Half-year Report
23/08/2024 12:38
BlackRock World Mining Trust plc
LEI: LNFFPBEUZJBOSR6PW155
Condensed Half Yearly Financial Report 30 June 2024
Performance record
As at As at
30 June 31 December
2024 2023
Net assets (£’000) 1 1,093,972 1,160,051
Net asset value per ordinary share (NAV) (pence) 572.21 606.78
Ordinary share price (mid-market) (pence) 569.00 587.00
Reference index 2 – net total return 6,041.29 6,002.54
Discount to net asset value 3 (0.6)% (3.3)%
========= =========
For the For the
six months year
ended ended
30 June 31 December
2024 2023
Performance (with dividends reinvested)
Net asset value per share 3 -1.9% -6.2%
Ordinary share price 3 +1.1% -10.4%
Reference index 2 +0.6% +2.4%
--------------- ---------------
Performance since inception (with dividends reinvested)
Net asset value per share 3 +1,291.6% +1,319.4%
Ordinary share price 3 +1,381.5% +1,365.9%
Reference index 2 +1,012.4% +1,005.2%
========= =========
For the For the Change
six months six months %
ended ended
30 June 2024 30 June 2023
Revenue
Net revenue profit after taxation (£’000) 22,848 31,767 -28.1
Revenue return per ordinary share (pence) 3 11.95 16.73 -28.6
--------------- --------------- ---------------
Dividend per ordinary share (pence)
– 1st interim 5.50 5.50 –
– 2nd interim 5.50 5.50 –
--------------- --------------- ---------------
Total dividends paid and payable 11.00 11.00 –
========= ========= =========
1 The change in net assets reflects portfolio movements, dividends paid and
the reissue of ordinary shares from treasury during the period.
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 contained within the Half
Yearly Financial Report.
Chairman’s Statement
Following the Annual General Meeting in May, I assumed the role as Chairman of
your Company. I am delighted to present the Half Yearly Financial Report to
shareholders.
Market overview
Markets have experienced heightened volatility shaped by continued
geopolitical and macroeconomic drivers. Interest rate policy and inflation
have remained top of mind amid elevated public debt and weaker growth relative
to the pre-pandemic era. The US-China trade war and geopolitical tensions,
including the Russia/Ukraine war and the conflict in the Middle East, have
also increased the supply chain risk.
It was a mixed period for the mining sector with a new all-time high price set
for copper and gold and a pick-up in merger and acquisition (M&A) activity.
This was offset by weakness across the bulk commodities as property related
demand in China continued to soften. Despite a number of positive drivers
during the first half, concerns over the outlook for China’s economy
negatively impacted the sector and the six month reporting period ended on a
weak note as momentum faltered and most commodity prices declined.
Performance
Against this backdrop, for the six month period ending 30 June 2024, the
Company’s net asset value per share (NAV) returned -1.9% and the share price
returned +1.1%. The Company’s reference index, the MSCI ACWI Metals & Mining
30% Buffer 10/40 Index, returned +0.6% (all percentages calculated in Sterling
terms with dividends reinvested).
Since the period end and up to the close of business on 21 August 2024, the
Company’s NAV has decreased by 2.9% compared to a fall of 3.2% (on a net
return basis) for the reference index (in Sterling terms with dividends
reinvested). Further information on the Company’s performance and the
factors that contributed to, or detracted from, performance during the six
months is set out in the Investment Manager’s Report.
Revenue return and dividends
Over the six month period to 30 June 2024, the Company’s revenue return
amounted to 11.95p per share, compared to 16.73p per share for the
corresponding period in 2023. This represents a decrease of 28.6% and reflects
reductions in dividends from many mining companies.
The first quarterly dividend of 5.50p per share was paid on 31 May 2024.
Today, the Board has announced a second quarterly dividend of 5.50p per share
which will be paid on 30 September 2024 to shareholders on the register on 6
September 2024 with the ex-dividend date being 5 September 2024. It remains
the Board’s intention to distribute substantially all of the Company’s
available income in the future.
Management of share rating
For the period under review, the Company’s ordinary shares have traded at an
average discount to NAV of 4.6% and were trading at a discount of 3.1% on a
cum income basis as at 21 August 2024, the latest practicable date prior to
the issue of this report. The Company did not buy back or reissue any shares
during the six month period ended 30 June 2024. Since the period end and up to
the date of this report, no ordinary shares have been reissued or bought back.
The Directors recognise the importance to investors that the Company’s share
price does not trade at a significant premium or discount to NAV. Accordingly,
the Directors monitor the share price closely and, in the context of wider
market conditions, with investor sentiment and premiums/discounts being
influenced by various external factors, will consider the issue of shares at a
premium or the repurchase at a discount to help balance demand and supply in
the market.
Gearing
One of the advantages of the investment trust structure is that the Company
can use gearing with the objective of increasing portfolio returns over the
longer term. The Company operates a flexible gearing policy which depends on
prevailing market conditions. It is not intended that gearing will exceed 25%
of the net assets of the Company and its subsidiary. Gearing at 30 June 2024
was 10.5% and maximum gearing during the period was 14.7%.
Board composition
I am delighted to welcome Elisabeth Scott to the Board. She was appointed
following the Annual General Meeting held on 9 May 2024. Elisabeth possesses a
great deal of investment trust specific expertise and asset management
experience, both through her executive career as an investment manager and in
her current involvement with a number of complementary boards. Elisabeth also
chaired the Association of Investment Companies from January 2021 until
January 2024. Further information on her background and experience can be
found on page 48 of the Half Yearly Financial Report.
As previously advised in last year’s Annual Report, David Cheyne, having
completed nearly 12 years on the Board, retired following the 2024 Annual
General Meeting. On behalf of the Board, I want to thank David for his many
years of excellent service to the Company and its shareholders and we wish him
the best for the future.
I am pleased to report that the Board is compliant with the recommendations of
the Parker Review and the FTSE Women Leaders Review. In accordance with the
Listing Rules, we have also disclosed the ethnicity of the Board and our
policy on matters of diversity. This disclosure can be found on pages 70 and
71 of the Company’s Annual Report.
Market outlook
Looking ahead, market volatility is unlikely to abate. 2024 marks a
significant year for elections worldwide bringing uncertainty on the policy
and geopolitical front. China, one of the most important economies for
commodity demand, has also fueled concerns for the growth outlook and there is
the potential for mounting geopolitical risk, primarily in the Middle East.
Although inflationary pressures are easing, a measured approach by each
central bank would indicate potential interest rate cuts in Europe and Asia
and an increasing likelihood of a rate cut in the US.
However, there are reasons for optimism for the commodities sector. The mining
industry is key to delivering the materials required for infrastructure
investment, including the investment required to support the transition to a
low carbon energy environment. This transition is expected to drive materials
demand for many years to come. Artificial intelligence (AI) systems depend on
minerals and metals in several ways and the investment in AI data centres and
power grids is also set to bolster metals demand. Despite the pick-up in M&A
activity, we are pleased to see mining companies continue to show strong
capital discipline, which should ensure that there is an appropriate split of
available cash flow between shareholder distributions and growth.
CHARLES GOODYEAR
Chairman
23 August 2024
Investment Manager’s Report
The first half of 2024 has been frustrating as the generally positive tone to
the sector was not reflected in a more positive total return for the period.
During the period, base and precious metal prices were buoyant with some
breaking out to new all-time highs. On the other hand, the prices of iron ore,
lithium and thermal coal moved lower on weaker demand or supply threats (in
the lithium market) that threatened long-term price assumptions. On the whole,
the blend of factors should have been supportive for share prices,
particularly when combined with increased merger and acquisition (M&A)
activity. It seems that rising interest rates, ongoing economic challenges in
China and a slower move to decarbonise the global economy overwhelmed the
positives and derated valuations, most notably the large cap diversified
companies. These factors had a negative impact on the net asset value (NAV) of
the Company.
Looking deeper into the fundamentals, the outlook remains positive. Companies
are cautious on committing to large scale projects and, as such, the supply
picture for most commodities is as constrained as in prior years. In fact, the
pick-up in M&A suggests that companies see more value in buying assets rather
than building them even after having to pay premiums for control. Tightness in
commodity markets persists and despite Chinese weakness, the overall demand
picture is robust, especially in the US.
Over the period the NAV of the Company returned -1.9% and the share price
returned +1.1%. This compares to the FTSE 100 Index which was up by 7.9%, the
Consumer Price Index was up by 2.0% and the reference index (MSCI ACWI Metals
& Mining Index 30% Buffer 10/40 Index (net total return)) increased by 0.6%
(all performance data numbers based in Sterling terms with dividends
reinvested).
Tug of war
The global battle against inflation continued during the first half of the
year. In most countries economic data moved in the right direction with large
falls in the rate of inflation, but as yet not sufficient to trigger easing by
the leading central banks. As a result of this markets have gyrated back and
forth like a tug of war between interest rate expectations and the ongoing
dominance of everything technology related, in particular the boom in
artificial intelligence (AI) related equities. The AI theme within stock
markets has grown to levels similar to that in previous tech booms so it will
be interesting to see how this plays out especially when so much of the growth
requires huge investment in basic infrastructure for it to be delivered.
Geopolitics has, sadly, not improved. The ongoing battle in Ukraine has
continued and it seems unlikely that common ground will be found for it to end
in the near term. The tragic situation in Israel and Gaza rages on with little
prospect for it to ease. Elsewhere elections have taken place across Europe
with large swings playing into the hands of some of the more extreme parts of
the political spectrum. The end outcome of this is still to reach a conclusion
but the probability of political stalemate or worse has risen. Lastly the
forthcoming US Presidential election continues to be too difficult to call.
ESG and the social license to operate
For the last few years this report has continued to emphasise the importance
of ESG when managing risk within mining related investments.
ESG (Environmental, Social and Governance) is highly relevant to the mining
sector and we seek 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 that will enable the carbon transition.
We consider ESG insights and data within the total set of information in our
research process and make a determination as to the materiality of such
information as part of the investment process used to build and manage the
portfolio. 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 or controversies in an appropriate way.
- We take a long-term approach, focused on engaging with
portfolio company boards and executive leadership to understand the drivers of
risk and financial value creation in companies’ business models, including
material sustainability-related risks and opportunities, as appropriate.
- There will be cases where a serious event has occurred,
for example an accident at a mine site and, in that case, we will assess
whether the relevant portfolio company is taking appropriate action to resolve
matters before deciding what to do.
- There will be companies which have derated (the downward
adjustment of multiples) as a result of an adverse ESG event or generally due
to poor ESG practices where there may be opportunities to invest at a
discounted price. However, the Company will only invest in these value-based
opportunities if we are satisfied that there is real evidence that the
relevant company’s culture has changed and that better operating practices
have been put in place.
