s shares are designed for private investors in the
UK, including retail investors and professionally advised
private clients. It is also attractive to institutional investors
who seek long-term capital growth through investing in
mining equities and who understand and are willing to
accept the risks of exposure to equities. When assessing
the suitability of shares, private investors should consider
consulting an independent financial adviser who specialises
in advising on the acquisition of shares and other securities
before acquiring shares. Naturally, investors should also be
capable of evaluating the risks and merits of an investment
in the Company and should always have sufficient resources
to bear any loss that may result.
The Common Reporting Standard
Tax legislation under the Organisation for Economic
Cooperation and Development (OECD) Common Reporting
Standard for Automatic Exchange of Financial Account
Information (the Common Reporting Standard) was
introduced on 1 January 2016. The legislation requires
investment trust companies to provide personal information
to HMRC about investors who purchase shares in investment
trusts. As an affected company, BlackRock World Mining
Trust plc has to provide information annually to the local
tax authority on the tax residencies of a number of non-UK
based certification shareholders and corporate entities. The
local tax authority to which the information is initially passed
may in turn exchange the information with the tax authorities
of another country or countries in which the shareholder may
be tax resident, where those countries (or tax authorities in
those countries) have entered into agreements to exchange
financial account information.
All new shareholders, excluding those whose shares are
held in CREST, entered on to the share register, will be
sent a certification form for the purposes of collecting this
information.
GDPR
Data protection rights were harmonised across the European
Union following the implementation of the General Data
Protection Regulation (GDPR) on 25 May 2018, since
retained in the UK by the European Union (Withdrawal)
Act 2018. The Board has sought and received assurances
from its third-party service providers that they have taken
appropriate steps to ensure compliance with the regulation.
Shareholder Rights Directive II
The Shareholder Rights Directive II took effect from 10
June 2019 with some transitional provisions. It encourages
long-term shareholder engagement and transparency
between companies and shareholders. In substantive
terms the changes were small for investment companies
and the majority of requirements apply to the Company’s
Directors’ Report
Section 3: Governance
59
remuneration policy and disclosure of processes, as well as
related party transactions. There are also additional rules for
AIFMs and proxy advisers.
Dividends
Details of the dividends paid and payable in respect of the
year are set out in the Chairman’s Statement and in note 8 on
page 106.
Investment management and
administration
BlackRock Fund Managers Limited (BFM), AIFM or the
Manager was appointed as the Company’s AIFM with effect
from 2 July 2014, having been authorised as an AIFM by the
FCA on 1 May 2014. The management contract is terminable
by either party on six months’ notice. Under the agreement,
the Board continues to be independent from the AIFM. The
agreement provides the appropriate balance between the
Board’s control over the Company, its investment policies
and compliance with regulatory obligations.
BlackRock Investment Management (UK) Limited (BIM (UK))
continues to act as the Company’s Investment Manager
under a delegation agreement with BFM. BIM (UK) also acted
as the Secretary of the Company throughout the year. The
Manager receives an annual management fee equivalent
to 0.80% of the Company’s gross assets (subject to certain
adjustments and deductions), which includes all services
provided by BlackRock.
Included within this management fee is a contribution of
£132,000 (excluding VAT) to a consortium element of a
focused investment trust sales and marketing initiative,
which enables the BlackRock investment trusts to achieve
efficiencies by combining certain sales and marketing
activities and is matched by BlackRock. This contribution will
be deducted from the fee payable to BlackRock. The purpose
of the programme is to ensure effective communication with
existing shareholders and to attract new shareholders to the
Company. This has the benefit of improving liquidity in the
Company’s shares and helps sustain the stock market rating
of the Company.
BFM and BIM (UK) are subsidiaries of BlackRock, Inc. which
is a publicly traded corporation on the New York Stock
Exchange operating as an independent firm.
Appointment of the Manager
The Board considers the arrangements for the provision of
investment management services to the Company on an
ongoing basis and a formal review is conducted annually.
As part of this review, the Board considered the quality
and continuity of the personnel assigned to handle the
Company’s affairs, the investment process and the results
achieved to date.
The Board believes that the continuing appointment of BFM
(the Manager) as AIFM, and the delegation of investment
management services to BIM (UK) (the Investment Manager)
on the terms disclosed above is in shareholders’ interests as
a whole. The specialist nature of the Company’s investment
remit is, in the Board’s view, best served by the Sectors and
Thematics team at BlackRock, which has a proven track
record in successfully investing in the mining sector.
Depositary and Custodian
The Company is required under the AIFMD to appoint an
AIFMD compliant depositary. The Company has appointed
The Bank of New York Mellon (International) Limited (BNYM
or the Depositary) to perform this role.
The Depositary’s duties and responsibilities are outlined in
the investment fund legislation (as defined in the FCA AIF
Rulebook). The main role of the Depositary under AIFMD is to
act as a central custodian with additional duties to monitor
the operations of the Company, including monitoring
cash flows and ensuring the Company’s assets are valued
appropriately in accordance with the relevant regulations and
guidance. The Depositary is also responsible for enquiring
into the conduct of the AIFM in each annual accounting
period. The Depositary receives a fee payable at 0.0095%
per annum of net assets. The Company has appointed the
Depositary in a tripartite agreement, to which BFM as AIFM
is also a signatory. The Depositary is liable for the loss of the
financial instruments held in custody.
Under the depositary agreement, custody services in respect
of the Company’s assets have been delegated to The Bank
of New York Mellon (International) Limited (BNYM). BNYM
receives a custody fee payable by the Company at rates
depending on the number of trades effected and the location
of securities held. The depositary agreement is subject to
90 days’ notice of termination by any party.
Registrar
The Company has appointed Computershare Investor
Services PLC as its Registrar (the Registrar). The principal
duty of the Registrar is the maintenance of the register
of shareholders (including registering transfers). It also
provides services in relation to any corporate actions,
dividend administration, shareholder documentation, the
Common Reporting Standard and the Foreign Account Tax
Compliance Act.
The Registrar receives a fixed fee each year, plus
disbursements and VAT for the maintenance of the register.
Fees in respect of corporate actions are negotiated on an
arising basis.
Change of control
There are no agreements to which the Company is a
party that might be affected by a change in control of the
Company.
60
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Exercise of voting rights in investee
companies
The exercise of voting rights attached to the Company’s
portfolio has been delegated by the Company to the
Investment Manager, whose policy is set out below.
BlackRock’s approach to voting at shareholder meetings,
engagement with companies and corporate governance is
framed within an investment context. BlackRock believes
that sound corporate governance practices and sustainable
business models contribute to companies’ long-term
financial performance and thus to better risk adjusted
returns. BlackRock’s proxy voting process is led by the
BlackRock Investment Stewardship (BIS) team, located
in ten offices around the world. Collectively within BIS,
18 languages are spoken and 31 academic disciplines
are represented. The team’s globally-coordinated, local
presence and breadth of experience enables more frequent
and better-informed dialogue with companies. The BIS
team draws upon its own expertise, as well as other internal
and external resources globally, to represent the long-term
economic interests of clients. Close collaboration takes place
between BIS and active portfolio managers. Active portfolio
managers with positions in a company can vote their shares
independently of BIS based on their views of what is best for
their specific fund and client base.
BIS’ Global Principles and market-specific proxy voting
guidelines, updated every year, form the foundation of the
team’s engagement with companies and voting decisions
at shareholder meetings on behalf of clients. The voting
guidelines are principles-based and not prescriptive because
BlackRock believes that each voting situation needs to be
assessed on its merits. Voting decisions are taken to support
the outcome that BlackRock believes is in the best economic
interests of clients. BlackRock’s global corporate governance
and engagement principles are published on its website at:
https://www.blackrock.com/corporate/literature/fact-sheet/
blk-responsible-investment-engprinciples-global.pdf
During the year under review, the Investment Manager voted
on 648 proposals at 61 general meetings on behalf of the
Company. At these meetings the Investment Manager voted
in favour of most resolutions, as should be expected when
investing in well-run companies, but voted against 18 (2.6%)
resolutions, abstained from voting on 21 (3.0%) resolutions
and withheld 17 votes (2.5%). The votes against were in
respect of proposals which contained insufficient disclosure
for the Investment Manager to make an informed decision,
the re-election of directors, or in respect of executive
remuneration packages which were considered to be poorly
structured.
Continuation vote
As agreed by shareholders, an ordinary resolution for the
continuation of the Company as an investment trust is
proposed annually at the Annual General Meeting. If any
such resolution is not passed, the Board shall put proposals
to shareholders within 42 days of the Annual General
Meeting with a view to enabling shareholders to realise their
holding of shares for cash or, if appropriate, a non-cash
consideration with a cash alternative.
Principal risks
The key risks faced by the Company are set out in the
Strategic Report.
Going concern
The Directors, having considered the nature and liquidity of
the portfolio, the Company’s investment objective and the
Company’s projected income and expenditure, are satisfied
that the Company has adequate resources to continue in
operational existence for a period of at least 12 months from
the date of approval of these financial statements and is
financially sound. The Board is mindful of the longer-term
effects on the global economy and recovery of economies
from the COVID-19 pandemic, and the current environment
of heightened geo-political risk given the war in Ukraine.
The Board believes that the Company and its key third-
party service providers have in place appropriate business
continuity plans and these services have continued to be
supplied without interruption throughout the COVID-19
pandemic.
The Company has a portfolio of investments which are
predominantly readily realisable and is able to meet all of its
liabilities from its assets and income generated from these
assets. The portfolio mainly comprises readily realisable
assets which can be sold to meet funding requirements if
necessary. As at 28 February 2023, 87% of the portfolio
was estimated as being capable of being liquidated within
three days. Accounting revenue and expense forecasts
are maintained and reported to the Board regularly and
it is expected that the Company will be able to meet all
its obligations. Borrowings under the overdraft and loan
facilities shall at no time exceed £230 million or 25% of the
Group’s net assets at the time of drawdown of the relevant
borrowings (whichever is lower) and this covenant was
complied with during the year. Based on the above, the Board
is satisfied that it is appropriate to continue to adopt the
going concern basis in preparing the financial statements
and that the Company has adequate resources to continue in
operational existence for the period to 31 March 2024, being
a period of at least 12 months from the date of approval of
these financial statements. Ongoing charges for the year
ended 31 December 2022 were approximately 0.95% of net
assets.
The Company has an annual continuation vote with the next
vote due to be held at the Annual General Meeting in April
2023. The Board has no reason to believe that this resolution
will not be passed. The Company’s longer-term viability is
considered in the viability statement on page 47.
Directors’ Report
continued
Section 3: Governance
61
Directors
The Directors of the Company as at 31 December 2022 and
their biographies are set out on pages 39 and 40. Details of
their interests in the shares of the Company are set out in
the Directors’ Remuneration Report on page 67. All of the
Directors held office throughout the year under review and
up to the date of signing the financial statements.
Although the Company’s Articles of Association require that
one-third of Directors retire and seek re-election at intervals
of no more than three years, the Board has resolved that all
Directors should be subject to re-election on an annual basis.
Accordingly, all of the Directors (other than Mr Edey who will
be retiring following the Annual General Meeting) will offer
themselves for re-election at the Annual General Meeting.
The Board has considered the positions of the retiring
Directors as part of the evaluation process and believes that
it would be in the Company’s best interests for each of the
Directors to be proposed for re-election at the forthcoming
Annual General Meeting, given their material level of
contribution and commitment to the role.
Having considered the Directors’ performance within the
annual Board performance evaluation process, further
details of which are provided on page 72, the Board believes
that it continues to be effective, and the Directors bring
extensive knowledge and commercial experience and
demonstrate a range of valuable business, financial and
asset management skills. The Board therefore recommends
that shareholders vote in favour of each Director’s proposed
re-election. More details in respect of the skills and
experience each Director brings to the Board are set out on
page 63.
There were no contracts subsisting during or at the end
of the year in which a Director of the Company is or was
materially interested and which is or was significant in relation
to the Company’s business. None of the Directors has a
service contract with the Company. No Director is entitled to
compensation for loss of office on the takeover of the Company.
Directors’ liability insurance and Directors’
indemnity
The Company has maintained appropriate Directors’ and
Officers’ liability insurance throughout the year. In addition
to Directors’ and Officers’ liability insurance cover, the
Company’s Articles of Association provide, subject to the
provisions of applicable UK legislation, a qualifying third-
party indemnity for Directors in respect of costs incurred
in the defence of any proceedings brought against them
by third parties arising out of their positions as Directors,
in which they are acquitted, or judgement is given in their
favour. The Company has entered into Deeds of Indemnity
with Directors individually which are available for inspection
at the Company’s registered office and will also be available
at the Annual General Meeting. The indemnity has been in
force during the financial year and up to the date of approval
of the financial statements.
Conflicts of interest
The Board has put in place a framework for Directors to
report conflicts of interest or potential conflicts of interest
which it believes has worked effectively during the year. All
Directors are required to notify the Company Secretary of
any situations or potential situations where they consider
that they have or may have a direct or indirect interest or
duty that conflicted or possibly conflicted with the interests
of the Company. All such situations are reviewed by the
Board and, where appropriate, duly authorised. Directors
are also made aware at each meeting that there remains a
continuing obligation to notify the Company Secretary of any
new situation that may arise, or any change to a situation
previously notified. It is the Board’s intention to continue to
review all notified situations on a regular basis.
Directors’ Remuneration Report and Policy
The Directors’ Remuneration Report is set out on pages 65
to 67. An advisory ordinary resolution to approve this report
will be put to shareholders at the Company’s forthcoming
Annual General Meeting. The Company is also required to
put the Directors’ Remuneration Policy on pages 68 and
69 to a binding shareholder vote every three years. The
Company’s Remuneration Policy was last put to shareholders
at the Annual General Meeting in 2020, therefore an
ordinary resolution to approve the policy will next be put to
shareholders at the forthcoming Annual General Meeting.
Notifiable interests in the Company’s voting
rights
As at 31 December 2022 the Company had not received
any notifications in accordance with the FCA’s Disclosure
Guidance and Transparency Rule 5.1.2R.
Foreign exchange
At the financial year end, approximately 81.6% of the
Company’s portfolio was invested in non-sterling assets,
with 34.3% invested in US dollar denominated assets. The
Investment Manager does not actively hedge currency
exposure.
Derivative transactions
During the year, the Group entered into a number of
derivative put and call option contracts generating option
premium income of £7,297,000 (2021: £7,065,000). Three
option contracts remained open at 31 December 2022
(2021: two option contracts), details of which are given in the
investment listing on pages 31 to 33. All open options were
fully covered.
Share capital
Details of the Company’s issued share capital are given in
note 16 to the Financial Statements. Details of the voting
rights in the Company’s ordinary shares as at the date of this
report are given in note 17 to the Notice of Annual General
Meeting. The ordinary shares carry the right to receive
dividends and have one voting right per ordinary share. There
62
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
are no restrictions on the voting rights of the ordinary shares
or on the transfer of ordinary shares, and there are no shares
that carry specific rights with regard to the control of the
Company.
Share repurchases
Shares may be repurchased when, in the opinion of the
Directors, the discount appears high or wider than the peer
group average and shares are available in the market. The
main objective of any buy back is to enhance the net asset
value per share of the remaining shares and to reduce the
absolute level and volatility of any discount to net asset value
at which shares may trade. Although the Manager initiates
the buy backs, the policy and parameters are set by the Board
and reviewed at regular intervals. The Company would raise
the cash needed to finance the purchase of ordinary shares
either by selling securities in the Company’s portfolio or by
short-term borrowing.
During the year and up to the date of this report no shares
have been bought back.
The latest authority to purchase ordinary shares for
cancellation or to be held in treasury was granted to the
Directors on 6 May 2022 and expires on 18 April 2023. The
Directors are proposing that their authority to buy back
shares be renewed at the forthcoming Annual General
Meeting. Purchases of ordinary shares pursuant to this
authority will only be made in the market for cash at prices
below the prevailing NAV per share.
Treasury shares
The Company is currently authorised to purchase its own
ordinary shares into treasury for reissue or cancellation at
a future date. The use of treasury shares should assist the
Company in providing a discount management mechanism.
The Board intends only to authorise the sale of shares
from treasury at prices at or above the prevailing net asset
value per share (plus costs of the relevant sale). This should
result in a positive overall effect for shareholders if shares
are bought back at a discount and then sold at a price at
or above the net asset value per share (plus costs of the
relevant sale).
The Company holds 4,108,806 ordinary shares in treasury
(2.3% of the Company’s issued share capital excluding
treasury shares).
Share issues
The Company has the authority to issue new shares or sell
shares from treasury for cash. During the year, the Company
has reissued 5,071,920 ordinary shares from treasury
for a total consideration after costs of £34,902,000 at an
average price of 688.14p per share and an average 1.3%
premium to NAV. Since the year end and up to 2 March
2023, the Company has reissued a further 150,000 ordinary
shares from treasury net of costs for a total consideration
of £1,084,000. The current authority to issue new ordinary
shares or sell shares from treasury for cash was granted to
the Directors on 6 May 2022 and expires on 18 April 2023.
The Directors are proposing that their authority to issue
new ordinary shares or sell shares from treasury for cash be
renewed at the forthcoming Annual General Meeting.
Streamlined Energy and Carbon Reporting
(SECR) statement: Greenhouse gas (GHG)
emissions and energy Consumption
disclosure
As an externally managed investment company, the
Company has no greenhouse gas emissions to report from
its operations, nor does it have any responsibility for any
other emissions producing sources under the Companies Act
(Strategic Report and Directors’ Reports) Regulations 2013.
For the same reason, the Company considers itself to be a
low energy user under the SECR regulations and therefore is
not required to disclose energy and carbon information.
Articles of Association
Any amendments to the Company’s Articles of Association
must be made by special resolution.
Business of the Annual General Meeting
(AGM)
UK government restrictions on public gatherings are
no longer in force in connection with COVID-19 and we
therefore intend to hold the AGM in the normal way with
physical attendance by shareholders. However, shareholders
should be aware that it is possible that restrictions could be
reimposed prior to the date of the AGM.
BlackRock requests that shareholders intending to attend
should comply with their COVID-19 safety protocols
before entering the venue. At the time of writing, visitors
are not permitted in BlackRock’s offices if they have tested
positive for COVID-19 in the past 10 days, are experiencing
COVID-19 related symptoms, or are subject to government
requirements for self-isolation or quarantine.
Annual General Meeting
The following information to be discussed at the
forthcoming AGM is important and requires your
immediate attention. If you are in any doubt about the
action you should take, you should seek advice from your
stockbroker, bank manager, solicitor, accountant or other
financial adviser authorised under the Financial Services
and Markets Act 2000 (as amended).
If you have sold or transferred all of your ordinary shares
in the Company, you should pass this document, together
with any other accompanying documents (but not the
personalised Form of Proxy) as soon as possible to the
purchaser or transferee, or to the stockbroker, bank
or other agent through whom the sale or transfer was
effected, for onward transmission to the purchaser or
transferee.
Directors’ Report
continued
Section 3: Governance
63
The business of this year’s Annual General Meeting consists
of 14 resolutions. Resolutions 1 to 12 are proposed as
ordinary resolutions and 13 and 14 are being proposed as
special resolutions.
Resolution 1 – Approval of the annual report and
financial statements
This resolution seeks shareholder approval of the Annual
Report and Financial Statements for the year ended
31 December 2022 and the auditors’ report thereon.
Resolution 2 – Approval of the Directors’
remuneration report
This resolution is an advisory vote on the Directors’
Remuneration Report, excluding any content relating to the
remuneration policy, as set out on pages 68 and 69.
Resolution 3 – Approval of the Directors’
Remuneration Policy
This resolution is to approve the Directors’ Remuneration
Policy as set out on pages 68 and 69.
Resolution 4 – Approval of the dividend
Resolution 4 seeks shareholder approval of a final dividend
of 23.50p per share for the year ended 31 December 2022.
Resolutions 5 to 8 – Re-election of Directors
Resolutions 5 to 8 relate to the re-election and election
of the Directors. The Board has undertaken a formal
performance evaluation during the year and confirms
that the performance of the Directors standing for
re-election continues to be effective and that each Director
demonstrates commitment to their role. The biographies of
the Directors are set out on pages 39 and 40. The Directors
have been appointed in order to bring a range of experience
appropriate to managing a business which invests in mining
companies and mining related businesses. Their experiences
range from holding senior positions in mining companies,
to advising mining companies on investments in other
mining companies and mines, to arranging finance for mines
and mining companies and to working in the investment
business. Individually their competences and experiences
mean that the Board is able to develop appropriate strategies
to manage the risk of investing in this sector and also to deal
with ESG issues, such as businesses that invest in pure-play
thermal coal. The skills and experience each Director brings
to the Board for the long-term sustainable success of the
Company are set out below.
Resolution 5 relates to the re-election of David Cheyne
who was appointed as a Director in 2012 and as Chairman
in 2019. Mr Cheyne was a legal adviser to a large number
of mining companies both on corporate matters and on
acquisitions and financing for over 30 years. As a result, he
has a great deal of experience on the issues that affect the
sector, including those relating to ESG. His experience as a
corporate lawyer, advising boards and as chairman of a large
international law firm, gives him considerable governance
experience, as well as a knowledge of the sector.
Resolution 6 relates to the re-election of Jane Lewis who has
served on the Board for nearly six years. She has extensive
sector experience through her career in investment company
corporate broking at Winterflood and business development
at leading investment trust management houses. She holds
a number of investment trust directorships, including as
chairman.
Resolution 7 relates to the re-election of Judith Mosely
who was appointed as a Director in 2014. Ms Mosely has
over twenty years’ experience in the City focusing on the
mining sector. She was employed until the end of December
2019 by Rand Merchant Bank as Business Development
Director for mining where she was responsible for identifying
opportunities in the sector in raising bank finance, mergers
and acquisitions, commodity hedging and debt capital
markets. Prior to this she headed the mining finance team
of Société Générale in London. She therefore has a strong
appreciation of risk, as well as a current appreciation of the
opportunities and challenges in the sector including ESG.
She regularly attends key industry conferences and her
involvement in industry groups such as Women in Mining
ensures that she is kept abreast of key industry matters.
Resolution 8 relates to the re-election of Srinivasan
Venkatakrishnan who was appointed as a Director on 1
August 2021. He has a proven track record of leading
multinational organisations, including major publicly-
listed companies, through periods of challenging and
transformative change. His career spans across six
continents and 15 countries; covers gold, silver and base
metals, oil and gas and power generation. The scope of his
work over the past 30+ years at the board and executive level
has spanned the full suite of leadership accountabilities,
including strategy development and execution, all aspects
of ESG, project development, organisational restructuring
and business planning, turnaround and productivity
improvement, in addition to complex corporate financing
activities spanning mergers & acquisitions, due diligence
studies and capital markets work. These efforts have
involved intricate, multi-jurisdictional financing and
large complex cross-border restructuring. Leading major
businesses in the extractive sector has moreover required
fostering and maintaining relationships with investors,
financiers, governments, regulators, organised labour, host
communities, media, and local and international civil society
groups. Mr Venkatakrishnan is a chartered accountant and
will bring this skill set to his new role as Chairman of the
Company’s Audit Committee.
Resolutions 9 and 10 – Re-appointment of the
external auditors and auditors’ remuneration
These resolutions relate to the re-appointment and
remuneration of the Company’s auditors. The Company,
through its Audit Committee, has considered the
independence and objectivity of the external auditors and
is satisfied that the auditors remain independent. Further
information in relation to the assessment of the auditors’
independence can be found on page 79.
64
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Resolutions relating to the following items of special
business will be proposed at the forthcoming Annual General
Meeting.
Resolution 11 – Continuation of the Company as
an investment trust
The ordinary resolution to be proposed will seek
shareholders’ authority that the Company shall continue in
being as an investment trust.
Resolution 12 – Authority to allot shares
The Directors may only allot shares for cash if authorised to
do so by shareholders in general meeting. This resolution
seeks authority for the Directors to allot shares for cash
up to an aggregate nominal amount of £944,515 which
is equivalent to 18,890,303 ordinary shares of 5p each
and represents 10% of the current issued share capital,
excluding treasury shares, as at the date of the Notice of
Annual General Meeting. This authority will expire at the
conclusion of next year’s Annual General Meeting in 2024,
unless renewed prior to that date at an earlier general
meeting.
Resolution 13 – Authority to disapply
pre-emption rights
By law, Directors require specific authority from shareholders
before allotting new shares or selling shares out of treasury
for cash without first offering them to existing shareholders
in proportion to their holdings. Resolution 13 empowers
the Directors to allot new shares for cash or to sell shares
which are held by the Company in treasury, otherwise
than to existing shareholders on a pro rata basis, up to an
aggregate nominal amount of £944,515 which is equivalent
to 18,890,303 ordinary shares of 5p each and 10% of the
Company’s issued ordinary share capital, excluding treasury
shares, as at the date of the Notice of Annual General
Meeting. Unless renewed at a general meeting prior to such
time, this authority will expire at the conclusion of the Annual
General Meeting of the Company to be held in 2024.
Resolution 14 – Authority to buy back shares
The resolution to be proposed will seek to renew the authority
granted to Directors enabling the Company to purchase its
own shares. The Directors will only consider repurchasing
shares in the market if they believe it to be in shareholders’
interests and as a means of correcting any imbalance
between supply and demand for the Company’s shares.
The Directors are seeking authority to purchase up to
28,316,565 ordinary shares (being 14.99% of the issued
share capital, excluding treasury shares, as at the date of
this report) or, if less, 14.99% of the ordinary shares in issue
at 18 April 2023. This authority, unless renewed at an earlier
general meeting, will expire at the conclusion of next year’s
Annual General Meeting.
Recommendation
The Board considers that the resolutions to be proposed at
the Annual General Meeting are likely to promote the success
of the Company and are in the best interests of the Company
and its shareholders as a whole. The Directors unanimously
recommend that shareholders vote in favour of these
resolutions as they intend to do so in respect of their own
beneficial holdings.
Corporate governance
Full details are given in the Corporate Governance Statement.
The Corporate Governance Statement forms part of this
Directors’ Report.
Audit information
As required by section 418 of the Companies Act 2006, each
of the Directors in office at the date of approval of this report
confirm that, so far as they are aware, there is no relevant
audit information of which the Group’s auditors are unaware
and each Director has taken all the steps that they ought to
have taken as a Director to make themselves aware of any
relevant audit information and to establish that the Group’s
auditors are aware of that information.
Independent auditors
The auditors, PricewaterhouseCoopers LLP, have indicated
their willingness to continue in office and resolutions
proposing their reappointment and authorising the Audit
Committee to determine their remuneration for the ensuing
year will be submitted at the Annual General Meeting.
The Directors’ Report was approved by the Board at its
meeting on 2 March 2023.
By order of the Board
CAROLINE DRISCOLL
For and on behalf of
BlackRock Investment Management (UK) Limited
Company Secretary
2 March 2023
Directors’ Report
continued
Section 3: Governance
65
The Board presents the Directors’ Remuneration Report for the
year ended 31 December 2022 which has been prepared in
accordance with sections 420-422 of the Companies Act 2006.
The Remuneration Report comprises a remuneration policy
report and a remuneration policy implementation report. The
remuneration policy report is subject to a triennial binding
shareholder vote and and will be put to shareholders for
approval at the forthcoming Annual General Meeting. The
remuneration implementation report is subject to an annual
advisory vote.
The law requires the Company’s auditors to audit certain of the
disclosures provided. Where disclosures have been audited,
they are indicated as such. The auditors’ opinion is included in
their report on pages
84
to 91.
Statement by the Chairman
The Board’s policy on remuneration is set out on pages 68
and 69. A key element of the remuneration policy is that
fees payable to Directors should be sufficient to attract and
retain individuals with suitable knowledge and experience
to promote the long-term success of the Company, whilst
also reflecting the time commitment and responsibilities of
the role. The basis for determining the level of any increase
in the Directors’ remuneration and the Board’s policy on
remuneration is set out in the Directors’ Remuneration
Policy.
The Board’s remuneration is considered annually and was
last reviewed in August 2022. Following a review, with effect
from 1 October the Board agreed that the Chairman’s fees
increase from £47,000 to £49,350, the Chairman of the
Audit Committee and Senior Independent Director receive
a fee increase from £39,500 to £41,475 and Directors’ fees
increase from £32,000 to £33,600. Prior to this, Directors’
fees were last increased on 1 September 2021. Following the
retirement of Mr Edey, Mr Venkatakrishnan will be appointed
as Chairman of the Audit Committee. Ms Lewis will become
Chair of the Management Engagement Committee and Ms
Mosely will replace Mr Edey as Senior Independent Director.
No discretionary fees have been paid to the Directors
during the year or previous year and the payment of such
fees is expected to be a rare occurrence, only necessary
in exceptional circumstances. Any discretionary fees paid
to the Directors will be clearly disclosed in the Directors’
Remuneration Report accompanied by an explanation of the
work undertaken and why it was deemed necessary to pay
such additional remuneration.
Remuneration Committee
The Board as a whole fulfils the function of the Remuneration
Committee and considers any change in the Directors’
remuneration policy. It is not considered necessary to have
a separate Remuneration Committee as the Company’s
Directors are all non-executive and independent of the
Manager. No advice or services were provided by any external
agencies or third parties in respect of remuneration levels.
Remuneration implementation report
A single figure for the total remuneration of each Director is set out in the table below for the year ended 31 December 2022.
Year ended 31 December 2022
Year ended 31 December 2021
Directors
Fees
Taxable
expenses
1
Total
Fees
Taxable
expenses
1
Total
£
£
£
£
£
£
David Cheyne
2
47,588
–
47,588
45,667
–
45,667
Russell Edey
3
39,994
629
40,623
38,167
–
38,167
Judith Mosely
32,400
–
32,400
30,667
–
30,667
Jane Lewis
32,400
1,792
34,192
30,667
–
30,667
Ollie Oliveira
4
–
–
–
17,500
–
17,500
Srinivasan Venkatakrishnan
5
32,400
9,549
41,949
13,167
–
13,167
Total
184,782
11,970
196,752
175,835
–
175,835
1
Taxable expenses relate to travel and subsistence costs incurred in carrying out business for the Company and which have been grossed up to include PAYE and NI
contributions.
2
Chairman.
3
Chairman of the Audit Committee, Management Engagement Committee and Senior Independent Director.
4
Retired on 31 July 2021.
⁵
Appointed as a Director on 1 August 2021.
The information in the above table has been audited. The amounts paid by the Company to the Directors were for services
as non-executive Directors. As at 31 December 2022 fees of £16,000 (2021: £14,375) were outstanding to Directors.
No discretionary payments were made in the year to 31 December 2022 (2021: nil).
Directors’ Remuneration Report
66
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Relative importance of spend on remuneration
To enable shareholders to assess the relative importance of spend on pay, this has been shown in the table below compared
with the Group’s dividend distributions, total revenue, net profit on ordinary activities and buy back/issue of ordinary shares.
As the Company has no employees, no consideration is required to be given to employment conditions elsewhere in setting
Directors’ fees and expenses.
2022
2021
Change
£’000
£’000
£’000
Directors’ total remuneration
197
176
+21
Total dividends paid and payable
75,405
78,331
-2,926
Total revenue
85,996
87,676
-1,680
Net profit on ordinary activities after taxation
202,420
192,470
9,950
Buy back of ordinary shares
–
393
-393
Issue of ordinary shares
34,902
63,187
-28,285
No payments were made in the year to any past Directors (2021: nil).
Annual percentage change in Directors’ fees
The following table set outs the annual percentage change in Directors’ fees for the past five years.
31 December 31 December 31 December 31 December 31 December
2018
2019
2020
2021
2022
David Cheyne¹
+0.0%
+0.0%
+0.0%
+4.4%
+5.0%
Russell Edey²
+0.0%
+0.0%
+0.0%
+5.3%
+5.0%
Jane Lewis
+0.0%
+0.0%
+0.0%
+6.7%
+5.0%
Judith Mosely
+0.0%
+0.0%
+0.0%
+6.7%
+5.0%
Srinivasan Venkatakrishan
3
n/a
n/a
n/a
n/a
+5.0%
¹
Chairman.
²
Chairman of the Audit Committee, Management Engagement Committee and Senior Independent Director.
³
As Srinivasan Venkatakrishan was appointed as a Director on 1 August 2021, the percentage change in his annual fixed fee in 2021 has been annualised.
As previously noted, the Company does not have any employees and hence no comparisons are given in respect of the
comparison between Directors’ and employees’ pay increases.
Directors’ Remuneration Report
continued
Section 3: Governance
67
Performance
The line graph that follows compares the Company’s net
asset value and mid-market share price (with dividends
reinvested) with the reference index. This index was chosen
for comparison purposes as it was deemed to be the most
relevant to the Company’s investment objective when
reporting to shareholders.