The main areas of engagement during the period have been on M&A, corporate
decarbonisation plans and capital allocation. The latter two are somewhat
interlinked given the healthy debate on how companies should allocate the cash
generated by their operations. In the past, spending on decarbonisation was
seen more as a choice but now this seems to have moved into a more core part
of corporate strategy. In part we believe this is due to a need to do this but
also the return on these investments seems to have improved. Although not at
the same levels of brown field capacity growth, it does seem to compare
favourably with greenfield growth investments. Another feature of this area
has been to try and explore with executives the role that outside capital
could play in helping to improve returns. The growth in infrastructure
investing by financial markets seems to have opened up a range of new
opportunities for companies to consider and these might easily challenge the
long-term view that mining companies need to wholly own their own
infrastructure.
When it comes to M&A, we stand by the view that companies should always seek
to explore what might be in the best interests of all stakeholders. If value
can be generated from combinations or sharing opportunities it is essential
that these are discussed so that all parties can benefit, especially when
synergies within the sector are so rare. Obviously, this does not mean that a
company should not try to maximise its takeout share price, but, it should not
be at the expense of losing out on a deal entirely. Given the high cost and
risk of developing new assets, combined with the small size of the sector in
the context of global markets, it is important that companies do not lose
sight of remaining relevant when it comes to capital markets and M&A might
help to deal with this threat.
Weaker prices
During the first half of the year there has been a significant dispersion of
returns within the commodity sector. As can be seen in the table that follows
the prices of gold, silver and tin were sharply higher year to date but also
when compared to the same period last year. On the other side of the pricing
for nickel, platinum and lithium were meaningfully lower. Within the overall
moves there were a number of takeaways: gold and copper moved to new all time
price highs during the period.
Commodity 30 June 2024 % Change % Change average price
year to date 1H24 1H24 vs 1H23
Gold US$/ounce (oz) 2,326.3 12.6% 14.1%
Silver US$/oz 29.3 20.7% 11.6%
Platinum US$/oz 1,012 0.6% -6.3%
Palladium US$/oz 972 -13.1% -35.2%
Copper US$/pound (lb) 4.29 11.7% 4.5%
Nickel US$/lb 7.73 4.1% -27.7%
Aluminium US$/lb 1.13 6.1% 1.3%
Zinc US$/lb 1.30 9.0% -6.8%
Lead US$/lb 0.99 7.0% -0.5%
Tin US$/lb 14.74 29.0% 11.4%
Uranium US$/lb 238 -17.6% 77.4%
Iron Ore (China 62% fines) US$/tonne (t) 106 -25.4% -0.3%
Thermal Coal (Newcastle) US$/t 133.65 1.2% -22.6%
Met Coal US$/t 238 -17.6% -0.6%
Lithium (Battery Grade China) US$/kilogram 12.59 -7.3% -68.9%
WTI (Cushing) US$/barrel 82.8 15.2% 6.3%
========= ========= =========
1H24 – six months ended 30 June 2024.
1H23 – six months ended 30 June 2023.
Sources: LSEG Datastream and Bloomberg, June 2024.
Within the portfolio the key commodity exposure is to copper on the base
metals side and gold within precious metals. Prices for both of these
commodities have been strong and key for performance will be how these
translate into earnings for the companies. Too often higher prices end up
being lost to the pressures of poor operating performance, inflation, taxation
or consumed in reinvestment by the companies. It is our expectation that the
management teams have the processes and skills to mitigate these negative
impacts.
Animal spirits
The last 12 months have certainly seen a pick-up in M&A activity within the
sector. This sudden surge in animal spirits seems to have been driven by a
realisation that producing assets traded in the equity market were trading at
a low valuation versus the replacement cost (which has risen as shown in the
chart contained on page 10 of the Half Yearly Financial Report) even including
the premiums required for a change of control. In 2023 Glencore moved to gain
control of Teck Resources when it announced plans to transform itself into a
metals business by divesting its coal assets. This process concluded with
Glencore agreeing to buy the coal assets leaving Teck Resources to follow a
strategy of metals related growth. The deal finally received the necessary
regulatory approvals in early July.
Capital intensity of new assets rising in real terms
In April 2024, BHP surprised the market by making a hostile offer for Anglo
American. This process continued for a month during which time multiple
attempts were made by BHP to try and conclude a combination of the two
businesses. Despite numerous higher offers the two parties were unable to
reach agreement leaving Anglo American to pursue its own strategy of
simplification. BHP is unable to make another offer for six months. It will be
interesting to see how successful Anglo American is on its organic plans as
many of the challenges they highlighted in relation to the bid by BHP might
delay their own plans leaving room for others to take another look at the
business.
As the period drew to an end a number of media outlets reported that further
transactions were being considered but as yet nothing tangible has come from
these rumours. It is certainly the case that M&A is back and it is essential
that companies remain disciplined when looking at opportunities given the poor
historic industry track record in this space.
Base metals
It was a strong first half for the base metals with prices rising on improved
demand, expected decline in interest rates, Chinese stimulus and financial
interest as investors look to gain exposure to the AI data-centre theme. The
copper price set a new all-time high in May and finished the first half up by
11.7%, with aluminium +6.1%, nickel +4.1% and zinc +9.0%.
Our favoured base metal, copper, saw positive demand growth in the first half
of the year driven by investments into the grid, electric vehicles (EV), wind
and solar power. We are increasingly seeing a change in China’s traditional
demand drivers with property linked commodity demand declining, whilst
investment into low carbon infrastructure and manufacturing is accelerating.
Copper supply continues to remain tight with limited new tonnes entering the
market. Smelters’ treatment and refining charges (TC/RC’s) an indication
of tightness in the concentrate market, are at record low levels which benefit
producer margins. A key near-term focus for the market is copper inventories
which have not meaningfully decreased in China which points to some softness
in the physical market near term.
Global copper inventories
We see a tight supply picture for copper. Power availability in Zambia and the
Democratic Republic of the Congo (DRC), along with some specific asset
production downgrades in Chile and Peru has further reduced supply
expectations this year. The key delta to supply over the next one-to-two years
is First Quantum’s Cobre Panama mine, which was placed on care and
maintenance at the end of last year. This asset has the potential to produce
up to 400ktpa copper over time and will have a big impact to the forecast
deficit in the market. At present the market is broadly assuming that the
asset will resume production at the end of 2025, but there remains a lot of
uncertainty around the timing of the restart. With the market forecast to be
500kt deficit this year, the timing of the return of Cobre Panama will have a
significant impact on market balances in 2025 and 2026.
Following our due diligence site visit to Chile last year to see a range of
copper projects, a clear takeaway is the increase in capital costs to develop
and build new copper mines. Part of this is due to higher inflation for steel,
equipment and labour, but there are structural increases to costs due to more
challenging permitting requirements for desalinated water, higher altitudes,
deeper orebodies and lower grades. As highlighted in the chart contained
within the Half Yearly Financial Report, recent greenfield copper developments
have had a capital intensity around US$30,000/t and this has risen
considerably over the last decade. Our analysis suggests that in order for
companies to generate a 15% post-tax internal rate of return on these
investments they would require an incentive copper price of US$12,000/t. This,
in our view, is an important structural driver for the copper price due to the
need to incentivise new supply going forward.
The Company’s copper exposure was a key source of positive returns during
the first half of the year. BHP’s approach for Anglo American highlighted
the value in copper equity values, given the cost to develop and build new
copper supply. Ivanhoe Mines (2.4% of the portfolio) continues to set the
standard for operational performance with the ramp-up of Kamoa-Kakula in the
DRC, with phase 1 and 2 of the mine delivered ahead of schedule and the phase
3 expansion completed in June nearly two quarters ahead of schedule. With the
smelter completion before the end of the year, unit costs are expected to fall
by 20%. With free cash flow increasing, we expect to see shareholder loans
decline and increasing cash returns to Ivanhoe Mines, positioning them well to
start paying dividends. Another notable copper outperformer includes Capstone
which is currently ramping up its Manto Verde copper project in Chile. During
the quarter Lundin Mining announced that it will exercise their option to
acquire an additional 19% stake in the Caserones copper mine for US$350
million.
The aluminium price finished the first half up by 6%, with the average price
up 1.3% versus the corresponding period last year. Aluminium prices have been
pressured over the last two years as energy prices have fallen which has
deflated the cost curve. However, with alumina, a key input for producing
aluminium, up over 40% year-to-date, rising cost pressure has pushed up the
aluminium price as well. Aluminium demand has benefited from investments into
solar power and the grid in recent years and we see it as a longer-term
beneficiary of energy transition spend. With aluminium and copper
substitutable for certain applications, they typically trade within a ratio of
one another. It has been interesting to see the copper price to aluminium
price ratio move up from a historical level of circa 3:1 to now circa 4:1.
Longer term we see upside to aluminium prices as carbon costs begin to be
incorporated into prices. The Company’s largest exposure to aluminium is via
Hydro (3.6% of the portfolio) which is one of the lowest-carbon producers of
aluminium by virtue of its access to hydro power in Norway.
It has been a difficult year for the nickel industry with the average nickel
price down by 27.7% in the first half of 2024 versus the same period last
year. While there was a modest rebound (+4%) in prices during the half, the
industry is struggling to generate competitive margins at this price level.
Significant growth in Indonesian nickel supply has structurally changed the
market, with nickel pig iron producers rapidly growing production and adapting
their facilities to allow the production of nickel matte and other
intermediary products. This material is typically more carbon intensive and,
should carbon pricing be incorporated into the cost curve, we would expect
Indonesian supply to decline over time. The Company has two pure play
exposures to nickel – the first Nickel Industries (0.6% of the portfolio)
today a nickel pig iron producer which is transitioning towards LME grade
nickel production which will improve earnings and margins. During the half,
Nickel Industries increased its equity interest in the ENC Project by 16.5% to
44%. This high-pressure acid leach project will see them produce battery grade
nickel and cobalt and will also reduce the company’s carbon footprint. The
second investment was done via a “PIPE” deal in 2022 into Lifezone Metals
which has traded as a public company since the end of June 2023. Lifezone
Metals, in conjunction with BHP, owns the Kabanga project in Tanzania which is
one of the world’s largest undeveloped nickel sulphide deposits.
Bulks and steel
It was a weak period for the bulk commodities, with iron ore prices down by
25.4%, metallurgical coal down by 17.6% and thermal coal prices up by 1.2%.
Chinese steel production has remained at a similar level to last year of circa
1 billion tonnes. However, domestic demand has softened primarily due to
property-linked weakness. As a result, China has returned to a high level of
steel exports which annualised more than 100 million tonnes per annum (mtpa).
This has put significant pressure on European steel prices, with production
curtailed to protect margins during the six month period. With China looking
to re-impose steel production caps to reduce carbon emissions and improve the
profitability of the steel industry, we would expect to see exports decline
and prices to stabilise. The other notable steel market that the Company has
exposure to is the US. Steel prices have returned to a more normalised level
versus two to three years ago. We remain positive on the outlook for the US
steel industry as the Government looks to commence its infrastructure
rebuilding programs.
Iron ore has been a key area of strength in recent years supporting free cash
flow and dividends for the large producers. While the spot price finished down
by 25% during the half, average prices were actually flat versus the
corresponding period in 2023 and are at a healthy level of US$118/t. Iron ore
has benefited from China’s high blast furnace utilisation rates, with
electric arc furnaces (EAF’s), which rely on scrap, struggling to grow
market share given the lack of available steel scrap supply and high
electricity prices. Longer term, as China looks to reduce the carbon intensity
of its steel industry, we would expect to see growth in EAF supply and also
higher demand for high grade iron ore.
Over the last five years, the iron ore price has been well supported at
US$90/t which appears to be the breakeven price for high-cost producers and
has provided a floor to the price. Supply discipline from the iron ore
producers has kept the iron ore market tight as they have pursued a “value
over volume” strategy. From 2025/2026 we see meaningful new supply entering
the market, primarily via the China controlled Simandou project being built in
conjunction with Rio Tinto. This is a high-grade ore body which has the
potential to reach 150mtpa which is expected to have a material impact on
overall iron ore supply.
The Company’s exposure to iron ore is primarily via the diversified majors
BHP, Vale and Rio Tinto. These companies generate strong margins and free cash
flow from their iron ore businesses with that cash flow being returned to
shareholders, or being reinvested into future facing commodities such as
copper. In addition, the Company has exposure to two pure play high grade iron
ore producers, Champion Iron and Labrador Iron. Champion Iron is ramping-up
its Bloom Lake operation in Canada and targeting the production of high grade
(69% Fe) iron ore which is a key component of low carbon steel production.
The coking coal market remains one of the more interesting commodity markets.
Western world producers have been hesitant to add new supply, whilst demand
continues to increase driven by steel producing countries such as India.
Having banned the import of Australian coking coal, we are seeing China
reverse the ban and return to imports again. Supply appears much more
inelastic, with limited new supply growth hitting the market ex-China. On the
corporate front, Glencore made an offer to Teck Resources to acquire its
coking coal business which was subsequently approved and completed in July
2024.
The thermal coal market has returned to a more balanced position this year
with prices holding between $120-140/t. India remains a significant force on
the import market, in line with the rapid economic growth within the country.
As we have seen in recent years, many western world thermal coal producers
have reduced growth spending and have committed to responsibly reduce
production over time. This has left the thermal coal market generally tight
and vulnerable to price spikes associated with spikes in energy demand. The
Company’s thermal coal exposure is via our 8.2% position in Glencore which
has used elevated thermal coal prices in recent years to deleverage the
business and buy back shares. Shortly after the end of the first six month
period, Glencore completed the acquisition of the Teck Resources coking coal
business which gives them a leading position in the Atlantic basin for coking
coal. Glencore announced at their results on 7 August 2024 that they will
retain the coal business and maintain their strategy of responsible run-off
for the thermal coal business. Should they decide to retain the business, we
would expect to see Glencore lift their net debt target back to their previous
level of US$10 billion which paves the way for additional shareholder returns
in the second half of the year. After the reporting period Glencore confirmed
at its half year results that they will retain the coal business following
engagement with its shareholders.
Precious metals
A new record all-time high price was set for gold at US$2,427/oz during the
first half of 2024 with the price finishing the period at US$2,326/oz, up by
12.6%. This is a notable step change from the US$1,800/oz trading range that
gold has largely held over recent years and leaves gold companies in a good
position to translate the higher gold price into stronger returns. A notable
feature of the gold market in 2024 has been central bank purchases of gold,
particularly from China. Whilst central banks have shown appetite for gold,
retail investors appear more cautious with gold exchange-traded fund (ETF)
holdings declining over the period. We find this perplexing. Gold has
delivered its role as a safe haven asset and portfolio diversifier and we see
a number of reasons for investors to continue to allocate to gold.
Silver performed particularly well during the period, rising by 20.7% with the
market recognising its relative price attractiveness versus gold, along with
its industrial demand. Silver’s key industrial end market is solar which saw
record installations in 2023 and continues to grow (albeit at a slower pace).
Interestingly, we are seeing a rising silver usage in solar as installers move
to TOPCon solar modules which have higher efficiency and importantly higher
silver intensity.
The Company increased its exposure to precious metals companies during the
first half of the year. This is a reflection of our positive outlook on gold
and the expected improvement in earnings from the gold companies. The Company
has maintained its preference for higher quality gold producers which have low
operating costs and a strong resource base which improves their ability to
generate stronger free cash flow through the cycle. Among our gold holdings,
Agnico Eagle Mines (4.3% of the portfolio) a Canadian listed producer focused
on operating in lower risk jurisdictions provided an update on its Detour Lake
operation which is on track to become a 1 million ounce gold producer by the
end of the decade making it a top five gold mine. Newmont Corporation
(Newmont) which has underperformed gold peers following the acquisition of
Newcrest Mining in 2023, provided an update on its strategy to create a
Focused Tier 1 Portfolio of assets to produce 6.7 million oz of gold by 2028.
Newmont has a series of non-core assets to sell as part of this process and
will also buy back US$1 billion in shares outstanding over the next 24 months.
The Company took the opportunity to increase its exposure to Newmont on the
expectation that it claws back its underperformance as it executes on its
strategy.
In the platinum group metals (PGMs) platinum has performed better during the
first half of 2024, increasing by 0.6%, compared to palladium which saw a
13.1% decrease over the first half of the year. A significant demand for PGMs
comes from catalytic converters, which are used in internal combustion engine
(ICE) vehicles to reduce carbon monoxide and nitrogen oxide emissions.
However, this demand is facing a long-term structural challenge due to the
declining demand for ICE vehicles due to the rise in popularity of EVs. While
platinum has various applications in industry, for instance jewellery, and as
an investment, palladium is particularly vulnerable to a lack of demand from
ICE vehicles and has not yet found a stable price point. A key question going
forward is PGMs use in hybrid electric vehicles and range extenders for EVs.
As the metals are often mined together their supply can be less responsive to
price decreases in just one of the PGMs.
The Company’s exposure to PGM producers slightly increased in the period to
2.2%, due to the positive performance from Bravo Mining. Bravo Mining, 1.6% of
the portfolio, is a PGM and nickel exploration company in Brazil, developing
the Luanga PGM deposit. The company’s value increased by 19.5% during the
first half of 2024 following the discovery of copper-gold mineralisation east
of its Luanga deposit. Although it is still in the early stages of this
exploration program, the drill results so far suggest a promising opportunity
for Bravo. The Company invested in a pre-IPO in April 2022 at C$0.50/share due
our belief in the assets and management’s potential. Since our initial
investment, the company has successfully had an IPO and as at 30 June 2024 was
trading at C$3.80/share.
Energy transition metals
Battery electric vehicle (BEV) sales continued to grow in 2024 and the
International Energy Agency (IEA) expects global electric car sales to remain
robust in 2024, reaching around 17 million by the end of the year, from around
14 million in 2023. BloombergNEF’s (BNEF) Long-Term Electric Vehicle Outlook
indicated that rapidly falling battery prices, advancements in next-generation
battery technology and improving economics of EVs continue to underpin
long-term EV growth globally. Passenger EV sales are expected to exceed 30
million in 2027 in BNEF’s base case scenario and grow to 73 million per year
in 2040.
We continue to see a focus on geopolitics with efforts from Western
politicians to decouple supply chains from China. The US announced an increase
in import tariffs for Chinese produced goods across strategic sectors,
including EVs and batteries. The European Commission notified carmakers that
it would provisionally apply additional duties of between 17 and 38 per cent
on imported Chinese EVs.
After lithium prices fell by 43% in 2023, the first half of 2024 has seen a
tough market continue with the price down by another 69%. Despite growing
strongly, demand for lithium from batteries did not meet optimistic
expectations. China has seen a greater penetration of plug-in hybrid electric
vehicles (PHEV) which often have smaller batteries containing less lithium.
Sales also disappointed in the smaller markets of the US and Europe. The
Company reduced its exposure to lithium and exited its position in Albemarle,
a lithium producer, in the first half of the year. The Company’s position in
Sigma Lithium negatively impacted performance during the six months after the
strategic review process the company was undertaking failed to result in a
sale of the company. The company is now focusing on its near-term expansion
plans which include doubling production in 2025.
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) which 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 Rare Earths (Lynas), a REE miner and processor
based in Malaysia and Australia. In the first half, Lynas’ equity fell by
17.2% during a period of weaker rare earth mineral pricing. In the six month
period Lynas announced they would start selling separated heavy rare earths,
widening their product offering from the mixed concentrate they currently
produce.
2023 saw an increased recognition in the key role of nuclear energy in
reaching net zero with a declaration at the 28th Conference of the Parties to
triple nuclear energy capacity by 2050. The strategic importance of uranium
was again highlighted in the first half of 2024 with the US Congress moving to
prohibit Russian uranium imports. The Company’s holding in uranium producer
Cameco rose by 14% in the six months, as the market continued to reward their
position as a western supplier of nuclear fuel and engineering through their
ownership interest in Westinghouse.
Royalty and unquoted investments
Over the last three years the Company has generated significant returns from
the unquoted section of the portfolio. This includes the IPOs of two private
investments, Ivanhoe Electric and Bravo Mining, at substantial premiums to
their purchase price.
As mentioned in previous reports, the focus of the unquoted investments is to
generate both capital growth and income to deliver the superior total return
goal for the portfolio. The Company continues to evaluate new opportunities as
it believes that they can provide an opportunity to generate superior returns
and maximise the return opportunities available in the mining sector.
As of 30 June 2024, the unquoted investments in the portfolio amounted to 7.2%
of the portfolio and consist of the BHP Brazil Royalty, the Vale Debentures,
Jetti Resources, MCC Mining and Polyus ADRs. 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 of the Company’s 2023
Annual Report.
BHP Brazil Royalty Contract (1.7% of the portfolio)
In July 2014 the Company signed a binding royalty agreement with Avanco
Minerals. The Company provided 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 we were delighted to report that Avanco Minerals was acquired by OZ
Minerals, an Australian based copper and gold producer for A$418 million. We
were equally pleased to report that in early 2023 OZ Minerals was acquired by
BHP, the world’s largest mining company and now operating the assets
underlying the royalty. Since our initial US$12 million investment was made,
we have received US$28.6 in royalty payments with the royalty achieving full
payback on the initial investment in 3½ years. As at the end of June 2024,
the royalty was valued at £19.9 million (1.7% of the portfolio) which equates
to a 365.3% cash return on the initial US$12 million invested.
We are pleased to report that production at Pedra Branca has normalised
following a geotechnical event in the second half of 2023. Recent results have
confirmed the asset is producing at steady state levels and after a successful
technical review from BHP we have confidence that the operational issues have
been resolved.
Vale Debentures (2.6% of the portfolio)
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. The
iron ore assets are world class given their grade, cost position,
infrastructure and resource life which is well in excess of 50 years.
Dividend payments are expected to grow once royalty payments commence on the
Southeastern System in 2025 and volumes from S11D and Serra Norte improve. At
Vale’s Capital Markets Day in December, the company outlined 50Mt of iron
ore growth to 2026 of which S11D is the largest component and an improved
quality mix from which the royalty will benefit.
The Debentures offer an attractive yield in excess of 10% based on the 2023
dividend. This is an appealing yield for a royalty investment, with this value
opportunity recognised by other listed royalty producers, Franco Nevada and
Sandstorm Gold 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.