Performance 1 January 2012 to
31 December 2022
0
50
100
150
200
250
Total return performance record, rebased to 100 at 31 December 2012.
Sources: BlackRock and Datastream.
1
With effect from 1 January 2020, the reference index changed to the
1
MSCI ACWI Metals & Mining 30% Buffer 10/40 Index – net total return.
1
Prior to 1 January 2020, the reference index was the EMIX Global Mining
1
Index (net total return). The performance of the reference index during
1
the period from 1 January 2020 to 31 December 2022 has been blended
1
ncluding
1
the effect of reinvestment of dividends.
•
MSCI ACWI Metals & Mining 30% Buffer 10/40 Index
•
Share price (mid-market)
•
Net asset value per share
2012
2013
2014
2015
2016
2017
2018
2019
2020
2022
2021
1
Shareholdings
The Board has not adopted a policy that Directors are
required to own shares in the Company. The interests of
the Directors in the ordinary shares of the Company are set
out in the following table. The Company does not have a
share option scheme, therefore none of the Directors has an
interest in share options.
31 December
2022
Ordinary
shares
31 December
2021
Ordinary
shares
David Cheyne
35,000
35,000
Russell Edey
20,000
20,000
Jane Lewis
5,362
5,362
Judith Mosely
7,400
7,400
Srinivasan Venkatakrishnan
1,000
1,000
The information in the above table has been audited.
All of the holdings of the Directors are beneficial. No changes
to these holdings have been notified up to the date of this
report.
Implementation of the remuneration policy
in 2022 financial year
The Directors intend that the Remuneration Policy, which
forms part of this report, will be implemented as set out on
pages 68 and 69. Directors’ fees have increased with effect
from 1 October 2022 as set out on page 65.
Retirement of Directors
Further details are given in the Directors’ Report on page 61.
By order of the Board
DAVID CHEYNE
Chairman
2 March 2023
68
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l
Annual Report and Financial Statements 31 December 2022
Directors’ remuneration policy
In determining the appropriate level of Directors’ fees, a
number of factors are considered, including the workload
of the Directors, their responsibilities, any change in these
responsibilities and additional legal duties (for example
as a result of new legislation being implemented), the
relationship with their suppliers and the size and complexity
of the Company. The time commitment required, the
level of skills and appropriate experience required and
the need for Directors to maintain on an ongoing basis
an appropriate level of knowledge of regulatory and
compliance requirements in an industry environment of
increasing complexity are also taken into account. The
Board also considers the average rate of inflation during
the period since the last fee increase and reviews the level
of remuneration in comparison with other investment trusts
of a similar size and/or mandate, as well as taking account
of any data published by the Association of Investment
Companies to ensure that fees are in line with industry
practice. This comparison, together with consideration of any
alteration in non-executive Directors’ responsibilities, is used
to review whether any change in remuneration is necessary.
The review is performed on an annual basis. No director will
be present when his or her own pay is being determined.
The Company has no employees and consequently no
consideration is required to be given to employment
conditions elsewhere in setting this policy and there has
been no employee consultation.
No element of the Directors’ remuneration is performance
related or subject to recovery or withholding (except for tax).
Directors cannot be awarded any share options or long-
term performance incentives. None of the Directors has a
service contract with the Company or receives any non-cash
benefits (except as described in the policy table), pension
entitlements or compensation for loss of office.
The remuneration policy will be applied when agreeing the
remuneration package of any new Director. The terms of a
Director’s appointment are detailed in a letter sent to them
when they join the Board. These letters are available for
inspection at the registered office of the Company.
Directors’ appointments do not have a fixed duration, but
they can be terminated by the Company in writing at any
time without obligation to pay compensation. On termination
of the appointment, Directors shall only be entitled to
accrued fees as at the date of termination, together with
reimbursement of any expenses properly incurred prior to
that date. Directors are also subject to re-election on an
annual basis and, if not elected, their appointment ceases
immediately. No payments for loss of office are made.
Consideration of shareholders’ views
An ordinary resolution to approve the Remuneration Report
is put to members at each Annual General Meeting and
shareholders have the opportunity to express their views
and raise any queries in respect of the remuneration policy
at this meeting. To date, no shareholders have commented
in respect of the remuneration policy. In the event that there
was a substantial vote against any resolution proposed at
the Company’s Annual General Meeting, the reasons for any
such vote would be sought and appropriate action taken.
Should the vote be against resolutions in relation to the
Directors’ remuneration, further details will be provided in
future Directors’ Remuneration Reports.
In accordance with the Companies Act 2006, the Company
is required to seek shareholder approval of its remuneration
policy on a triennial basis. An ordinary resolution for the
approval of the remuneration policy and the future policy
table will be put to members at the forthcoming Annual
General Meeting. It is the intention of the Board that the
policy on remuneration will continue to apply for all financial
years of the Company up to 31 December 2025.
Any discretionary fees paid to the Directors will be
clearly disclosed in the Directors’ Remuneration Report
accompanied by an explanation of the work undertaken.
Shareholder voting
At the Company’s previous Annual General Meeting held on
6 May 2022, 99.60% of votes cast (including votes cast at
the Chairman of the Meeting’s discretion) were in favour of
the resolution to approve the Directors’ Remuneration Report
in respect of the year ended 31 December 2021 and 0.40%
were against. 64,910 votes were withheld.
At the Company’s Annual General Meeting held on 30 April
2020, 99.77% (including votes cast at the Chairman of the
Meeting’s discretion) were in favour of the resolution to
approve the Directors’ Remuneration
P
olicy and 0.23% of
votes cast were against. 120,960 votes were withheld.
Directors’ Remuneration Policy
Section 3: Governance
69
Future policy table
Purpose and link to
strategy
Fees and benefits payable to Directors should be sufficient to attract and retain individuals of high
calibre with suitable knowledge and experience. Those chairing the Board and key Committees
should be paid higher fees than other Directors in recognition of their more demanding roles. Fees
should reflect the time spent by Directors on the Company’s affairs and the level of complexity of
responsibilities borne by the Directors.
Description
Current levels of fixed annual fee (effective from 1 October 2022):
Chairman – £49,350
Audit Committee Chairman – £41,475
Directors – £33,600
Maximum and
minimum levels
Remuneration consists of a fixed fee each year, set in accordance with the stated policies and any
increase granted must be in line with the stated policies. The Company’s Articles of Association set
a limit of £250,000 in respect of the remuneration that may be paid to Directors in any financial
year, not including expenses and discretionary fees. In addition, the Directors propose a limit of
£75,000 (excluding any tax grossing up) in relation to the maximum that may be paid in respect
of taxable expenses. These ceilings have been set at a level to provide flexibility in respect of the
recruitment of additional Board members and inflation.
Policy on share
ownership
Directors are not required to own shares in the Company.
Operation – fees
Fixed fee element
The Board reviews the quantum of Directors’ pay each year to ensure that this is in line with
the level of Directors’ remuneration for other investment trusts of a similar size. When making
recommendations for any changes in fees, the Board will consider wider factors such as the
average rate of inflation over the period since the previous review and the level and any change in
complexity of the Directors’ responsibilities (including additional time commitments as a result
of increased regulatory or corporate governance requirements). Directors are not eligible to be
compensated for loss of office, nor are they eligible for bonuses, pension benefits, share options or
other incentives or benefits. Directors do not have service contracts but are appointed under letters
of appointment.
Discretionary fees
The Company’s Articles of Association authorise the payment of additional discretionary fees to
Directors for any additional work undertaken on behalf of the Company which is outside of their
normal duties. Any such work and the fees payable are subject to the prior approval of the Chairman
or, in the case of the Chairman undertaking the extra work, subject to the prior approval of the
Chairman of the Audit Committee. Any discretionary fees paid will be disclosed in the Directors’
remuneration implementation report within the Annual Report. The level of discretionary fees
shall be determined by the Directors and will be subject to a maximum of £10,000 per annum
per Director.
Operation – expenses
Taxable expenses
The Directors are entitled to be repaid all reasonable travelling, hotel and other expenses incurred
by them in or about the performance of their duties as Directors, including any expenses incurred
in attending meetings of the Board or Committees of the Board, Annual General Meetings or
General Meetings. Some expenses incurred by Directors such as travel expenses incurred by the
Directors in the course of travel to attend Board and Committee meetings which are held at the
Company’s registered office in London and which are reimbursed by the Company are subject to
tax and national insurance. The Company’s policy is that all reasonable costs of this nature will be
reimbursed as they are incurred, including the tax and national insurance costs incurred by the
Director on such expenses.
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Annual Report and Financial Statements 31 December 2022
Chairman’s introduction
Corporate Governance is the process by which the Board
seeks to look after shareholders’ interests and protect and
enhance shareholder value. Shareholders hold the Directors
responsible for the stewardship of the Company, delegating
authority and responsibility to the Directors to manage the
Company on their behalf and holding them accountable for
its performance.
The Board is ultimately responsible for framing and
executing the Company’s strategy and for closely
monitoring risks. We aim to run our Company in a manner
which is responsible and consistent with our belief in
honesty, transparency and accountability. In our view,
good governance means managing our business well and
engaging effectively with investors. We consider the practice
of good governance to be an integral part of the way we
manage the Company and we are committed to maintaining
high standards of financial reporting, transparency and
business integrity.
As a UK-listed investment trust company our principal
reporting obligation is driven by the UK Corporate
Governance Code (the UK Code) issued by the Financial
Reporting Council in July 2018. However, as listed
investment trust companies differ in many ways from other
listed companies, the Association of Investment Companies
has drawn up its own set of guidelines, the AIC Code of
Corporate Governance (the AIC Code) issued in February
2019, which addresses the governance issues relevant
to investment companies and meets the approval of the
Financial Reporting Council.
Both the UK Code and the AIC Code apply to accounting
periods beginning on or after 1 January 2019. The Board has
determined that it has complied with the recommendations
of the AIC Code. This in most material respects is the same
as the UK Code, save that there is greater flexibility regarding
the tenure of office of the Chairman and membership of the
Audit Committee.
This report, which forms part of the Directors’ Report,
explains how the Board deals with its responsibility, authority
and accountability.
Compliance
The Board has made the appropriate disclosures in this
report to ensure the Company meets its continuing
obligations. It should be noted that, as an investment trust,
most of the Company’s day-to-day responsibilities are
delegated to third parties, the Company has no employees
and the Directors are all non-executive, therefore not all of
the provisions of the UK Code are directly applicable to the
Company.
The Board considers that the Company has complied with
the recommendations of the AIC Code and the provisions
contained within the UK Code that are relevant to the
Company throughout this accounting period, except the
provisions relating to:
•
the role of the chief executive;
•
executive directors’ remuneration; and
•
the need for an internal audit function.
The Board considers that these provisions are not relevant to
the position of the Company, being an externally managed
investment company with no executive employees and, in
relation to the internal audit function, in view of BlackRock
having an internal audit function. Further explanation is
provided below.
Information on how the Company has applied the principles
of the AIC Code and UK Code is set out below. The UK Code
is available from the Financial Reporting Council’s website at
frc.org.uk. The AIC Code is available from the Association of
Investment Companies at theaic.co.uk.
The Board
The Board currently consists of five non-executive Directors,
all of whom are independent of the Company’s Manager.
Provision 9 of the UK Code which relates to the combination
of the roles of the chairman and chief executive does not
apply as the Company has no executive directors.
The Board’s primary purpose is to direct the Company to
maximise shareholder value within a framework of proper
controls and in accordance with the Company’s investment
objective.
Board structure and management
Details of the Board’s structure, roles and responsibilities
and management are set out in the summary of Governance
Structure on page 38. The Directors’ biographies on pages
39 and 40 demonstrate a breadth of investment, commercial,
accounting, financial and professional experience which
enables them to provide effective strategic leadership and
proper governance of the Company. Details of the Chairman’s
other significant time commitments can be found on page 39.
The Company does not have a chief executive as day-to-day
management of the Company’s affairs is delegated to the
Manager as AIFM, with investment management and other
ancillary services delegated to the Investment Manager.
Representatives of the Manager, Investment Manager
and Company Secretary attend each Board meeting. The
Board, the AIFM, the Investment Manager and the Company
Secretary operate in a supportive and co-operative manner.
Board independence and tenure
The Board regularly reviews the independence of
its members and considers all of the Directors to be
independent. A number of factors were taken into account
when making this assertation, including length of tenure,
the individual contribution of each Director, their other
Corporate Governance Statement
Section 3: Governance
71
directorships and interests, and their ongoing commitment
and enthusiasm to promote the long-term success of the
Company, its shareholders and stakeholders. This individual
independence allows all of the Directors to sit on the
Company’s various Committees, although in line with the UK
Code, the Chairman of the Board does not act as a member
of the Audit Committee.
The Board is of the view that length of service will not
necessarily compromise the independence or contribution of
directors of an investment trust company, where continuity
and experience can add significantly to the strength of the
Board. Following the formal performance evaluation process,
the Board has concluded that, notwithstanding Mr Cheyne
has served as a Director (and now Chairman) for over nine
years, he continues to be independent in character and
judgement and his range of skills and experience has been
beneficial for the Board.
The Board considers that the tenure of the Chairman
should be determined principally by how the Board’s
purpose in providing strategic leadership, governance and
bringing challenge and support to the Manager can best
be maintained, whilst also recognising the importance
of independence, refreshment, diversity and retention
of accumulated knowledge. It firmly believes that an
appropriate balance of these factors is essential for an
effective functioning Board and, at times, will naturally result
in some longer serving directors, including the Chairman.
Furthermore, the Board wishes to retain the flexibility to be
able to recruit outstanding candidates when they become
available rather than simply adding new Directors based
upon a predetermined timetable.
Under the AIC Code the tenure of a director who is elevated
to Chairman may be extended by three years. The Board has
decided that this extension should apply to Mr Cheyne’s
tenure which will therefore be extended to the Annual
General Meeting in the Spring of 2024.
None of the Directors has a service contract with the
Company. The terms of their appointment are detailed in
a letter sent to them when they join the Board. Copies of
these letters are available on request from the Company’s
registered office and will be available at the Annual General
Meeting.
Diversity
The Board’s aim regarding diversity, including age, gender,
educational and professional background and other forms of
diversity, is to take these into account during the recruitment
and appointment process. However, the Board is committed
to an objective of appointing the most appropriate candidate,
regardless of gender or other forms of diversity, and therefore
no targets have been set against which to report.
The Board will be complying with the recommendations
of the Parker Review in respect of Board diversity and the
recent changes to the FCA’s Listing Rules which set out new
diversity targets and associated disclosure requirements
for all UK and overseas companies with shares listed on
the premium or standard segment of the FCA’s Official List.
The new rules apply to annual financial reports for periods
starting on or after 1 April 2022.
As at the date of this report, the Board had a 60:40 gender
ratio and one member is from a minority ethnic background.
Following Mr Edey’s retirement on 18 April 2022, Ms Mosely
will replace him as Senior Independent Director.
Directors’ appointment, retirement and
rotation
The rules concerning the appointment, retirement and
rotation of Directors are discussed in the Directors’ Report
on page 61. The Board has considered the position of
each of the Directors as part of the evaluation process and
believes it would be in the best interests of the Company for
the Directors retiring to be proposed for re-election at the
forthcoming Annual General Meeting given their material
level of contribution and commitment to the Company.
Mr Edey will be retiring and will not be seeking re-election.
The Board recognises the value of progressive renewing
of, and succession planning for, company boards. The
refreshment of the Board will remain as an ongoing
process to ensure that the Board is well-balanced through
the appointment of new Directors with the skills and
experience necessary. Directors must be able to demonstrate
commitment to the Company, including in terms of time. The
Board is cognisant of the concept of ‘overboarding’ and has
considered the time commitment required by the Directors’
other roles, taking into account their nature and complexity.
The Board reviews this information annually to ensure all
Directors have sufficient capacity to effectively carry out their
role.
Directors’ induction, training and
development
When a new Director is appointed to the Board, he or she
is provided with all the relevant information regarding the
Company and his or her duties and responsibilities as a
Director. In addition, a new Director will also spend some
time with the Investment Manager, the Company Secretary
and other key employees of the Manager whereby he or she
will become familiar with the workings and processes of the
Company.
The Company’s policy is to encourage Directors to keep up
to date and attend training courses on matters which are
directly relevant to their involvement with the Company.
The Directors also receive regular briefings from, amongst
others, the auditors, representatives of the Manager and the
Company Secretary regarding any proposed developments
or changes in laws or regulations that could affect them or
the Company. Directors’ training and development needs are
reviewed by the Chairman on an annual basis.
72
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Annual Report and Financial Statements 31 December 2022
Directors’ liability insurance
The Company has maintained appropriate Directors’ liability
insurance cover throughout the year.
The Board’s responsibilities
The Board is responsible to shareholders for the overall
management of the Company. It decides upon matters
relating to the Company’s investment objective, policy
and strategy and monitors the Company’s performance
towards achieving that objective through its agreed policy
and strategy. The Board has also adopted a schedule of
matters reserved for its decision. The Board is supplied in
a timely manner with information in a form and of a quality
appropriate to enable it to discharge its duties.
Strategic issues and all operational matters of a material
nature are determined by the Board. The Board has
responsibility for ensuring that the Company keeps adequate
accounting records which disclose with reasonable accuracy
at any time the financial position of the Company and which
enable it to ensure that the financial statements comply with
the Companies Act 2006. It is the Board’s responsibility to
present a balanced and understandable assessment, which
extends to interim and other price-sensitive reports. The
Board is also responsible for safeguarding the assets of the
Company and for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The Board has established a procedure whereby Directors
wishing to do so in the furtherance of their duties, may take
independent advice at the Company’s expense.
Performance evaluation
In order to review the effectiveness of the Board, the
Committees and the individual Directors, the Board carries
out a formal and rigorous annual appraisal process. This
encompasses both quantitative and qualitative measures
of performance in respect of the Board and its Committees,
implemented by way of completion of an evaluation survey
and a subsequent review of findings. The Chairman also
reviews with each Director their individual performance,
contribution and commitment and the appraisal of the
Chairman is reviewed by the other Directors, led by the Senior
Independent Director.
The appraisal process is considered by the Board to be
constructive in terms of identifying areas for improving
the functioning and the performance of the Board and its
Committees and the contribution of individual Directors, as
well as building on and developing individual and collective
strengths. The review concluded that the Board oversees
the management of the Company effectively and has the
skills and expertise to safeguard shareholders’ interests. The
Board, the Investment Manager and representatives of the
Manager were found to operate in a cooperative and open
environment. Each Director made a valuable contribution to
the Board and its discussions, brought different qualities to
the Board, challenged the Investment Manager and Manager
constructively, remained independent in character and
judgement, and dedicated sufficient time to their respective
role on the Board. Board composition, dynamics and
structure worked well.
There were no significant actions arising from the evaluation
process and it was agreed that the current composition of the
Board and its Committees reflected a suitable mix of skills
and experience and that the Board as a whole, the individual
Directors and its Committees, were functioning effectively.
Delegation of responsibilities
Management and administration
The management of the investment portfolio and the
administration of the Company have been contractually
delegated to BlackRock Fund Managers Limited (BFM), as
the Company’s AIFM, and BFM (with the permission of the
Company) has delegated certain investment management
and other ancillary services to BlackRock Investment
Management (UK) Limited (BIM (UK) or the Investment
Manager). The contractual arrangements with BFM (the
Manager) are summarised on page 59.
The Manager, operating under guidelines determined
by the Board, has direct responsibility for the decisions
relating to the day-to-day running of the Company and is
accountable to the Board for the investment, financial and
operating performance of the Company. The Board has
final investment authority on unquoted investments. The
review of the Manager’s performance is an ongoing duty and
responsibility of the Board which is carried out at each Board
meeting. In addition, a formal review is undertaken annually,
details of which are set out in the Directors’ Report.
The Manager has delegated the portfolio valuation and
fund accounting services to The Bank of New York Mellon
(International) Limited (BNYM). The assets of the Company
have been entrusted to the Depositary for safekeeping. The
Depositary is The Bank of New York Mellon (International)
Limited. The address at which this business is conducted is
given on page 141.
The Board has delegated the exercise of voting rights
attaching to the securities held in the portfolio to the
Investment Manager. Details of the Investment Manager’s
approach to voting at shareholder meetings are set out on
page 60.
The Company Secretary
The Board has direct access to company secretarial advice
and the services of the Manager which, through its nominated
representative, is responsible for ensuring that Board and
Committee procedures are followed and that applicable
regulations are complied with. The appointment and removal
of the Company Secretary is a matter for the whole Board.
The Board has established a procedure whereby Directors
wishing to do so in the furtherance of their duties, may take
independent professional advice at the Company’s expense.
Corporate Governance Statement
continued
Section 3: Governance
73
Committees of the Board
The Board has appointed a number of committees as set out
below.
Nomination Committee
As the Board is small and comprises only non-executive
Directors it fulfils the function of the Nomination Committee
and is chaired by the Chairman of the Board. Should a
vacancy occur, or the Board decides to recruit new members,
the Board will take into account the size, balance and profile
of the Board as a whole to identify any areas that need
strengthening. Due to the specialist nature of the investment
mandate and the difficulty in finding new Directors with
knowledge of the mining sector, the existing Directors
may identify suitable individuals from their range of
contacts, although other sources, including external search
consultants, may also be used as required.
Audit Committee
The Audit Committee, which is currently chaired by Mr Edey,
comprises the whole Board with the exception of Mr Cheyne,
who is not a member of the Committee but may attend by
invitation. Further details are given in the Report of the Audit
Committee on pages 76 to 80.
Management Engagement Committee
On 18 November 2021 the Board resolved to establish a
separate Management Engagement Committee chaired by
Mr Edey and comprising the whole Board. The Committee is
responsible for reviewing the performance of the Manager
in terms of investment management, company secretarial
services and fund accounting and, at least annually, reviews
the investment management agreement to ensure the terms
remain competitive. It will consider each year whether the
continuing appointment of the Manager on the terms of the
management contract is in the interests of the Company’s
shareholders as a whole. It will also consider and make
recommendations to the Board regarding the appointment
of third-party service providers and ensure that third-party
service providers comply with the terms of their respective
agreements with the Company and that the provisions
of such agreements follow industry practice, remain
competitive and are in the best interests of shareholders.
Remuneration Committee
The Company’s policy on Directors’ remuneration, together
with details of the remuneration of each Director, is detailed
in the Directors’ Remuneration Report and Directors’
Remuneration Policy on pages 65 to 69. As stated in the
Directors’ Remuneration Report, the full Board determines
the level of Directors’ fees and accordingly there is no
separate Remuneration Committee.
Internal controls
The Board is responsible for establishing and maintaining
the internal controls of the Company and for reviewing
their effectiveness, for ensuring that financial information
published or used within the business is reliable and for
regularly monitoring compliance with regulations governing
the operation of investment trusts. The Board, through the
Audit Committee (the Committee), regularly reviews the
effectiveness of the internal control systems to identify,
evaluate and manage the Company’s significant risks. If any
significant failings or weaknesses are identified, the Manager
and Board ensure that necessary action is taken to remedy
the failings. The Board is not aware of any significant failings
or weaknesses arising in the year under review.
Control of the risks identified, covering financial, operational,
compliance and risk management, is embedded in the
operations of the Company. There is a monitoring and
reporting process to review these controls, which has been
in place throughout the year under review and up to the date
of this report, carried out by the Manager’s corporate audit
departments. This accords with the Financial Reporting
Council’s ‘Guidance on Risk Management, Internal Control
and Related Financial and Business Reporting’.
The Company’s risk register sets out the risks relevant to the
Company and describes, where relevant, the internal controls
that are in place at the AIFM, the Investment Manager and
other third-party service providers to mitigate these risks.
The Committee formally reviews this register on a semi-
annual basis and the Manager as the Company’s AIFM
reports on any significant issues that have been identified in
the period. In addition, BlackRock’s internal audit department
provides an annual presentation to the Audit Committee
chairs of the BlackRock investment trusts on the results of
testing performed in relation to BlackRock’s internal control
processes. The Depositary also reviews the control processes
in place at the Custodian, the Fund Accountant and the AIFM
and reports formally to the Committee twice yearly. Both the
AIFM and the Depositary will escalate issues and report to
the Committee outside of these meetings on an ad hoc basis
to the extent this is required. The Committee also receives
annual and quarterly Service Organisation Control (SOC
1) reports respectively from BlackRock and BNYM on the
internal controls of their respective operations, together with
the opinion of their reporting accountant.
The Board recognises that these control systems can only be
designed to manage rather than eliminate the risk of failure
to achieve business objectives and to provide reasonable, but
not absolute, assurance against material misstatement or
loss, and relies on the operating controls established by the
Manager, the Fund Accountant and Custodian. The Manager
prepares revenue forecasts and management accounts
which allow the Board to assess the Company’s activities and
review its performance. The Board and the Manager have
agreed clearly defined investment criteria, specified levels
of authority and exposure limits. Reports on these issues,
including performance statistics and investment valuations,
are submitted to the Board at each meeting.
The Company does not have its own internal audit function,
as all the administration is delegated to the Manager and
other third-party service providers. The Board monitors the
controls in place through the internal control reports and the
74
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Manager’s internal audit department and feels that there is
currently no need for the Company to have its own internal
audit function, although this matter is kept under review.
Financial reporting
The Statement of Directors’ Responsibilities in respect of
the Annual Report and Financial Statements is set out on
page 81, the Independent Auditors’ Report on pages
84
to 91
and the Statement of Going Concern on page 60.
Socially responsible investment
Investment trusts do not employ staff and accordingly have
no direct impact on social matters but can be significant
investors in the economies of the regions in which they
invest. The Company invests in mining companies
around the world primarily on financial grounds to meet
its stated objectives. The Company has not adopted an
ESG or impact focused investment strategy and does
not exclude investments based on ESG criteria. However,
the Board believes that it is important to seek to invest
in companies whose boards act responsibly in respect of
environmental, ethical and social issues. The Investment
Manager’s evaluation procedures and financial analysis of
the companies within the portfolio includes research and
appraisal and also takes into account environmental policies,
social, ethical and other business issues. More information
regarding the Manager’s approach to ESG integration is
given on pages
54
to 57.
BlackRock is a signatory to the UK Stewardship Code, which
sets high expectations for how investors, and the service
providers that support them, manage assets on behalf
of UK savers and pensioners. The Manager’s compliance
with the UK Stewardship Code is publicly available on the
BlackRock website: www.blackrock.com/corporate/about-us/
investment-stewardship#stewardship-reports.
Bribery prevention policy
The provision of bribes of any nature to third parties in
order to gain a commercial advantage is prohibited and is
a criminal offence. The Board has a zero-tolerance policy
towards bribery and a commitment to carry out business
fairly, honestly and openly. The Board takes its responsibility
to prevent bribery very seriously and the Manager has anti-
bribery policies and procedures in place which are high
level, proportionate and risk based. The Company’s service
providers have been contacted in respect of their anti-bribery
policies and, where necessary, contractual changes are made
to existing agreements in respect of anti-bribery provisions.
Criminal Finances Act 2017
The Company has a commitment to zero tolerance towards
the criminal facilitation of tax evasion.
Communications with shareholders
Communications with shareholders is given a high
priority. Regular updates on performance are available to
shareholders on the BlackRock website and the Investment
Manager will review the Company’s portfolio performance at
the Annual General Meeting. The Notice of Annual General
Meeting which is sent out 20 working days in advance of
the meeting sets out the business of the Meeting which is
explained in the Directors’ Report. Separate resolutions are
proposed for substantive issues.
Proxy voting figures will be announced to shareholders at
the Annual General Meeting and will be made available
on the website shortly after the meeting. In accordance
with Provision 4 of the UK Code, when 20% of votes have
been cast against a resolution at any general meeting, the
Board will explain, when announcing the results of voting,
what actions it intends to take to understand the reasons
behind the vote result. An interim action statement will also
be published within six months of the vote, setting out the
views received from shareholders and the actions that the
Company has taken, and the Board will include a summary of
the feedback and actions in the next Annual Report.
The Company’s willingness to enter into discussions with
institutional shareholders is also demonstrated by the
programmes of institutional presentations by the Investment
Manager. The Board discusses with the Investment Manager
at each Board meeting any feedback from meetings with
shareholders and it also receives reports from its corporate
brokers. The Chairman is available to meet directly with
shareholders periodically without the Investment Manager
being present. The Chairman may be contacted via the
Company Secretary whose details are given on page 141.
The dialogue with shareholders provides a two-way forum for
canvassing the views of shareholders and enabling the Board
to become aware of any issues of concern, including those
relating to performance, strategy and corporate governance.
There is a section within this report entitled ‘Shareholder
Information’ which provides an overview of useful
information available to shareholders. The Company’s
financial statements, regular factsheets and other
information are also published on the BlackRock website at
www.blackrock.com/uk/brwm. The work undertaken by the
auditors does not involve consideration of the maintenance
and integrity of the website and, accordingly, the auditors
accept no responsibility for any changes that have occurred
to the financial statements since they were initially presented
on the website. Visitors to the website need to be aware that
legislation in the United Kingdom governing the preparation
and dissemination of the accounts may differ from
legislation in their jurisdiction.
Packaged Retail and Insurance-Based
Investment Products (PRIIPS) Regulation
(The Regulation)
The Regulation (as onshored in the UK and amended)
requires that anyone manufacturing, advising on, or selling
a PRIIP to retail investors in the UK must comply with the
Regulation. Shares issued by investment trusts fall into
scope of the Regulation.
Corporate Governance Statement
continued
Section 3: Governance
75
Investors should be aware that the Regulation requires the
AIFM, as PRIIPs manufacturer, to prepare a key information
document (KID) in respect of the Company. This KID must
be made available, free of charge, to UK retail investors prior
to them making any investment decision and have been
published on BlackRock’s website. The Company is not
responsible for the information contained in the KID and
investors should note that the procedures for calculating
the risks, costs and potential returns are prescribed by
the Regulation. The figures in the KID may not reflect
the expected returns for the Company and anticipated
performance returns cannot be guaranteed.
The PRIIPs KID in respect of the Company can be found at:
www.blackrock.com/uk/brwm.
Disclosure Guidance and Transparency
Rules
Other information required to be disclosed pursuant to the
Disclosure Guidance and Transparency Rules has been
placed in the Directors’ Report on pages
58
to 64 because it
is information which refers to events that have taken place
during the course of the year.
For and on behalf of the Board
DAVID CHEYNE
Chairman
2 March 2023
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Annual Report and Financial Statements 31 December 2022
As Chairman of the Company’s Audit Committee (the
Committee) I am pleased to present the Committee’s report
to shareholders for the year ended 31 December 2022.
Composition
All of the Directors, except the Chairman of the Board, were
members of the Committee during the year under review.
The Chairman may attend Committee meetings by invitation.
The Board considers that at least one member of the
Committee has recent and relevant financial experience and
specific competence in accounting and/or auditing and the
Committee as a whole has competence relevant to the sector
in which the Company operates.
The biographies of the Directors may be found on pages 39
and 40.
Performance evaluation
Details of the evaluation of the Committee are set out in the
Corporate Governance Statement on page 73.
Role and responsibilities
The Committee meets at least twice a year. The two planned
meetings are held prior to the Board meetings to approve
the half yearly and annual results. The Committee does
not consider that as an investment trust company it needs
to hold an additional meeting, although this is kept under
review.
The Committee operates within written terms of reference
detailing its scope and duties and these are available on the
website at www.blackrock.com/uk/brwm. The Committee’s
principal duties, as set out in the terms of reference, are set
out below. In accordance with these duties, the principal
activities of the Committee during the year included:
Internal controls, financial reporting and risk
management systems
•
reviewing the adequacy and effectiveness of the Group’s
internal financial controls and the internal control and risk
management systems;
•
reasonably satisfying itself that such systems meet
relevant legal and regulatory requirements;
•
monitoring the integrity of the financial statements;
•
reviewing the consistency of, and any changes to,
accounting policies;
•
reviewing the Half Yearly and Annual Report and Financial
Statements to ensure that the Group’s results and
financial position are presented accurately and fairly to
shareholders;
•
reviewing semi-annual reports from the Manager on its
activities as AIFM; and
•
reviewing half yearly reports from the Depositary on its
activities.
Narrative reporting
•
reviewing the content of the Annual Report and Financial
Statements and advising the Board on whether, taken as
a whole, they are fair, balanced and understandable and
provide the information necessary for shareholders to
assess the Group’s position, performance, business model
and strategy.