We continue to actively look for opportunities to grow royalty exposure given
it provides an effective mechanism to lock-in long-term income which further
diversifies the Company’s revenues.
Jetti Resources (2.1% of the portfolio)
In early 2022, the Company made an investment into mining technology company
Jetti Resources (Jetti) which has developed a new catalyst that improves
copper recovery from primary copper sulphides (specifically copper contained
in chalcopyrite, which is often uneconomic) under conventional leach
conditions. Jetti is currently in negotiation with a number of mining
companies to trial their technology where they will look to integrate their
catalyst into existing help leach SX-EW mines to improve recoveries at a low
capital cost. The technology has been demonstrated to work at Capstone’s
Pinto Valley copper mine and has been trialled at some of Freeport McMoRan’s
copper operations. If Jetti’s technology is proven to work at scale, we see
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 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. Since then, we have seen a number of
competing leaching technology companies enter the market placing pressure on
economics and the share of profits Jetti would receive from recovering
additional copper. Along with a more challenging market and slower roll out of
its leaching technology across targeted assets, the Company has chosen to
reduce the holding value of the asset by 7.3%. This remains 106.2% above the
price when the Company initially purchased its holding in 2022. We continue to
remain positive on the longer-term outlook for Jetti as it looks to deploy its
copper leaching technology across a range of world class existing copper
assets.
MCC Mining (0.8% of the portfolio)
MCC Mining (MCC) is a private company exploring for copper in Colombia. It is
undertaking early-stage greenfield exploration and has strong geological
potential to host multiple world class porphyry deposits. Shareholders include
other mid-to large-cap copper miners, which is an indication of the strategic
value of the company. Following new regulations in Colombia which allowed for
the exploration drilling in the forestry reserve, the company commenced
drilling at its Comita and Pantanos deposits in 2023. Drilling to date has
been very encouraging. Over the last 18 months, MCC has drilled 38% of the
Top-40 open-pit copper holes globally, with two porphyry deposits confirmed at
Comita and Pantanos. The company successfully completed a US$50 million
funding round at a 50% premium to our initial investment and we have been
encouraged by the calibre of investors invested in the company.
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 the first half of 2024 income generated
from options was £4.3 million. During the period the Company was able to take
advantage of a number of specific events where volatility seemed to be
mis-priced versus the underlying risks. This was a key driver behind the
overall performance for the first half of the year. At the end of the period
the Company had 0.1% of net assets exposed to derivatives and the average
exposure to derivatives during the period was less than 5% of net assets.
Gearing
At 30 June 2024, the Company had £134.5 million of net debt, with a gearing
level of 10.5%. The debt is held principally in US Dollar rolling short-term
loans and managed against the value of the portfolio as a whole. During the
period the Company once again reviewed the use of gearing on the back of
interest rates remaining higher than generally expected. Less debt was used
during the period than in prior years but, with share prices generally flat to
lower over the period as a whole, debt was a drag on returns during the six
months. Looking back at the report from last year the outlook remains similar
with a view that as macro risks fade opportunities will present themselves for
gearing levels to rise back to normal levels even though the debt will have a
higher cost. On the back of this, facilities were refreshed with our lenders
and remain at £200 million for loans and £30 million for the overdraft.
Outlook
After a frustrating first half to the year where much of the positive news did
not translate into a more optimistic outcome, it is easy to think that things
will improve for the remainder of the year. As things stand, it certainly
looks that way with copper, gold and silver prices moving higher once again
and iron ore remaining resolutely above the psychological $100/t level.
However, the macro picture is not without risk. The world’s largest
commodity consumer, China, remains weak and until its domestic challenges are
fixed it seems unlikely that it will drive commodity prices higher. Elsewhere,
geopolitics remain an ever present threat. Tensions in the Middle East and
Ukraine persist. Elections in Europe have raised the prospect of a shift in
the political landscape and with the US Presidential election due in November
it will be far from easy sailing ahead.
Despite these risks, shareholders should expect the portfolio to remain fully
invested with a focus on stock specific outcomes rather than just market
related factors such as commodity price sensitivity. This approach has
delivered excellent results over the last few years and the current mix of
holdings has a high degree of exposure to similar dynamics boding well for the
future.
In addition, the Company will continue to seek out opportunities to maximise
income during the balance of the year in order to try and offset what looks to
be the lagged impact of dividend cuts from the results in the second half of
2023. Achieving this remains integral to the goal of delivering a superior
total return for shareholders through the cycle.
EVY HAMBRO AND OLIVIA MARKHAM
BLACKROCK INVESTMENT MANAGEMENT (UK) LIMITED
23 August 2024
Ten largest investments
Together, the ten largest investments represented 53.8% of total investments
of the Company’s portfolio as at 30 June 2024 (31 December 2023: 54.8%).
1 ▲ Glencore (2023: 3rd)
Diversified mining group
Market value: £98,576,000
Share of investments: 8.2% (2023: 8.3%)
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.
2 ▼ BHP1,2 (2023: 1st)
Diversified mining group
Market value: £93,667,000
Share of investments: 7.8% comprising equity of 6.1% and mining royalty of
1.7% (2023: 10.1%)
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 and silver.
3 ▲ Rio Tinto3 (2023: 4th)
Diversified mining group
Market value: £74,688,000
Share of investments: 6.2% (2023: 7.3%)
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.
4 ▲ Anglo American3 (2023: 17th)
Diversified mining group
Market value: £67,258,000
Share of investments: 5.6% (2023: 1.9%)
A global diversified mining company with a portfolio that includes diamonds,
platinum, copper and iron ore. The company operates mines in Canada, Peru,
Chile, Australia and a number of countries in Africa.
5 ► Freeport-McMoRan3 (2023: 5th)
Copper producer
Market value: £60,582,000
Share of investments: 5.0% (2023: 5.0%)
A global mining group which operates large, long-lived, geographically diverse
assets with significant proven and probable reserves of copper, gold and
molybdenum.
6 ► Newmont Corporation (2023: 6th)
Gold producer
Market value: £57,491,000
Share of investments: 4.8% (2023: 3.6%)
The world’s largest gold producer by market capitalisation. The group has
gold and copper operations on five continents, with active gold mines in
Nevada, Australia, Ghana, Peru and Suriname.
7 ▼ Vale2,3,4 (2023: 2nd)
Diversified mining group
Market value: £55,473,000
Share of investments: 4.6% comprising equity of 2.0% and debentures of 2.6%
(2023: 9.6%)
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.
8 ▲ Agnico Eagle Mines (2023: 19th)
Gold producer
Market value: £51,568,000
Share of investments: 4.3% (2023: 1.6%)
A Canadian-based senior gold producer with operations in Canada, Finland,
Australia and Mexico. The company also has exploration and development assets
in the US.
9 ▲ Teck Resources (2023: 10th)
Diversified mining group
Market value: £45,179,000
Share of investments: 3.7% (2023: 2.3%)
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 and zinc.
10 ▼ Hydro (2023: 9th)
Aluminium producer
Market value: £43,887,000
Share of investments: 3.6% (2023: 2.6%)
A Norwegian aluminium and renewable energy company, headquartered in Oslo. It
is one of the largest aluminium companies worldwide. It has operations in some
50 countries around the world. The company is present throughout the aluminium
value chain, from energy to bauxite mining and alumina refining, primary
aluminium, aluminium extrusions and aluminium recycling.
1 Includes mining royalty contract.
2 Includes investments held at Directors’ valuation.
3 Includes options.
4 Includes fixed income securities.
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.
Arrows indicate the change in relative ranking of the position in the
portfolio compared to its ranking as at 31 December 2023.
Percentages in brackets represent the value of the holding as at 31 December
2023.
Investments as at 30 June 2024
Main Market % of
geographical value investments
exposure £’000
Diversified
Glencore Global 98,576 8.2
Rio Tinto Global 75,020 } 6.2
Rio Tinto Put Option 19/07/24 £52.00 Global (332)
BHP Global 73,732 6.1
Anglo American Global 67,750 } 5.6
Anglo American Call Option 19/07/24 £25.00 Global (492)
Vale Debentures 1, 2, 4 Global 31,295 } 4.6
Vale Global 24,343
Vale Call Option July 24 BRL11.5 Global (165)
Teck Resources Global 45,179 3.7
--------------- ---------------
414,906 34.4
========= =========
Copper
Freeport-McMoRan Global 60,989 } 5.0
Freeport-McMoRan Put Option 19/07/24 US$49.00 Global (407)
Ivanhoe Mines Other Africa 29,363 2.4
Jetti Resources 2 Global 25,207 2.1
Ivanhoe Electric United States 24,449 2.0
Sociedad Minera Cerro Verde Latin America 21,321 1.8
Lundin Mining Global 20,441 1.7
BHP Brazil Royalty 2, 3 Latin America 19,935 1.7
Southern Copper Corporation Latin America 19,668 1.6
Metals Acquisition Australasia 13,193 1.1
Capstone Mining United States 12,904 1.1
Foran Mining Canada 10,937 0.9
Develop Global Australasia 10,705 0.9
First Quantum Minerals Global 10,089 0.8
MCC Mining 2 Latin America 10,011 0.8
Filo Corp Latin America 4,070 0.3
Hudbay Global 3,631 0.3
Solaris Resources Latin America 3,557 0.3
Antofagasta Latin America 3,297 0.3
--------------- ---------------
303,360 25.1
========= =========
Gold
Newmont Corporation Global 57,491 4.8
Agnico Eagle Mines Canada 51,568 4.3
Wheaton Precious Metals Global 39,307 3.2
Barrick Gold Global 31,011 2.6
Franco-Nevada Global 19,095 1.6
Northern Star Resources Australasia 12,967 1.1
Kinross Gold Global 12,057 1.0
Endeavour Mining Other Africa 8,566 0.7
Allied Gold 1 Other Africa 7,900 0.6
AngloGold Ashanti Global 3,702 0.3
Firefly Metals Canada 3,595 0.3
Polyus Russia – –
--------------- ---------------
247,259 20.5
========= =========
Steel
Nucor United States 28,052 2.3
Steel Dynamics United States 13,571 1.1
ArcelorMittal Global 13,092 1.1
Stelco Holdings Canada 5,898 0.5
--------------- ---------------
60,613 5.0
========= =========
Industrial Minerals
Albemarle Global 9,431 0.8
Iluka Resources Australasia 9,090 0.8
Lynas Rare Earths Australasia 7,214 0.6
Sigma Lithium Latin America 6,408 0.5
Mineral Resources Australasia 6,173 0.5
Sheffield Resources Australasia 4,046 0.3
Pilbara Minerals Australasia 4,017 0.3
Chalice Mining Australasia 1,900 0.2
--------------- ---------------
48,279 4.0
========= =========
Aluminium
Hydro Global 43,887 3.6
--------------- ---------------
43,887 3.6
========= =========
Iron Ore
Labrador Iron Canada 11,816 1.0
Champion Iron Canada 10,683 0.9
Deterra Royalties Australasia 3,265 0.3
Equatorial Resources Other Africa 214 –
--------------- ---------------
25,978 2.2
========= =========
Platinum Group Metals
Bravo Mining Latin America 19,811 1.6
Northam Platinum Global 2,392 0.2
Impala Platinum South Africa 1,635 0.1
--------------- ---------------
23,838 1.9
========= =========
Uranium
Cameco Canada 19,466 1.6
--------------- ---------------
19,466 1.6
========= =========
Nickel
Nickel Industries Indonesia 6,778 0.6
Lifezone Metals Global 6,068 0.5
Bindura Nickel Global 31 –
--------------- ---------------
12,877 1.1
========= =========
Mining Services
Woodside Energy Group Australasia 6,463 0.5
--------------- ---------------
6,463 0.5
========= =========
Zinc
Titan Mining United States 911 0.1
--------------- ---------------
911 0.1
========= =========
Comprising: 1,207,837 100.0
========= =========
– Investments 1,209,233 100.1
– Options (1,396) (0.1)
--------------- ---------------
1,207,837 100.0
========= =========
1 Includes fixed income securities.
2 Includes investments held at Directors’ valuation.
3 Includes mining royalty contract.
4 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 30 June 2024 (including options
classified as liabilities on the balance sheet) was 67 (31 December 2023: 69).