External audit
•
making recommendations to the Board, to be put to
shareholders for approval at the Annual General Meeting in
relation to the appointment, re-appointment and removal
of the Company’s external auditors;
•
reviewing the scope, execution, results, cost effectiveness,
independence and objectivity of the external auditors;
•
reviewing and approving the audit and non-audit fees
payable to the external auditors and the terms of their
engagement;
•
reviewing and approving the external auditors’ plan
for the following financial year, with a focus on the
identification of areas of audit risk and consideration of the
appropriateness of the level of audit materiality adopted;
•
reviewing the efficiency of the external audit process and
the quality of the audit engagement partner and the audit
team, and making a recommendation with respect to the
reappointment of the auditors;
•
reviewing the role of the Manager and third-party service
providers in an effective audit process;
•
considering the quality of the formal audit report to
shareholders; and
•
overseeing the relationship with the external auditors.
Reporting responsibilities
•
reporting to the Board on its proceedings and how it
has discharged its responsibilities, making whatever
recommendations it deems appropriate on any area within
its remit; and
•
compiling a report on its activities to be included in the
Annual Report and Financial Statements.
Internal audit
•
considering the need for an internal audit function, as set
out in the Corporate Governance Statement on pages 73
and 74 and below.
The fees paid to the external auditors are set out in note 5
of the Financial Statements. An explanation of how auditor
objectivity and independence is safeguarded is reported
under ‘Assessment of the effectiveness of the external audit
process’ on page 79.
Report of the Audit Committee
Section 3: Governance
77
Whistleblowing policy
The Committee has reviewed and accepted the
‘whistleblowing’ policy that has been put in place by
BlackRock under which its staff, in confidence, can raise
concerns about possible improprieties in matters of financial
reporting or other matters, insofar as they affect the
Company.
Internal audit
The Company does not have its own internal audit function,
as all the administration is delegated to the Manager. The
Board considers that it is sufficient to rely on the internal
audit department of BlackRock and the requirement for an
internal audit function is kept under review. The external
auditors obtain an understanding of the internal controls
in place at both the Manager and the Fund Accountant
by analysing the relevant control reports issued by their
independent auditors.
Non-audit services
The Company’s policy on permitted audit related and
non-audit services is set out in full in the Committee’s terms
of reference which are available on the Manager’s website at
www.blackrock.com/uk/brwm. The only audit related services
provided in the year related to the review of the half yearly
financial statements.
United Kingdom Single Electronic Format
Regulatory Technical Standard (UKSEF)
The Committee paid special attention to the preparation of
the financial statements in digital form under the UKSEF
taxonomy and regulatory technical standard. As this was the
second report in this format, we made sure the necessary
procedures had been completed by all parties, including
the technical accounting team of the Manager, the
Fund
Accountant, The Bank of New York Mellon, and a specialist
information technology provider.
Significant issues considered regarding the
Annual Report and Financial Statements
During the year, the Committee considered a number of
significant issues and areas of key audit risk in respect of the
Annual Report and Financial Statements. The Committee
reviewed the external audit plan at an early stage and
concluded that the appropriate areas of audit risk relevant
to the Company had been identified and that suitable audit
procedures had been put in place to obtain reasonable
assurance that the financial statements as a whole would be
free of material misstatements. The table on page 78 sets out
the key areas of risk identified and also explains how these
were addressed.
As the provision of portfolio valuation, fund accounting
and administration services is delegated to the Manager,
which sub-delegates certain administrative functions to The
Bank of New York Mellon (International) Limited (BNYM),
the Committee has also reviewed the internal control
reports prepared by BlackRock and BNYM. This enables the
Committee to ensure that the relevant control procedures
are in place to cover the areas of risk as identified in the table
that follows and are adequate and appropriate and have been
confirmed as operating effectively by their reporting auditor.
78
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Significant issue
How the issue was addressed
The accuracy of the valuation of the investment portfolio
Listed investments are valued using stock exchange prices from
third party pricing providers. The Board reviews detailed portfolio
valuations including the fair valuation of unquoted investments
on a regular basis throughout the year and receives confirmation
from the Manager that the pricing basis is appropriate and in line
with relevant accounting standards as adopted by the Company
and that the carrying values are materially correct. In relation to
the OZ Minerals Brazil Royalty Contract and equity shares of Jetti
Resources and MCC Mining, the Board reviews the valuation report
of independent external valuers.
The risk of misappropriation of assets and unsecured
ownership of investments
The Depositary is responsible for financial restitution for loss of
financial investments held in custody. The Depositary reports to
the Committee twice a year.
The Committee reviews reports from its service providers on key
controls over the assets of the Company and will take action to
address any significant issues that are identified in these reports,
which may include direct discussions with representatives of the
relevant service providers to obtain more detailed information
surrounding any matters of concern and gaining assurance that
appropriate remediation has been taken. Any significant issues
are reported by the Manager to the Committee. The Manager has
put in place procedures to ensure that investments can only be
made to the extent that the appropriate contractual and legal
arrangements are in place to protect the Company’s assets.
The accuracy of the calculation of management fees
The management fee is calculated in accordance with the
contractual terms in the investment management agreement by
the Fund Accountant and is reviewed in detail by the Manager.
The risk that income is overstated, incomplete or inaccurate
through failure to recognise proper income entitlements or to
apply the appropriate accounting treatment for recognition of
income
The Committee reviews income forecasts, including special
dividends and written options, and receives explanations from
the Manager for any variations or significant movements from
previous forecasts and prior year numbers. The Committee
also reviews and approves the rationale for the revenue/capital
accounting treatment of option income and special dividends.
The Committee also reviews SOC1 Reports from its service
providers, including the Company’s Fund Accountant and
Custodian, BNYM. These reports include information on control
processes in place to ensure the accurate recording of income
and any exceptions are highlighted to the Committee and will be
investigated further to ensure that appropriate remedial action has
been taken where relevant.
Auditors and audit tenure
The Committee reviews the performance of the auditors
on an annual basis, taking into consideration the
services and advice provided to the Company and the
fees charged for these services. The Company’s auditors,
PricewaterhouseCoopers LLP, were appointed on 28 April
2016 following the result of a tender process held in late
2015. Ms Gillian Alexander has been the Company’s audit
partner since the financial year commencing on 1 January
2021.
The Committee, in conjunction with the Board, is committed
to reviewing the auditors’ appointment each year to ensure
that the Company is receiving an optimal level of service.
In addition, even if no change is made to the audit firm
appointed, the audit partner changes at least every five years.
There are no contractual obligations that restrict the
Company’s choice of auditors. The Committee is mindful
of EU audit legislation which requires the rotation of long
serving auditors. The Company will be required to put its
audit contract out to tender again by no later than 2026.
The Committee is satisfied that the Company has complied
with the provisions of the Statutory Audit Services for
Large Companies Market Investigation (Mandatory
Use of Competitive Processes and Audit Committee
Responsibilities) Order 2014, published by the Competition
and Markets Authority on 26 September 2014. In recognition
of underlying audit rotation requirements, the Committee
currently intends that an audit tender process will be
undertaken during the year to 31 December 202
5
to appoint
either the incumbent or a new audit firm for the financial year
ending 31 December 2026 onwards.
Audit related service fees of £8,925 (excluding VAT) paid to
PricewaterhouseCoopers LLP relate to their review of the half
yearly financial statements (2021: £8,500).
Report of the Audit Committee
continued
Section 3: Governance
79
Assessment of the effectiveness of the
external audit process
To assess the effectiveness of the external audit, members
of the Committee work closely with the Manager to obtain
a good understanding of the progress and efficiency of the
audit. The Committee has adopted a formal framework to
review the effectiveness of the external audit process and
audit quality. This includes a review of the following areas:
•
the quality of the audit engagement partner and the audit
team;
•
the expertise of the audit firm and the resources available
to it;
•
identification of areas of audit risk;
•
planning, scope and execution of the audit;
•
consideration of the appropriateness of the level of audit
materiality adopted;
•
the role of the Committee, the Manager and third-party
service providers in an effective audit process;
•
communications by the auditors with the Committee;
•
how the auditors support the work of the Committee and
how the audit contributes added value;
•
policies and procedures to pre-approve and monitor
non-audit services including gifts and hospitality;
•
the independence and objectivity of the audit firm; and
•
the quality of the formal audit report to shareholders.
Feedback in relation to the audit process and also the
effectiveness of the Manager in performing its role is also
sought from relevant involved parties, notably the audit
partner and team. The external auditors are invited to attend
the Committee meetings at which the half yearly and annual
financial statements are considered and at which they
have the opportunity to meet with the Committee without
representatives of the Manager or Investment Manager
being present.
The effectiveness of the Committee and the Manager in the
external audit process is assessed principally in relation to
the timely identification and resolution of any process errors
or control breaches that might impact the Company’s net
asset values and accounting records. It is also assessed by
reference to how successfully any issues in respect of areas
of accounting judgement are identified and resolved, the
quality and timeliness of papers analysing these judgements,
the Board and the Manager’s approach to the value of the
independent audit and the booking of any audit adjustments
arising, and the timely provision of draft public documents
for review by the auditors and the Committee.
To form a conclusion regarding the independence of the
external auditors, the Committee considers whether the skills
and experience of the auditors make them a suitable supplier
of non-audit services and whether there are safeguards in
place to ensure that there is no threat to their objectivity
and independence in the conduct of the audit resulting
from the provision of such services. On an ongoing basis,
PricewaterhouseCoopers LLP review the independence
of their relationship with the Company and report to the
Committee, providing details of any other relationship
with the Manager. As part of this review, the Committee
also receives information about policies and processes for
maintaining independence and monitoring compliance
with relevant requirements from the Company’s auditors,
including information on the rotation of audit partners and
staff, the level of fees that the Company pays in proportion
to the overall fee income of the firm, and the level of related
fees, details of any relationships between the audit firm and
its staff and the Company, as well as an overall confirmation
from the auditors of their independence and objectivity.
As a result of its review, the Committee has concluded that
the external audit has been conducted effectively and also
that PricewaterhouseCoopers LLP is independent of the
Company and the Manager.
Conclusions in respect of the Annual Report
and Financial Statements
The production and the audit of the Company’s Annual
Report and Financial Statements is a comprehensive process
requiring input from a number of different contributors.
In order to reach a conclusion that the Annual Report and
Financial Statements are fair, balanced and understandable,
the Board has requested that the Committee advise
on whether these criteria are satisfied. In so doing, the
Committee has given consideration to the following:
•
the comprehensive control framework over the production
of the Annual Report and Financial Statements, including
the verification processes in place to deal with the factual
content;
•
the extensive levels of review that are undertaken in
the production process by the Manager, the Depositary
and other third-party service providers responsible for
accounting services and the Committee;
•
the controls that are in place at the Manager and third-
party service providers to ensure the completeness and
accuracy of the Group’s financial records and the security
of the Group’s assets; and
•
the existence of satisfactory internal control reports that
have been reviewed and reported on by external auditors
to verify the effectiveness of the internal controls of the
Manager, Depositary, Custodian and Fund Accountants.
80
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
In addition to the work outlined above, the Committee has
reviewed the Annual Report and Financial Statements and
is satisfied that, taken as a whole, they are fair, balanced and
understandable. In reaching this conclusion, the Committee
has assumed that the reader of the Annual Report and
Financial Statements would have a reasonable level of
knowledge of the investment trust industry in general and of
investment trusts in particular. The Committee has reported
on these findings to the Board who affirm the Committee’s
conclusions in the Statement of Directors’ Responsibilities in
respect of the Annual Report and Financial Statements.
RUSSELL EDEY
Chairman
Audit Committee
2 March 2023
Report of the Audit Committee
continued
Section 3: Governance
81
The Directors are responsible for preparing the Annual
Report and Financial Statements in accordance with
applicable law and regulations. Company law requires the
Directors to prepare financial statements for each financial
year. Under that law, the Directors are required to prepare
the financial statements in accordance with UK-adopted
International Accounting Standards (IAS).
Under Company law, the Directors must not approve the
financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the Group
and Company and of the profit or loss of the Group for that
period. In preparing those financial statements, the Directors
are required to:
•
present fairly the financial position, financial performance
and cash flows of the Group and 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 UK-adopted IAS, subject to any material
departures disclosed and explained in the financial
statements;
•
provide additional disclosures when compliance with the
specific requirements in accordance with UK-adopted IAS
is insufficient to enable users to understand the impact of
particular transactions, other events and conditions on the
Group’s and 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 Group
and Company will continue in business.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Group’s and Company’s transactions and disclose with
reasonable accuracy at any time the financial position of
the Group and Company and enable them to ensure that the
financial statements comply with the Companies Act 2006.
They are also responsible for safeguarding the assets of
the Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are also responsible for preparing the Strategic
Report, Directors’ Report, the Directors’ Remuneration
Report, the Corporate Governance Statement and the
Report of the Audit Committee in accordance with the
Companies Act 2006 and applicable regulations, including
the requirements of the Listing Rules and the Disclosure
Guidance and Transparency Rules. The Directors have
delegated responsibility to the Manager for the maintenance
and integrity of the Company’s corporate and financial
information included on the BlackRock website. Legislation
in the United Kingdom governing the preparation and
dissemination of financial statements may differ from
legislation in other jurisdictions.
Each of the Directors, whose names are listed on pages 39
and 40, confirm to the best of their knowledge that:
•
the financial statements, which have been prepared in
accordance with UK-adopted IAS, give a true and fair view
of the assets, liabilities, financial position and net return of
the Group and 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 Group and Company, together with a
description of the principal risks and uncertainties that
it faces.
The 2018 UK Corporate Governance Code also requires
Directors to ensure that the Annual Report and Financial
Statements are fair, balanced and understandable. In
order to reach a conclusion on this matter, the Board has
requested that the Audit Committee advise on whether it
considers that the Annual Report and Financial Statements
fulfil these requirements. The process by which the
Committee has reached these conclusions is set out in the
Audit Committee’s Report on pages 76 to 80. As a result, the
Board has concluded that the Annual Report and Financial
Statements for the year ended 31 December 2022, taken as a
whole, are fair, balanced and understandable and provide the
information necessary for shareholders to assess the Group’s
and Company’s position, performance, business model and
strategy.
For and on behalf of the Board
DAVID CHEYNE
Chairman
2 March 2023
Statement of Directors’ Responsibilities
in respect of the Annual Report and
Financial Statements
Financial
statements
Section 4: Financial statements
83
In precious metals, gold was the standout as the average price was flat for the year
compared to silver, platinum and palladium which were all lower. We continue to
focus on high quality producers with an attractive operating margin and a solid
production profile and resource base.
PHOTO COURTESY OF NEWMONT CORPORATION
84
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l
Annual Report and Financial Statements 31 December 2022
Report on the audit of the financial
statements
Opinion
In our opinion, BlackRock World Mining Trust plc’s Group
financial statements and Parent Company financial
statements (the “financial statements”):
•
give a true and fair view of the state of the Group’s and
of the Parent Company’s affairs as at 31 December 2022
and of the Group’s profit and the Group’s and Parent
Company’s cash flows for the year then ended;
•
have been properly prepared in accordance with UK-
adopted international accounting standards as applied
in accordance with the provisions of the Companies Act
2006; and
•
have been prepared in accordance with the requirements
of the Companies Act 2006.
We have audited the financial statements, included
within the Annual Report and Financial Statements (the
“Annual Report”), which comprise: the Consolidated and
Parent Company Statements of Financial Position as
at 31 December 2022; the Consolidated Statement of
Comprehensive Income; the Consolidated Statement
of Changes in Equity; the Parent Company Statement
of Changes in Equity; and the Consolidated and Parent
Company Cash Flow Statements for the year then ended;
and the notes to the financial statements, which include a
description of the significant accounting policies.
Our opinion is consistent with our reporting to the Audit
Committee.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities under ISAs (UK) are further described
in the Auditors’ responsibilities for the audit of the financial
statements section of our report. We believe that the audit
evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Independence
We remained independent of the Group in accordance
with the ethical requirements that are relevant to our
audit of the financial statements in the UK, which includes
the FRC’s Ethical Standard, as applicable to listed public
interest entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-
audit services prohibited by the FRC’s Ethical Standard were
not provided.
Other than those disclosed in Note 5, we have provided
no non-audit services to the Company or its controlled
undertakings in the period under audit.
Our audit approach
Context
The Group comprises BlackRock World Mining Trust plc (the
“Parent Company”) and BlackRock World Mining Investment
Company Limited (the “Subsidiary”). The Group engages
BlackRock Fund Managers Limited (the “Manager”) to
manage its assets. We conducted our audit of the financial
statements using information from The Bank of New York
Mellon (International) Limited (the "Fund Accountant") to
whom the Manager has, with the consent of the Directors,
delegated the provision of certain administrative functions.
Overview
Audit scope
•
We tailored the scope of our audit taking into account the
types of investments within the Group, the involvement
of the third parties referred to in the Context section, the
accounting processes and controls, and the industry in
which the Group operates.
•
We obtained an understanding of the control environment
in place at both the Manager and the Fund Accountant and
adopted a fully substantive testing approach using reports
obtained from the Fund Accountant.
Key audit matters
•
Valuation and existence of investments (Group and Parent)
•
Accuracy, completeness and occurrence of income (Group
and Parent)
•
Ability to continue as a going concern (Continuation Vote)
(Parent)
Materiality
•
Overall Group materiality: £12.99m (2021: £11.44m) based
on 1% of net assets.
•
Overall Company materiality: £12.3
4
m (2021: £10.90m)
based on 1% of net assets, capped at 95% of the Group
materiality.
•
Performance materiality: £9.74m (2021: £8.58m) (Group)
and £9.25m (2021: £8.15m) (Company).
The scope of our audit
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the financial
statements.
Key audit matters
Key audit matters are those matters that, in the auditors’
professional judgement, were of most significance in the
audit of the financial statements of the current period and
include the most significant assessed risks of material
misstatement (whether or not due to fraud) identified by the
auditors, including those which had the greatest effect on:
the overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team.
Independent auditors’ report
to the members of BlackRock World Mining Trust plc
Section 4: Financial statements
85
These matters, and any comments we make on the results of
our procedures thereon, were addressed in the context of our
audit of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate
opinion on these matters.
This is not a complete list of all risks identified by our audit.
The key audit matters below are consistent with last year.
Key audit matter
How our audit addressed the key audit matter
Valuation and existence of investments (Group and Parent)
Refer to the Report of the Audit Committee (page 76),
Accounting policies (page
99
) and Notes to the Financial
Statements (page 126).
The investment portfolio of £1.4bn at the year
end comprised
of listed equity and fixed income securities of £1.3bn and
unlisted equity and fixed income securities of £105m.
We focused on the valuation and existence of listed
investments because investments represent the principal
element of the net asset value as disclosed on the Statement
of Financial
P
osition in the Annual Report and Financial
Statements.
For unlisted investments, we focused on the valuation of
OZ Minerals Brazil Royalty (£21.2m) and Jetti Resources
(£29.9m) as the valuation of these investments requires
estimates and significant judgements to be applied by the
Manager. Changes to the estimates and/or judgements can
result, either on an individual or aggregate basis, in a material
change to the valuation of the investments.
Our audit work on the valuation and existence of the listed
investments included the following:
•
We tested the valuation of all of the investments by
agreeing the valuation to independent third party
sources; and,
•
We tested the existence of all of the investments by
agreeing the Group’s and Parent Company's holdings to
an independent custodian and broker confirmation
s
. For
the Parent Company’s investment in the subsidiary, we
agreed the valuation of the investment to the net asset
value of the subsidiary which we audited.
Our audit work on the valuation and existence of unlisted
investments included the following:
•
We tested the existence of all of the investments by
agreeing the Group's and Parent Company's holdings to
an independent custodian and broker confirmations; and
•
We understood the valuation techniques used by the
Directors in determining the fair value of each unlisted
investment.
For OZ Minerals Brazil Royalty, we performed the following
audit procedures:
•
We obtained and reviewed the valuation report issued by
the external expert;
•
We held discussions with the external expert throughout
December 2022 up until February 2023 to understand:
–
the approach taken in the current year and obtained
an understanding of changes in the assumptions
since last year; and,
–
the impact of climate change on the valuation.
86
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Independent auditors’ report
to the members of BlackRock World Mining Trust plc (continued)
Key audit matter
How our audit addressed the key audit matter
•
We involved PwC specialists to evaluate the valuation
methodology applied, with reference to the International
Private Equity and Venture Capital Valuation guidelines
(IPEV);
•
We confirmed existence to an independent custodian
confirmation;
•
We understood the valuation techniques used by the
Directors in determining the fair value of the OZ Minerals
Brazil Royalty
Contract
;
•
We performed price benchmarking and sensitivity
analysis over gold and copper price forecasts
and
di
scount rate used; and
•
We also agreed the royalty rate to the royalty agreement
and agreed inputs in the discounted cash flow calculation
to publicly-available forecasts released by OZ Minerals,
the operator of the mine.
For Jetti Resources we performed the following audit
procedures:
•
We obtained and reviewed the valuation report issued by
the external expert;
•
We involved PwC specialists to evaluate the valuation
methodology applied, with reference to the International
Private Equity and Venture Capital Valuation guidelines
(IPEV);
•
We confirmed existence to an independent custodian
confirmation;
•
We understood the valuation techniques used by the
Directors in determining the fair value of Jetti Resources;
and
•
We performed price benchmarking over copper price
forecasts and sensitivity analysis over the earning
multiple used.
We have no matters to report as a result of this testing.
Section 4: Financial statements
87
Key audit matter
How our audit addressed the key audit matter
Accuracy, completeness and occurrence of income (Group and
Parent)
Refer to the Report of the Audit Committee (page 76),
Accounting policies (page
98
) and Notes to the Financial
Statements (page 102).
Income from investments consists
primarily of dividend income.
Within dividend income there is a risk of incomplete or
inaccurate recognition of income through the failure
to recognise proper income entitlements or to apply an
inappropriate accounting treatment.
In addition, the Directors are required to exercise judgement
in determining whether income receivable in the form of
special dividends should be classified as ‘revenue’ or ‘capital’
in the Statement of Comprehensive Income.
We responded to this risk by performing the following audit
procedures:
•
We obtained an understanding of the processes and
controls around income recognition and classification
of special dividends by reviewing the internal controls
reports of the Fund Accountant; and,
•
We assessed the appropriateness of the classification of
special dividends as revenue or capital by the Directors
with reference to publicly available information.
For all dividends recorded by the Group and the Parent
Company, we performed our audit procedures through the
use of our proprietary testing tool Halo:
•
We tested the accuracy of dividend income by agreeing
the dividend rates from investments to independent
market data;
•
We tested occurrence by examining for each investment
holding, that all dividends recorded in the year had been
declared in the market; and,
•
To test for completeness, we investigated that the
appropriate dividends had been received in the year by
reference to independent data of dividends declared for
all investment holdings held within the year.
As stipulated by the requirements set out in the AIC SORP,
we tested the allocation and presentation of dividend income
between the revenue and capital columns of the Consolidated
Statement of
C
omprehensive
I
ncome by determining reasons
behind dividend distributions.
We have no matters to report as a result of this testing.
Ability to continue as a going concern (Continuation Vote)
(Parent)
A continuation vote is due to take place at the next Annual
General Meeting in 2023, which, if passed, will allow the
Parent Company to continue as an investment trust for a
further year. As such, the Directors have considered and
assessed the potential impact on the ability of the Parent
Company to continue as a going concern.
The Directors have concluded, based on their assessment
and discussions with key investors, that the Parent
Company will be able to continue its operations and meet its
liabilities as they fall due for a period of at least 12 months
from the date of approving the financial statements.
We have reviewed the Directors’ assessment of going concern
including the continuation vote. We also challenged the
Directors on their assessment which includes, but is not
limited to, the following in support of the vote:
•
The shareholder register is stable, comprising a wide
range of private wealth managers and retail investors;
•
The financial performance of the Parent Company above
its targeted performance benchmark for the past 3 years;
and,
•
The previous continuation votes passed with no
significant votes against.
The procedures we performed and our conclusions on going
concern are included in the Conclusions relating to going
concern section below.
88
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l
Annual Report and Financial Statements 31 December 2022
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed
enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of
the Group and the Company, the accounting processes and
controls, and the industry in which they operate.
As part of designing our audit, we determined materiality
and assessed the risks of material misstatement in the
financial statements. In particular, we looked at where the
Directors made subjective judgements, for example in respect
of significant accounting estimates that involved making
assumptions and considering future events that are inherently
uncertain.
The impact of climate risk on our audit
In planning our audit, we made enquiries of the Directors
and Investment Manager to understand the extent of the
potential impact of climate change on the Group’s financial
statements. The Directors and Investment Manager
concluded that there was no material impact on the financial
statements. Our evaluation of this conclusion included
challenging key judgements and estimates in areas where
we considered that there was greatest potential for climate
change impact. This was principally in relation to the
valuation of certain hard to value investments as explained in
our key audit matter ‘Valuation and existence of investments’.
We also considered the consistency of the climate change
disclosures included in the Strategic Report and Investment
Manager’s Report with the financial statements and our
knowledge from our audit.
Materiality
The scope of our audit was influenced by our application
of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations,
helped us to determine the scope of our audit and the nature,
timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in
evaluating the effect of misstatements, both individually and
in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined
materiality for the financial statements as a whole as follows:
Financial statements – Group
Financial statements – Company
Overall materiality
£1
2
.
99
m (2021: £11.44m).
£12.3
4
m (2021: £10.90m).
How we determined it
1% of net assets
1% of net assets, capped at 95% of the
Group materiality
Rationale for benchmark applied
We applied this benchmark, which is a
generally accepted auditing practice for
investment trust audits.
We applied this benchmark, which is a
generally accepted auditing practice
for investment trust audits. The Parent
Company is capped at 95% of the overall
Group materiality.
For each component in the scope of our Group audit, we
allocated a materiality that is less than our overall Group
materiality. The range of materiality allocated across
components was between £12,
343
k and £72k. Certain
components were audited to a local statutory audit materiality
that was also less than our overall Group materiality.
We use performance materiality to reduce to an appropriately
low level the probability that the aggregate of uncorrected
and undetected misstatements exceeds overall materiality.
Specifically, we use performance materiality in determining
the scope of our audit and the nature and extent of our testing
of account balances, classes of transactions and disclosures,
for example in determining sample sizes. Our performance
materiality was 75% (2021: 75%) of overall materiality,
amounting to £9.74m (2021: £8.58m) for the Group financial
statements and £9.25m (2021: £8.15m) for the Company
financial statements.
In determining the performance materiality, we considered
a number of factors - the history of misstatements, risk
assessment and aggregation risk and the effectiveness of
controls - and concluded that an amount at the upper end of
our normal range was appropriate.
We agreed with the Audit Committee that we would report to
them misstatements identified during our audit above £649k
(Group audit) (2021: £572k) and £617k (Company audit)
(2021: £543k) as well as misstatements below those amounts
that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the Directors’ assessment of the Group's
and the Company’s ability to continue to adopt the going
concern basis of accounting included:
•
evaluating the Directors’ updated risk assessment and
considering whether it addressed relevant threats,
including Russia’s invasion of Ukraine, rise of inflation
and the wider macroeconomic uncertainty;
•
evaluating the Directors’ assessment of potential
operational impacts, considering their consistency with
Independent auditors’ report
to the members of BlackRock World Mining Trust plc (continued)
Section 4: Financial statements
89
other available information and our understanding of
the business and assessing the potential impact on the
financial statements;
•
reviewing the Directors’ assessment of the Group’s
financial position in the context of its ability to meet
future expected operating expenses, their assessment
of liquidity as well as their review of the operational
resilience of the Group and oversight of key third-party
service providers;
•
assessing the implication of significant reductions in NAV
as a result of a severe downside but plausible scenario in
the market’s performance on the ongoing ability of the
Group to operate; and,
•
reviewing the Directors’ assessment of going concern in
relation to the passing of the continuation vote.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on
the Group’s and the Company’s ability to continue as a going
concern for a period of at least twelve months from when the
financial statements are authorised for issue.
In auditing the financial statements, we have concluded that
the Directors’ use of the going concern basis of accounting in
the preparation of the financial statements is appropriate.
However, because not all future events or conditions can
be predicted, this conclusion is not a guarantee as to the
Group’s and the Company’s ability to continue as a going
concern.
In relation to the Directors’ reporting on how they have
applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation to
the Directors’ statement in the financial statements about
whether the Directors considered it appropriate to adopt the
going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors
with respect to going concern are described in the relevant
sections of this report.
Reporting on other information
The other information comprises all of the information in
the Annual Report other than the financial statements and
our auditors’ report thereon. The Directors are responsible
for the other information. Our opinion on the financial
statements does not cover the other information and,
accordingly, we do not express an audit opinion or, except to
the extent otherwise explicitly stated in this report, any form
of assurance thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing
so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the audit, or otherwise appears to be materially
misstated. If we identify an apparent material inconsistency or
material misstatement, we are required to perform procedures
to conclude whether there is a material misstatement of the
financial statements or a material misstatement of the other
information. If, based on the work we have performed, we
conclude that there is a material misstatement of this other
information, we are required to report that fact. We have
nothing to report based on these responsibilities.
With respect to the Strategic Report and Director’s Report, we
also considered whether the disclosures required by the UK
Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit,
the Companies Act 2006 requires us also to report certain
opinions and matters as described below.
Strategic Report and Directors’ Report
In our opinion, based on the work undertaken in the course
of the audit, the information given in the Strategic Report
and Director’s Report for the year ended 31 December 2022
is consistent with the financial statements and has been
prepared in accordance with applicable legal requirements.
In light of the knowledge and understanding of the Group
and Company and their environment obtained in the course
of the audit, we did not identify any material misstatements
in the Strategic Report and Directors’ Report.
Directors’ Remuneration
In our opinion, the part of the Directors’ Remuneration
Report to be audited has been properly prepared in
accordance with the Companies Act 2006.
Corporate Governance Statement
The Listing Rules require us to review the Directors’
statements in relation to going concern, longer-term viability
and that part of the
C
orporate Governance Statement
relating to the Company’s compliance with the provisions of
the UK Corporate Governance Code specified for our review.
Our additional responsibilities with respect to the
C
orporate
Governance Statement as other information are described in
the Reporting on other information section of this report.
Based on the work undertaken as part of our audit, we
have concluded that each of the following elements of the
C
orporate Governance Statement is materially consistent
with the financial statements and our knowledge obtained
during the audit, and we have nothing material to add or
draw attention to in relation to:
•
The Directors’ confirmation that they have carried out a
robust assessment of the emerging and principal risks;
•
The disclosures in the Annual Report that describe those
principal risks, what procedures are in place to identify
emerging risks and an explanation of how these are being
managed or mitigated;
90
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
•
The Directors’ statement in the financial statements
about whether they considered it appropriate to adopt
the going concern basis of accounting in preparing them,
and their identification of any material uncertainties to
the Group’s and Company’s ability to continue to do so
over a period of at least twelve months from the date of
approval of the financial statements;
•
The Directors’ explanation as to their assessment of
the Group’s and Company’s prospects, the period this
assessment covers and why the period is appropriate;
and
•
The Directors’ statement as to whether they have a
reasonable expectation that the Company will be able
to continue in operation and meet its liabilities as they
fall due over the period of its assessment, including any
related disclosures drawing attention to any necessary
qualifications or assumptions.
Our review of the Directors’ statement regarding the longer-
term viability of the Group and Company was substantially
less in scope than an audit and only consisted of making
inquiries and considering the Directors’ process supporting
their statement; checking that the statement is in alignment
with the relevant provisions of the UK Corporate Governance
Code; and considering whether the statement is consistent
with the financial statements and our knowledge and
understanding of the Group and Company and their
environment obtained in the course of the audit.
In addition, based on the work undertaken as part of our
audit, we have concluded that each of the following elements
of the
C
orporate Governance Statement is materially
consistent with the financial statements and our knowledge
obtained during the audit:
•
The Directors’ statement that they consider the
Annual Report, taken as a whole, is fair, balanced and
understandable, and provides the information necessary
for the members to assess the Group’s and Company’s
position, performance, business model and strategy;
•
The section of the Annual Report that describes the
review of effectiveness of risk management and internal
control systems; and
•
The section of the Annual Report describing the work of
the Audit Committee.
We have nothing to report in respect of our responsibility
to report when the Directors’ statement relating to the
Company’s compliance with the Code does not properly
disclose a departure from a relevant provision of the Code
specified under the Listing Rules for review by the auditors.