As at 30 June 2024 the Company did not hold any equity interests in companies
comprising more than 3% of a company’s share capital.
Portfolio analysis as at 30 June 2024
Commodity Exposure1
2024 2023 2024
portfolio (%) portfolio (%) 2 reference index (%) 3
Diversified 34.4 38.4 33.1
Copper 25.1 21.8 14.3
Gold 20.5 15.2 21.9
Steel 5.0 7.3 18.9
Industrial Minerals 4.0 5.5 1.3
Aluminium 3.6 3.3 3.2
Iron Ore 2.2 2.5 4.2
Platinum Group Metals 1.9 1.6 1.2
Uranium 1.6 2.3 0
Nickel 1.1 1.0 0
Mining Services 0.5 1.0 0
Zinc 0.1 0.1 0.3
Energy Minerals 0 0 0
Other 4 0 0 1.6
1 Based on index classifications
2 Represents exposure at 31 December 2023.
3 MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (net total return).
4 Represents a very small exposure.
Geographic Exposure1
2024
Global 64.0%
Canada 9.5%
Latin America 8.9%
Other 2 7.2%
Australasia 6.6%
Other Africa (ex South Africa) 3.7%
South Africa 0.1%
2023
Global 67.4%
Canada 7.5%
Latin America 7.4%
Australasia 7.3%
Other 2 7.0%
Other Africa (ex South Africa) 3.2%
South Africa 0.2%
1 Based on the principal commodity exposure and place of operation of each
investment.
2 Consists of Indonesia, Russia and United States.
Interim Management Report and Responsibility Statement
The Chairman’s Statement and the Investment Manager’s Report above give
details of the important events which have occurred during the period and
their impact on the financial statements.
Principal risks and uncertainties
The principal risks faced by the Group can be divided into various areas as
follows:
- Market;
- Investment performance;
- Operational;
- Legal and regulatory compliance; and
- Financial.
The Board reported on the principal risks and uncertainties faced by the Group
in the Annual Report and Financial Statements for the year ended 31 December
2023. A detailed explanation can be found in the Strategic Report on pages 42
to 45 and note 18 on pages 116 to 133 of the Annual Report and Financial
Statements which is available on the website maintained by BlackRock at
www.blackrock.com/uk/brwm.
In the view of the Board, there have not been any changes to the fundamental
nature of the principal risks and uncertainties since the previous report and
these are equally applicable to the remaining six months of the financial year
as they were to the six months under review.
Going concern
The Directors, having considered the nature and liquidity of the portfolio,
the Group’s investment objective and the Group’s projected income and
expenditure, are satisfied that the Group has adequate resources to continue
in operational existence for the foreseeable future and is financially sound.
The Board is mindful of the continuing uncertainty surrounding the current
environment of heightened geopolitical risk given the war in Ukraine and
conflict in the Middle East. The Board believes that the Group and its key
third-party service providers have in place appropriate business continuity
plans and these services have continued to be supplied without interruption.
The Group 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. Accounting revenue and expense forecasts
are maintained and reported to the Board regularly and it is expected that the
Group will be able to meet all its obligations. Borrowings under the overdraft
and revolving credit facilities shall at no time exceed £230 million or 25%
of the Group’s net asset value (whichever is the lower) and this covenant
was complied with during the period.
Ongoing charges for the year ended 31 December 2023 were approximately 0.91%
of net assets and this is unlikely to change significantly going forward.
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.
Related party disclosure and transactions with the Manager
BlackRock Fund Managers Limited (BFM) was appointed as the Company’s
Alternative Investment Fund Manager (AIFM) with effect from 2 July 2014. BFM
has (with the Company’s consent) delegated certain portfolio and risk
management services, and other ancillary services, to BlackRock Investment
Management (UK) Limited (BIM (UK)). Both BFM and BIM (UK) are regarded as
related parties under the Listing Rules. Details of the management and
marketing fees payable are set out in notes 4 and 5 respectively and note 13
below.
The related party transactions with the Directors are set out in note 14
below.
Directors’ responsibility statement
The Disclosure Guidance and Transparency Rules (DTR) of the UK Listing
Authority require the Directors to confirm their responsibilities in relation
to the preparation and publication of the Interim Management Report and
Financial Statements.
The Directors confirm to the best of their knowledge that:
- the condensed set of financial statements contained within
the Condensed Half Yearly Financial Report has been prepared in accordance
with UK-adopted International Accounting Standard 34 Interim Financial
Reporting; and
- the Interim Management Report, together with the
Chairman’s Statement and Investment Manager’s Report, include a fair
review of the information required by 4.2.7R and 4.2.8R of the Financial
Conduct Authority Disclosure Guidance and Transparency Rules.
The Condensed Half Yearly Financial Report was approved by the Board on 23
August 2024 and the above responsibility statement was signed on its behalf by
the Chairman.
CHARLES GOODYEAR
FOR AND ON BEHALF OF THE BOARD
23 August 2024
Consolidated Statement of Comprehensive Income for the six months ended 30
June 2024
Six months ended Six months ended Year ended
30 June 2024 30 June 2023 31 December 2023
(unaudited) (unaudited) (audited)
Notes Revenue Capital Total Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Income from investments held at fair value through profit or loss 3 23,198 – 23,198 34,111 630 34,741 68,317 630 68,947
Other income 3 4,821 – 4,821 2,891 – 2,891 6,827 – 6,827
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total revenue 28,019 – 28,019 37,002 630 37,632 75,144 630 75,774
========= ========= ========= ========= ========= ========= ========= ========= =========
Net loss on investments and options held at fair value through profit or loss – (40,360) (40,360) – (123,495) (123,495) – (140,576) (140,576)
Net gains on foreign exchange – 424 424 – 8,301 8,301 – 9,018 9,018
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total 28,019 (39,936) (11,917) 37,002 (114,564) (77,562) 75,144 (130,928) (55,784)
========= ========= ========= ========= ========= ========= ========= ========= =========
Expenses
Investment management fees 4 (1,116) (3,446) (4,562) (1,171) (3,622) (4,793) (2,374) (7,317) (9,691)
Other operating expenses 5 (611) (6) (617) (644) (11) (655) (1,278) (15) (1,293)
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total operating expenses (1,727) (3,452) (5,179) (1,815) (3,633) (5,448) (3,652) (7,332) (10,984)
========= ========= ========= ========= ========= ========= ========= ========= =========
Net profit/(loss) on ordinary activities before finance costs and taxation 26,292 (43,388) (17,096) 35,187 (118,197) (83,010) 71,492 (138,260) (66,768)
Finance costs 6 (1,148) (3,446) (4,594) (1,121) (3,432) (4,553) (2,375) (7,166) (9,541)
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Net profit/(loss) on ordinary activities before taxation 25,144 (46,834) (21,690) 34,066 (121,629) (87,563) 69,117 (145,426) (76,309)
Taxation (charge)/credit (2,296) 923 (1,373) (2,299) 1,212 (1,087) (4,426) 1,750 (2,676)
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Net profit/(loss) on ordinary activities after taxation 22,848 (45,911) (23,063) 31,767 (120,417) (88,650) 64,691 (143,676) (78,985)
========= ========= ========= ========= ========= ========= ========= ========= =========
Earnings/(loss) per ordinary share (pence) – basic and diluted 8 11.95 (24.01) (12.06) 16.73 (63.40) (46.67) 33.95 (75.40) (41.45)
========= ========= ========= ========= ========= ========= ========= ========= =========
The total columns of this statement represent the Group’s Statement of
Comprehensive Income, prepared in accordance with UK-adopted International
Accounting Standards (IAS). 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 period. All
income is attributable to the equity holders of the Group.
The Group does not have any other comprehensive income/(loss) (30 June 2023:
£nil; 31 December 2023: £nil). The net profit/(loss) for the period
disclosed above represents the Group’s total comprehensive income/(loss).
Consolidated Statement of Changes in Equity for the six months ended 30 June
2024
Note Called Share Capital Special Capital Revenue Total
up share premium redemption reserve reserves reserve £’000
capital account reserve £’000 £’000 £’000
£’000 £’000 £’000
For the six months ended 30 June 2024 (unaudited)
At 31 December 2023 9,651 151,493 22,779 193,008 725,161 57,959 1,160,051
Total comprehensive (loss)/income:
Net (loss)/profit for the period – – – – (45,911) 22,848 (23,063)
Dividends paid 1 7 – – – – – (43,016) (43,016)
--------------- --------------- --------------- --------------- --------------- --------------- ---------------
At 30 June 2024 9,651 151,493 22,779 193,008 679,250 37,791 1,093,972
========= ========= ========= ========= ========= ========= =========
For the six months ended 30 June 2023 (unaudited)
At 31 December 2022 9,651 148,107 22,779 180,736 868,837 69,175 1,299,285
Total comprehensive (loss)/income:
Net (loss)/profit for the period – – – – (120,417) 31,767 (88,650)
Transactions with owners, recorded directly to equity:
Ordinary shares reissued from treasury – 3,386 – 12,305 – – 15,691
Share reissue costs – – – (31) – – (31)
Dividends paid 2 7 – – – – – (54,877) (54,877)
--------------- --------------- --------------- --------------- --------------- --------------- ---------------
At 30 June 2023 9,651 151,493 22,779 193,010 748,420 46,065 1,171,418
========= ========= ========= ========= ========= ========= =========
For the year ended 31 December 2023 (audited)
At 31 December 2022 9,651 148,107 22,779 180,736 868,837 69,175 1,299,285
Total comprehensive (loss)/income:
Net (loss)/profit for the year – – – – (143,676) 64,691 (78,985)
Transactions with owners, recorded directly to equity:
Ordinary shares reissued from treasury – 3,386 – 12,305 – – 15,691
Share reissue costs – – – (33) – – (33)
Dividends paid 3 7 – – – – – (75,907) (75,907)
--------------- --------------- --------------- --------------- --------------- --------------- ---------------
At 31 December 2023 9,651 151,493 22,779 193,008 725,161 57,959 1,160,051
========= ========= ========= ========= ========= ========= =========
1 The final dividend for the year ended 31 December 2023 of 17.00p per share,
declared on 7 March 2024 and paid on 14 May 2024, and 1st quarterly interim
dividend for the year ended 31 December 2024 of 5.50p per share, declared on
10 May 2024 and paid on 28 June 2024.
2 The final dividend for the year ended 31 December 2022 of 23.50p per share,
declared on 3 March 2023 and paid on 26 April 2023, and 1st quarterly interim
dividend for the year ended 31 December 2023 of 5.50p per share, declared on
18 April 2023 and paid on 31 May 2023.
3 The final dividend of 23.50p per share for the year ended 31 December 2022,
declared on 3 March 2023 and paid on 26 April 2023; 1st interim dividend of
5.50p per share for the year ended 31 December 2023, declared on 18 April 2023
and paid on 31 May 2023; 2nd interim dividend of 5.50p per share for the year
ended 31 December 2023, declared on 24 August 2023 and paid on 6 October 2023
and 3rd interim dividend of 5.50p per share for the year ended 31 December
2023, declared on 11 October 2023 and paid on 22 December 2023.
For information on the Company’s distributable reserves, please refer to
note 11 below.
Consolidated Statement of Financial Position as at 30 June 2024
Notes 30 June 30 June 31 December
2024 2023 2023
(unaudited) (unaudited) (audited)
£’000 £’000 £’000
Non current assets
Investments held at fair value through profit or loss 12 1,209,233 1,283,858 1,298,420
Current assets
Current tax asset 1,515 1,036 1,276
Other receivables 6,827 3,512 3,592
Cash collateral held with brokers 9,492 – 6,269
Cash and cash equivalents 16,032 42,207 10,612
--------------- --------------- ---------------
Total current assets 33,866 46,755 21,749
========= ========= =========
Total assets 1,243,099 1,330,613 1,320,169
========= ========= =========
Current liabilities
Current tax liability (367) (353) (352)
Other payables (12,322) (8,326) (8,052)
Derivative financial liabilities held at fair value through profit or loss 12 (1,396) – (1,401)
Bank loans 10 (134,483) (150,234) (149,828)
--------------- --------------- ---------------
Total current liabilities (148,568) (158,913) (159,633)
========= ========= =========
Total assets less current liabilities 1,094,531 1,171,700 1,160,536
========= ========= =========
Non current liabilities
Deferred taxation liability (559) (282) (485)
--------------- --------------- ---------------
Net assets 1,093,972 1,171,418 1,160,051
========= ========= =========
Equity attributable to equity holders
Called up share capital 9 9,651 9,651 9,651
Share premium account 151,493 151,493 151,493
Capital redemption reserve 22,779 22,779 22,779
Special reserve 193,008 193,010 193,008
Capital reserve 679,250 748,420 725,161
Revenue reserve 37,791 46,065 57,959
--------------- --------------- ---------------
Total equity 1,093,972 1,171,418 1,160,051
========= ========= =========
Net asset value per ordinary share (pence) 8 572.21 612.72 606.78
========= ========= =========
Consolidated Cash Flow Statement for the six months ended 30 June 2024
Six months Six months Year ended
ended ended 31 December
30 June 2024 30 June 2023 2023
(unaudited) (unaudited) (audited)
£’000 £’000 £’000
Operating activities
Net loss on ordinary activities after taxation (21,690) (87,563) (76,309)
Add back finance costs 4,594 4,553 9,541
Net loss on investments and options held at fair value through profit or loss (including transaction costs) 40,360 123,495 140,576
Net gains on foreign exchange (424) (8,301) (9,018)
Sales of investments held at fair value through profit or loss 360,569 342,903 648,272
Purchases of investments held at fair value through profit or loss (309,667) (326,545) (662,250)
(Increase)/decrease in other receivables (719) 918 1,069
Increase in other payables 66 2,026 1,556
(Increase)/decrease in amounts due from brokers (2,755) 1 (409)
Increase in amounts due to brokers 4,216 – –
Net movement in cash collateral held with brokers (3,223) 6,795 526
--------------- --------------- ---------------
Net cash inflow from operating activities before taxation 71,327 58,282 53,554
========= ========= =========
Taxation paid – – (12)
Taxation on investment income included within gross income (1,373) (1,437) (2,664)
--------------- --------------- ---------------
Net cash inflow from operating activities 69,954 56,845 50,878
========= ========= =========
Financing activities
Repayment of loans (14,599) – –
Interest paid (4,532) (4,665) (9,571)
Net proceeds from ordinary shares reissued from treasury – 15,660 15,658
Dividends paid (43,016) (54,877) (75,907)
--------------- --------------- ---------------
Net cash outflow from financing activities (62,147) (43,882) (69,820)
========= ========= =========
Increase/(decrease) in cash and cash equivalents 7,807 12,963 (18,942)
Effect of foreign exchange rate changes (2,387) (248) 62
--------------- --------------- ---------------
Change in cash and cash equivalents 5,420 12,715 (18,880)
Cash and cash equivalents at start of period/year 10,612 29,492 29,492
--------------- --------------- ---------------
Cash and cash equivalents at end of period/year 16,032 42,207 10,612
========= ========= =========
Comprised of:
Cash at bank 16,032 42,207 10,612
--------------- --------------- ---------------
16,032 42,207 10,612
========= ========= =========
Notes to the financial statements for the six months ended 30 June 2024
1. Principal activity
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 principal activity of the subsidiary, BlackRock World Mining Investment
Company Limited, is investment dealing.
2. Basis of preparation
The Half Yearly Financial Statements for the six month period ended 30 June
2024 have been prepared in accordance with the Disclosure Guidance and
Transparency Rules sourcebook of the Financial Conduct Authority and with the
UK-adopted International Accounting Standard 34 (IAS 34) Interim Financial
Reporting. The Half Yearly Financial Statements should be read in conjunction
with the Group’s Annual Report and Financial Statements for the year ended
31 December 2023, which have been prepared in accordance with UK-adopted
International Accounting Standards (IAS) in conformity with the requirements
of the Companies Act 2006.
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
UK-adopted IAS, the financial statements have been prepared in accordance with
guidance set out in the SORP.
Adoption of new and amended International Accounting Standards and
interpretations:
IFRS 17 – Insurance contracts (effective 1 January 2023). This standard
replaced IFRS 4 and applies to all types of insurance contracts. IFRS 17
provides a consistent and comprehensive model for insurance contracts covering
all relevant accounting aspects.
This standard did not have any impact on the Company as it has no insurance
contracts.
IAS 12 – Deferred tax related to assets and liabilities arising from a
single transaction (effective 1 January 2023). The 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.
IAS 8 – Definition of accounting estimates (effective 1 January 2023). The
IASB has amended IAS 8 Accounting Policies, Changes in Accounting Estimates
and Errors to help distinguish between accounting policies and accounting
estimates, replacing the definition of accounting estimates.
IAS 1 and IFRS Practice Statement 2 – Disclosure of accounting policies
(effective 1 January 2023). The IASB has amended IAS 1 Presentation of
Financial Statements to help preparers in deciding which accounting policies
to disclose in their financial statements by stating that an entity is now
required to disclose material accounting policies instead of significant
accounting policies.
IAS 12 – International Tax Reform Pillar Two Model Rules (effective 1
January 2023). The IASB has published amendments to IAS 12 Income Taxes to
respond to stakeholders’ concerns about the potential implications of the
imminent implementation of the OECD pillar two rules on the accounting for
income taxes. The amendment is an exception to the requirements in IAS 12 that
an entity does not recognise and does not disclose information about deferred
tax assets as liabilities related to the OECD pillar two income taxes and a
requirement that current tax expenses must be disclosed separately to pillar
two income taxes.
The amendment of these standards did not have any significant impact on the
Company.
Relevant International Accounting Standards that have yet to be adopted:
IAS 1 – Classification of liabilities as current or non current (effective 1
January 2024). The IASB has amended IAS 1 Presentation of Financial Statements
to clarify its requirement for the presentation of liabilities depending on
the rights that exist at the end of the reporting period. The amendment
requires liabilities to be classified as non current if the entity has a
substantive right to defer settlement for at least 12 months at the end of the
reporting period. The amendment no longer refers to unconditional rights.
IAS 1 – Non current liabilities with covenants (effective 1 January 2024).
The IASB has amended IAS 1 Presentation of Financial Statements to introduce
additional disclosures for liabilities with covenants within 12 months of the
reporting period. The additional disclosures include the nature of covenants,
when the entity is required to comply with covenants, the carrying amount of
related liabilities and circumstances that may indicate that the entity will
have difficulty complying with the covenants.
None of the standards that have been issued, but are not yet effective, are
expected to have a material impact on the Company.
3. Income
Six months Six months Year ended
ended ended 31 December
30 June 2024 30 June 2023 2023
(unaudited) (unaudited) (audited)
£’000 £’000 £’000
Investment income:
UK dividends 5,469 5,150 8,647
Overseas dividends 12,616 17,281 33,457
Overseas special dividends 1,480 6,269 17,736
Income from contractual rights (BHP Brazil Royalty) 756 2,760 4,186
Income from Vale Debentures 2,399 1,498 2,608
Income from fixed income investments 478 1,153 1,683
--------------- --------------- ---------------
Total investment income 23,198 34,111 68,317
========= ========= =========
Other income:
Option premium income 4,336 2,483 5,964
Deposit interest 323 305 678
Broker interest received 79 49 104
Stock lending income 83 54 81
--------------- --------------- ---------------
4,821 2,891 6,827
========= ========= =========
Total income 28,019 37,002 75,144
========= ========= =========
During the period, the Group received option premium income in cash totalling
£5,184,000 (six months ended 30 June 2023: £2,525,000; year ended 31
December 2023: £6,724,000) 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 period, option premiums of £4,336,000 (six
months ended 30 June 2023: £2,483,000; year ended 31 December 2023:
£5,964,000) were amortised to revenue.
At 30 June 2024 there were four open positions (30 June 2023: none; 31
December 2023: three) with an associated liability of £1,396,000 (30 June
2023: £nil; 31 December 2023: £1,401,000).
Dividends and interest received in cash in the six months ended 30 June 2024
amounted to £19,507,000 and £2,746,000 (six months ended 30 June 2023:
£27,716,000 and £3,080,000; year ended 31 December 2023: £59,542,000 and
£5,159,000).
Special dividends of £nil (six months ended 30 June 2023: £630,000; year
ended 31 December 2023: £630,000) have been recognised in capital for the six
months ended 30 June 2024.