Responsibilities for the financial statements
and the audit
Responsibilities of the directors for the financial
statements
As explained more fully in the Statement of Directors’
Responsibilities in respect of the Annual Report and
Financial Statements, the Directors are responsible for the
preparation of the financial statements in accordance with
the applicable framework and for being satisfied that they
give a true and fair view. The Directors are also responsible
for such internal control as they determine is necessary to
enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are
responsible for assessing the Group’s and the Company’s
ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the
going concern basis of accounting unless the Directors
either intend to liquidate the Group or the Company or to
cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and
to issue an auditors’ report that includes our opinion.
Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect
material misstatements in respect of irregularities, including
fraud. The extent to which our procedures are capable of
detecting irregularities, including fraud, is detailed below.
Based on our understanding of the Group and industry, we
identified that the principal risks of non-compliance with
laws and regulations related to breaches of Chapter 4 of Part
24 of the Corporation Tax Act 2010, and we considered the
extent to which non-compliance might have a material effect
on the financial statements. We also considered those laws
and regulations that have a direct impact on the financial
statements such as the Companies Act 2006. We evaluated
management’s incentives and opportunities for fraudulent
manipulation of the financial statements (including the risk
of override of controls), and determined that the principal
risks were related to posting inappropriate journal entries to
Independent auditors’ report
to the members of BlackRock World Mining Trust plc (continued)
Section 4: Financial statements
91
increase net asset value. Audit procedures performed by the
engagement team included:
•
holding discussions with the Manager and the Audit
Committee, including consideration of known or
suspected instances of non-compliance with laws and
regulation and fraud;
•
understanding the controls implemented by the Manager
and the Fund Accountant designed to prevent and detect
irregularities;
•
assessing the Group’s compliance with the requirements
of Section 1158 of the Corporation Tax Act 2010,
including recalculation of numerical aspects of the
eligibility conditions;
•
identifying and testing journal entries, in particular
year end journal entries posted by the Fund Accountant
during the preparation of the financial statements;
•
designing audit procedures to incorporate
unpredictability around the nature, timing or extent
of our testing for example, targeting transactions that
otherwise would be immaterial; and
•
reviewing relevant meeting minutes, including those of
the Audit Committee.
There are inherent limitations in the audit procedures
described above. We are less likely to become aware of
instances of non-compliance with laws and regulations that
are not closely related to events and transactions reflected
in the financial statements. Also, the risk of not detecting a
material misstatement due to fraud is higher than the risk of
not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
Our audit testing might include testing complete populations
of certain transactions and balances, possibly using data
auditing techniques. However, it typically involves selecting
a limited number of items for testing, rather than testing
complete populations. We will often seek to target particular
items for testing based on their size or risk characteristics. In
other cases, we will use audit sampling to enable us to draw
a conclusion about the population from which the sample is
selected.
A further description of our responsibilities for the audit of
the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared
for and only for the Company’s members as a body in
accordance with Chapter 3 of Part 16 of the Companies Act
2006 and for no other purpose. We do not, in giving these
opinions, accept or assume responsibility for any other
purpose or to any other person to whom this report is shown
or into whose hands it may come save where expressly
agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to
you if, in our opinion:
•
we have not obtained all the information and
explanations we require for our audit; or
•
adequate accounting records have not been kept by the
Company, or returns adequate for our audit have not
been received from branches not visited by us; or
•
certain disclosures of Directors’ remuneration specified
by law are not made; or
•
the Company financial statements and the part of the
Directors’ Remuneration Report to be audited are not in
agreement with the accounting records and returns.
We have no exceptions to report arising from this
responsibility.
Appointment
Following the recommendation of the Audit Committee, we
were appointed by the Directors on 28 April 2016 to audit
the financial statements for the year ended 31 December
2016 and subsequent financial periods. The period of total
uninterrupted engagement is 7 years, covering the years
ended 31 December 2016 to 31 December 2022.
Other matter
In due course, as required by the Financial Conduct Authority
Disclosure Guidance and Transparency Rule 4.1.14R, these
financial statements will form part of the ESEF-prepared
annual financial report filed on the National Storage
Mechanism of the Financial Conduct Authority in accordance
with the ESEF Regulatory Technical Standard (‘ESEF RTS’).
This auditors’ report provides no assurance over whether
the annual financial report will be prepared using the single
electronic format specified in the ESEF RTS.
GILLIAN ALEXANDER
(Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Edinburgh
2
March 2023
92
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Consolidated Statement of
Comprehensive Income
for the year ended 31 December 2022
2022
2021
Notes
Revenue
Capital
Total
Revenue
Capital
Total
£’000
£’000
£’000
£’000
£’000
£’000
Income from investments held at fair value
through profit or loss
3
Other income
3
Total revenue
Net profit on investments held at fair value
through profit or loss
10
Net loss on foreign exchange
14
(17,645 )
(17,645 )
(1,696 )
(1,696 )
Total
Expenses
Investment management fee
4
(2,615 )
(8,031 )
(10,646 )
(2,252 )
(6,978 )
(9,230 )
Other operating expenses
5
(1,037 )
(28 )
(1,065 )
(1,034 )
(9 )
(1,043 )
Total operating expenses
(3,652 )
(8,059 )
(11,711 )
(3,286 )
(6,987 )
(10,273 )
Net profit on ordinary activities before finance
costs and taxation
Finance costs
6
(1,182 )
(3,520 )
(4,702 )
(374 )
(1,117 )
(1,491 )
Net profit on ordinary activities before
taxation
Taxation (charge)/credit
7
(5,149 )
(3,266 )
(5,106 )
(4,120 )
Net profit on ordinary activities after taxation
Earnings per ordinary share (pence) – basic
and diluted
9
The total column of this statement represents the Group’s Statement of Comprehensive Income, prepared in accordance with
UK-adopted International Accounting Standards (IASs). The supplementary revenue and capital accounts are both prepared
under guidance published by the Association of Investment Companies (AIC). All items in the above statement derive from
continuing operations. No operations were acquired or discontinued during the year. All income is attributable to the equity
holders of the Group.
The Group does not have any other comprehensive income (2021: £nil). The net profit for the year disclosed above represents
the Group’s total comprehensive income.
The notes on pages
97 to
132 form part of these financial statements.
Section 4: Financial statements
93
Consolidated Statement of Changes
in Equity
for the year ended 31 December 2022
The notes on pages
97 to
132 form part of these financial statements.
Group
Notes
Called
up share
capital
Share
premium
account
Capital
redemption
reserve
Special
reserve
Capital
reserves
Revenue
reserve
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
For the year ended 31 December 2022
At 31 December 2021
Total comprehensive income:
Net profit for the year
Transactions with owners, recorded directly
to equity:
Ordinary shares reissued from treasury
16,17
Share reissue costs
16,17
(70 )
(70 )
Dividends paid
1
8
(80,911 )
(80,911 )
At 31 December 2022
For the year ended 31 December 2021
At 31 December 2020
Total comprehensive income:
Net profit for the year
Transactions with owners, recorded directly
to equity:
Ordinary shares reissued from treasury
Share reissue costs
(127 )
(127 )
Ordinary shares purchased into treasury
(390 )
(390 )
Share purchase costs
(3 )
(3 )
Dividends paid
2
8
(43,215 )
(43,215 )
At 31 December 2021
1
The final dividend of 27.00 p per share for the year ended 31 December 2021, declared on 8 March 2022 and paid on 19 May 2022; 1st interim dividend of 5.50 p
per share for the year ended 31 December 2022, declared on 6 May 2022 and paid on 30 June 2022; 2nd interim dividend of 5.50 p per share for the year ended 31
December 2022, declared on 23 August 2022 and paid on 30 September 2022 and 3rd interim dividend of 5.50 p per share for the year ended 31 December 2022,
declared on 16 November 2022 and paid on 22 December 2022.
2
The final dividend of 8.30 p per share for the year ended 31 December 2020, declared on 4 March 2021 and paid on 6 May 2021; 1st interim dividend of 4.50 p per
share for the year ended 31 December 2021, declared on 29 April 2021 and paid on 25 June 2021; 2nd interim dividend of 5.50 p per share for the year ended 31
December 2021, declared on 19 August 2021 and paid on 24 September 2021 and 3rd interim dividend of 5.50 p per share for the year ended 31 December 2021,
declared on 18 November 2021 and paid on 24 December 2021.
For information on the Company’s distributable reserves please refer to note 17 on pages 111
to
113.
94
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Company
Notes
Called
up share
capital
Share
premium
account
Capital
redemption
reserve
Special
reserve
Capital
reserves
Revenue
reserve
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
For the year ended 31 December 2022
At 31 December 2021
9,651
138,818
22,779
155,123
748,107
68,396 1,142,874
Total comprehensive income:
Net profit for the year
–
–
–
–
126,460
75,960
202,420
Transactions with owners, recorded directly
to equity:
Ordinary shares reissued from treasury
16,17
–
9,289
–
25,683
–
–
34,972
Share reissue costs
16,17
–
–
–
(70)
–
–
(70)
Dividends paid
1
8
–
–
–
–
–
(80,911)
(80,911)
At 31 December 2022
9,651
148,107
22,779
180,736
874,567
63,445 1,299,285
For the year ended 31 December 2021
At 31 December 2020
9,651
127,155
22,779
103,992
634,547
32,701
930,825
Total comprehensive income:
Net profit for the year
–
–
–
–
113,560
78,910
192,470
Transactions with owners, recorded directly
to equity:
Ordinary shares reissued from treasury
–
11,663
–
51,651
–
–
63,314
Share reissue costs
–
–
–
(127)
–
–
(127)
Ordinary shares purchased into treasury
–
–
–
(390)
–
–
(390)
Share purchase costs
–
–
–
(3)
–
–
(3)
Dividends paid
2
8
–
–
–
–
–
(43,215)
(43,215)
At 31 December 2021
9,651
138,818
22,779
155,123
748,107
68,396 1,142,874
1
The final dividend of 27.00p per share for the year ended 31 December 2021, declared on 8 March 2022 and paid on 19 May 2022; 1st interim dividend of 5.50p
per share for the year ended 31 December 2022, declared on 6 May 2022 and paid on 30 June 2022; 2nd interim dividend of 5.50p per share for the year ended
31 December 2022, declared on 23 August 2022 and paid on 30 September 2022 and 3rd interim dividend of 5.50p per share for the year ended 31 December
2022, declared on 16 November 2022 and paid on 22 December 2022.
2
The final dividend of 8.30p per share for the year ended 31 December 2020, declared on 4 March 2021 and paid on 6 May 2021; 1st interim dividend of 4.50p
per share for the year ended 31 December 2021, declared on 29 April 2021 and paid on 25 June 2021; 2nd interim dividend of 5.50p per share for the year ended
31 December 2021, declared on 19 August 2021 and paid on 24 September 2021 and 3rd interim dividend of 5.50p per share for the year ended 31 December
2021, declared on 18 November 2021 and paid on 24 December 2021.
For information on the Company’s distributable reserves please refer to note 17 on pages 111
to
113.
Parent Company Statement of Changes
in Equity
for the year ended 31 December 2022
The notes on pages
97 to
132 form part of these financial statements.
Section 4: Financial statements
95
Consolidated and Parent Company
Statements of Financial Position
as at 31 December 2022
31 December 2022
31 December 2021
Notes
Group
Company
Group
Company
£’000
£’000
£’000
£’000
Non current assets
Investments held at fair value through profit
or loss
10
1,432,075
1,263,979
Current assets
Current tax asset
821
85
Other receivables
12
4,431
5,209
Cash collateral held with brokers
18
6,795
580
Cash and cash equivalents
18
23,317
20,222
Total current assets
35,364
26,096
Total assets
1,467,439
1,290,075
Current liabilities
Current tax liability
(373 )
(361)
(427 )
(427)
Other payables
13
(6,155 )
(7,223)
(5,183 )
(6,251)
Derivative financial liabilities held at fair value
through profit or loss
10
(1,227 )
(1,227)
(667 )
(667)
Bank overdraft
14,15,18
–
(356 )
(356)
Bank loans
14,15
(158,783 )
(158,783)
(138,867 )
(138,867)
Total current liabilities
(166,538 )
(167,594)
(145,500 )
(146,568)
Total assets less current liabilities
1,299,845
1,143,507
Non current liabilities
Deferred taxation liability
7 (c)
(560 )
(560)
(633 )
(633)
Net assets
1,299,285
1,142,874
Equity attributable to equity holders
Called up share capital
16
9,651
9,651
Share premium account
17
148,107
138,818
Capital redemption reserve
17
22,779
22,779
Special reserve
17
180,736
155,123
Capital reserves:
At 1 January
748,107
634,547
Net profit for the year
126,460
113,560
At 31 December
17
874,567
748,107
Revenue reserve:
At 1 January
68,396
32,701
Net profit for the year
75,960
78,910
Dividends paid
(80,911 )
(80,911)
(43,215 )
(43,215)
At 31 December
17
63,445
68,396
Total equity
1,299,285
1,142,874
Net asset value per ordinary share (pence)
9
688.35
622.21
The financial statements on pages
92 to
132 were approved and authorised for issue by the Board of Directors on
2
March
2023 and signed on its behalf by Mr David Cheyne, Chairman.
BlackRock World Mining Trust plc
Registered in England and Wales, No.2868209
The notes on pages
97 to
132 form part of these financial statements.
96
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Consolidated and Parent Company Cash
Flow Statements
for the year ended 31 December 2022
31 December 2022
31 December 2021
Group
Company
Group
Company
£’000
£’000
£’000
£’000
Operating activities
Net profit before taxation
205,686
196,590
Add back finance costs
4,702
1,491
Net profit on investments held at fair value through profit
or loss (including transaction costs)
(152,937 )
(152,990)
(122,374 )
(122,374)
Net loss on foreign exchange
17,645
1,696
Sales of investments held at fair value through profit or
loss
489,236
354,182
Purchases of investments held at fair value through profit
or loss
(503,782 )
(503,782)
(442,711 )
(442,711)
Decrease/(increase) in other receivables
13
(1,233 )
(1,233)
Increase in other payables
1,013
2,571
Decrease in amounts due from brokers
243
2,776
Decrease in amounts due to brokers
–
(2,473 )
(2,473)
Net movement in cash collateral held with brokers
(6,215 )
(6,215)
2,363
Net cash inflow/(outflow) from operating activities
before taxation
55,551
(7,122 )
(7,122)
Taxation paid
(432 )
(432)
(484 )
(484)
Taxation on investment income included within gross
income
(3,210 )
(3,210)
(3,303 )
(3,303)
Net cash inflow/(outflow) from operating activities
51,909
(10,909 )
(10,909)
Financing activities
Drawdown of loans
2,359
35,020
Interest paid
(4,720 )
(4,720)
(1,439 )
(1,439)
Shares purchased into treasury
–
(390 )
(390)
Share purchase costs paid
–
(3 )
(3)
Net proceeds from ordinary shares reissued from treasury
34,902
63,187
Dividends paid
(80,911 )
(80,911)
(43,215 )
(43,215)
Net cash (outflow)/inflow from financing activities
(48,370 )
(48,370)
53,160
Increase in cash and cash equivalents
3,539
42,251
Cash and cash equivalents at start of the year
19,866
(16,008 )
(22,118)
Effect of foreign exchange rate changes
(88 )
(88)
(267 )
(267)
Cash and cash equivalents at end of year
23,317
19,866
Comprised of:
Cash and cash equivalents
23,317
20,222
Bank overdraft
–
(356 )
(356)
23,317
19,866
The notes on pages
97 to
132 form part of these financial statements.
Notes to the financial statements
for the year ended 31 December 2022
The principal activity of the Company is that of an investment
trust company within the meaning of Section 1158 of the
Corporation Tax Act 2010. The Company was incorporated
in England on 28 October 1993 and this is the 29th Annual
Report.
The principal activity of the subsidiary, BlackRock World
The principal accounting policies adopted by the Group and
Company have been applied consistently, other than where
new policies have been adopted and are set out below.
On 31 December 2020, International Financial Reporting
Standards (IFRS) as adopted by the European Union
at that date was brought into UK law and became UK-
adopted International Accounting Standards (IASs), with
future changes being subject to endorsement by the UK
Endorsement Board and with the requirements of the
Companies Act 2006 as applicable to companies reporting
under those standards. The Company transitioned to
IASs in its consolidated financial statements with effect
from 1 January 2021. There was no impact or changes in
accounting policies from the transition.
The Group and Company financial statements have been
prepared under the historic cost convention modified by
the revaluation of certain financial assets and financial
liabilities held at fair value through profit or loss and in
accordance with IASs. The Company has taken advantage of
the exemption provided under Section 408 of the Companies
Act 2006 not to publish its individual Statement of
Comprehensive Income and related notes. All of the Group’s
operations are of a continuing nature.
Insofar as the Statement of Recommended Practice (SORP)
for investment trust companies and venture capital trusts,
issued by the Association of Investment Companies (AIC)
in October 2019 and updated in July 2022, is compatible
with IASs, the financial statements have been prepared in
accordance with guidance set out in the SORP.
Substantially all of the assets of the Group consist of
securities that are readily realisable and, accordingly, the
Directors believe that the Group has adequate resources
to continue in operational existence for the foreseeable
future for the period to 31 March 2024, being a period of
at least twelve months from the date of approval of the
financial statements and therefore consider the going
concern assumption to be appropriate. The Directors have
reviewed compliance with the covenants associated with
the bank overdraft facility, loan facility, income and expense
projections and the liquidity of the investment portfolio in
making their assessment.
The Directors have considered the impact of climate change
on the value of the investments included in the Financial
Statements and have concluded that:
•
there was no further impact of climate change to be
considered as the investments are valued based on market
pricing as required by IFRS 13; and
•
the risk is adequately captured in the assumptions and
inputs used in measurement of Level 3 assets, as noted in
note 18 of the Financial Statements.
None of the Group's other assets and liabilities were
considered to be potentially impacted by climate change.
s
terling,
which is the currency of the primary economic environment
in which the Group operates. All values are rounded to the
nearest thousand pounds (£’000) except where otherwise
Relevant International Accounting Standards that
have yet to be adopted:
(effective 1 January 2023).
This standard replaces IFRS 4, which currently permits a wide
range of accounting practices in accounting for insurance
contracts. IFRS 17 will fundamentally change the accounting
by all entities that issue insurance contracts and investment
contracts with discretionary participation features.
This standard is unlikely to have any impact on the Company
IAS 12 – Deferred tax related to assets and liabilities
arising from a single transaction
(effective 1 January 2023).
The International Accounting Standards Board (IASB) has
amended IAS 12 Income Taxes to require companies to
recognise deferred tax on particular transactions that, on
initial recognition, give rise to equal amounts of taxable and
deductible temporary differences. According to the amended
guidance, a temporary difference that arises on initial
recognition of an asset or liability is not subject to the initial
recognition exemption if that transaction gave rise to equal
amounts of taxable and deductible temporary differences.
These amendments might have a significant impact on the
preparation of financial statements by companies that have
substantial balances of right-of-use assets, lease liabilities,
decommissioning, restoration and similar liabilities. The
impact for those affected would be the recognition of
additional deferred tax assets and liabilities.
The amendment of this standard is unlikely to have any
significant impact on the Group.
Section 4: Financial statements
97
Notes to the financial statements
continued
2. Accounting policies
continued
None of the standards that have been issued, but are not
yet effective, are expected to have a material impact on the
The Group’s financial statements are made up to
31 December each year and consolidate the financial
statements of the Company and its wholly owned subsidiary,
which is registered and operates in England and Wales,
BlackRock World Mining Investment Company Limited
(together ‘the Group’). The subsidiary company is not
considered an investment entity. In the financial statements
of the Parent Company, the investment in the subsidiary
company is held at fair value.
Subsidiaries are consolidated from the date of their
acquisition, being the date on which the Company obtains
control, and continue to be consolidated until the date that
such control ceases. The financial statements of subsidiaries
used in the preparation of the consolidated financial
statements are based on consistent accounting policies. All
intra-group balances and transactions, including unrealised
(c) Presentation of the Statement of
Comprehensive Income
In order to better reflect the activities of an investment trust
company and in accordance with guidance issued by the AIC,
supplementary information which analyses the Consolidated
Statement of Comprehensive Income between items of a
revenue and a capital nature has been presented alongside
the Consolidated Statement of Comprehensive Income.
The Directors are of the opinion that the Group is engaged in
Dividends receivable on equity shares are recognised as
revenue for the year on an ex-dividend basis. Where no ex-
dividend date is available, dividends receivable on or before
the year end are treated as revenue for the year. Provision is
made for any dividends and interest income not expected to
be received. Special dividends, if any, are treated as a capital
or a revenue receipt depending on the facts or circumstances
of each particular case. The return on a debt security is
recognised on a time apportionment basis so as to reflect
the effective yield on the debt security. Interest income and
deposit interest is accounted for on an accruals basis.
Options may be purchased or written over securities held
in the portfolio for generating or protecting capital returns,
or for generating or maintaining revenue returns. Where
the purpose of the option is the generation of income, the
premium is treated as a revenue item. Where the purpose
of the option is the maintenance of capital, the premium is
treated as a capital item.
Option premium income is recognised as revenue evenly over
the life of the option contract and included in the revenue
account of the Consolidated Statement of Comprehensive
Income unless the option has been written for the
maintenance and enhancement of the Group’s investment
portfolio and represents an incidental part of a larger capital
transaction, in which case any premia arising are allocated
to the capital account of the Consolidated Statement of
Comprehensive Income.
Royalty income from contractual rights is measured at the
fair value of the consideration received or receivable where
the Investment Manager can reliably estimate the amount,
pursuant to the terms of the agreement. Royalty income from
contractual rights received comprises of a return of income
and a return of capital based on the underlying cost of the
contract and, accordingly, the return of income element is
taken to the revenue account and the return of capital element
is taken to the capital account. These amounts are disclosed in
the Consolidated Statement of Comprehensive Income within
income from investments and net profit on investments held
at fair value through profit or loss, respectively.
The useful life of the contractual rights will be determined
by reference to the contractual arrangements, the planned
mine life on commencement of mining and the underlying
cost of the contractual rights will be revalued on a systematic
basis using the units of production method over the life of
the contractual rights which is estimated using available
estimated proved and probable reserves specifically
associated with the mine. The Investment Manager relies on
public disclosures for information on proven and probable
reserves from the operators of the mine. Amortisation
rates are adjusted on a prospective basis for all changes
to estimates of the life of contractual rights and iron ore
reserves. These are disclosed in the Consolidated Statement
of Comprehensive Income within net profit on investments
held at fair value through profit or loss.
Where the Group has elected to receive its dividends in
the form of additional shares rather than in cash, the cash
equivalent of the dividend is recognised as income. Any
excess in the value of the shares received over the amount of
the cash dividend is recognised in capital.
Underwriting commission receivable is taken into account on
on an accruals basis. Expenses have been charged wholly
to the revenue account of the Consolidated Statement of
Comprehensive Income, except as follows:
•
expenses which are incidental to the acquisition or sale
of an investment are charged to the capital account of
the Consolidated Statement of Comprehensive Income.
Details of transaction costs on the purchases and sales of
investments are disclosed within note 10 to the financial
statements on page 108;
98
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
•
expenses are treated as capital where a connection with
the maintenance or enhancement of the value of the
investments can be demonstrated; and
•
the investment management fee and finance costs have
been allocated 75% to the capital account and 25% to
the revenue account of the Consolidated Statement of
Comprehensive Income in line with the Board’s expectations
of the long-term split of returns, in the form of capital gains
The tax expense represents the sum of the tax currently
payable and deferred tax. The tax currently payable is based
on the taxable profit for the year. Taxable profit differs from
net profit as reported in the Consolidated Statement of
Comprehensive Income because it excludes items of income
or expenses that are taxable or deductible in other years and
it further excludes items that are never taxable or deductible.
The Group’s liability for current tax is calculated using tax
rates that were applicable at the balance sheet date.
Where expenses are allocated between capital and revenue
accounts, any tax relief in respect of the expenses is allocated
between capital and revenue returns on the marginal basis
using the Company’s effective rate of corporation tax for the
accounting period.
differences that have originated but not reversed at the
financial reporting date, where transactions or events that
result in an obligation to pay more taxation in the future or
right to pay less taxation in the future have occurred at the
financial reporting date. This is subject to deferred taxation
assets only being recognised if it is considered more likely
than not that there will be suitable profits from which the
future reversal of the temporary differences can be deducted.
Deferred taxation assets and liabilities are measured at the
or loss
In accordance with IFRS 9, the Group classifies its investments
at initial recognition as held at fair value through profit or
loss and are managed and evaluated on a fair value basis in
accordance with its investment strategy and business model.
All investments, including contractual rights, are measured
initially and subsequently at fair value through profit or loss.
Purchases of investments are recognised on a trade date basis.
Contractual rights are recognised on the completion date, where
a purchase of the rights is under a contract, and are initially
measured at fair value excluding transaction costs. Sales of
investments are recognised at the trade date of the disposal.
The fair value of the financial investments is based on their
quoted bid price at the financial reporting date, without
deduction for the estimated future selling costs. This policy
applies to all current and non-current asset investments held
by the Group.
The gains and losses from changes in fair value of
contractual rights are taken to the Consolidated Statement of
Comprehensive Income and arise as a result of the revaluation
of the underlying cost of the contractual rights, changes in
commodity prices and changes in estimates of proven and
probable reserves specifically associated with the mine.
Under IASs, the investment in the subsidiary in the
Company’s Statement of Financial Position is fair valued
which is deemed to be the net asset value of the subsidiary.
Changes in the value of investments held at fair value through
profit or loss and gains and losses on disposal are recognised
in the Consolidated Statement of Comprehensive Income as
‘Net profit on investments held at fair value through profit or
loss’. Also included within the heading are transaction costs in
relation to the purchase or sale of investments.
For all financial instruments not traded in an active market,
the fair value is determined by using various valuation
techniques. Valuation techniques include market approach
(i.e., using recent arm’s length market transactions adjusted
as necessary and reference to the current market value of
another instrument that is substantially the same) and the
income approach (i.e., discounted cash flow analysis and
option pricing models making as much use of available and
supportable market data where possible). See note 2(q)
(i) Options
Options are held at fair value through profit or loss based on
the bid/offer prices of the options written to which the Group
is exposed. The value of the option is subsequently marked-
to-market to reflect the fair value through profit or loss of the
option based on traded prices. Where the premium is taken
to the revenue account, an appropriate amount is shown as
capital return such that the total return reflects the overall
change in the fair value of the option. When an option is
exercised, the gain or loss is accounted for as a capital gain
or loss. Any cost on closing out an option is transferred to
the revenue account along with any remaining unamortised
premium.
Other receivables and other payables do not carry any
interest and are short-term in nature and are accordingly
Under IASs, final dividends should not be accrued in the
financial statements unless they have been approved by
shareholders before the financial reporting date. Interim
dividends should not be recognised in the financial
statements unless they have been paid.
Dividends payable to equity shareholders are recognised
in the Consolidated and Parent Company Statements of
Section 4: Financial statements
99
Notes to the financial statements
continued
2. Accounting policies
continued
Transactions involving foreign currencies are converted
at the rate ruling at the date of the transaction. Foreign
currency monetary assets and liabilities and non-monetary
assets held at fair value are translated into
s
terling at the
rate ruling on the financial reporting date. Foreign exchange
differences arising on translation are recognised in the
Consolidated Statement of Comprehensive Income as a
revenue or capital item depending on the income or expense
to which they relate. For investment transactions and
investments held at the year end, denominated in a foreign
currency, the resulting gains or losses are included in the
profit/(loss) on investments held at fair value through profit
or loss in the Consolidated Statement of Comprehensive
Cash comprises cash in hand, bank overdrafts and on
demand deposits. Cash equivalents are short-term, highly
liquid investments that are readily convertible to known
amounts of cash and that are subject to an insignificant risk
of changes in value. Bank overdrafts are shown separately
on the Consolidated and Parent Company Statements of
Bank overdrafts and loans are recorded at the net proceeds
received. Finance charges, including any premium payable
on settlement or redemption and direct issue costs, are
accounted for on an accruals basis in the Consolidated
Statement of Comprehensive Income using the effective
interest rate method and are added to the carrying amount
of the instrument to the extent that they are not settled in the
Financial assets and financial liabilities are offset and the net
amount reported in the Consolidated and Parent Company
Statements of Financial Position if there is a currently
enforceable legal right to offset the recognised amounts and
there is an intention to settle on a net basis, or to realise the
Shares repurchased and subsequently cancelled – share
capital is reduced by the nominal value of the shares
repurchased and the capital redemption reserve is
correspondingly increased in accordance with Section 733
of the Companies Act 2006. The full cost of the repurchase is
charged to the special reserve.
repurchase is charged to the special reserve.
Where treasury shares are subsequently reissued:
•
amounts received to the extent of the repurchase price are
credited to the special reserve and capital reserves based
on a weighted average basis of amounts utilised from
these reserves on repurchases; and
•
any surplus received in excess of the repurchase price is
Where new shares are issued, amounts received to the extent
of any surplus received in excess of the par value are taken to
the share premium account.
Share issue costs are charged to the share premium account.
Costs on share reissues are charged to the special reserve
The Group makes estimates and assumptions concerning the
future. The resulting accounting estimates and assumptions
will, by definition, seldom equal the related actual results.
Estimates and judgements are regularly evaluated and are
based on historical experience and other factors, including
expectations of future events that are believed to be
reasonable under the circumstances. The estimates and
assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities
within the next financial year are addressed below.
Fair value of unquoted financial instruments
When the fair values of financial assets and financial
liabilities recorded in the Consolidated and Parent Company
Statements of Financial Position cannot be derived from
active markets, their fair value is determined using a variety
of valuation techniques that include the use of valuation
models.
(a) The fair value of the OZ Minerals contractual rights was
assessed by an independent valuer with a recognised
and relevant professional qualification. The inputs to
these models are taken from observable markets where
possible, but where this is not feasible, estimation is
required in establishing fair values. The estimates include
considerations of production profiles, commodity prices,
cash flows and discount rates. Changes in assumptions
about these factors could affect the reported fair value
of financial instruments in the Consolidated and Parent
Company Statements of Financial Position and the level
where the instruments are disclosed in the fair value
hierarchy. To assess the significance of a particular input
to the entire measurement, the external valuer performs
sensitivity analysis.
(b) The fair value of the investment in equity shares of
Jetti Resources and MCC Mining were assessed by an
independent valuer with a recognised and relevant
professional qualification.
100
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
The valuation is carried out based on market approach
using earnings multiple and price of recent transactions.
Changes in assumptions about these factors could
affect the reported fair value of financial instruments in
the Consolidated and Parent Company Statements of
Financial Position and the level where the instruments
are disclosed in the fair value hierarchy. To assess
the significance of a particular input to the entire
measurement, the external valuer performs sensitivity
analysis.
based on the net assets of the subsidiary company,
which is considered appropriate based on the nature and
The key assumptions used to determine the fair value of the
unquoted financial instruments and sensitivity analyses are
Section 4: Financial statements
101
Notes to the financial statements
continued
2022
2021
£’000
£’000
Investment income:
UK dividends
17,536
25,681
UK special dividends
2,167
5,507
Overseas dividends
45,094
36,624
Overseas special dividends
3,808
1,250
Income from contractual rights (OZ Minerals Royalty)
3,096
2,562
Income from Vale debentures
3,863
6,971
Income from fixed income investments
2,523
1,963
Total investment income
78,087
80,558
Other income:
Option premium income
7,297
7,065
Deposit interest
513
–
Broker interest received
18
–
Stock lending income
81
53
7,909
7,118
Total income
85,996
87,676
During the year, the Group received option premium income in cash totalling £7,541,000 (2021: £6,745,000) for writing put
and covered call options for the purposes of revenue generation.
Option premium income is amortised evenly over the life of the option contract and, accordingly, during the year, option
premiums of £7,297,000 (2021: £7,065,000) were amortised to revenue.
At 31 December 2022, there were three open positions (2021: two) with an associated liability of £1,227,000 (2021: £667,000).
Dividends and interest received in cash during the year amounted to £68,630,000 and £5,918,000 (2021: £68,199,000 and
£5,186,000).
102
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
2022
2021
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Investment management fee
2,615
8,031
10,646
2,252
6,978
9,230
Total
2,615
8,031
10,646
2,252
6,978
9,230
The investment management fee (which includes all services provided by BlackRock) is 0.8% of the Company’s gross assets
(subject to certain adjustments). During the year, £9,848,000 (2021: £8,537,000) of the investment management fee was
generated from net assets and £798,000 (2021: £693,000) from the gearing effect on gross assets due to the quarter–on–
quarter increase in the NAV per share for the year as set out below:
Cum income
Quarterly
Gearing effect
NAV per share
increase/
on management
Quarter end
(pence)
(decrease) %
fees (£’000)
31 December 2021
622.21
–
–
31 March 2022
769.58
+23.7
267
30 June 2022
584.86
–24.0
–
30 September 2022
602.56
+3.0
294
31 December 2022
688.35
+14.2
237
Cum income
Quarterly
Gearing effect
NAV per share
increase/
on management
Quarter end
(pence)
(decrease) %
fees (£’000)
31 December 2020
536.34
–
–
31 March 2021
566.62
+5.6
243
30 June 2021
616.20
+8.8
224
30 September 2021
554.49
–10.0
–
31 December 2021
622.21
+12.2
226
The daily average of the net assets under management during the year ended 31 December 2022 was £1,232,043,000 (2021:
£1,085,438,000).