4. Investment management fee
Six months ended Six months ended Year ended
30 June 2024 30 June 2023 31 December 2023
(unaudited) (unaudited) (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Investment management fee 1,116 3,446 4,562 1,171 3,622 4,793 2,374 7,317 9,691
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total 1,116 3,446 4,562 1,171 3,622 4,793 2,374 7,317 9,691
========= ========= ========= ========= ========= ========= ========= ========= =========
The investment management fee (which includes all services provided by
BlackRock) is 0.80% of the Company’s gross assets (subject to certain
adjustments). During the period, £4,303,000 (six months ended 30 June 2023:
£4,793,000; year ended 31 December 2023: £9,421,000) of the investment
management fee was generated from net assets and £259,000 (six months ended
30 June 2023: £nil; year ended 31 December 2023: £270,000) from the gearing
effect on gross assets due to the quarter-on-quarter increase in the NAV per
share for the period as set out below:
Quarter end Cum income Quarterly Gearing effect
NAV per share increase/ on management
(pence) (decrease) % fees (£’000)
31 December 2022 688.35
31 March 2023 664.51 -3.5 –
30 June 2023 612.72 -7.8 –
30 September 2023 601.47 -1.8 –
31 December 2023 606.78 +0.9 270
31 March 2024 568.07 -6.4 –
30 June 2024 572.21 +0.7 259
========= ========= =========
The daily average of the net assets under management during the period ended
30 June 2024 was £1,100,397,000 (six months ended 30 June 2023:
£1,276,151,000; year ended 31 December 2023: £1,203,977,000).
The fee is allocated 25% to the revenue account and 75% to the capital account
of the Consolidated Statement of Comprehensive Income.
There is no additional fee for company secretarial and administration
services.
5. Other operating expenses
Six months Six months Year ended
ended ended 31 December
30 June 2024 30 June 2023 2023
(unaudited) (unaudited) (audited)
£’000 £’000 £’000
Allocated to revenue:
Custody fee 53 55 109
Auditors’ remuneration:
– audit services 33 25 55
– non-audit services 1 – 5 9
Registrar’s fee 42 41 86
Directors’ emoluments 81 94 179
AIC fees 10 10 21
Broker fees 12 12 25
Depositary fees 52 61 116
FCA fee 21 16 40
Directors’ insurance 10 11 22
Marketing fees 61 65 144
Stock exchange fees 25 26 52
Legal and professional fees 67 82 147
Bank facility fees 2 45 39 85
Printing and postage fees 22 29 55
Directors' search fees – – 25
Write back of prior year expenses 3 (7) – –
Other administrative costs 84 73 108
--------------- --------------- ---------------
611 644 1,278
========= ========= =========
Allocated to capital:
Transaction charges 4 6 11 15
--------------- --------------- ---------------
617 655 1,293
========= ========= =========
1 Fees paid to the auditors for non-audit services of £nil excluding VAT
(six months ended 30 June 2023: £4,675; year ended 31 December 2023: £9,350)
relate to the review of the Condensed Half Yearly Financial Report.
2 There is a 4 basis point facility fee chargeable on the full loan
facilities whether drawn or undrawn.
3 Relates to legal and professional fees written back during the six months
ended 30 June 2024 (six months ended 30 June 2023: none; year ended 31
December 2023: none).
4 For the six months ended 30 June 2024, expenses of £6,000 (six months
ended 30 June 2023: £11,000; year ended 31 December 2023: £15,000) were
charged to the capital account of the Statement of Comprehensive Income. These
relate to transaction costs charged by the custodian on sale and purchase
trades.
The transaction costs incurred on the acquisition of investments amounted to
£586,000 for the six months ended 30 June 2024 (six months ended 30 June
2023: £504,000; year ended 31 December 2023: £1,055,000). Costs relating to
the disposal of investments amounted to £137,000 for the six months ended 30
June 2024 (six months ended 30 June 2023: £67,000; year ended 31 December
2023: £182,000). All transaction costs have been included within the capital
reserves.
6. Finance costs
Six months ended Six months ended Year ended
30 June 2024 30 June 2023 31 December 2023
(unaudited) (unaudited) (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Interest paid on bank loans 1,134 3,404 4,538 1,118 3,423 4,541 2,370 7,151 9,521
Interest paid on bank overdraft 14 42 56 3 9 12 5 15 20
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total 1,148 3,446 4,594 1,121 3,432 4,553 2,375 7,166 9,541
========= ========= ========= ========= ========= ========= ========= ========= =========
Finance costs are charged 25% to the revenue account and 75% to the capital
account of the Consolidated Statement of Comprehensive Income.
7. Dividends
The final dividend of 17.00p per share for the year ended 31 December 2023 was
paid on 14 May 2024. The Board has declared a first quarterly interim dividend
of 5.50p per share for the quarter ended 31 March 2024, paid on 28 June 2024
to shareholders on the register on 31 May 2024.
The Board has declared a second quarterly interim dividend of 5.50p per share
for the quarter ended 30 June 2024 which will be paid on 30 September 2024 to
shareholders on the register on 6 September 2024. This dividend has not been
accrued in the financial statements for the six months ended 30 June 2024 as,
under IAS, interim dividends are not recognised until paid. Dividends are
debited directly to reserves.
Dividends on equity shares paid during the period were:
Six months Six months Year ended
ended ended 31 December
30 June 2024 30 June 2023 2023
(unaudited) (unaudited) (audited)
£’000 £’000 £’000
Final dividend for the year ended 31 December 2023 of 17.00p per share (2022: 23.50p) 32,501 44,392 44,392
1st quarterly interim dividend for the year ending 31 December 2024 of 5.50p per share (2023: 5.50p) 10,515 10,485 10,485
2nd quarterly interim dividend for the year ended 31 December 2023 of 5.50p per share (2022: 5.50p) – – 10,515
3rd quarterly interim dividend for the year ended 31 December 2023 of 5.50p per share (2022: 5.50p) – – 10,515
--------------- --------------- ---------------
43,016 54,877 75,907
========= ========= =========
8. Consolidated earnings and net asset value per ordinary share
Total revenue, capital loss and net asset value per ordinary share are shown
below and have been calculated using the following:
Six months Six months Year ended
ended ended 31 December
30 June 2024 30 June 2023 2023
(unaudited) (unaudited) (audited)
Net revenue profit attributable to ordinary shareholders (£’000) 22,848 31,767 64,691
Net capital loss attributable to ordinary shareholders (£’000) (45,911) (120,417) (143,676)
----------------- ----------------- -----------------
Total loss attributable to ordinary shareholders (£’000) (23,063) (88,650) (78,985)
========== ========== ==========
Equity shareholders’ funds (£’000) 1,093,972 1,171,418 1,160,051
The weighted average number of ordinary shares in issue during the period on which the earnings per ordinary share was calculated was: 191,183,036 189,935,356 190,564,324
The actual number of ordinary shares in issue at the end of the period on which the net asset value per ordinary share was calculated was: 191,183,036 191,183,036 191,183,036
----------------- ----------------- -----------------
Earnings per ordinary share
Revenue earnings per share (pence) – basic and diluted 11.95 16.73 33.95
Capital loss per share (pence) – basic and diluted (24.01) (63.40) (75.40)
----------------- ----------------- -----------------
Total loss per share (pence) – basic and diluted (12.06) (46.67) (41.45)
========== ========== ==========
As at As at As at
30 June 30 June 31 December
2024 2023 2023
(unaudited) (unaudited) (audited)
Net asset value per ordinary share (pence) 572.21 612.72 606.78
Ordinary share price (pence) 569.00 599.00 587.00
========= ========= =========
There were no dilutive securities at the period end.
9. Called up share capital
(unaudited) Ordinary Treasury Total Nominal
shares shares shares value
in issue number number £’000
number
Allotted, called up and fully paid share capital comprised:
Ordinary shares of 5 pence each:
At 31 December 2023 191,183,036 1,828,806 193,011,842 9,651
----------------- ----------------- ----------------- -----------------
At 30 June 2024 191,183,036 1,828,806 193,011,842 9,651
========== ========== ========== ==========
During the six months ended 30 June 2024, the Company
– did not buy back any shares into treasury (six months ended 30 June 2023:
none; year ended 31 December 2023: none).
– did not reissue any shares (six months ended 30 June 2023: 2,430,000
shares; year ended 31 December 2023: 2,430,000 shares) from treasury for a net
consideration after costs of £nil (six months ended 30 June 2023:
£15,660,000; year ended 31 December 2023: £15,658,000).
Since the period end and up to 23 August 2024, the Company has not reissued or
bought back any ordinary shares.
10. Reconciliation of liabilities arising from financing activities
Six months Six months Year ended
ended ended 31 December
30 June 2024 30 June 2023 2023
(unaudited) (unaudited) (audited)
£’000 £’000 £’000
Bank loan and overdraft at beginning of the period/year 149,828 158,783 158,783
Cash flows:
Net drawdown of loan (14,599) – –
Non-cash flows:
Effects of foreign exchange gains (746) (8,549) (8,955)
--------------- --------------- ---------------
Bank loan and overdraft at end of the period/year 134,483 150,234 149,828
========= ========= =========
11. Reserves
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, 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.
The share premium account and capital redemption reserve are not distributable
reserves 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 reserve 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 such as dividends. In accordance with the Company’s Articles of
Association, the special reserve, capital reserve and revenue reserve may be
distributed by way of dividend. The Parent Company’s capital gains of
£685,258,000 (30 June 2023: £754,209,000; 31 December 2023: £731,067,000)
comprise a gain on capital reserve arising on investments sold of
£512,782,000 (30 June 2023: £494,063,000; 31 December 2023: £508,899,000),
a gain on capital reserve arising on revaluation of listed investments of
£149,772,000 (30 June 2023: £225,150,000; 31 December 2023: £189,283,000),
revaluation gains on unquoted investments of £15,195,000 (30 June 2023:
£27,706,000; 31 December 2023: £25,478,000) and a revaluation gain on the
investment in the subsidiary of £7,509,000 (30 June 2023: £7,290,000; 31
December 2023: £7,407,000). The capital reserve arising on the revaluation of
listed investments of £149,772,000 (30 June 2023: £225,150,000; 31 December
2023: £189,283,000) is subject to fair value movements and may not be readily
realisable at short notice; as such it may not be entirely distributable. The
reserves of the subsidiary company are not distributable until distributed as
a dividend to the Parent Company. 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.
12. Financial risks and valuation of financial instruments
The Company’s investment activities expose it to the various types of risk
which are associated with the financial instruments and markets in which it
invests. The risks are substantially consistent with those disclosed in the
previous annual financial statements with the exception of those outlined
below.
Market risk arising from price risk
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 Company’s net asset value.
Liquidity risk
The Group has an overdraft facility of £30 million (30 June 2023: £30
million; 31 December 2023: £30 million) and a multi-currency loan facility of
£200 million (30 June 2023: £200 million; 31 December 2023: £200 million)
which are updated and renewed on an annual basis. Under the loan facility, the
individual loan drawdowns are taken with a three month maturity period.
At 30 June 2024, the Group had a US Dollar loan outstanding of US$170,000,000
which matures on 12 September 2024 (30 June 2023: US Dollar loan of
US$191,000,000 which matured on 22 September 2023; 31 December 2023: US Dollar
loan of US$191,000,000 which matured on 22 March 2024). The Group had no
outstanding Sterling loan at 30 June 2024 (30 June 2023: £nil; year ended 31
December 2023: £nil).
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) (30 June 2023 and 31 December 2023: £230
million or 25% of the Group’s net asset value (whichever is the lower)) and
this covenant was complied with during the respective periods.
Valuation of financial instruments
Financial assets and financial liabilities are either carried in the
Consolidated Statement of Financial Position at their fair value (investments
and derivatives) or at an amount which is considered to be the fair value (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), as set out in
the Group's Annual Report and Financial Statements for the year ended 31
December 2023. All investments are held at fair value through profit or loss.
The amortised cost amounts of due from brokers, dividends and interest
receivable, due to brokers, accruals, cash at bank, bank loans and bank
overdrafts approximate their fair value.
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 available from an exchange, 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 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 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.
Assessing the significance of a particular input to the fair value measurement
in its entirety requires judgement, considering factors specific to the asset
or liability including an assessment of the relevant risks including but not
limited to credit risk, market risk, liquidity risk, business risk and
sustainability risk. The determination of what constitutes ‘observable’
inputs requires significant judgement by the Investment Manager and these
risks are adequately captured in the assumptions and inputs used in
measurement of Level 3 assets or liabilities.
Valuation process and techniques for Level 3 valuations
BHP Brazil 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 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 in this instance
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 period.
Jetti Resources and MCC Mining
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 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
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
related risks, including climate risk, in accordance with the fair value
related requirements of the Group’s financial reporting framework.
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 as at 30 June 2024 (unaudited) Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’000
Assets:
Equity investments 1,114,885 – 35,218 1,150,103
Fixed income securities 7,900 31,295 – 39,195
Investment in contractual rights – – 19,935 19,935
--------------- --------------- --------------- ---------------
Total assets 1,122,785 31,295 55,153 1,209,233
========= ========= ========= =========
Liabilities:
Derivative financial instruments – written options – (1,396) – (1,396)
--------------- --------------- --------------- ---------------
Total 1,122,785 29,899 55,153 1,207,837
========= ========= ========= =========
Financial assets/(liabilities) at fair value through profit or loss as at 30 June 2023 (unaudited) Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’000
Assets:
Equity investments 1,164,070 12,860 33,770 1,210,700
Fixed income securities 9,558 44,250 – 53,808
Investment in contractual rights – – 19,350 19,350
--------------- --------------- --------------- ---------------
Total assets 1,173,628 57,110 53,120 1,283,858
========= ========= ========= =========
Liabilities:
Derivative financial instruments – written options – – – –
--------------- --------------- --------------- ---------------
Total 1,173,628 57,110 53,120 1,283,858
========= ========= ========= =========
Financial assets/(liabilities) at fair value through profit or loss as at 31 December 2023 (audited) Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’000
Assets:
Equity investments 1,193,969 – 32,695 1,226,664
Fixed income securities 16,924 36,516 – 53,440
Investment in contractual rights – – 18,316 18,316
--------------- --------------- --------------- ---------------
Total assets 1,210,893 36,516 51,011 1,298,420
========= ========= ========= =========
Liabilities:
Derivative financial instruments – written options – (1,401) – (1,401)
--------------- --------------- --------------- ---------------
Total 1,210,893 35,115 51,011 1,297,019
========= ========= ========= =========
A reconciliation of fair value measurement in Level 3 is set out below.
Level 3 Financial assets at fair value through profit or loss Six months Six months Year ended
ended ended 31 December
30 June 2024 30 June 2023 2023
(unaudited) (unaudited) (audited)
£’000 £’000 £’000
Opening fair value 51,011 56,891 56,891
Return of capital – royalty (203) (341) (497)
Total profit or loss included in net profit on investments in the Consolidated Statement of Comprehensive Income
– assets held at the end of the period/year 4,345 (3,430) (5,383)
--------------- --------------- ---------------
Closing balance 55,153 53,120 51,011
========= ========= =========
The Level 3 valuation process and techniques used are explained in the
accounting policies in note 2(h) on page 102 of the Company’s Annual Report
and Financial Statements for the year ended 31 December 2023. A more detailed
description of the techniques is found above under 'Valuation process and
techniques’ for Level 3 valuations.
The Level 3 investments as at 30 June 2024 in the table that follows relate to
the BHP Brazil Royalty, convertible bonds and equity shares of Jetti
Resources, MCC Mining and Polyus ADRs. In accordance with IFRS 13 these
investments were categorised as Level 3.
In arriving at the fair value of the BHP Brazil Royalty, the key inputs are
the underlying commodity prices and illiquidity discount. In arriving at the
fair value of Jetti Resources, MCC Mining and Polyus ADRs, the key inputs are
shown below.
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 30 June 2024, 30 June 2023
and 31 December 2023 are as shown below.
Description As at Valuation Unobservable Range of weighted Reasonable Impact on fair
30 June technique input average inputs possible shift 1 value
2024 +/ -
£’000
Jetti Resources 25,207 Market approach Earnings multiple 5.50x 10.0% £2.5m
BHP Brazil Royalty 19,935 Discounted cash flows Discount rate – weighted average cost of capital 8.0% – 10.0% 1.0% £1.0m
Average gold prices US$1,650 – US$ 2,314 per ounce 10.0% £1.5m
Average copper prices US$7,700 – US$10,000 per tonne 10.0% £1.0m
MCC Mining 10,011 Market approach Price of recent transaction 10.0% £1.0m
Polyus ADRs – Listing suspended – valued at nominal US$0.01
---------------
Total 55,153
=========
Description As at Valuation Unobservable Range of weighted Reasonable Impact on fair
30 June technique input average inputs possible shift 1 value
2023 +/ -
£’000
Jetti Resources 28,264 Market approach Earnings multiple 6.22x 5.0% £1.1m
BHP Brazil Royalty 19,350 Discounted cash flows Discount rate – weighted average cost of capital 5.0% – 8.0% 1.0% £1.0m
Average gold prices US$1,400 – US$1,600 per ounce 10.0% £1.5m
Average copper prices US$7,209 – US$8,510 per tonne 10.0% £1.0m
MCC Mining 5,506 Market approach Price of recent transaction 5.0% £0.3m
Polyus ADRs – Listing suspended - valued at nominal US$0.01
---------------
Total 53,120
=========
Description As at Valuation Unobservable Range of weighted Reasonable Impact on
31 December technique input average inputs possible shift 1 fair value
2023 +/-
£’000
BHP Brazil Royalty 18,316 Discounted cash flows Discount rate–weighted average cost of capital 5.0% - 8.0% 1.0% £1.0m
Average gold prices US$1,706-US$1,780 per ounce 10.0% £1.8m
Average copper prices US$8,397-US$8,469 per tonne 10.0% £1.2m
Jetti Resources 27,204 Market approach Earnings multiple 6.00x 5.0% £1.4m
MCC Mining 5,491 Market approach Price of recent transaction 5.0% £0.3m
Polyus – Listing suspended – valued at nominal US$0.01
Polymetal International – Delisted – valued at nominal US$0.01
---------------
Total 51,011
=========
1 The sensitivity analysis refers to a percentage amount added or deducted
from the input and the effect this has on the fair value.
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.
13. 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 Company’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 56 of the Annual Report and Financial Statements for the year ended 31
December 2023.
The investment management fee due for the six months ended 30 June 2024
amounted to £4,562,000 (six months ended 30 June 2023: £4,793,000; year
ended 31 December 2023: £9,691,000). At the period end, £7,169,000 was
outstanding in respect of the management fee (30 June 2023: £7,685,000; 31
December 2023: £7,262,000).
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
period ended 30 June 2024 amounted to £61,000 excluding VAT (six months ended
30 June 2023: £65,000; year ended 31 December 2023: £144,000). At the
period end, £115,000 was outstanding in respect of the marketing services (30
June 2023: £81,000; 31 December 2023: £55,000).
The ultimate holding company of the Manager and the Investment Manager is
BlackRock, Inc., a company incorporated in Delaware, USA.
14. Related party disclosure
During the period ended 30 June 2024, there have been no transactions with
related parties which have materially affected the financial position or the
performance of the Company.
Directors’ shareholdings
At the period end members of the Board held ordinary shares in the Company as
set out below:
Directors 30 June 30 June 31 December
2024 2023 2023
Ordinary shares Ordinary shares Ordinary shares
Charles Goodyear (Chairman) 1 60,000 n/a 60,000
Jane Lewis 7,000 5,362 5,362
Judith Mosely 7,400 7,400 7,400
Srinivasan Venkatakrishnan 2,000 1,000 2,000
Elisabeth Scott 2 – n/a n/a
========= ========= =========
1 Appointed as a Director on 24 August 2023.
2 Appointed as a Director on 9 May 2024.
Since the period end and up to the date of this report there have been no
changes in Directors’ holdings.
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).
Total % of shares held by Total % of shares held by Number of Significant
Related BlackRock Funds Significant Investors who are Investors who are not
not affiliates of BlackRock affiliates of BlackRock
Group or BlackRock, Inc. Group or BlackRock, Inc.
As at 30 June 2024 1.32 n/a n/a
As at 30 June 2023 1.25 n/a n/a
As at 31 December 2023 1.29 n/a n/a
========= ========= =========
15. Capital commitments and contingent liabilities
There was no capital commitment as at 30 June 2024 (30 June 2023: one
commitment for US$10,000,000 in relation to the SPAC PIPE commitment for
investment in Lifezone SPAC; 31 December 2023: none).
There were no contingent liabilities at as 30 June 2024 (30 June 2023: none;
31 December 2023: none).
16. Publication of non-statutory accounts
The financial information contained in this Half Yearly Financial Report does
not constitute statutory accounts as defined in Section 435 of the Companies
Act 2006. The financial information for the six months ended 30 June 2024 has
not been audited or reviewed by the Company’s auditors (six months ended
June 2023: has been reviewed by the Company's auditors).
The information for the year ended 31 December 2023 has been extracted from
the latest published audited financial statements, which have been filed with
the Registrar of Companies, unless otherwise stated. The report of the
auditors on those accounts contained no qualification or statement under
Sections 498(2) or (3) of the Companies Act 2006.
17. Annual results
The Board expects to announce the annual results for the year ending 31
December 2024 in February 2025.
Copies of the results announcement can be obtained from the Secretary on 020
7743 3000 or at cosec@blackrock.com. The Annual Report should be available by
the beginning of March 2025, with the Annual General Meeting being held in May
2025.
ENDS
The Condensed Half Yearly Financial Report will also be available on the
BlackRock website at www.blackrock.com/uk/brwm. Neither the contents of the
Manager’s website nor the contents of any website accessible from hyperlinks
on the Manager’s website (or any other website) is incorporated into, or
forms part of, this announcement.
For further information, please contact:
Charles Kilner, Director - Closed End Funds, BlackRock Investment Management
(UK) Limited -
Tel: 020 7743 1869
Evy Hambro, Fund Manager, BlackRock Investment Management (UK) Limited -
Tel: 020 7743 3000
Emma Phillips, Media & Communications, BlackRock Investment Management (UK)
Limited - Tel: 020 7743 2922
Press enquires:
Ed Hooper, Lansons Communications
Tel: 020 7294 3620
E-mail: BlackRockInvestmentTrusts@lansons.com or EdH@lansons.com
12 Throgmorton Avenue
London EC2N 2DL
23 August 2024
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