The fee is allocated 25% to the revenue account and 75% to the capital account of the Consolidated Statement of
Comprehensive Income.
Section 4: Financial statements
103
Notes to the financial statements
continued
2022
2021
£’000
£’000
Allocated to revenue:
Custody fee
101
103
Auditors’ remuneration:
– audit services
51
41
– non-audit services
1
9
9
Registrar’s fee
86
91
Directors’ emoluments
2
197
176
AIC fees
21
21
Broker fees
24
25
Depositary fees
116
101
FCA fee
30
24
Directors’ insurance
23
19
Marketing fees
132
140
Stock exchange fees
37
26
Legal and professional fees
35
52
Bank facility fees
3
97
73
Printing and postage fees
47
37
Write back of prior year expenses
4
(55)
–
Other administrative costs
86
96
1,037
1,034
Allocated to capital:
Transaction charges
5
28
9
1,065
1,043
2022
2021
The Company’s ongoing charges
6
, calculated as a percentage of average daily net assets and
using the management fee and all other operating expenses, excluding finance costs, direct
transaction costs, transaction charges, VAT recovered, taxation, prior year expenses written back
and certain non-recurring items were:
0.95%
0.95%
The Company’s ongoing charges
6
, calculated as a percentage of average daily gross assets and
using the management fee and all other operating expenses, excluding finance costs, direct
transaction costs, transaction charges, VAT recovered, taxation, prior year expenses written back
and certain non-recurring items were:
0.84%
0.84%
¹
Fees paid to the auditor for non-audit services of £8,925 excluding VAT (2021: £8,500) relate to the review of the Condensed Half Yearly Financial Report.
2
Details of the Directors’ emoluments can be found in the Directors’ Remuneration Report on page 65. The Company has no employees.
3
There is a 4 basis point facility fee chargeable on the full loan facility whether drawn or undrawn.
4
Relates to Directors’ expenses, miscellaneous fees, legal fees and professional services fees written back during the year (2021: no accruals written back).
5
For the year ended 31 December 2022, expenses of £28,000 (2021: £9,000) were charged to the capital account of the Consolidated Statement of Comprehensive
Income. These include transaction costs charged by the custodian on sale and purchase trades.
6
Alternative Performance Measures, see Glossary on pages 148
to
2021
Revenue
Capital
Total
Revenue
Capital
Total
£’000
£’000
£’000
£’000
£’000
£’000
Interest payable – bank loans
1,177
3,505
4,682
365
1,097
1,462
Interest payable – bank overdraft
5
15
20
9
20
29
Total
1,182
3,520
4,702
374
1,117
104
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
(a) Analysis of charge/(credit) in the year
2022
2021
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Current taxation:
Corporation taxation
2,635
(2,144)
491
3,112
(1,511)
1,601
Double taxation relief
(839)
361
(478)
(1,240)
–
(1,240)
Overseas tax
3,210
–
3,210
3,303
–
3,303
Peruvian capital gains tax charge
–
116
116
–
38
38
Total current taxation charge/(credit)
5,006
(1,667)
3,339
5,175
(1,473)
3,702
Deferred taxation movement (note 7(c))
143
(216)
(73)
(69)
487
418
Total taxation charge/(credit) (note 7(b))
5,149
(1,883)
3,266
5,106
(986)
4,120
(b) Factors affecting total taxation charge/(credit) for the year
The taxation assessed for the year is lower (2021: lower) than the standard rate of corporation tax in the UK of 19.00% (2021:
19.00%). The differences are explained below:
2022
2021
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Profit on ordinary activities before taxation
81,162
124,524
205,686
84,016
112,574
196,590
Tax on profit on ordinary activities at standard rate of
corporation tax of 19.00% (2021: 19.00%)
15,421
23,660
39,081
15,963
21,389
37,352
Effects of:
Overseas tax suffered
3,210
–
3,210
3,303
–
3,303
Foreign exchange loss not taxable
–
3,399
3,399
–
318
318
Gain on investments held at fair value through profit
or loss not subject to tax
–
(29,208)
(29,208)
–
(23,251)
(23,251)
Effect of rate change on income taxable in different
period
63
–
63
–
–
–
Non taxable UK dividends
(3,744)
–
(3,744)
(5,926)
–
(5,926)
Non taxable overseas dividends
(8,962)
–
(8,962)
(6,994)
–
(6,994)
Disallowed expenses
–
5
5
–
2
2
Double taxation relief
(839)
361
(478)
(1,240)
–
(1,240)
Peruvian capital gains tax charge
–
116
116
–
556
556
Movement in respect of Peruvian capital gains tax
–
(216)
(216)
–
–
–
(10,272)
(25,543)
(35,815)
(10,857)
(22,375)
(33,232)
Total taxation charge/(credit) for the year
(note 7(a))
5,149
(1,883)
3,266
5,106
(986)
4,120
The Company is exempt from corporation tax on capital gains provided it maintains its status as an investment trust under
Chapter 4 of Part 24 of the Corporation Tax Act 2010. Due to the Company’s intention to meet the conditions required to
maintain its investment trust status, it has not provided for deferred tax on any capital gains or losses.
Section 4: Financial statements
105
Notes to the financial statements
continued
7. Taxation
continued
Following the changes in Peruvian tax legislation effective from 1 January 2011, a capital gains tax is imposed on gains
realised by non-residents at rates of 5% or 30% depending on whether the transaction took place inside or outside of Peru. As
at 31 December 2022, the Group has an accrued capital gains tax liability of £302,000 (2021: £518,000) for unrealised capital
gains arising on investments in stocks listed on the Peruvian stock exchange. The tax has been calculated at the rate of 5% of
the unrealised capital gains, being the difference between the market value of the investments at the year end and their average
purchase cost.
Group and
Group and
Company
Company
2022
2021
£’000
£’000
Deferred tax liabilities in respect of timing differences:
Deferred tax liability brought forward
(633)
(215)
Deferred tax charge in respect of taxable dividend income
(143)
100
Movement in Peruvian capital gains tax
216
(518)
Deferred tax liability carried forward
(560)
Dividends paid on equity shares:
2022
2021
Record date
Payment date
£’000
£’000
Final dividend of 27.00p per share for the year
ended 31 December 2021 (2020: 8.30p)
18 March 2022
19 May 2022
49,898
14,782
1st interim dividend of 5.50p per share for the
year ended 31 December 2022 (2021: 4.50p)
27 May 2022
30 June 2022
10,251
8,224
2nd interim dividend of 5.50p per share for the
year ended 31 December 2022 (2021: 5.50p)
2 September 2022
30 September 2022
10,381
10,106
3rd interim dividend of 5.50p per share for the
year ended 31 December 2022 (2021: 5.50p)
25 November 2022
22 December 2022
10,381
10,103
80,911
43,215
The total dividends payable in respect of the year ended 31 December 2022 which form the basis of Section 1158 of the
Corporation Tax Act 2010 and Section 833 of the Companies Act 2006, and the amounts declared, meet the relevant
requirements as set out in this legislation.
Dividends paid, or declared on equity shares:
2022
2021
£’000
£’000
1st quarterly interim dividend of 5.50p per share for the year ended 31 December 2022
(2021: 4.50p)
10,251
8,224
2nd quarterly interim dividend of 5.50p per share for the year ended 31 December 2022
(2021: 5.50p)
10,381
10,106
3rd quarterly interim dividend of 5.50p per share for the year ended 31 December 2022
(2021: 5.50p)
10,381
10,103
Final dividend of 23.50p per share for the year ended 31 December 2022 (2021: final dividend
27.00p)
1
44,392
49,898
75,405
78,331
1
106
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Total revenue, capital earnings and net asset value per ordinary share are shown below and have been calculated using
the following:
2022
2021
Net revenue profit attributable to ordinary shareholders (£’000)
76,013
78,910
Net capital profit attributable to ordinary shareholders (£’000)
126,407
113,560
Total profit attributable to ordinary shareholders (£’000)
202,420
192,470
Equity shareholders’ funds (£’000)
1,299,285
1,142,874
The weighted average number of ordinary shares in issue during the year on which the earnings
per ordinary share was calculated was:
186,868,187
181,037,188
The actual number of ordinary shares in issue at the year end on which the net asset value per
ordinary share was calculated was:
188,753,036
183,681,116
Earnings per ordinary share
Revenue earnings per share (pence) - basic and diluted
40.68
43.59
Capital earnings per share (pence) - basic and diluted
67.64
62.73
Total earnings per share (pence) - basic and diluted
108.32
106.32
As at
31 December
2022
As at
31 December
2021
Net asset value per ordinary share (pence)
688.35
622.21
Ordinary share price (pence)
697.00
589.00
Section 4: Financial statements
107
Notes to the financial statements
continued
Group
Company
Group
Company
2022
2022
2021
2021
£’000
£’000
£’000
£’000
UK listed equity investments held at fair value through
profit or loss
159,828
159,828
271,430
271,430
Overseas listed equity investments held at fair value
through profit or loss
1,126,857
1,126,857
853,801
853,801
Fixed income investments held at fair value through profit
or loss
116,960
116,960
113,408
113,408
Contractual rights held at fair value through profit or loss
21,199
21,199
18,162
18,162
Investment in subsidiary held at fair value through profit
or loss
1
–
7,231
–
7,178
Total value of financial asset investments
1,424,844
1,432,075
1,256,801
1,263,979
Derivative financial instruments - written option contracts
(1,227)
(1,227)
(667)
(667)
Total value of financial asset investments and
derivatives at 31 December
1,423,617
1,430,848
1,256,134
1,263,312
Opening book cost of investment and derivative holdings
859,298
859,298
693,750
693,750
Investment and derivative holding gains
396,836
404,014
351,481
358,659
Opening fair value
1,256,134
1,263,312
1,045,231
1,052,409
Analysis of transactions made during the year:
Purchases at cost
503,782
503,782
442,711
442,711
Sales proceeds received
(488,969)
(488,969)
(353,915)
(353,915)
Contractual rights - return of capital
(267)
(267)
(267)
(267)
Gains on investments and derivatives
2
152,937
152,990
122,374
122,374
Closing fair value
1,423,617
1,430,848
1,256,134
1,263,312
Closing book cost of investment and derivative holdings
983,103
983,103
859,298
859,298
Closing investment and derivative holding gains
440,514
447,745
396,836
404,014
Closing fair value
1,423,617
1,430,848
1,256,134
1,263,312
Comprising of:
– Equity investments
1,424,844
1,432,075
1,256,801
1,263,979
–
derivative financial instruments – written option contracts
(1,227)
(1,227)
(667)
(667)
Total
1,423,617
1,430,848
1,256,134
1,263,312
1
Relates to wholly owned subsidiary, BlackRock World Mining Investment Company Limited.
2
Includes profit received in the subsidiary company of $53,000 (2021: £nil) included within income.
The Group and Company received £488,969,000 (2021: £353,915,000) from investments sold in the year. The bookcost of these
investments when they were purchased was £379,710,000 (2021: £279,394,000). These investments have been revalued over time
and until they were sold any unrealised gains/losses were included in the fair value of investments. Special dividends amounting to
£811,000 (2021: £nil) have been recognised in capital during the year.
During the year, transaction costs of £828,000 (2021: £690,000) were incurred on the acquisition of investments. Costs relating
to the disposal of investments during the year amounted to £238,000 (2021: £260,000). All transaction costs have been included
within the capital reserves.
2022
2021
Securities lending
£’000
£’000
Aggregate value of securities on loan at year end
52,411
75,315
Maximum aggregate value of securities on loan during the year
198,884
81,198
Fee income from stock lending during the year
81
53
In respect of securities on loan at the year end, securities of £57,750,000 (2021: £82,922,000) were held as collateral, the value
of which exceeded the value of securities on loan by £5,339,000 (2021: £7,607,000).
In respect of the maximum aggregate value of securities on loan during the year, securities of £198,176,000 (2021: £85,922,000)
were held as collateral, the value of which is less than the value of securities on loan by £708,000 (2021: higher by £4,724,000).
108
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
At 31 December 2022, the Company had one wholly owned subsidiary which is registered and operating in England and Wales
and has been included in the consolidated financial statements. BlackRock World Mining Investment Company Limited was
incorporated on 11 November 1993. There are no non-controlling interests in the subsidiary.
The principal activity of the subsidiary company is investment dealing. The registered address of the subsidiary company is
12 Throgmorton Avenue, London EC2N 2DL.
Issued share capital
Description of shares
2022
2021
BlackRock World Mining Investment Company Limited
Ordinary shares of £1
£100
£100
Under IAS, the investment in the subsidiary is fair valued in the separate financial statements of the Company which is
deemed to be the total equity of the Company and equates to £7,231,000 (2021: £7,178,000). The subsidiary has not paid
2022
Company
2022
Group
2021
Company
2021
£’000
£’000
£’000
£’000
Amounts due from brokers
1
1
244
244
Prepayments and accrued income
4,430
4,430
4,965
4,965
4,431
4,431
5,209
2022
Company
2022
Group
2021
Company
2021
£’000
£’000
£’000
£’000
Accruals for expenses and interest payable
6,155
6,155
5,183
5,183
Amounts due to subsidiary
–
1,068
–
1,068
6,155
7,223
5,183
Group
2022
£’000
Company
2022
£’000
Group
2021
£’000
Company
2021
£’000
Bank loan
158,783
158,783
138,867
138,867
Bank overdraft
–
–
356
356
158,783
158,783
139,223
139,223
The Group has an overdraft facility of £30 million (2021: £30 million) and a multi-currency loan facility of £200 million (2021:
£200 million) which are updated and renewed on an annual basis. Under the multi-currency loan facility, the individual loan
drawdowns are taken with a three month maturity period. At 31 December 2022, the Group had a US
d
ollar loan outstanding of
US$191,000,000 which matures on 17 March 2023 (2021: US
d
ollar loan for US$161,000,000 which matured on 11 February
2022). The Group has no outstanding Pound
s
terling loan at 31 December 2022 (2021: Pound
s
terling loan for £20,000,000
which matured on 11 February 2022). The loans are provided by The Bank of New York Mellon. The interest rate on bank loans
approximate 3.30% per annum for US
d
ollar balances (2021: 1.10% per annum for US
d
ollar balances and 0.97% per annum
for Pound
s
terling balances). The Company incurred a foreign currency loss of £17,645,000, (2021: £1,696,000) of which the
Section 4: Financial statements
109
Notes to the financial statements
continued
Group
Company
Group
Company
2022
2022
2021
2021
£’000
£’000
£’000
£’000
Bank loan and overdraft at beginning of the year
139,223
139,223
124,845
124,845
Cash flows:
Movement in overdraft
(356)
(356)
(22,071)
(22,071)
Net drawdown of loan
2,359
2,359
35,020
35,020
Non cash flows:
Effects of foreign exchange loss
17,557
17,557
1,429
1,429
Bank loan and overdraft at end of the year
158,783
158,783
139,223
Nominal
in issue
Treasury shares
Total shares
value
number
number
number
£’000
Allotted, called up and fully paid share capital
comprised:
Ordinary shares of 5p each
At 31 December 2021
183,681,116
9,330,726
193,011,842
9,651
Ordinary shares reissued from treasury
5,071,920
(5,071,920)
–
–
At 31 December 2022
188,753,036
4,258,806
193,011,842
9,651
During the year ended 31 December 2022 the Company:
– did not buy back shares into treasury (2021: 69,698 shares bought back for a net consideration after costs of £393,000);
– reissued 5,071,920 shares (2021: 10,200,000 shares) from treasury for a net consideration after costs of £34,902,000 (2021:
£63,187,000).
Since the year end and up to
2
March 2023, the Company has reissued 150,000 ordinary shares from treasury for a total
110
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Share
premium
account
Capital
redemption
reserve
Special
reserve
Capital
reserve
arising on
investments
sold
Capital
reserve
arising on
revaluation
of
investments
held
Revenue
reserve
Group
£’000
£’000
£’000
£’000
£’000
£’000
At 31 December 2021
138,818
22,779
155,123
345,594
396,836
74,073
Movement during the year:
Total comprehensive income:
Net profit for the year
–
–
–
82,729
43,678
76,013
Transactions with owners, recorded
directly to equity:
Ordinary shares reissued from treasury
9,289
–
25,683
–
–
–
Share reissue costs
–
–
(70)
–
–
–
Dividends paid
–
–
–
–
–
(80,911)
At 31 December 2022
148,107
22,779
180,736
428,323
440,514
69,175
Share
premium
account
Capital
redemption
reserve
Distributable reserves
Special
reserve
Capital
reserve
Capital
arising on
reserve
revaluation
arising on
of
investments
investments
sold
held
Revenue
reserve
Company
£’000
£’000
£’000
£’000
£’000
£’000
At 31 December 2021
138,818
22,779
155,123
344,093
404,014
68,396
Movement during the year:
Total comprehensive income:
Net profit for the year
–
–
–
82,729
43,731
75,960
Transactions with owners, recorded
directly to equity:
Ordinary shares reissued from treasury
9,289
–
25,683
–
–
–
Share reissue costs
–
–
(70)
–
–
–
Dividends paid
–
–
–
–
–
(80,911)
At 31 December 2022
148,107
22,779
180,736
426,822
447,745
63,445
Section 4: Financial statements
111
Notes to the financial statements
continued
17. Reserves
continued
Capital
reserve
Capital
arising on
reserve
revaluation
Share
Capital
arising on
of
premium
redemption
Special
investments
investments
Revenue
account
reserve
reserve
sold
held
reserve
Group
£’000
£’000
£’000
£’000
£’000
£’000
At 31 December 2020
127,155
22,779
103,992
277,389
351,481
38,378
Movement during the year:
Total comprehensive income:
Net profit for the year
–
–
–
68,205
45,355
78,910
Transactions with owners, recorded
directly to equity:
Ordinary shares reissued from treasury
11,663
–
51,651
–
–
–
Share reissue costs
–
–
(127)
–
–
–
Ordinary shares purchased into treasury
–
–
(390)
–
–
–
Share purchase costs
–
–
(3)
–
–
–
Dividends paid
–
–
–
–
–
(43,215)
At 31 December 2021
138,818
22,779
155,123
345,594
396,836
74,073
Distributable reserves
Capital
reserve
Capital
arising on
reserve
revaluation
Share
Capital
arising on
of
premium
redemption
Special
investments
investments
Revenue
account
reserve
reserve
sold
held
reserve
Company
£’000
£’000
£’000
£’000
£’000
£’000
At 31 December 2020
127,155
22,779
103,992
275,888
358,659
32,701
Movement during the year:
Total comprehensive income:
Net profit for the year
–
–
–
68,205
45,355
78,910
Transactions with owners, recorded
directly to equity:
Ordinary shares reissued from treasury
11,663
–
51,651
–
–
–
Share reissue costs
–
–
(127)
–
–
–
Ordinary shares purchased into treasury
–
–
(390)
–
–
–
Share purchase costs
–
–
(3)
–
–
–
Dividends paid
–
–
–
–
–
(43,215)
At 31 December 2021
138,818
22,779
155,123
344,093
404,014
68,396
Pursuant to a resolution of the Company passed at an Extraordinary General Meeting on 13 January 1998 and following
the Company’s application to the Court for cancellation of its share premium account, the Court approval was received
on 27 January 1999 and £157,633,000 was transferred from the share premium account to a special reserve which is a
distributable reserve.
112
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
The share premium and capital redemption reserve are not distributable profits under the Companies Act 2006. In accordance
with ICAEW Technical Release 02/17BL on Guidance on Realised and Distributable Profits under the Companies Act 2006,
the special reserve and capital reserves of the Parent Company may be used as distributable reserves for all purposes and, in
particular, the repurchase by the Parent Company of its ordinary shares and for payments as dividends. In accordance with
the Company’s Articles of Association, the special reserve, capital reserves and the revenue reserve may be distributed by way
of dividend. The Parent Company’s capital gains of £874,567,000 (2021: capital gain of £748,107,000) comprise a gain on
capital reserve arising on investments sold of £426,822,000 (2021: gain of £344,093,000), a gain on capital reserve arising on
revaluation of listed investments of £409,037,000 (2021: gain of £387,997,000) revaluation gains on unquoted investments
of £31,477,000 (2021: £8,839,000) and a revaluation gain on the investment in the subsidiary of £7,231,000 (2021: gain of
£7,178,000). The capital reserve arising on the revaluation of listed investments of £391,896,000 (2021: £387,997,000) is
subject to fair value movements and may not be readily realisable at short notice; as such it may not be entirely distributable. The
investments are subject to financial risks, as such capital reserves (arising on investments sold) and the revenue reserve may not
be entirely distributable if a loss occurred during the realisation of these investments. The reserves of the subsidiary company are
The Group’s investment activities expose it to various types of risks which are associated with the financial instruments
and markets in which it invests. The following information is not intended to be a comprehensive summary of all risks and
shareholders should refer to the Alternative Investment Fund Managers’ Directive FUND 3.2.2R Disclosures which can be
found at www.blackrock.com/uk/brwm for a more detailed discussion of the risks inherent in investing in the Group.
Risk management framework
The following information refers to the risk management framework of the Alternative Investment Fund Manager (AIFM).
However, as disclosed in the Corporate Governance Statement on page
73
and in the Statement of Directors’ Responsibilities
on page 81, it is the ultimate responsibility of the Board to ensure that the Group’s risks are appropriately monitored, and to
the extent that elements of this are delegated to third-party service providers, the Board is responsible for ensuring that the
relevant parties are discharging their duties in accordance with the terms of the relevant agreements and taking appropriate
action to the extent issues are identified.
The Directors of the AIFM review quarterly investment performance reports and receive semi-annual presentations in
person from the Investment Manager covering the Group’s performance and risk profile during the year. The AIFM has
delegated the day-to-day administration of the investment programme to the Investment Manager. The Investment
Manager is also responsible for ensuring that the Group is managed within the terms of its investment guidelines and
limits set out in the Alternative Investment Fund Managers’ Directive FUND 3.2.2R Disclosures which can be found at
www.blackrock.com/uk/brwm.
The AIFM is responsible for monitoring investment performance, product risk monitoring and oversight and has the
responsibility for the monitoring and oversight of regulatory and operational risk for the Group. The Directors of the AIFM
have appointed a Risk Manager who has responsibility for the daily risk management process with assistance from key risk
management personnel of the Investment Manager, including members of the Risk and Quantitative Analysis Group (RQA)
which is a centralised group which performs an independent risk management function. RQA independently identifies,
measures and monitors investment risk, including climate related risk, and tracks the actual risk management practices
being deployed across the Group. By breaking down the components of the process, RQA has the ability to determine if the
appropriate risk management processes are in place. This captures the risk management tools employed, how the levels of risk
are controlled, ensuring risk/return is considered in portfolio construction and reviewing outcomes.
The AIFM reports to the Audit Committee twice yearly on key risk metrics and risk management processes; in addition, the
Depositary monitors the performance of the AIFM and reports to the Audit Committee semi-annually. Any significant issues
are reported to the Board as they arise.
Risk Exposures
The risk exposures of the Group and Company are set out as follows:
Market risk arises mainly from uncertainty about future values of financial instruments influenced by other price, currency and
interest rate movements. It represents the potential loss the Group may suffer through holding market positions in financial
instruments in the face of market movements.
Section 4: Financial statements
113
Notes to the financial statements
continued
18. Risk management policies and procedures
continued
A key metric the RQA Group uses to measure market risk is Value-at
-Risk (VaR) which encompasses price, currency and
interest rate risk. VaR is a statistical risk measure that estimates the potential portfolio loss from adverse market moves in
an ordinary market environment. VaR analysis reflects the interdependencies between risk variables, unlike a traditional
sensitivity analysis.
The VaR calculations are based on a confidence level of 99%, with a holding period of not greater than one day and a historical
observation period of not less than one year (250 days). A VaR number is defined at a specified probability and a specified
time horizon. A 99% one day VaR means that the expectation is that 99% of the time over a one-day period the Company will
lose less than this number in percentage terms. Therefore, higher VaR numbers indicate higher risk. It is noted that the use
of VaR methodology has limitations, namely assumptions that risk factor returns are normally distributed and that the use of
historical market data as a basis for estimating future events does not encompass all possible scenarios, particularly those
that are of an extreme nature and that the use of a specified confidence level (e.g. 99%) does not take into account losses
that occur beyond this level. There is some probability that the loss could be greater than the VaR percentage amounts. These
limitations, and the nature of the VaR measure, mean that the Company can neither guarantee that losses will not exceed the
VaR amounts indicated, nor that losses in excess of the VaR amounts will not occur more frequently.
The one-day VaR for the Group and Company as of 31 December 2022 and 31 December 2021 (based on a 99% confidence
level) was 5.28% and 4.64% respectively.
Exposure to other price risk
Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors
specific to the individual financial instrument or its issuer, or factors affecting similar financial instruments traded in the
market. Local, regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health
issues, recessions, climate change, or other events could have a significant impact on the Group and the market price of its
investments and could result in increased premiums or discounts to the Group’s net asset value.
The current environment of heightened geo-political risk given the war in Ukraine has undermined investor confidence
and market direction. In addition to the tragic and devastating events in Ukraine, the war has constricted supplies of key
commodities, pushing prices up and creating a level of market uncertainty and volatility which is likely to persist for some time.
The impact of the coronavirus outbreak was profound across all aspects of society. In developed economies, it is clear that
the worst of the impact is now over. However, there is an expectation that seasonal peaks and new variants could give rise
to renewed travel restrictions, enhanced health screenings at ports of entry and elsewhere, disruption of and delays in
healthcare service preparation and delivery and supply chain disruptions which will create ongoing challenges. Widescale
and comprehensive vaccination programmes have been put in place by many countries which have had a positive effect.
Nevertheless, the impact of COVID-19 continues to adversely affect the economies of many nations across the globe and this
in turn may continue to impact investments held by the Company.
The Group is exposed to market price risk arising from its equity investments, fixed income investments and written options.
The movements in the prices of these investments result in movements in the performance of the Group. Other price risk
sensitivity has been covered by the VaR analysis under the market risk section above.
The Group’s exposure to other changes in market prices at 31 December 2022 on its equity and fixed interest investments
was £1,424,844,000 (2021: £1,256,801,000). In addition, the Group’s gross notional market exposure to these price changes
through its option portfolio was £33,232,000 (2021: £29,864,000).
Management of other price risk
By diversifying the portfolio, where this is appropriate and consistent with the Group’s objectives, the risk that a price change
of a particular investment will have a material impact on the NAV of the Group is minimised which is in line with the investment
objectives of the Group.
Use of derivatives
The Group may utilise both exchange traded and over-the-counter (OTC) option contracts as part of its investment policy.
Options written by the Group provide the purchaser with the opportunity to purchase from or sell the Group the underlying
asset at an agreed-upon value either on or before the expiration of the option. Options are generally settled on a net basis.
114
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
During the year ended 31 December 2022 and 2021 the Group wrote covered call and put option contracts to generate
revenue income for the Group. As the call and put options are covered by dedicated cash resources and no call and put option
contracts were written to manage price risk, there is no impact on the Group’s exposure to gearing or leverage as a result
of writing covered call and put options. The notional amount of the three put options written that were open (2021: two put
options) at 31 December 2022 was £33,232,000 (2021: £29,864,000).
Economic exposure through option writing is restricted such that no more than 20% of the Group’s portfolio shall be under
option at any given time. Exposures are monitored daily by the Investment Manager, BlackRock, and its independent risk
management team. The Board also reviews the exposures regularly.
The option positions are diversified across sectors and geographies comprising three positions as at 31 December 2022
(2021: two).
The economic exposures to options can be closed out at any time by the Group with immediate effect. Details of securities and
Concentration of exposure to market price risks
An analysis of the Group’s investment portfolio is shown on pages 31
to 33
. At 31 December 2022 this shows that the portfolio
had significant levels of investments in United States of America, Latin America, Australasia, Africa and Canada. Accordingly,
there is a concentration of exposure to those regions, though it is recognised that an investment’s country of domicile or
listing does not necessarily equate its exposure to the economic conditions in that country.
(ii) Market risk arising from foreign currency risk
Exposure to foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in foreign exchange rates. Foreign currency sensitivity risk has been covered by the VaR analysis under the market
risk section.
The fair values of the Group’s and Company’s monetary items which have foreign currency exposure at 31 December 2022
and 31 December 2021 are shown below. Where the equity investments which are not monetary items are denominated in a
foreign currency, they have been included separately in the analysis so as to show the overall level of exposure.
US
dollar
Canadian
dollar
Australian
dollar
Brazilian
real
Others
Total
2022
£’000
£’000
£’000
£’000
£’000
£’000
Receivables (due from brokers, dividends and other income
receivable)
7,035
671
–
2,159
158
10,023
Cash and cash equivalents
411
94
–
–
–
505
Bank loans
(158,783)
–
–
–
–
(158,783)
Payables (due to brokers and other payables)
(610)
–
–
–
–
(610)
Derivative financial liabilities at fair value through profit or loss
(544)
–
–
–
–
(544)
Total foreign currency exposure on net monetary items
(152,491)
765
–
2,159
158
(149,409)
Investments at fair value through profit or loss
487,897
278,664
286,992
37,339
69,922 1,160,814
Total net foreign currency exposure
335,406
279,429
286,992
39,498
70,080 1,011,405
Section 4: Financial statements
115
Notes to the financial statements
continued
18. Risk management policies and procedures
continued
US
Canadian
Australian
Brazilian
dollar
dollar
dollar
real
Others
Total
2021
£’000
£’000
£’000
£’000
£’000
£’000
Receivables (due from brokers, dividends and other income
receivable)
1,346
784
–
2,711
327
5,168
Cash and cash equivalents
–
54
–
–
–
54
Bank loans
(118,867)
–
–
–
–
(118,867)
Bank overdrafts
(356)
–
–
–
–
(356)
Payables (due to brokers and other payables)
(186)
–
–
–
(233)
(419)
Derivative financial liabilities at fair value through profit or loss
(376)
–
(291)
–
–
(667)
Total foreign currency exposure on net monetary items
(118,439)
838
(291)
2,711
94
(115,087)
Investments at fair value through profit or loss
416,920
259,784
91,855
40,895
77,631
887,085
Total net foreign currency exposure
298,481
260,622
91,564
43,606
77,725
771,998
Management of foreign currency risk
The Investment Manager monitors the Group’s exposure to foreign currencies on a daily basis and reports to the Board of the
Company on a regular basis.
The Investment Manager measures the risk to the Group of the foreign currency exposure by considering the effect on the
Group’s net asset value and income of a movement in the exchange rate to which the Group’s assets, liabilities, income and
expenses are exposed.
The Group does not use financial instruments to mitigate the currency exposure in the period between the time that income
is included in the financial statements and its receipt. Derivative contracts are not used to hedge against exposure to foreign
currency risk.
Consequently, the Group is exposed to risks that the exchange rate of its reporting currencies, relative to other currencies, may
change in a manner which has an adverse effect on the value of the portion of the Group’s assets which are denominated in
currencies other than their own currencies.
(iii) Market risk arising from interest rate risk
Exposure to interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in
market interest rates.
The Group is exposed to interest rate risk specifically through its fixed income investments, cash holdings and its borrowing
facility for investment purposes. Interest rate movements may affect the level of income receivable from any cash at bank
and on deposits. The effect of interest rate changes on the earnings of the companies held within the portfolio may have
a significant impact on the valuation of the Group’s investments. Interest rate sensitivity risk has been covered by the VaR
analysis under the market risk section.
Interest rate exposure
The exposure for Group and Company at 31 December 2022 and 31 December 2021 of financial assets and liabilities to
interest rate risk is shown by reference to:
–
floating interest rates – when the interest rate is due to be re-set; and
–
fixed interest rates – when the financial instrument is due for repayment.
116
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
2022
2021
Group
Within one
year
£’000
More than
one year
£’000
Total
£’000
Within one
year
£’000
More than
one year
£’000
Total
£’000
Exposure to floating interest rates:
Cash collateral held with brokers
6,795
–
6,795
580
–
580
Cash and cash equivalents
29,492
–
29,492
26,332
–
26,332
Bank loans
(158,783)
–
(158,783)
(138,867)
–
(138,867)
Bank overdraft
–
–
–
(356)
–
(356)
Exposure to fixed interest rates:
Fixed income investments
–
116,960
116,960
–
113,408
113,408
Total exposure to interest rates
(122,496)
116,960
(5,536)
(112,311)
113,408
1,097
2022
2021
Company
Within one
year
£’000
More than
one year
£’000
Total
£’000
Within one
year
£’000
More than
one year
£’000
Total
£’000
Exposure to floating interest rates:
Cash collateral held with brokers
6,795
–
6,795
580
–
580
Cash and cash equivalents
23,317
–
23,317
20,222
–
20,222
Bank loans
(158,783)
–
(158,783)
(138,867)
–
(138,867)
Bank overdraft
–
–
–
(356)
–
(356)
Exposure to fixed interest rates:
Fixed income investments
–
116,960
116,960
–
113,408
113,408
Total exposure to interest rates
(128,671)
116,960
(11,711)
(118,421)
113,408
(5,013)
Interest rates received on cash balances are approximately 1.51% for USD balances and 1.13% per annum for GBP balances
(2021: nil% for USD balances and nil% for GBP balances). Interest rates paid on bank loans are approximately 2.82% per
annum for USD balances and 2.39% per annum for GBP balances (2021: 1.10% per annum for USD balances and 0.97% per
annum for GBP balances). Effective interest rates on fixed income investments ranged from 2.00% to 7.50% (2021: 2.00% to
7.50%).
Management of interest rate risk
The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into account
when making investment decisions and borrowings under the loan and overdraft facilities.
The Group finances part of its activities through borrowings at levels approved and monitored by the Board of the Company.
Section 4: Financial statements
117
Notes to the financial statements
continued
18. Risk management policies and procedures
continued
Counterparty credit risk is the risk that the issuer of a financial instrument will fail to fulfil an obligation or commitment that it
has entered into with the Group.
The Group is exposed to counterparty credit risk from the parties with which it trades and will bear the risk of settlement
default. Counterparty credit risk to the Group arises from transactions to purchase or sell investments, fixed income
investments and through option writing transactions on equity investments held within the portfolio.
The major counterparties engaged with the Group and Company are all widely recognised and regulated entities.
Depositary
The Group’s Depositary is The Bank of New York Mellon (International) Limited (BNYM or the Depositary) (S&P long-term
credit rating as at 31 December 2022: AA- (2021: AA-)). The Group’s listed investments are held on its behalf by The Bank of
New York Mellon (International) Limited (BNYM) as the Group’s Custodian (as sub-delegated by the Depositary). All of the
equity and fixed income assets and cash of the Group are held within the custodial network of the global custodian appointed
by the Depositary. Bankruptcy or insolvency of the Depositary/Custodian may cause the Group’s rights with respect to its
investments held by the Depositary/Custodian to be delayed or limited. The maximum exposure to this risk at 31 December
2022 is the total value of equity and fixed income investments held with the Depositary/Custodian and cash and cash
equivalents in the Consolidated and Parent Company Statements of Financial Position.
In accordance with the requirements of the depositary agreement, the Depositary will ensure that any agents it appoints
to assist in safekeeping the equity and fixed income investments of the Group will segregate the equity and fixed income
investments of the Group. Thus, in the event of insolvency or bankruptcy of the Depositary/Custodian, the Group’s non-cash
assets are segregated and this reduces counterparty credit risk. The Group will, however, be exposed to the counterparty credit
risk of the Depositary in relation to the Group’s cash held by the Depositary. In the event of the insolvency or bankruptcy of
the Depositary, the Group will be treated as a general creditor of the Depositary in relation to cash holdings of the Group. The
Board monitors the Group’s risk by reviewing the custodian’s internal control reports.
Securities lending
All securities lending transactions entered into by the Company are subject to a written legal agreement between the Company
and the Securities Lending Agent, BlackRock Advisors (UK) Limited, a related party to the Company, and separately between
the Securities Lending Agent and the approved borrowing counterparty. Collateral received in exchange for securities lent is
transferred under a title transfer arrangement and is delivered to and held in an account with a tri-party collateral manager
in the name of the Depositary, The Bank of New York Mellon (International) Limited, on behalf of the Company. Collateral
received is segregated from the assets belonging to the Company’s Depositary or the Lending Agent.
The value of securities on loan as a proportion of the Group and Company’s total lendable assets as at 31 December
2022 was 4.48% (2021: 7.34%) and as a proportion of the Group’s net assets as at 31 December 2022 was 4.04% (2021:
6.58%). Income earned from securities lending during the year ended 31 December 2022 is set out in note 3 of the financial
statements.
Total lendable assets represent the aggregate value of assets forming part of the Group and Company’s securities lending
programme. This excludes any assets held by the Company that are not considered lendable due to any market, regulatory,
investment or other restriction.
The following table details the value of securities on loan and associated collateral received, analysed by counterparty as at
31 December 2022 and 31 December 2021.
118
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
2022
Country of
establishment
Stock
lending
£’000
Collateral
received
£’000
Barclays Bank plc
United Kingdom
29,587
32,905
Barclays Capital Securities Limited
United Kingdom
1,230
1,341
BNP Paribas Arbitrage
France
638
697
Citigroup Global Markets Limited
United Kingdom
1,402
1,454
Goldman Sachs International
United Kingdom
3,392
3,657
J.P. Morgan Securities plc
United Kingdom
1,729
1,892
Macquarie Bank Limited
Australia
12,166
13,311
UBS AG
Switzerland
2,267
2,493
52,411
57,750
2021
Country of
establishment
Stock
lending
£’000
Collateral
received
£’000
Barclays Bank plc
United Kingdom
23,227
25,683
Barclays Capital Securities Limited
United Kingdom
15,898
17,561
Citigroup Global Markets Limited
United Kingdom
7,399
7,810
Goldman Sachs International
United Kingdom
3,640
3,869
UBS AG
Switzerland
25,151
27,999
75,315
82,922
Collateral
The Company engages in securities lending transactions for which it may hold collateral received from a counterparty.
The following table provides an analysis by currency of the underlying non-cash collateral received by way of a title
transfer collateral arrangement by the Company, in respect of securities lending transactions as at 31 December 2022 and
31 December 2021:
2022
Currency
Non-cash
collateral
received
£’000
Canadian dollar
217
Chinese yuan
1,815
Euro
3,084
Hong Kong dollar
2,468
Japanese yen
1,542
Singapore dollar
26
Swiss franc
1,115
UK sterling
2,561
US dollar
44,817
Other
105
Total
57,750
Section 4: Financial statements
119
Notes to the financial statements
continued
18. Risk management policies and procedures
continued
Non-cash
collateral
received
2021
Currency
£’000
Australian dollar
147
Canadian dollar
2,686
Chinese yuan
121
Euro
15,422
Hong Kong dollar
34
Japanese yen
18,137
Singapore dollar
615
Swiss franc
8,748
UK sterling
17,864
US dollar
18,907
Other
241
Total
82,922
Non-cash collateral received by way of a title transfer collateral arrangement in relation to securities lending transactions
cannot be sold, reinvested or pledged.
The following table provides an analysis of the type, quality and maturity tenor of non-cash collateral received and posted by
the Group and Company by way of a title transfer collateral arrangement in respect of securities lending transactions as at
31 December 2022 and 31 December 2021.
Maturity Tenor
91 to 365
More than
Open
8 to 30 days
days
365 days
Transactions
Total
2022
£’000
£’000
£’000
£’000
£’000
Collateral received – securities lending
Fixed income
Investment grade
–
–
3,170
–
3,170
Equities
Recognised equities
–
–
–
54,580
54,580
Total
–
–
3,170
54,580
57,750
Maturity Tenor
91 to 365
More than
Open
8 to 30 days
days
365 days
Transactions
Total
2021
£’000
£’000
£’000
£’000
£’000
Collateral received – securities lending
Fixed income
Investment grade
–
–
10,844
–
10,844
Equities
Recognised equities
–
–
–
72,078
72,078
Total
–
–
10,844
72,078
82,922
Investment grade securities are those issued by an entity with a minimum investment grade credit rating from at least one
globally recognised credit rating agency; Standard & Poor’s, Moody’s or Fitch.
120
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
The maturity tenor analysis for fixed income securities received as collateral is based on the respective contractual maturity
date, while equity securities received as collateral are presented as open transactions as they are not subject to a contractual
maturity date.
As at 31 December 2022 and 2021, all non-cash collateral (equity and debt securities) received by the Group and Company in
respect of securities lending transactions is held by the Group’s Depositary (or through its delegates).
The following table lists the ten largest issuers by value of non-cash collateral (equity and debt securities) received by the
Group and Company by way of a title transfer collateral arrangement across securities lending transactions as at 31 December
2022 and 2021.
2022
Non cash collateral issuer – securities
Value
£’000
% of the
Company’s
NAV
Southwest Airlines
3,286
0.25
Marvell Technology Inc
3,286
0.25
Cisco Systems Inc
2,320
0.18
JD Health International Inc
1,873
0.14
Cf Industries Holdings Inc
1,217
0.09
Vale ADR Representing One Sa
1,207
0.09
Abbott Laboratories
1,207
0.09
Becton Dickinson
1,207
0.09
Meta Platforms Inc Class A
1,207
0.09
China Resources
1,204
0.09
Other issuers
39,736
3.06
Total
57,750
4.42
2021
Non cash collateral issuer – securities
Value
£’000
% of the
Company’s
NAV
Rio Tinto
2,928
0.26
Alphabet Inc
2,925
0.26
Nestlé
2,470
0.22
GlaxoSmithKline
2,108
0.18
Government of France
2,100
0.18
Roche Holdings
2,009
0.18
UniCredit
1,896
0.17
Shell
1,868
0.16
LVMH
1,769
0.15
UBS Group
1,596
0.14
Other issuers
61,253
5.36
Total
82,922
7.26
Counterparties/brokers
The Group only invests directly in markets that operate on a delivery versus payment basis and consequently most investment
transactions in listed securities involve simultaneous delivery of securities against cash payment using an approved broker.
The risk of default is considered minimal and the trade will fail if either party fails to meet its obligation.
For a few markets that the Group invests in from time to time, although they operate on a delivery versus payment basis, there
may be a very short time gap between stock delivery and payment, giving a potential rise to counterparty credit risk with the
broker in relation to transactions awaiting settlement. Risk relating to unsettled transactions is considered small due to the
short settlement period involved and the high credit quality of the brokers used for those markets. The Group monitors the
credit rating and financial position of the broker used to further mitigate this risk.
Section 4: Financial statements
121
Notes to the financial statements
continued
18. Risk management policies and procedures
continued
Cash held by a counterparty to financial derivative contracts is subject to the credit risk of the counterparty. The following table
details the total number of counterparties to which the Group is exposed, the maximum exposure to any one counterparty,
any collateral held by the Group against this exposure, the total exposure to all other counterparties and the lowest long-term
credit rating of any one counterparty (or its ultimate parent if unrated).
Maximum
exposure
Total exposure
to any one
to all other
counterparty
1
Lo
Collateral held
1
west credit
counterparties
1
Total number of
rating of any one
counterparties
£’000
£’000
£’000
counterparty
2
2022
3
29,492
–
6,796
A+
2021
5
26,332
–
824
BBB+
1
Calculated on a net basis.
2
Standard & Poor’s ratings.
The Group may also be exposed to counterparty risk should there be any rehypothecation of pledged collateral. Collateral
is received/paid where the client service agreement states that there should be collateral movements agreed with the
counterparty, where there is a requirement for a mark-to-market process or collateralisation to ensure that the Group is
protected against any counterparty default.
Collateral
The Group engages in activities which may require collateral to be provided to a counterparty (Pledged Collateral) or may hold
collateral received (Inbound Collateral) from a counterparty. The Group uses Inbound Collateral received from a counterparty
to reduce the counterparty credit risk associated with any trading activity in which the Group has engaged.
Cash collateral pledged by the Group is separately identified as an asset in the Consolidated and Parent Company Statements
of Financial Position and is not included as a component of cash and cash equivalents. The cash is subject to certain
counterparty credit risk as the Group’s access to its cash could be delayed should the counterparties become insolvent or
bankrupt. Collateral received in the form of securities is not reflected in the Consolidated and Parent Company Statements of
Financial Position. The Group has the right to sell or re-pledge collateral received in the form of securities in circumstances
such as default.
The fair value of inbound cash collateral and cash collateral pledged is reflected in the table below:
Liability for
Pledged collateral
inbound collateral
As at
As at
As at
As at
31 December 31 December 31 December 31 December
2022
2021
2022
2021
£’000
£’000
£’000
£’000
Cash collateral - Bank of America Merrill Lynch (2021: Citigroup)
6,795
580
–
–
Receivables
Amounts due from debtors are disclosed in the Consolidated and Parent Company Statements of Financial Position as
receivables. The counterparties included in receivables are the same counterparties discussed previously under counterparty
credit risk and subject to the same scrutiny by the BlackRock RQA Counterparty & Concentration Risk team (RQA CCR). The
Group monitors the ageing of receivables to mitigate the risk of debtor balances becoming overdue.
122
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
In summary, the exposure to credit risk at 31 December 2022 and 2021 was as follows:
2022
2021
Group
£’000
£’000
Investment in contractual rights
21,199
18,162
Fixed income investments
116,960
113,408
Cash collateral held with brokers
6,795
580
Cash and cash equivalents
29,492
26,332
Other receivables (amounts due from brokers, dividends and interest receivable)
4,431
5,209
178,877
163,691
2022
2021
Company
£’000
£’000
Investment in contractual rights
21,199
18,162
Fixed income investments
116,960
113,408
Cash collateral held with brokers
6,795
580
Cash and cash equivalents
23,317
20,222
Other receivables (amounts due from brokers, dividends and interest receivable)
4,431
5,209
172,702
157,581
Management of counterparty credit risk
Credit risk is monitored and managed by RQA CCR. The team is headed by BlackRock’s Chief Credit Officer who reports to the
Global Head of RQA. Credit authority resides with the Chief Credit Officer and selected team members to whom specific credit
authority has been delegated. As such, counterparty approvals may be granted by the Chief Credit Officer, or by identified RQA
Credit Risk Officers who have been formally delegated authority by the Chief Credit Officer.
The counterparty/credit risk is managed as follows:
–
transactions are only entered into with those counterparties approved by RQA CCR, with a formal review carried out for
each new counterparty and with counterparties selected by RQA CCR on the basis of a number of risk mitigation criteria
designed to reduce the risk to the Group of default;
–
the creditworthiness of financial institutions with whom cash and fixed income instruments are held is reviewed regularly
by the RQA CCR team; and
–
the RQA CCR team review the credit standard of the Group’s brokers on a periodic basis and set limits on the amount that
may be due from any one broker.
The Board monitors the Group’s counterparty risk by reviewing:
–
the semi-annual report from the Depositary, which includes the results of periodic site visits to the Group’s custodian
where controls are reviewed and tested;
–
the custodian’s Service Organisation Control (SOC 1) reports which include a report by the custodian’s auditor. This report
sets out any exceptions or issues noted as a result of the auditor’s review of the custodian’s control processes;
–
the Manager’s internal control reports which include a report by the Manager’s auditor. This report sets out any exceptions
or issues noted as a result of the auditor’s review of the Manager’s control processes; and
–
in addition, the Depositary and the Manager report any significant breaches or issues arising to the Board as soon as these
are identified.
There were no past due or impaired assets as of 31 December 2022 (2021: nil). The major counterparties engaged with the
Group are all widely recognised and regulated entities.
Section 4: Financial statements
123
Notes to the financial statements
continued
18. Risk management policies and procedures
continued
In order to better define its contractual rights and to secure rights that will help the Group mitigate its counterparty risk, the
Group may enter into an ISDA Master Agreement or similar agreement with its OTC derivative contract counterparties. An
ISDA Master Agreement is an agreement between the Group and the counterparty that governs OTC derivative contracts
and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or
termination event. Under an ISDA Master Agreement, the Group has a contractual right to offset with the counterparty certain
derivative financial instruments payables and/or receivables with collateral held and/or posted and create one single net
payment in the event of default including the bankruptcy or insolvency of the counterparty. However, bankruptcy or insolvency
laws of a particular jurisdiction may impose restrictions on, or prohibitions against, the right of offset in bankruptcy, insolvency
or other events.
For financial reporting purposes, the Group does not offset derivative assets and derivative liabilities that are subject to netting
arrangements in the Statements of Financial Position. The disclosures set out in the following tables include financial assets
and financial liabilities that are subject to an enforceable master netting arrangement or similar agreement.
At 31 December 2022 and 2021, the Group’s and Company’s derivative assets and liabilities (by type) are as follows:
At 31 December 2022
At 31 December 2021
Assets
Liabilities
Assets
Liabilities
Derivatives
£’000
£’000
£’000
£’000
Written option contracts
–
(1,227)
–
(667)
Total derivative assets and liabilities in the Consolidated and Parent
Company Statements of Financial Position
–
(1,227)
–
(667)
Total assets and liabilities subject to a master netting agreement
–
(1,227)
–
(667)
The following table presents the Group’s and Company’s derivative liabilities by counterparty, net of amounts available for
offset, under a master netting agreement and net of any related collateral paid/(received) by the Group at 31 December 2022
and 2021:
Derivative
liabilities
subject to a
master netting
Derivatives
Net amount
agreement by a
available for
Non-cash
Pledged cash
of derivative
counterparty
offset
collateral given
collateral
liabilities
Counterparty
£’000
£’000
£’000
£’000
£’000
At 31 December 2022
Bank of America Merrill Lynch
(1,227)
–
–
1,227
–
At 31 December 2021
Citigroup
(376)
–
–
376
–
BNP Paribas
(291)
–
–
–
(291)
Offsetting and cash pooling arrangements
The Company and its subsidiary have a legally enforceable right under the bank overdraft agreement with The Bank of New
York Mellon (International) Limited to set off the cash held in the subsidiary and bank overdraft balance in the Company. The
cash and overdraft balances are held in the same currency and are managed under a compensated group arrangement with
the same bank where interest is received/charged on the net cash/overdraft balance.
In practice, the Group has not and does not expect the cash and overdraft balances to settle on a net basis and, accordingly, we
have presented the cash and cash equivalents and bank overdraft balances in the Statement of Financial Position on a gross
basis before offsetting the positive cash balances held in the subsidiary company against the bank overdraft balance in the
124
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Liquidity risk is the risk that the Group will encounter difficulties in meeting obligations associated with financial liabilities.
The Group is also exposed to the liquidity risk for margin calls on derivative instruments. The Group has an overdraft facility
of £30 million (2021: £30 million) and a multi-currency loan facility of £200 million (2021: £200 million) which are updated
and renewed on an annual basis. As per the borrowing agreements, borrowings under the overdraft and loan facilities shall
at no time exceed £230 million or 25% of the Group’s net asset value (whichever is the lower) (2021: £230 million or 25% of
the Group’s net asset value (whichever is lower)) and this covenant was complied with during the year. For details of the loan
facility, refer to note 14.
Liquidity risk exposure
The remaining undiscounted gross cash flows of the financial liabilities as at 31 December 2022 and 2021, based on the
earliest date on which payment can be required, were as follows:
2022
3 months or
less
2021
3 months or
less
Group
£’000
£’000
Current liabilities:
Amounts due to brokers, accruals and provisions
6,528
5,610
Derivative financial liabilities at fair value through profit or loss
1,227
667
Bank overdraft
–
356
Bank loans
158,783
138,867
166,538
145,500
2022
3 months or
less
2021
3 months or
less
Company
£’000
£’000
Current liabilities:
Amounts due to brokers, accruals and provisions
7,584
6,678
Derivative financial liabilities at fair value through profit or loss
1,227
667
Bank overdraft
–
356
Bank loans
158,783
138,867
167,594
146,568
Management of liquidity risk
Liquidity risk is minimised by holding sufficient liquid investments which can be readily realised to meet liquidity demands.
Asset disposals may also be required to meet liquidity needs. However, the timely sale of trading positions can be impaired
by many factors including decreased trading volume and increased price volatility. As a result, the Group may experience
difficulties in disposing of assets to satisfy liquidity demands. Liquidity risk is not significant as the majority of the Group’s
assets are investments in listed securities that are readily realisable.
The Board gives guidance to the Investment Manager as to the maximum amounts of the Group’s resources that should be
invested in any one company. The policy is that the Group should remain 90% invested in normal market conditions and that
25% of the Group’s assets may be invested in cash or cash equivalents. Short-term borrowings may be used to manage short-
term cash requirements.
The Group’s liquidity risk is managed on a daily basis by the Investment Manager in accordance with established policies
and procedures in place. The Investment Manager reviews daily forward-looking cash reports which project cash obligations.
These reports allow them to manage their obligations.
Section 4: Financial statements
125
Notes to the financial statements
continued
18. Risk management policies and procedures
continued
Financial assets and financial liabilities are either carried in the Consolidated and Parent Company Statements of Financial
Position at their fair value (investment and derivatives) or at amortised cost (due from brokers, dividends and interest
receivable, due to brokers, accruals, cash at bank and bank overdrafts). IFRS 13 requires the Group to classify fair value
measurements using a fair value hierarchy that reflects the significance of inputs used in making the measurements. The
valuation techniques used by the Group are explained in the accounting policies note 2(h) to the Financial Statements on
page
99
.
Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair
value measurement of the relevant asset.
The fair value hierarchy has the following levels:
Level 1 – Quoted market price for identical instruments in active markets
A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available from an
exchange, dealer, broker, industry group, pricing service or regulatory agency and those prices represent actual and regularly
occurring market transactions on an arm’s length basis. The Group does not adjust the quoted price for these instruments.
Level 2 – Valuation techniques using observable inputs
This category includes instruments valued using quoted prices for similar instruments in markets that are considered less
than active, or other valuation techniques where all significant inputs are directly or indirectly observable from market data.
Valuation techniques used for non-standardised financial instruments such as options, currency swaps and other over-the-
counter derivatives include the use of comparable recent arm’s length transactions, reference to other instruments that are
substantially the same, discounted cash flow analysis, option pricing models and other valuation techniques commonly used
by market participants making the maximum use of market inputs and relying as little as possible on entity specific inputs.
Over-the-counter derivative option contracts have been classified as Level 2 investments as their valuation has been based on
market observable inputs represented by the underlying quoted securities to which these contracts expose the Group.
Level 3 – Valuation techniques using significant unobservable inputs
This category includes all instruments where the valuation technique includes inputs not based on market data and these
inputs could have a significant impact on the instrument’s valuation.
This category also includes instruments that are valued based on quoted prices for similar instruments where significant
entity determined adjustments or assumptions are required to reflect differences between the instruments and instruments
for which there is no active market. The Investment Manager considers observable data to be that market data that is readily
available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that
are actively involved in the relevant market.
The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the
basis of the lowest level input that is significant to the fair value measurement. If a fair value measurement uses observable
inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement.
Assessing the significance of a particular input to the fair value measurement requires judgement, considering factors specific
to the asset or liability. The determination of what constitutes ‘observable’ inputs requires significant judgement by the
Investment Manager.
Valuation process and techniques for Level 3 valuations
(a) OZ Minerals Royalty
The Directors engage a mining consultant, an independent valuer with a recognised and relevant professional qualification, to
conduct a periodic valuation of the contractual rights and the fair value of the contractual rights is assessed with reference to
relevant factors. At the reporting date the income streams from contractual rights have been valued on the net present value
of the pre-tax cash flows discounted at a rate the external valuer considers reflects the risk associated with the project. The
126
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
valuation model uses discounted cash flow analysis which incorporates both observable and non-observable data. Observable
inputs include assumptions regarding current rates of interest and commodity prices. Unobservable inputs include
assumptions regarding production profiles, price realisations, cost of capital and discount rates. In determining the discount
rate to be applied, the external valuer considers the country and sovereign risk associated with the project, together with the
time horizon to the commencement of production and the success or failure of projects of a similar nature. To assess the
significance of a particular input to the entire measurement, the external valuer performs a sensitivity analysis. The external
valuer has undertaken an analysis of the impact of using alternative discount rates on the fair value of contractual rights.
This investment in contractual rights is reviewed regularly to ensure that the initial classification remains correct given the
asset’s characteristics and the Group’s investment policies. The contractual rights are initially recognised using the transaction
price as it was indicative of the best evidence of fair value at acquisition and are subsequently measured at fair value, taking
into consideration the relevant IFRS 13 requirements. In arriving at their estimates of market values, the valuers have used their
market knowledge and professional judgement. The Group classifies the fair value of this investment as Level 3.
Valuations are the responsibility of the Directors of the Company. In arriving at a final valuation, the Directors consider the
independent valuer’s report, the significant assumptions used in the fair valuation and the review process undertaken by
BlackRock’s Pricing Committee. The valuation of unquoted investments is performed on a quarterly basis by the Investment
Manager and reviewed by the Pricing Committee of the Manager. On a quarterly basis the Investment Manager will review the
valuation of the contractual rights and inputs for significant changes. A valuation of contractual rights is performed annually
by an external valuer, SRK Consulting (UK) Limited, and reviewed by the Pricing Committee of the Manager. The valuations
are also subject to quality assurance procedures performed within the Pricing Committee. On a semi-annual basis, after the
checks above have been performed, the Investment Manager presents the valuation results to the Directors. This includes a
discussion of the major assumptions used in the valuations. There were no changes in valuation techniques during the year.
(b) Jetti Resources and MCC Mining equity shares
The fair value of the investment equity shares of Jetti Resources and MCC Mining were assessed by an independent valuer
with a recognised and relevant professional qualification. The valuation is carried out based on market approach using
earnings multiple and price of recent transactions. Changes in assumptions about these factors could affect the reported
fair value of financial instruments in the Consolidated and Parent Company Statements of Financial Position and the level
where the instruments are disclosed in the fair value hierarchy. To assess the significance of a particular input to the entire
measurement, the external valuer performs a sensitivity analysis.
Fair values of financial assets and financial liabilities
The table below sets out fair value measurements using the IFRS 13 fair value hierarchy.
Financial assets/(liabilities) at fair value through profit or loss
at 31 December 2022 – Group
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Assets:
Equity investments
1,250,984
9
35,692
1,286,685
Fixed income securities
68,894
48,066
–
116,960
Investment in contractual rights
–
–
21,199
21,199
Total assets
1,319,878
48,075
56,891
1,424,844
Liabilities:
Derivative financial instruments – written options
–
(1,227)
–
(1,227)
Total
1,319,878
46,848
56,891
1,423,617
Section 4: Financial statements
127
Notes to the financial statements
continued
18. Risk management policies and procedures
continued
Financial assets/(liabilities) at fair value through profit or loss
at 31 December 2021 – Group
Level 1
Level 2
Level 3
Total
£’000
£’000
£’000
£’000
Assets:
Equity investments
1,114,430
8,955
1,846
1,125,231
Fixed income securities
59,108
40,895
13,405
113,408
Investment in contractual rights
–
–
18,162
18,162
Total assets
1,173,538
49,850
33,413
1,256,801
Liabilities:
Derivative financial instruments – written options
–
(667)
–
(667)
Total
1,173,538
49,183
33,413
1,256,134
Financial assets/(liabilities) at fair value through profit or loss
at 31 December 2022 – Company
Level 1
Level 2
Level 3
Total
£’000
£’000
£’000
£’000
Assets:
Equity investments
1,250,984
9
42,923
1,293,916
Fixed income securities
68,894
48,066
–
116,960
Investment in contractual rights
–
–
21,199
21,199
Total assets
1,319,878
48,075
64,122
1,432,075
Liabilities:
Derivative financial instruments – written options
–
(1,227)
–
(1,227)
Total
1,319,878
46,848
64,122
1,430,848
Financial assets/(liabilities) at fair value through profit or loss
at 31 December 2021 – Company
Level 1
Level 2
Level 3
Total
£’000
£’000
£’000
£’000
Assets:
Equity investments
1,114,430
8,955
9,024
1,132,409
Fixed income securities
59,108
40,895
13,405
113,408
Investment in contractual rights
–
–
18,162
18,162
Total assets
1,173,538
49,850
40,591
1,263,979
Liabilities:
Derivative financial instruments – written options
–
(667)
–
(667)
Total
1,173,538
49,183
40,591
1,263,312
128
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
A reconciliation of fair value measurement in Level 3 is set out below.
Level 3 Financial assets at fair value through profit or loss
at 31 December – Group
2022
2021
£’000
£’000
Opening fair value
33,413
19,753
Return of capital – royalty
(267)
(267)
Additions at cost
20,106
14,390
Transfer of equities from Level 1 to Level 3
2
–
Conversion of equity and transfer to Level 1
(2,546)
–
Conversion of convertible bond to equity and transfer to Level 2
(10,160)
–
Transfer of equities and convertible bonds to Level 2
(19,305)
–
Total profit or loss included in net profit on investments in the Consolidated Statement of
Comprehensive Income:
- assets transferred to Level 1 during the period
169
–
- assets transferred to Level 2 during the period
14,212
–
- assets held at the end of the period
21,267
(463)
Closing balance
56,891
33,413
Level 3 Financial assets at fair value through profit or loss
at 31 December – Company
2022
2021
£’000
£’000
Opening fair value
40,591
26,931
Return of capital – royalty
(267)
(267)
Additions at cost
20,106
14,390
Transfer of equities from Level 1 to Level 3
2
–
Conversion of equity and transfer to Level 1
(2,546)
–
Conversion of convertible bond to equity and transfer to Level 2
(10,160)
–
Transfer of equities and convertible bonds to Level 2
(19,305)
–
Total profit or loss included in net profit on investments in the Parent Company Statement of
Comprehensive Income:
- assets transferred to Level 1 during the period
169
–
- assets transferred to Level 2 during the period
14,212
–
- assets held at the end of the period
21,320
(463)
Closing balance
64,122
40,591
The Level 3 valuation process and techniques used are explained in the accounting policies in note 2(h). A more detailed
description of the techniques is found on pages 126
and
127 under ‘Valuation process and techniques’ for Level 3 valuations.
The Level 3 investments as at 31 December 2022 in the table below relate to the OZ Minerals Brazil Royalty, convertible bonds
and equity shares of Jetti Resources, MCC Mining and Lifezone SPAC PIPE. In accordance with IFRS 13, these investments
were categorised as Level 3.
In arriving at the fair value of the OZ Minerals Brazil Royalty, the key inputs are the underlying commodity prices and illiquidity
discount. In arriving at the fair value of Jetti Resources and MCC Mining securities, the key inputs are shown on page 130.
The Level 3 valuation process and techniques used by the Company are explained in the accounting policies in notes 2(h)
and 2(q) and a detailed explanation of the techniques is also available on pages 126
and
127 under ‘Valuation process and
techniques’.
Section 4: Financial statements
129
Notes to the financial statements
continued
18. Risk management policies and procedures
continued
Quantitative information of significant unobservable inputs – Level 3 – Group and Company
The significant unobservable inputs used in the fair value measurement categorised within Level 3 of the fair value
hierarchy, together with an estimated quantitative sensitivity analysis, as at 31 December 2022 and 31 December 2021 are
as shown below.
As at
Range of
31 December
weighted
Reasonable
2022
Valuation
Unobservable
average
possible
Impact on
Description
£’000
technique
input
inputs
shift¹ +/-
fair value
Discounted
rate–
weighted
Discounted
average cost
OZ Minerals Brazil Royalty
21,199
cash flows
of capital
5.0% - 8.0%
1.0%
£1.0m
US$1,400-
Average
US$1,600
gold prices
per ounce
10.0%
£1.5m
US$7,209-
Average
US$8,510
copper prices
per tonne
10.0%
£1.0m
Market
Earnings
Jetti Resources
29,873
approach
multiple
5.93x
5.0%
£0.6m
Market
Price of recent
MCC Mining
5,819
approach
transaction
5.0%
£0.3m
Lifezone commitment (see Note 21)
–
Listing
suspended
– valued
at nominal
Polyus
–
US$0.01
Total
56,891
1
The sensitivity analysis refers to a percentage amount added or deducted from the input and the effect this has on the fair value.
As at
Range of
31 December
weighted
Reasonable
2021
Valuation
Unobservable
average
possible
Impact on
Description
£’000
technique
input
inputs
shift¹ +/-
fair value
Discounted
rate–
weighted
Discounted
average cost
OZ Minerals Brazil Royalty
18,162
cash flows
of capital
5.0% - 8.0%
1.0%
£1.0m
US$1,400-
Average
US$1,600
gold prices
per ounce
10.0%
£1.5m
US$7,209-
Average
US$8,510
copper prices
per tonne
10.0%
£1.0m
Market
approach
and scenario
analysis for
convertible
Invanhoe Electric and I-Pulse securities
15,251
notes
Asset multiple
0.75x - 1.25x
25.0%
£0.5m
Total
33,413
1
The sensitivity analysis refers to a percentage amount added or deducted from the input and the effect this has on the fair value.
130
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
The sensitivity impact on fair value is calculated based on the sensitivity estimates set out by the independent valuer in its
report on the valuation of contractual rights. Significant increases/(decreases) in estimated commodity prices and discount
rates in isolation would result in a significantly higher/(lower) fair value measurement. Generally, a change in the assumption
made for the estimated value is accompanied by a directionally similar change in the commodity prices and discount rates.
For exchange listed equity investments, the quoted price is the bid price. Substantially, all investments are valued based on
unadjusted quoted market prices. Where such quoted prices are readily available in an active market, such prices are not
required to be assessed or adjusted for any business risks, including climate change risk, in accordance with the fair value
The Group’s capital management objectives are:
–
to ensure it will be able to continue as a going concern; and
–
to achieve a balanced return of dividends and capital growth over the longer term, by investing primarily in securities of
companies in the mining and metals sectors.
This is to be achieved through an appropriate balance of equity capital and gearing. The Company operates a flexible gearing
policy which depends on prevailing conditions. The policy is that debt should not be more than 25% of the Group’s net assets.
The Group’s total invested capital at 31 December 2022 was £1,458,068,000 (2021: £1,282,097,000) comprising of bank loans
and an overdraft of £158,783,000 (2021: £139,223,000) and equity shares, capital and reserves of £1,299,285,000 (2021:
£1,142,874,000)).
Under the terms of the overdraft and loan facility agreement, the Group’s total indebtedness shall at no time exceed
£230 million or 25% of the Group’s net asset value (whichever is the lowest).
The cash and bank overdraft accounts of the Company and subsidiary in the same currency are managed under a
compensated group arrangement and are therefore presented on a net basis in the Group financial statements.
The Board with the assistance of the Investment Manager monitors and reviews the broad structure of the Group’s capital on
an ongoing basis. This review includes:
–
the planned level of gearing, which takes into account the Investment Manager’s view on the market; and
–
the need to buy back equity shares, either for cancellation or to be held in treasury, which takes account of the difference
between the NAV per share and the share price (i.e. the level of share price discount or premium).
The Group is subject to externally imposed capital requirements:
–
as a public company
, the Group has a minimum share capital of £50,000; and
–
in order to be able to pay dividends out of profits available for distribution, the Group has to be able to meet one of the two
capital restrictions tests imposed on investment companies by law.
19. Transactions with the Investment Manager and AIFM
BlackRock Fund Managers Limited (BFM) provides management and administration services to the Company under a
contract which is terminable on six months’ notice. BFM has (with the Group’s consent) delegated certain portfolio and risk
management services, and other ancillary services to BlackRock Investment Management (UK) Limited (BIM (UK)). Further
details of the investment management contract are disclosed in the Directors’ Report on page
59
.
The investment management fee due for the year ended 31 December 2022 amounted to £10,646,000 (2021: £9,230,000).
At the year end, £5,443,000 was outstanding in respect of the management fee (2021: £4,587,000).
In addition to the above services, BIM (UK) has provided the Group with marketing services. The total fees paid or payable for
these services for the year ended 31 December 2022 amounted to £132,000 excluding VAT (2021: £140,000). Marketing fees
of £62,000 were outstanding as at 31 December 2022 (2021: £55,000).
The ultimate holding company of the Manager and the Investment Manager is BlackRock, Inc., a company incorporated in
Delaware, USA.
Section 4: Financial statements
131
Notes to the financial statements
continued
Directors’ emoluments
At the date of this report, the Board consists of five non-executive Directors, all of whom are considered to be independent of
the Manager by the Board.
Disclosures of the Directors’ interests in the ordinary shares of the Company and fees and expenses payable to the Directors
are set out in the Directors’ Remuneration Report on pages 65
to
67. As at 31 December 2022, £16,000 (2021: £14,375) was
outstanding in respect of Directors’ fees.
Significant holdings
The following investors are:
a.
funds managed by the BlackRock Group or are affiliates of BlackRock Inc. (Related BlackRock Funds); or
b.
investors (other than those listed in (a) above) who held more than 20% of the voting shares in issue in the Company and
are as a result, considered to be related parties to the Company (Significant Investors).
As at 31 December 2022
Total % of shares held by Related
Total % of shares held by Significant
Number of Significant Investors who
BlackRock Funds
Investors who are not affiliates of
are not affiliates of BlackRock Group or
BlackRock Group or BlackRock, Inc.
BlackRock, Inc.
2.27
n/a
n/a
As at 31 December 2021
Total % of shares held by Related
Total % of shares held by Significant
Number of Significant Investors who
BlackRock Funds
Investors who are not affiliates of
are not affiliates of BlackRock Group or
BlackRock Group or BlackRock, Inc.
BlackRock, Inc.
1.77
n/a
There was one capital commitment at 31 December 2022 (2021: nil). This was a US$10,000,000 commitment in relation to the
132
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l
Annual Report and Financial Statements 31 December 2022
Section 5: Additional information
135
Additional
information
The Company has exposure to two aluminium producers, Alcoa and Norsk Hydro,
which both have access to renewable, low cost energy for the majority of their
production, leaving them well positioned in the current environment of high energy
costs and in the longer term as the market places a greater cost on carbon.
PHOTO COURTESY OF ALCOA
136
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Financial calendar
The timing of the announcement and publication of the
Company’s results may normally be expected in the months
shown below:
February/March
Annual results announced.
March
Annual Report and Financial Statements
published.
April/May
Annual General Meeting.
August
Half yearly figures announced and half
yearly financial report published.
Dividend – 2022
The proposed final dividend in respect of the year ended
31 December 2022 is 23.50
p per share. The Board also
declared three quarterly interim dividends of 5.50p per share.
Ex-dividend date (shares transferred without
the dividend)
9 March 2023
Record date (last date for registering
transfers to receive the dividend)
10 March 2023
Last date for registering DRIP instructions
3 April 2023
Dividend payment date
26 April 2023
Quarterly dividends
Dividends will be paid quarterly as follows.
Period ending
Announce
Payment date
31 March
April/May
June
30 June
August
September
30 September
November
December
31 December
February
May
Payment of dividends
Cash dividends will be sent by cheque to the first-named
shareholder at their registered address. Dividends may
also be paid direct into a shareholder’s bank account via
BACSTEL-IP (Bankers’ Automated Clearing Service – Telecom
Internet Protocol). This may be arranged by contacting
the Company’s registrar, Computershare Investor Services
PLC, through their secure website investorcentre.co.uk,
or by telephone on 0370 707 1187, or by completing the
Mandate Instructions section on the reverse of your dividend
confirmation statement and sending this to the Company’s
registrar, Computershare. Dividend confirmations will be
sent to shareholders at their registered address, unless other
instructions have been given, to arrive on the payment date.
Dividend reinvestment scheme (DRIP)
Shareholders may request that their dividends be used
to purchase further shares in the Company. Dividend
reinvestment forms may be obtained from Computershare
Investor Services PLC through their secure website
investorcentre.co.uk or on 0370 707 1187. Shareholders who
have already opted to have their dividends reinvested do not
need to reapply. The last date for registering for this service
for the forthcoming dividend is 3 April 2023.
Dividend tax allowance
The annual tax-free allowance on dividend income across
an individual’s entire share portfolio is currently £2,000,
reducing to £1,000 from 6 April 2023 and then £500 from
6 April 2024. Above this amount, individuals pay tax on their
dividend income at a rate dependent on their income tax
bracket and personal circumstances.
The Company continues to provide registered shareholders
with confirmation of the dividends paid and this should be
included with any other dividend income received when
calculating and reporting total dividend income received. It is
a shareholder’s responsibility to include all dividend income
when calculating any tax liability.
If you have any tax queries, please contact a financial advisor.
Share price
The Company’s mid-market ordinary share price is
quoted daily in The Financial Times and The Times under
‘Investment Companies’ and in The Daily Telegraph under
‘Investment Trusts’. The share price is also available on the
BlackRock website at www.blackrock.com/uk/brwm.
ISIN/SEDOL numbers
The ISIN/SEDOL numbers and mnemonic codes for the
Company’s shares are:
Ordinary shares
ISIN
GB0005774855
SEDOL
0577485
Reuters Code
BRWM.L
Bloomberg Code
BRWM LN
Ticker
BRWM
Shareholder information
Section 5: Additional information
137
Share dealing
Investors wishing to purchase more shares in the Company
or sell all or part of their existing holding may do so through a
stockbroker. Most banks also offer this service. Alternatively,
please go to www.computershare.com/dealing/uk for a range
of dealing services made available by Computershare.
CREST
The Company’s shares may be held in CREST, an electronic
system for uncertificated securities trading.
Private investors can continue to retain their share
certificates and remain outside the CREST system. Private
investors are able to buy and sell their holdings in the same
way as they did prior to the introduction of CREST, although
there may be differences in dealing charges.
Risk factors
• Past performance is not necessarily a guide to future
performance.
• The value of your investment in the Company and the
income from it can fluctuate as the value of the underlying
investments fluctuate.
• The price at which the Company’s shares trade on the
London Stock Exchange is not the same as their net asset
value (NAV) (although they are related) and therefore you
may realise returns which are lower or higher than NAV
performance.
Electronic communications
We encourage you to play your part in reducing our impact
on the environment and elect to be notified by email when
your shareholder communications become available online.
This means you will receive timely, cost-effective and greener
online annual reports, half yearly financial reports and other
relevant documentation.
Shareholders who opt for this service will receive an email
from Computershare with a link to the relevant section of
the BlackRock website where the documents can be viewed
and downloaded. Please submit your email address by
visiting investorcentre.co.uk/ecomms. You will require your
shareholder reference number which you will find on your
share certificate or dividend confirmation statement.
You will continue to receive a printed copy of these reports
if you have elected to do so. Alternatively, if you have not
submitted your email address nor have elected to receive
printed reports, we will write and let you know where you can
view these reports online.
Electronic proxy voting
Shareholders are able to submit their proxy votes electronically
via Computershare’s internet site at eproxyappointment.com
using their shareholder reference number, control number and
a unique identification PIN which will be provided with voting
instructions and the Notice of Annual General Meeting.
CREST members who wish to appoint one or more proxies
or give an instruction through the CREST electronic proxy
appointment service may do so by using the procedures
described in the CREST manual. More details are set out
in the notes on the Form of Proxy and the Notice of Annual
General Meeting.
Duration of the Company
Shareholders are given an opportunity at each Annual
General Meeting to vote on an ordinary resolution to
continue the life of the Company for a further twelve months.
Nominee code
Where shares are held in a nominee company name, the
Company undertakes:
•
to provide the nominee company with multiple copies of
shareholder communications, so long as an indication of
quantities has been provided in advance; and
•
to allow investors holding shares through a nominee
company to attend general meetings, provided the correct
authority from the nominee company is available.
Nominee companies are encouraged to provide the
necessary authority to underlying shareholders to attend the
Company’s general meetings.
Publication of net asset value/portfolio
analysis
The net asset value per share (NAV) of the Company is
calculated daily, with details of the Company’s investments
and performance being published monthly.
The daily NAV per share and monthly information
are released through the London Stock Exchange’s
Regulatory News Service and are available on the website
at www.blackrock. com/uk/brwm and through the Reuters
News Service under the code ‘BLRKINDEX’, on page 8800
on Topic 3 (ICV terminals) and under ‘BLRK’ on Bloomberg
(monthly information only).
Individual Savings Accounts (ISAs)
ISAs are a tax-efficient method of investment and the
Company’s shares are eligible investments for inclusion
within stocks and shares Individual Savings Accounts. In the
2022/2023 tax year investors have an annual ISA allowance
of £20,000 (2021/2022: £20,000) which can be invested in
either cash or shares.
Online access
Other details about the Company are also available on the
website at www.blackrock.com/uk/brwm. The financial
statements and other literature are published on the website.
Visitors to the website need to be aware that legislation
in the United Kingdom governing the preparation and
dissemination of the financial statements may differ from
legislation in their jurisdiction.
138
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Shareholders can also manage their shareholding online by
using Investor Centre, Computershare’s secure website at
investorcentre.co.uk. To register on Computershare’s website
you will need your shareholder reference number which can
be found on paper or electronic communications you have
previously received from Computershare. Listed below are
the most frequently used features of the website.
•
Holding enquiry – view balances, values, history, payments
and reinvestments.
•
Payments enquiry – view your dividends and other
payment types.
•
Address change – change your registered address.
•
Bank details update – choose to receive your dividend
payment directly into your bank account instead of by
cheque.
•
e-Comms sign
-up – choose to receive email notifications
when your shareholder communications become available
instead of paper communications.
•
Outstanding payments – reissue payments using the
online replacement service.
•
Downloadable forms – including dividend mandates, stock
transfer, dividend reinvestment and change of address
forms.
Shareholder enquiries
The Company’s registrar is Computershare Investor
Services PLC. Certain details relating to your holding can
be checked through the Computershare Investor Centre
website. As a security check, specific information needs
to be input accurately to gain access to an individual’s
account. This includes your shareholder reference number,
available from your share certificate, dividend confirmation
statement or other electronic communications you have
previously received from Computershare. The address of the
Computershare website is investorcentre.co.uk. Alternatively,
please contact the registrar on 0370 707 1187.
Changes of name or address must be notified in writing
either through Computershare’s website, or to the registrar
at:
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
General enquiries
Enquiries about the Company should be directed to:
The Secretary
BlackRock World Mining Trust plc
12 Throgmorton Avenue
London EC2N 2DL
Telephone: 020 7743 3000
Email: cosec@blackrock.com
Shareholder information
continued
Section 5: Additional information
139
By type of holder
Number of
shares
% of total
2022
% of total
2021
Number of
holders
% of total
2022
% of total
2021
Direct private investors
3,186,339
2.0
1.8
1,557
74.3
51.1
Nominee companies
184,325,187
97.2
97.4
494
23.6
47.5
Others
1,241,
5
10
0.8
0.8
44
2.1
1.4
188,753,036
100.0
100.0
2,095
100.0
100.0
By size of holding
Number of
shares
% of total
2021
% of total
2020
Number of
holders
% of total
2021
% of total
2020
1-10,000
3,161,423
3.2
2.9
1,725
82.3
87.9
10,001-100,000
7,734,795
4.1
4.1
213
10.2
7.0
100,001-1,000,000
34,950,579
21.9
20.2
109
5.2
3.6
1,000,001-5,000,000*
91,655,550
49.6
47.2
42
2.0
1.3
Over 5,000,000
51,250,689
21.2
25.6
6
0.3
0.2
188,753,036
100.0
100.0
2,095
100.0
100.0
*
Excludes treasury shares of 4,258,806.
Analysis of ordinary shareholders
as at 31 December 2022 (unaudited)
140
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Year ended
31 December
Net Assets
Undiluted
Net Asset
Value per
Ordinary
Share
Diluted
Net Asset
Value per
Ordinary
Share
1
Gearing
Ordinary
Share Price
Revenue
available
for Ordinary
Shareholders
Revenue
Earnings
per
Ordinary
Share
Dividends
per
Ordinary
Share
£’000
p
p
%
p
£’000
p
p
1994
446,816
104.94
104.12
–
93.50
3,642
0.86
0.77
1995
452,762
106.27
105.23
0.1
93.00
5,637
1.32
1.00
1996
424,774
99.70
–
–
86.50
5,082
1.19
1.15
1997
318,494
74.75
–
–
59.50
3,894
0.91
0.85
1998
230,284
60.92
–
–
55.75
5,619
1.43
2.35
1999
223,397
116.99
–
11.2
100.75
2,238
1.00
1.20
2000
186,022
109.36
–
8.3
91.50
2,939
1.63
1.30
2001
196,726
118.48
–
–
96.50
6,434
3.82
3.15
2002
243,350
149.48
–
–
131.75
4,110
2.52
2.10
2003
389,244
239.09
–
8.8
217.00
2,816
1.73
1.70
2004
2
398,129
244.55
240.29
6.0
218.00
4,899
3.01
2.50
2005
668,202
397.03
–
0.7
351.50
5,642
3.39
2.80
2006
868,545
516.07
503.23
0.9
444.00
14,782
8.78
4.50
2007
1,268,120
804.13
752.28
–
655.00
13,391
8.25
5.50
2008
590,927
331.39
–
0.5
252.50
9,831
5.64
5.50
2009
1,176,813
662.02
–
3.6
550.00
8,714
4.90
4.75
2010
1,708,023
962.06
–
1.8
811.00
11,667
6.57
6.00
2011
1,317,004
742.86
–
2.5
631.50
26,099
14.71
14.00
2012
1,215,743
685.75
–
7.1
586.50
38,614
21.78
21.00
2013
885,346
499.39
–
9.6
465.00
39,633
22.36
21.00
2014
624,674
352.35
–
11.7
310.35
37,452
21.13
21.00
2015
377,313
212.83
–
12.2
181.00
32,744
18.47
21.00
2016
677,546
383.98
–
12.4
336.50
23,303
13.19
13.00
2017
804,647
456.01
–
12.2
397.75
28,093
15.92
15.60
2018
685,595
388.81
–
13.5
340.50
32,013
18.15
18.00
2019
757,110
433.17
–
11.7
383.00
39,561
22.46
22.00
2020
930,825
536.34
–
12.3
522.00
35,451
20.40
20.30
2021
1,142,874
622.21
–
9.9
589.00
78,910
43.59
42.50
2022
1,299,285
688.35
–
9.6
697.00
76,013
40.68
40.00
1
Diluted net asset value per ordinary share calculated for potentially dilutive securities in issue such as warrants and treasury shares.
2
Prior to 2004, financial information had been prepared under UK GAAP. From 2004 all information is prepared under IFRS as set out in note 2 to the Financial
Statements on pages
97
to 1
01
.
Historical record
(unaudited)
Section 5: Additional information
141
Registered Office
(Registered in England, No. 2868209)
12 Throgmorton Avenue
London EC2N 2DL
Alternative Investment Fund Manager
BlackRock Fund Managers Limited*
12 Throgmorton Avenue
London EC2N 2DL
Investment Manager and Company
Secretary
BlackRock Investment Management (UK) Limited*
12 Throgmorton Avenue
London EC2N 2DL
Telephone: 020 7743 3000
Email: cosec@blackrock.com
Depositary, Custodian, Banker and Fund
Accountant
The Bank of New York Mellon (International) Limited*
160 Queen Victoria Street
London EC4V 4LA
Registrar
Computershare Investor Services PLC*
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
Telephone: 0370 707 1187
Independent Auditors
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Atria One
144 Morrison Street
Edinburgh
EH3 8EX
Stockbrokers
JPMorgan Cazenove Limited*
25 Bank Street
Canary Wharf
London E14 5JP
Winterflood Securities Limited*
The Atrium Building
Cannon Bridge
25 Dowgate Hill
London EC4R 2GA
Solicitors
Herbert Smith Freehills LLP
Exchange House
Primrose Street
London EC2A 2EG
Management and other service providers
*
Authorised and regulated by the Financial Conduct Authority.
142
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Remuneration related disclosures in
accordance with Article 22(2) of the AIFMD,
Article 107 of the AIFMD Regulations and
Section XIII of the ESMA Guidelines on
sound remuneration policies under the
AIFMD
The below disclosures are made in respect of the
remuneration policies of the BlackRock group (“BlackRock”),
as they apply to BlackRock Fund Managers Limited (the
“Manager”). The disclosures are made in accordance with
the provisions in the UK implementing the Alternative
Investment Fund Managers Directive (the “AIFMD”), the
European Commission Delegated Regulation supplementing
the AIFMD (the “Delegated Regulation”) and the “Guidelines
on sound remuneration policies under the AIFMD” issued by
the European Securities and Markets Authority.
The BlackRock AIFM Remuneration Policy (the “AIFM
Remuneration Policy”) will apply to the EEA entities within
the BlackRock group authorised as a manager of alternative
investment funds in accordance with the AIFMD, and will
ensure compliance with the requirements of Annex II of
the AIFMD and to UK entities within the BlackRock group
authorised as a manager of a UK alternative investment fund
in accordance with the UK version of the Directive.
The Manager has adopted the AIFM Remuneration Policy, a
summary of which is set out below.
Remuneration Governance
BlackRock’s remuneration governance in EMEA operates
as a tiered structure which includes: (a) the Management
Development and Compensation Committee (“MDCC”)
(which is the global, independent remuneration committee
for BlackRock, Inc. and (b) the Manager’s board of directors
(the “Manager’s Board”)). These bodies are responsible for
the determination of BlackRock’s remuneration policies
which includes reviewing the remuneration policy on a
regular basis and being responsible for its implementation.
The implementation of the remuneration policy is annually
subject to central and independent review for compliance
with policies and procedures for remuneration adopted by
the MDCC and by the Manager’s Board. The remuneration
disclosure is produced and owned by MDCC and the
Manager’s Board.
(a) MDCC
The MDCC’s purposes include:
•
providing oversight of:
–
BlackRock’s executive compensation programmes;
–
BlackRock’s employee benefit plans; and
–
such other compensation plans as may be
established by BlackRock from time to time for
which the MDCC is deemed as administrator;
•
reviewing and discussing the compensation discussion
and analysis included in the BlackRock, Inc. annual proxy
statement with management and approving the MDCC’s
report for inclusion in the proxy statement;
•
reviewing, assessing and making reports and
recommendations to the BlackRock, Inc. Board of
Directors (the ‘BlackRock, Inc. Board’) as appropriate
on BlackRock’s talent development and succession
planning, with the emphasis on performance and
succession at the highest management levels; and
•
supporting the boards of the Company’s EMEA
regulated entities in meeting their remuneration-related
obligations by overseeing the design and implementation
of EMEA remuneration policy in accordance with
applicable regulations.
The MDCC directly retains its own independent
compensation consultant, Semler Brossy Consulting Group
LLC, who has no relationship with BlackRock Inc. or the
BlackRock, Inc. Board that would interfere with its ability to
provide independent advice to the MDCC on compensation
matters.
The BlackRock, Inc. Board has determined that all of the
members of the MDCC are “independent” within the meaning
of the listing standards of the New York Stock Exchange
(NYSE), which requires each meet a “non-employee director”
standard.
The MDCC held 7 meetings during 2022. The MDCC charter
is available on BlackRock, Inc.’s website (www.blackrock.com).
(b) The Manager’s Board
The Manager’s Board has the task of supervising and
providing oversight of the AIFM Remuneration Policy as it
applies to the Manager and its Identified Staff.
Decision-making process
Remuneration decisions for employees are made once
annually in January following the end of the performance
year. This timing allows full-year financial results to be
considered along with other non-financial goals and
objectives. Although the framework for remuneration
decision-making is tied to financial performance,
significant discretion is used to determine individual
variable remuneration based on achievement of strategic
and operating results and other considerations such as
management and leadership capabilities.
No set formulas are established and no fixed benchmarks are
used in determining annual incentive awards. In determining
AIFM Report on Remuneration
(unaudited)
Section 5: Additional information
143
specific individual remuneration amounts, a number of
factors are considered including non-financial goals and
objectives and overall financial and investment performance.
These results are viewed in the aggregate without any
specific weighting, and there is no direct correlation between
any particular performance measure and the resulting
annual incentive award. The variable remuneration awarded
to any individual(s) for a particular performance year may
also be zero.
Annual incentive awards are paid from a bonus pool.
The size of the projected bonus pool, including cash and
equity awards, is reviewed throughout the year by the MDCC
and the final total bonus pool is approved after year-end.As
part of this review, the MDCC receives actual and projected
financial information over the course of the year as well as
final year-end information. The financial information that
the MDCC receives and considers includes the current year
projected income statement and other financial measures
compared with prior year results and the current year budget.
The MDCC additionally reviews other metrics of BlackRock’s
financial performance (e.g., net inflows of AUM and
investment performance) as well as information regarding
market conditions and competitive compensation levels.
The MDCC regularly considers management’s
recommendation as to the percentage of pre-incentive
operating income that will be accrued and reflected as a
compensation expense throughout the year for the cash
portion of the total annual bonus pool (the “accrual rate”).
The accrual rate of the cash portion of the total annual bonus
pool may be modified by the MDCC during the year based on
its review of the financial information described above. The
MDCC does not apply any particular weighting or formula to
the information it considers when determining the size of the
total bonus pool or the accruals made for the cash portion of
the total bonus pool.
Following the end of the performance year, the MDCC
approves the final bonus pool amount.
As part of the year-end review process the Enterprise Risk
and Regulatory Compliance departments report to the
MDCC on any activities, incidents or events that warrant
consideration in making compensation decisions.
Individuals are not involved in setting their own
remuneration.
Control functions
Each of the control functions (Enterprise Risk, Legal &
Compliance, and Internal Audit) has its own organisational
structure which is independent of the business units
and therefore staff members in control functions are
remunerated independently of the businesses they oversee.
The head of each control function is either a member of the
Global Executive Committee (“GEC”), the global management
committee, or has a reporting obligation to the board of
directors of BlackRock Group Limited, the parent company
of all of BlackRock’s EMEA regulated entities, including the
Manager.
Functional bonus pools are determined with reference to the
performance of each individual function. The remuneration
of the senior members of control functions is directly
overseen by the MDCC
Link between pay and performance
There is a clear and well defined pay-for-performance
philosophy and compensation programmes which are
designed to meet the following key objectives as detailed
below:
•
appropriately balance BlackRock’s financial results
between shareholders and employees;
•
attract, retain and motivate employees capable of making
significant contributions to the long-term success of the
business;
•
align the interests of senior employees with those of
shareholders by awarding BlackRock Inc.’s stock as a
significant part of both annual and long-term incentive
awards;
•
control fixed costs by ensuring that compensation
expense varies with profitability;
•
link a significant portion of an employee’s total
compensation to the financial and operational
performance of the business;
•
promote sound and effective risk management across all
risk categories, including sustainability risk;
•
discourage excessive risk-taking (sustainability related or
otherwise); and
•
ensure that client interests are not negatively impacted
by remuneration awarded on a short-term, mid-term
and/or long-term basis.
Driving a high-performance culture is dependent on the
ability to measure performance against objectives, values
and behaviours in a clear and consistent way. Managers use
a 5-point rating scale to provide an overall assessment of an
employee’s performance, and employees also provide a self-
evaluation. The overall, final rating is reconciled during each
employee’s performance appraisal. Employees are assessed
on the manner in which performance is attained as well as
the absolute performance itself.
144
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
I
n keeping with the pay-for-performance philosophy, ratings
are used to differentiate and reward individual performance
– but don’t pre-determine compensation outcomes.
Compensation decisions remain discretionary and are made
as part of the year-end compensation process.
When setting remuneration levels other factors are
considered, as well as individual performance, which may
include:
•
the performance of the Manager, the funds managed by
the Manager and/or the relevant functional department;
•
factors relevant to an employee individually; relationships
with clients and colleagues; teamwork; skills; any
conduct issues; and, subject to any applicable policy, the
impact that any relevant leave of absence may have on
contribution to the business;
•
the management of risk within the risk profiles
appropriate for BlackRock’s clients;
•
strategic business needs, including intentions regarding
retention;
•
market intelligence;
•
criticality to business; and
•
supporting the firm’s approaches to environmental,
social and governance factors and diversity, equity and
inclusion.
A primary product tool is risk management and, while
employees are compensated for strong performance in their
management of client assets, they are required to manage
risk within the risk profiles appropriate for their clients.
Therefore, employees are not rewarded for engaging in
high-risk transactions outside of established parameters.
Remuneration practices do not provide undue incentives for
short-term planning or short-term financial rewards, do not
reward unreasonable risk and provide a reasonable balance
between the many and substantial risks inherent within the
business of investment management, risk management and
advisory services.
BlackRock operates a total compensation model for
remuneration which includes a base salary, which is
contractual, and a discretionary bonus scheme.
BlackRock operates an annual discretionary bonus scheme.
Although all employees are eligible to be considered for a
discretionary bonus, there is no contractual obligation to
make any award to an employee under its discretionary
bonus scheme. In exercising discretion to award a
discretionary bonus, the factors listed above (under the
heading “Link between pay and performance”) may be taken
into account in addition to any other matters which become
relevant to the exercise of discretion in the course of the
performance year.
Discretionary bonus awards for all employees, including
executive officers, are subject to a guideline that determines
the portion paid in cash and the portion paid in BlackRock,
Inc. stock and subject to additional vesting/clawback
conditions. Stock awards are subject to further performance
adjustment through variation in BlackRock, Inc.’s share
price over the vesting period. As total annual compensation
increases, a greater portion is deferred into stock. The MDCC
adopted this approach in 2006 to substantially increase
the retention value and shareholder alignment of the
compensation package for eligible employees, including the
executive officers. The portion deferred into stock vests into
three equal instalments over the three years following grant.
Supplementary to the annual discretionary bonus as
described above, equity awards may be made to select
individuals to provide greater linkage with future business
results. These long-term incentive awards have been
established individually to provide meaningful incentive for
continued performance over a multi-year period recognising
the scope of the individual’s role, business expertise and
leadership skills.
Selected senior leaders are eligible to receive performance-
adjusted equity-based awards from the “BlackRock
Performance Incentive Plan” (“BPIP”). Awards made from
the BPIP have a three-year performance period based on a
measurement of As Adjusted Operating Margin
1
and Organic
Revenue Growth
2
. Determination of pay-out will be made
based on the firm’s achievement relative to target financial
results at the conclusion of the performance period. The
maximum number of shares that can be earned is 165% of
the award in those situations where both metrics achieve
pre-determined financial targets. No shares will be earned
where the firm’s financial performance in both of the above
metrics is below a pre-determined performance threshold.
These metrics have been selected as key measures of
shareholder value which endure across market cycles.
A limited number of investment professionals have a portion
of their annual discretionary bonus (as described above)
awarded as deferred cash that notionally tracks investment
in selected products managed by the employee. The intention
of these awards is to align investment professionals with the
investment returns of the products they manage through the
deferral of compensation into those products. Clients and
external evaluators have increasingly viewed more favourably
those products where key investors have “skin in the game”
through significant personal investments.
1
As Adjusted Operating Margin: As reported in BlackRock’s external filings,
reflects adjusted Operating Income divided by Total Revenue net of
distribution and servicing expenses and amortisation of deferred sales
commissions.
2
Organic Revenue Growth: Equal to net new base fees plus net new Aladdin
revenue generated in the year (in dollars).
AIFM Report on Remuneration
(unaudited) continued
Section 5: Additional information
145
Identified Staff
The AIFM Remuneration Policy sets out the process that
will be applied to identify staff as Identified Staff, being
categories of staff of the Manager, including senior
management, risk takers, control functions and any
employee receiving total remuneration that takes them into
the same remuneration bracket as senior management and
risk takers, whose professional activities have a material
impact on the risk profiles of the Manager or of the funds it
manages.
The list of Identified Staff will be subject to regular review,
being formally reviewed in the event of, but not limited to:
•
organisational changes;
•
new business initiatives;
•
changes in significant influence function lists;
•
changes in role responsibilities; and
•
revised regulatory direction.
Quantitative Remuneration Disclosure
The Manager is required under the AIFMD to make
quantitative disclosures of remuneration. These disclosures
are made in line with BlackRock’s interpretation of currently
available regulatory guidance on quantitative remuneration
disclosures. As market or regulatory practice develops
BlackRock may consider it appropriate to make changes to
the way in which quantitative remuneration disclosures are
calculated. Where such changes are made, this may result
in disclosures in relation to a fund not being comparable to
the disclosures made in the prior year, or in relation to other
BlackRock fund disclosures in that same year.
Disclosures are provided in relation to (a) the staff of the
Manager; (b) staff who are senior management; and (c) staff
who have the ability to materially affect the risk profile of
the Fund, including individuals who, although not directly
employed by the Manager, are assigned by their employer to
carry out services directly for the Manager.
All individuals included in the aggregated figures disclosed
are rewarded in line with BlackRock’s remuneration policy
for their responsibilities across the relevant BlackRock
business area. As all individuals have a number of areas of
responsibilities, only the portion of remuneration for those
individuals’ services attributable to the Manager is included
in the aggregate figures disclosed.
Members of staff and senior management of the Manager
typically provide both AIFMD and non-AIFMD related
services in respect of multiple funds, clients and functions
of the Manager and across the broader BlackRock group.
Conversely, members of staff and senior management of
the broader BlackRock group may provide both AIFMD and
non-AIFMD related services in respect of multiple funds,
clients and functions of the broader BlackRock group
and of the Manager. Therefore, the figures disclosed are a
sum of individuals’ portion of remuneration attributable
to the Manager according to an objective apportionment
methodology which acknowledges the multiple-service
nature of the Manager and the broader BlackRock group.
Accordingly, the figures are not representative of any
individual’s actual remuneration or their remuneration
structure.
The amount of the total remuneration awarded to the
Manager’s staff in respect of the Manager’s financial year
ending 31 December 2022 is US$194.5 million.
This figure
is comprised of fixed remuneration of US$109.3 million and
variable remuneration of US$85.3 million. There were a total
of 3,790 beneficiaries of the remuneration described above.
The amount of the aggregate remuneration awarded by the
Manager in respect of the Manager’s financial year ending
31 December 2022, to its senior management was US$21.6
million, and to other members of its staff whose actions
potentially have a material impact on the risk profile of the
Manager or its funds was US$8.8 million. These figures relate
to the entire Manager and not to the Company.
146
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Leverage
The Company may employ leverage and borrow cash in
accordance with its stated investment policy or investment
strategy. The Company may also employ leverage in its
investment programme through foreign exchange forward
contracts. The use of borrowings and leverage has attendant
risks and can, in certain circumstances, substantially
increase the adverse impact to which the Company’s
investment portfolio may be subject.
Consistent with its investment objective and policy, the
Company may utilise a variety of exchange traded and over
the counter (OTC) derivative instruments such as covered
put/call options as part of its investment policy. The use of
derivatives may expose the Company to a higher degree of
risk. No derivatives were used for leverage purposes during
the year.
For the purposes of this disclosure, leverage is any method
by which the Company’s exposure is increased, whether
through borrowing of cash or securities, or leverage
embedded in foreign exchange forward contracts or by any
other means. The AIFMD requires that each leverage ratio be
expressed as the ratio between a Company’s exposure and its
NAV, and prescribes two required methodologies, the gross
methodology and the commitment methodology (as set out
in AIFMD Level 2 Implementation Guidance), for calculating
such exposure.
Using the methodologies prescribed under the AIFMD, the
leverage of the Group and Company is disclosed in the table
below:
Commitment
leverage as at
31 December
2022
Gross
leverage
as at
31 December
2022
Leverage ratio
1.12
1.12
Other risk disclosures
The financial risk disclosures relating to risk framework
and liquidity risk are set out in note 18 to the notes to the
Financial Statements.
Pre investment disclosures
The AIFMD requires certain information to be made
available to investors in AIFs before they invest and requires
that material changes to this information be disclosed
in the Annual Report of each AIF. An Investor Disclosure
Document, which sets out information on the Company’s
investment strategy and policies, leverage, risk, liquidity,
administration, management, fees, conflicts of interest and
other shareholder information is available on the website at
www.blackrock.com/uk/brwm.
There have been no material changes (other than those
reflected in these financial statements or previously
disclosed to the London Stock Exchange through a
primary information provider) to this information requiring
disclosure. Any information requiring immediate disclosure
pursuant to the AIFMD will be disclosed to the London Stock
Exchange through a primary information provider.
CAROLINE DRISCOLL
For and on behalf of
BlackRock Investment Management (UK) Limited
Company Secretary
2 March 2023
Other AIFMD disclosures
(unaudited)
Section 5: Additional information
147
The disclosures below are made in compliance with the requirements of Listing Rule 9.8.4.
9.8.4 (1) The Company has not capitalised any interest in the period under review.
9.8.4 (2) The Company has not published any unaudited financial information in a class 1 circular or prospectus or any profit
forecast or profit estimate.
9.8.4 (3) This provision has been deleted.
9.8.4 (4) The Company does not have any long-term incentive schemes in operation.
9.8.4 (5) and 9.8.4 (6) No Director of the Company has waived or agreed to waive any current or future emoluments from the
Company or any subsidiary undertaking.
9.8.4 (7) The Company has reissued a total of 5,071,920 ordinary shares from treasury during the year at a premium to NAV
at an average price of 688.14p per share for a total consideration of £34,902,000 excluding costs. Since the year end and up
to 2 March 2023, a further 150,000
ordinary shares have been reissued from treasury for a total consideration net of costs of
£1,084,000.
9.8.4 (8) The Company’s subsidiary has not allotted any equity securities for cash in the period under review.
9.8.4 (9) This provision is not applicable to the Company.
9.8.4 (10) There were no other contracts of significance subsisting during the period under review to which the Company is
a party and in which a Director of the Company is or was materially interested, or between the Company and a controlling
shareholder.
9.8.4 (11) This provision is not applicable to the Company.
9.8.4 (12) and 9.8.4 (13) There were no arrangements under which a shareholder has waived or agreed to waive any dividends
or future dividends.
9.8.4 (14) This provision is not applicable to the Company.
CAROLINE DRISCOLL
For and on behalf of
BlackRock Investment Management (UK) Limited
Company Secretary
2 March 2023
Information to be disclosed in accordance
with Listing Rule 9.8.4
148
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Alternative performance measure (APM)
An APM is a measure of performance or financial position
that is not defined in applicable accounting standards and
cannot be directly derived from the financial statements.
The Group’s APMs are set out below and are cross-referenced
where relevant to the financial inputs used to derive them as
contained in other sections of the Annual Financial Report.
Closed-end company
An investment trust works along the same lines as a unit
trust, in that it pools money from investors which is then
managed on a collective basis. The main difference is that an
investment trust is a company listed on the Stock Exchange
and, in most cases, trading takes place in shares which have
already been issued, rather than through the creation or
redemption of units. As the number of shares which can be
issued or cancelled at any one time is limited, and requires
the approval of existing shareholders, investment trusts
are known as closed-end funds or companies. This means
that investment trusts are not subject to the same liquidity
constraints as open ended funds and can therefore invest in
less liquid investments.
Discount and premium*
Investment trust shares can frequently trade at a discount to
NAV. This occurs when the share price (based on the mid-
market share price) is less than the NAV and investors may
therefore buy shares at less than the value attributable to
them by reference to the underlying assets. The discount
is the difference between the share price and the NAV,
expressed as a percentage of the NAV. As at 31 December
2022, the share price was 697.00p (2021: 589.00p) and
the NAV was
688.35p (2021: 622.21p) giving a premium
of 1.3% (2021: discount of 5.3%) (please see note 9 of the
financial statements on page
107
for the audited inputs to
the calculation).
A premium occurs when the share price (based on the mid-
market share price) is more than the NAV and investors
would therefore be paying more than the value attributable
to the shares by reference to the underlying assets. For
example, if the share price was 610p and the NAV 600p, the
premium would be 1.7%.
Discounts and premiums are mainly the consequence of
supply and demand for the shares on the stock market.
Gearing and borrowings
Investment companies can borrow to purchase additional
investments. This is called ‘gearing’. It allows investment
companies to take advantage of a long-term view on a sector
or to take advantage of a favourable situation or a particularly
attractive stock without having to sell existing investments.
Gearing works by magnifying a company’s performance. If
a company ‘gears up’ and then markets rise and returns on
the investments outstrip the costs of borrowing, the overall
returns to investors will be even greater. But if markets fall and
the performance of the assets in the portfolio is poor, then
losses suffered by the investor will also be magnified.
Net gearing
calculation
Page
31 December
2022
£’000
31 December
2021
£’000
Net assets
95
1,299,285
1,142,874
(a)
Borrowings
95
158,783
139,223
(b)
Total assets (a + b)
1,458,068
1,282,097
(c)
Current assets
1
95
41,539
32,206
(d)
Current liabilities
(excluding
borrowings)
95
(7,755)
(6,277)
(e)
Cash and cash
equivalents (d + e)
33,784
25,929
(f)
Net gearing
(g = (c – f – a)/ a)
9.6%
9.9%
(g)
1
Includes cash at bank.
Gross assets
Gross assets is defined as the total of the Group’s net assets
and borrowings.
Leverage
Leverage is defined in the AIFM Directive as ‘any method by
which the AIFM increases the exposure of an AIF it manages
whether through borrowing of cash or securities, or leverage
embedded in derivative positions or by any other means’.
Leverage is measured in terms of ‘exposure’ and is expressed
as a ratio of net asset value:
Leverage ratio
=
Exposure
Net assets
The Directive sets out two methodologies for calculating
exposure. These are the Gross Method and the Commitment
Method. The treatment of cash and cash equivalent balances
in terms of calculating what constitutes an ‘exposure’ under
AIFMD differs for these two methods. The definitions for
calculating the Gross Method exposures require that ‘the
value of any cash and cash equivalents which are highly
liquid investments held in the base currency of the AIF,
that are readily convertible to a known amount of cash, are
subject to an insignificant risk of change in value and provide
a return no greater than the rate of a three-month high
quality government bond’ should be excluded from exposure
calculations.
Glossary
*
Alternative Performance Measure.
Section 5: Additional information
149
NAV and share price return (with dividends
reinvested)*
Performance statistics enable the investor to make
performance comparisons between investment trusts with
different dividend policies. The performance measures the
combined effect of any dividends paid, together with the
rise or fall in the share price or NAV. This is calculated by
the movement in the share price or NAV plus the dividends
paid by the Group assuming these are reinvested in the
Group at the prevailing NAV/Share price (please see note
9 of the financial statements for the audited inputs to the
calculations).
NAV total return –
sterling
Page
31 December
2022
31 December
2021
Closing NAV per
share (pence)
107
688.35
622.21
Add back interim
and final dividends
(pence)
106
43.50
23.80
Effect of dividend
reinvestment
(pence)
0.58
1.34
Adjusted closing
NAV (pence)
732.43
647.35
(a)
Opening NAV per
share (pence)
107
622.21
536.34
(b)
NAV total return
(c = ((a - b)/b)) (%)
17.7
20.7
(c)
Share price total
return – sterling
Page
31 December
2022
31 December
2021
Closing share
price (pence)
107
697.00
589.00
Add back interim
and final dividends
(pence)
106
43.50
23.80
Effect of dividend
reinvestment
(pence)
1.75
0.42
Adjusted closing
share price
(pence)
742.25
613.22
(a)
Opening share
price (pence)
107
589.00
522.00
(b)
Share price total return
(c = ((a - b)/b)) (%)
26.0
17.5
(c)
Net asset value per share (Cum income NAV)
This is the value of the Group’s assets attributable to
one ordinary share. It is calculated by dividing ‘equity
shareholders’ funds’ by the total number of ordinary
shares in issue (excluding treasury shares). For example,
as at 31 December 2022, equity shareholders’ funds were
worth £1,299,285,000 (2021: £1,142,874,000) and there
were 188,753,036 ordinary shares in issue (excluding
treasury shares) (2021: 183,681,116); the undiluted NAV
was therefore 688.35p per ordinary share (2021: 622.21p)
(please see note 9 of the financial statements for the audited
inputs to the calculations).
Equity shareholders’ funds are calculated by deducting from
the Group’s total assets, its current and long-term liabilities
and any provision for liabilities and charges.
Net asset value per share (Capital only
NAV)*
This NAV focuses on the value of the Group’s assets
disregarding the current period revenue income, on the
basis that most trusts will distribute substantially all of their
income in any financial period. It is also the measure adopted
by the Association of Investment Companies for preparation
of statistical data. It is calculated by dividing ‘equity
shareholders’ funds’ (excluding current period revenue) by
the total number of ordinary shares in issue.
As at 31 December 2022, equity shareholders’ funds less
the current year net revenue return (after interim dividends)
amounted to £1,254,285,000 (2021: £1,092,397,000) and
there were 188,753,036 ordinary shares in issue (2021:
183,681,116) (excluding treasury shares); therefore the
capital only NAV was 664.51p (2021: 594.72p).
Equity shareholders’ funds (excluding current period
revenue) of £1,254,285,000 are calculated by deducting
from the Group’s net assets (£1,299,285,000) its current
period revenue (£76,013,000) and adding back the interim
dividends paid from revenue (£31,013,000).
Ongoing charges ratio*
Ongoing charges (%)
=
Annualised ongoing charges
Average undiluted net asset value
in the period
Ongoing charges are those expenses of a type which are
likely to recur in the foreseeable future, whether charged to
capital or revenue, and which relate to the operation of the
investment company as a collective fund. Ongoing charges
are based on costs incurred in the year as being the best
estimate of future costs and include the annual management
charge.
*
Alternative Performance Measure.
150
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
As recommended by the AIC in its guidance, ongoing charges
are calculated using the Group’s annualised recurring
revenue and capital expenses (excluding finance costs,
direct transaction costs, custody transaction charges, VAT
recovered, taxation, prior year expenses written back and
certain non-recurring items) expressed as a percentage of
the average daily net assets of the Group during the year.
The inputs that have been used to calculate the ongoing
charges percentage are set out in the following table.
Ongoing charges
calculation on
net assets
Page
31 December
2022
£’000
31 December
2021
£’000
Management fee
103
10,646
9,230
Other operating
expenses
1
104
1,092
1,034
Total management
fee and other
operating
expenses
11,738
10,264
(a)
Average daily net
assets in the year
1,232,043
1,085,438
(b)
Ongoing charges on
net assets (c = a/b)
0.95%
0.95%
(c)
1
Excluding prior year expenses of £55,000 written off during the year ended
31 December 2022 (31 December 2021: £nil).
Ongoing charges
calculation on
gross assets
Page
31 December
2022
31 December
2021
Management fee
103
10,646
9,230
Other operating
expenses
1
104
1,092
1,034
Total management
fee and other
operating
expenses
11,738
10,264
(a)
Average daily
gross assets in the
year
1,403,426
1,221,651
(b)
Ongoing charges on
gross assets (c = a/b)
0.84%
0.84%
(c)
1
Excluding prior year expenses of £55,000 written off during the year ended
31 December 2022 (31 December 2021: £nil).
Options and options overwriting strategy
An option is a contract that offers the buyer the right, but not
the obligation, to buy (call) or sell (put) a security or other
financial asset at an agreed-upon price (the strike price)
during a certain period of time or on a specific date (exercise
date) for a fee (the premium). The sale of call or put options
on stocks that are believed to be overpriced or underpriced,
based on the assumption that the options will not be
exercised, is referred to as an ‘options overwriting’ strategy.
The seller of the option collects a premium but, if the option
subsequently expires without being exercised, there will be
no down side for the seller. However, if the stock rises above
the exercise price the holder of the option is likely to exercise
the option and this strategy can reduce returns in a rising
market.
The Company employs an options overwriting strategy but
seeks to mitigate risk by utilising predominantly covered call
options (meaning that call options are only written in respect
of stocks already owned within the Company’s portfolio such
that, if the options are exercised, the Company does not need
to purchase stock externally at fluctuating market prices to
meet its obligations under the options contract). Any use of
derivatives for efficient portfolio management and options
for investment purposes will be made on the basis of the
same principles of risk spreading and diversification that
apply to the Company’s direct investments.
Physical metals
Metals such as copper, zinc and nickel.
Quoted securities and unquoted
investments
Securities that trade on an exchange for which there is a
publicly quoted price. Unquoted securities are financial
securities that do not trade on an exchange for which there is
not a publicly quoted price.
Reference index – MSCI ACWI Metals &
Mining 30% Buffer 10/40 Index (MSCI ACWI)
The MSCI ACWI index is designed to be less concentrated
and more diversified than other indices by constraining the
exposure to any single issuer to 10% of the index value,
with a 30% buffer applied, and the sum of the weights of all
exposures to single issuers at more than 5% of the index at
40%, also with a 30% buffer applied.
The 30% buffer operates to ensure that the index does not
have to be rebalanced constantly to retain its diversification
characteristics due to the market movement of the
index constituents. The buffer is applied at the quarterly
rebalancing of the index taking the maximum weight of any
index security to 7% (10% reduced by 30%) and the sum of
the weights of securities representing more than 3.5% (5%
reduced by 30%) to 28% (40% reduced by 30%).
If, due to market moves, any security breaches a 9% position,
or the sum of all securities over 4.5% breach 36%, (which
is equivalent to a 10% buffer applied to the 5 and 40 levels)
there is an extraordinary rebalance prior to the quarter end
taking the index back to the 30% buffer levels as described.
Glossary
continued
Section 5: Additional information
151
Revenue profit and revenue reserves
Revenue profit is the net revenue income earned after
deduction of fees and expenses allocated to the revenue
account and taxation suffered by the Group. Revenue
reserves is the undistributed income that the Group keeps
as reserves. Investment trusts do not have to distribute all
the income they generate, after expenses. They may retain
up to 15% of revenue generated which will be held in a
revenue reserve. This reserve can be used at a later date to
supplement dividend payments to shareholders.
Royalties
Contracts that involve one party giving capital (funding) to
a mining company in return for a percentage share of the
revenues from one or more of the company’s assets.
Treasury shares
Treasury shares are shares that a company keeps in its own
treasury which are not currently issued to the public. These
shares do not pay dividends, have no voting rights and
are not included in a company’s total issued share capital
amount for calculating percentage ownership. Treasury
stock may have come from a repurchase or buy back from
shareholders, or it may never have been issued to the public
in the first place. Treasury shares may be reissued from
treasury to the public to meet demand for a company’s
shares in certain circumstances.
Yield*
The yield is the amount of cash (in percentage terms) that is
returned to the owners of the security, in the form of interest
or dividends received from it. Normally, it does not include
the price variations, distinguishing it from the total return.
Page
31 December
2022
31 December
2021
Interim and final
dividends paid/
payable (pence)
1
106
40.00
42.50
(a)
Ordinary share
price (pence)
107
697.00
589.00
(b)
Yield (c = a/b) (%)
5.7
7.2
(c)
1
Comprising dividends declared/paid for the twelve months to 31 December.
*
Alternative Performance Measure.
Section 6: Notice of annual general meeting
153
Annual
General
Meeting
We added a new position in Mineral Resources in October. The company is
looking to grow its iron ore business alongside its lithium, mining service and
gas businesses, and finished the year up by 45%.
PHOTO COURTESY OF MINERAL RESOURCES
154
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Notice is hereby given that the twenty ninth Annual General
Meeting of BlackRock World Mining Trust plc will be held
at the offices of BlackRock at 12 Throgmorton Avenue,
London EC2N 2DL on Tuesday, 18 April 2023 at 11.30 a.m.
to consider and, if thought fit, pass resolutions 1 to 12 as
ordinary resolutions and resolutions 13 and 14 as special
resolutions.
More information in respect of the contribution of each
Director to support their re-election is given in the Directors’
Report on page 63.
Ordinary business
1.
To receive the report of the Directors and the financial
statements for the year ended 31 December 2022,
together with the report of the auditors thereon.
2.
To approve the Directors’ Remuneration Report for the
year ended 31 December 2022, excluding any content
relating to the remuneration policy of the Company.
3.
To approve the Directors’ Remuneration Policy as set out
on pages
68 and 69
.
4.
To declare a final dividend of 23.50p per ordinary share
for the year ended 31 December 2022.
5.
To re-elect Mr D W Cheyne as a Director.
6.
To re-elect Ms J Lewis as a Director.
7.
To re-elect Ms J Mosely as a Director.
8.
To re-elect Mr S Venkatakrishnan as a Director.
9.
To reappoint PricewaterhouseCoopers LLP as auditors
of the Company to hold office until the conclusion of the
next Annual General Meeting of the Company.
10.
To authorise the Audit Committee to determine the
auditors’ remuneration.
Special business
Ordinary resolutions
11.
That the Company shall continue in being as an
investment trust.
12.
That in substitution for all existing authorities, the
Directors of the Company be and they are hereby
generally and unconditionally authorised pursuant to
section 551 of the Companies Act 2006 (the Act), to
exercise all the powers of the Company to allot relevant
securities in the Company (as described in that section)
up to an aggregate nominal amount of £944,515 (being
10% of the aggregate nominal amount of the issued
share capital, excluding treasury shares, of the Company
at the date of this notice) provided that this authority
shall (unless previously revoked) expire at the conclusion
of the Company’s Annual General Meeting to be held in
2024, but the Company shall be entitled to make offers
or agreements before the expiry of this authority which
would or might require relevant securities to be allotted
after such expiry and the Directors may allot such
securities pursuant to any such offer or agreement as if
the power conferred hereby had not expired.
Special resolutions
13.
That in substitution for all existing authorities and
subject to the passing of resolution numbered 12
above, the Directors of the Company be and are hereby
empowered pursuant to sections 570 and 573 of the
Companies Act 2006 (the Act) to allot equity securities
(as defined in section 560 of the Act) and to sell equity
securities held by the Company as treasury shares (as
defined in section 724 of the Act) for cash pursuant to
the authority granted by the resolution numbered 12
above, as if section 561(1) of the Act did not apply to any
such allotments and sales of equity securities, provided
that this power:
(a)
shall expire at the conclusion of the next Annual
General Meeting of the Company to be held in 2024,
except that the Company may before such expiry
make offers or agreements which would or might
require equity securities to be allotted or sold after
such expiry and notwithstanding such expiry the
Directors may allot and sell equity securities in
pursuance of such offers or agreements;
(b)
shall be limited to the allotment of equity securities
and/or the sale of equity securities held in treasury
for cash up to an aggregate nominal amount of
£944,515 (representing 10% of the aggregate
nominal amount of the issued share capital,
excluding treasury shares, of the Company at the
date of this notice); and
(c)
shall be limited to the allotment and/or sale of
equity securities at a price of not less than the net
asset value per share as close as practicable to the
allotment or sale.
14.
That in substitution for the Company’s existing authority
to make market purchases of ordinary shares of 5p
each in the Company (Shares), the Company be and is
hereby generally and, subject as hereinafter appears,
unconditionally authorised in accordance with section
701 of the Companies Act 2006 (the Act) to make market
purchases of Shares (within the meaning of section 693
of the Act) provided that:
Notice of Annual General Meeting
Section 6: Notice of annual general meeting
155
(a)
the maximum number of Shares hereby authorised
to be purchased shall be 28,316,565, or if less, that
number of Shares which is equal to 14.99% of the
Company’s issued share capital (excluding treasury
shares) as at 18 April 2023;
(b)
the minimum price (exclusive of expenses) which
may be paid for any such Share shall be 5p being
the nominal value per share;
(c)
the maximum price (exclusive of expenses) which
may be paid for any such Share shall be the
higher of (i) 105% of the average of the middle
market quotations (as derived from the Official
List) of the Shares for the five dealing days prior
to the date on which the market purchase is made
and (ii) the higher of the price quoted for (a) the
last independent trade of and (b) the highest
independent bid for, any number of Shares on the
trading venue where the purchase is carried out;
and
(d)
unless renewed, the authority hereby conferred
shall expire at the conclusion of the next Annual
General Meeting of the Company in 2024 save
that the Company may, prior to such expiry,
enter into a contract to purchase Shares under
the authority hereby conferred and may make a
purchase of Shares pursuant to any such contract
notwithstanding such expiry.
All Shares purchased pursuant to the above authority shall
be either:
(i)
held, sold, transferred or otherwise dealt with as
treasury shares in accordance with the provisions of
the Act; or
(ii)
cancelled immediately upon completion of the
purchase.
By order of the Board
CAROLINE DRISCOLL
For and on behalf of
BlackRock Investment Management (UK) Limited
Company Secretary
2 March 2023
Registered Office:
156
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
Notes:
1.
A member entitled to attend and vote at the meeting
convened by the above Notice is entitled to appoint one
or more proxies to exercise all or any of the rights of the
member to attend, speak and vote in his place. A proxy need
not be a member of the Company. If a member appoints more
than one proxy to attend the meeting, each proxy must be
appointed to exercise the rights attached to a different share
or shares held by the member.
2.
To appoint a proxy, you may use the Form of Proxy enclosed
with this Annual Report. To be valid, the Form of Proxy,
together with the power of attorney or other authority (if any)
under which it is signed or a notarially certified or office copy
of the same, must be completed and returned to the office of
the Company’s registrar in accordance with the instructions
printed thereon as soon as possible and in any event by not
later than 11.30 a.m. on 14 April 2023 (Saturdays, Sundays
and public holidays excepted). Amended instructions must
also be received by the Company’s registrar by the deadline
for receipt of proxies. Alternatively, you can vote or appoint a
proxy electronically by visiting eproxyappointment.com. You
will be asked to enter the Control Number, the Shareholder
Reference Number and PIN which are printed on the form
of proxy. The latest time for the submission of proxy votes
electronically is 11.30 a.m. on 14 April 2023 (Saturdays,
Sundays and public holidays excepted).
3.
Completion and return of the Form of Proxy will not prevent a
member from attending the meeting and voting in person.
4.
Proxymity Voting – If you are an institutional investor you
may also be able to appoint a proxy electronically via the
Proxymity platform, a process which has been agreed by
the Company and approved by the Registrar. For further
information regarding Proxymity, please go to www.
proxymity.io. Your proxy must be lodged by 11.30 a.m. on
14 April 2023 (Saturdays, Sundays and public holidays
excepted) in order to be considered valid. Before you can
appoint a proxy via this process you will need to have
agreed to Proxymity’s associated terms and conditions. It is
important that you read these carefully as you will be bound
by them and they will govern the electronic appointment of
your proxy.
5.
Any person receiving a copy of this Notice as a person
nominated by a member to enjoy information rights under
section 146 of the Companies Act 2006 (a Nominated
Person) should note that the provisions in Notes 1 and 2
above concerning the appointment of a proxy or proxies to
attend the meeting in place of a member, do not apply to a
Nominated Person as only shareholders have the right to
appoint a proxy. However, a Nominated Person may have a
right under an agreement between the Nominated Person
and the member by whom he or she was nominated to be
appointed, or to have someone else appointed, as proxy
for the meeting. If a Nominated Person has no such proxy
appointment right or does not wish to exercise it, he/she may
have a right under such agreement to give instructions to the
member as to the exercise of voting rights at the meeting.
6.
Nominated Persons should also remember that their main
point of contact in terms of their investment in the Company
remains the member who nominated the Nominated Person
to enjoy the information rights (or perhaps the custodian
or broker who administers the investment on their behalf).
Nominated Persons should continue to contact that member,
custodian or broker (and not the Company) regarding any
changes or queries relating to the Nominated Person’s
personal details and interest in the Company (including any
administrative matter). The only exception to this is where the
Company expressly requests a response from the Nominated
Person.
7.
Pursuant to regulation 41 of the Uncertificated Securities
Regulations 2001, only shareholders registered in the
register of members of the Company by not later than
6.00 p.m. on 14 April 2023 shall be entitled to attend and
vote at the meeting in respect of the number of shares
registered in their name at such time. If the meeting is
adjourned, the time by which a person must be entered on
the register of members of the Company in order to have the
right to attend and vote at the adjourned meeting is 6.00 p.m.
two days prior to the time of the adjournment. Changes to
the register of members after the relevant times shall be
disregarded in determining the rights of any person to attend
and vote at the meeting.
8.
In the case of joint holders, the vote of the senior holder
who tenders a vote whether in person or by proxy shall be
accepted to the exclusion of the votes of the other joint
holders and, for this purpose, seniority will be determined
by the order in which the names stand in the register of
members of the Company in respect of the relevant joint
holding.
9.
Shareholders who hold their shares electronically may
submit their votes through CREST, by submitting the
appropriate and authenticated CREST message so as to be
received by the Company’s registrar not later than 11.30 a.m
on 14 April 2023 (Saturdays, Sundays and public holidays
excepted). Instructions on how to vote through CREST can
be found by accessing the following website: euroclear.
com/CREST. Shareholders are advised that CREST and the
internet are the only methods by which completed proxies
can be submitted electronically.
10.
If you are a CREST system user (including a CREST personal
member) you can appoint one or more proxies or give an
instruction to a proxy by having an appropriate CREST
message transmitted. To appoint one or more proxies or to
give an instruction to a proxy (whether previously appointed
or otherwise) via the CREST system, CREST messages must
be received by Computershare (ID number 3RA50) not later
than 11.30 a.m. on 14 April 2023 (Saturdays, Sundays and
public holidays excepted). For this purpose, the time of
receipt will be taken to be the time (as determined by the
timestamp generated by the CREST system) from which
Computershare is able to retrieve the message. CREST
personal members or other CREST sponsored members
should contact their CREST sponsor for assistance with
appointing proxies via CREST. For further information on
CREST procedures, limitations and system timings please
refer to the CREST manual. The Company may treat as invalid
a proxy appointment sent by CREST in the circumstances set
out in Regulation 35(5)(a) of the Uncertificated Securities
Regulations 2001.
11.
If the Chairman, as a result of any proxy appointments, is
given discretion as to how the votes subject of those proxies
are cast and voting rights in respect of those discretionary
proxies, when added to the interest in the Company’s
securities already held by the Chairman, result in the
Chairman holding such number of voting rights that he has
a
notifiable obligation under the Disclosure Guidance and
Transparency Rules, the Chairman will make the necessary
notifications to the Company and the Financial Conduct
Authority. As a result, any member holding 3% or more of
the voting rights in the Company, who grants the Chairman
a
discretionary proxy in respect of some or all of those voting
rights and so would otherwise have a notification obligation
under the Disclosure Guidance and Transparency Rules,
need not make a separate notification to the Company and
the Financial Conduct Authority.
Notice of Annual General Meeting
continued
Section 6: Notice of annual general meeting
157
12.
Any question relevant to the business of the meeting may
be asked at the meeting by anyone permitted to speak at the
meeting. A shareholder may alternatively submit a question
in advance by a letter addressed to the Company Secretary
at the Company’s registered office. Under section 319A of
the Companies Act 2006, the Company must answer any
question a shareholder asks relating to the business being
dealt with at the meeting, unless (i) answering the question
would interfere unduly with the preparation for the meeting
or involve the disclosure of confidential information; (ii) the
answer had already been given on a website in the form of an
answer to a question; or (iii) it is undesirable in the interests
of the Company or the good order of the meeting that the
question be answered.
13.
Any corporation which is a member can appoint one or
more corporate representatives who may exercise on its
behalf all of its powers as a member provided that, if it
is appointing more than one corporate representative, it
does not do so in relation to the same shares. It is therefore
no longer necessary to nominate a designated corporate
representative. Representatives should bring to the meeting
evidence of their appointment, including any authority under
which it is signed.
14.
Under section 527 of the Companies Act 2006, members
meeting the threshold requirements set out in that section
have the right to require the Company to publish on a website
a statement setting out any matter relating to:
(i)
the audit of the Company’s accounts (including the
auditors’ report and the conduct of the audit) that are laid
before the meeting; or
(ii)
any circumstance connected with an auditor of the
Company ceasing to hold office since the previous
meeting at which annual accounts and reports were laid
in accordance with section 437 of the Companies Act
2006.
The Company may not require the members requesting such
website publication to pay its expenses in complying with
sections 527 or 528 of the Companies Act 2006. Where the
Company is required to place a statement on a website under
section 527 of the Companies Act 2006, it must forward the
statement to the Company’s auditors not later than the time
when it makes the statement available on the website. The
business which may be dealt with at the meeting includes
any statement that the Company has been required under
section 527 of the Companies Act 2006 to publish on a
website.
15.
Under sections 338 and 338A of the Companies Act 2006,
members meeting the threshold requirements in those
sections have the right to require the Company:
(i)
to give, to members of the Company entitled to receive
notice of the meeting, notice of a resolution which may
properly be moved and is intended to be moved at the
meeting; and/or
(ii)
to include in the business to be dealt with at the meeting
any matter (other than a proposed resolution) which may
be properly included in the business.
A resolution may properly be moved or a matter may properly
be included in the business unless:
(a)
(in the case of a resolution only) it would, if passed, be
ineffective (whether by reason of inconsistency with any
enactment or the Company’s constitution or otherwise);
(b)
it is defamatory of any person; or
(c)
it is frivolous or vexatious.
Such a request may be in hard copy form or in electronic
form and must identify the resolution of which notice is to
be given or the matter to be included in the business, must
be authorised by the person or persons making it, must
be received by the Company not later than 6 March 2023,
being the date six weeks clear before the meeting and (in the
case of a matter to be included in the business only) must
be accompanied by a statement setting out the grounds for
the request.
16.
Further information regarding the meeting which the
Company is required by section 311A of the Companies
Act 2006 to publish on a website in advance of the
meeting (including this Notice), can be accessed at
www.blackrock.com/uk/brwm.
17.
As at the date of this report, the Company’s issued share
capital comprised 188,903,036 ordinary shares of 5 pence
each, excluding shares held in treasury. Each ordinary
share carries the right to one vote and therefore the total
number of voting rights in the Company on 2 March 2023 is
188,903,036.
18.
No service contracts exist between the Company and any of
the Directors, who hold office in accordance with letters of
appointment and the Articles of Association.
158
BlackRock World Mining Trust plc
l
Annual Report and Financial Statements 31 December 2022
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