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Blackrock World Mining Trust Plc

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Blackrock World Mining Trust Plc BlackRock World Mining Trust plc Mining Trust BlackRock World BlackRock World Mining Trust plc Annual Report and Financial Statements 31 December 2020 Annual Report and Financial Statements 31 December 2020 blackrock.com/uk/brwm Job No: 44037 Proof Event: 4 Black Line Level: 1 Park Communications Ltd Alpine Way London E6 6LA Customer: BlackRock Project Title: World Mining Annual Rpt 2020 T: 0207 055 6500 F: 020 7055 6600 Job No: 44037 Proof Event: 13 Black Line Level: 1 Park Communications Ltd Alpine Way London E6 6LA Customer: BlackRock Project Title: World Mining Annual Rpt 2020 T: 0207 055 6500 F: 020 7055 6600 Financial highlights 536.34p 522.00p1 NAV per ordinary share Ordinary share price +23.8% +36.3% £930.8m 20.40p Net assets Revenue return per +22.9% ordinary share -9.2% 20.30p 3.9%2,3 Total dividends Yield 7.7% +46.7%2, 4 Decrease in total Share price total return dividends per share MSCI ACWI Metals and Mining CPI5 +0.6% 30% Buffer 10/40 Index +20.6%4 FTSE All-Share Index -9.8%4 FTSE 100 -11.5%4 +31.8%2, 4 NAV total return MSCI ACWI Metals and Mining 30% Buffer 10/40 Index +20.6%4 FTSE All-Share Index -9.8%4 FTSE 100 -11.5%4 Percentage comparisons are year-on-year against 31 December 2019. ¹ Mid-market. 2 Alternative Performance Measures. See Glossary on pages 138 to 141. 3 Based on dividends paid and declared for the year ended 31 December 2020 and share price as at 31 December 2020. 4 Performance figures are calculated in sterling terms with dividends reinvested. 5 Consumer Price Index. Within the gold equity market, the increased focus on shareholder returns continued during the period under review. Newmont Corporation offers the most attractive dividend yield of the senior gold producers, announcing a dividend increase of 79% at the beginning of the year. This was subsequently supplemented by a new gold-linked dividend policy. PHOTO COURTESY OF NEWMONT CORPORATION Section 1: Overview and performance 1 Job No: 44037 Proof Event: 17 Black Line Level: 6 Park Communications Ltd Alpine Way London E6 6LA Customer: BlackRock Project Title: World Mining Annual Rpt 2020 T: 0207 055 6500 F: 020 7055 6600 Why BlackRock World Mining Trust plc? Investment objective The Company’s investment policy is to provide a diversified investment in mining and metal assets worldwide, actively managed with the objective of maximising total returns. While the policy is to invest principally in quoted securities, the Company’s investment policy includes investing in royalties derived from the production of metals and minerals as well as physical metals. Up to 10% of gross assets may be held in physical metals and up to 20% may be invested in unquoted investments. Reasons to invest Conviction Yield Flexibility A conviction-led approach to adding The Company offers an attractive 4.2% The Company provides a diversified value by truly understanding and net dividend yield for the year ended 31 exposure to the mining sector, with a comparing companies in the mining December 2020. Whilst mainly invested total return approach. The Portfolio sector, rather than by betting on the in equities, the Company makes use of Managers have the ability to use short-term direction of commodity fixed income and unquoted instruments investment tools such as option writing prices. Unconstrained by market cap, to enhance revenue. The Company’s and gearing. sub-sector or region, the Portfolio global remit means that the majority Managers can invest in a wide range of of its holdings generate earnings from opportunities. around the world. Opportunity Expertise ESG There is an increased focus on The Company is managed by Environmental, Social and Governance sustainability and, globally, regulation BlackRock’s Sectors and Thematics (ESG) is a key consideration. Due to is stepping up as the world looks to team, one of the largest investors in the high impact that mining has on crack down on pollution and carbon natural resources. The team has the communities, countries and the world emissions. The Company seeks resources to undertake extensive, we live in, as a general approach the opportunities in mining companies that proprietary, on-the-ground research Company will not invest in companies produce materials that will help advance to get to know the management of the which have high ESG risks and no these changes, including the need companies in which they invest. plans to address existing deficiencies. for metals such as nickel, cobalt and lithium to supply the world’s growing demand for batteries in everything from iPads to electric vehicles. A member of the Association of Investment Companies Further details about the Company including the latest annual and half yearly financial reports, fact sheets and stock exchange announcements are available on the website at blackrock.com/uk/brwm 2 BlackRock World Mining Trust plc l Annual Report and Financial Statements 31 December 2020 Job No: 44037 Proof Event: 17 Black Line Level: 6 Park Communications Ltd Alpine Way London E6 6LA Customer: BlackRock Project Title: World Mining Annual Rpt 2020 T: 0207 055 6500 F: 020 7055 6600 Contents Section 1: Overview and performance Financial highlights 1 Why BlackRock World Mining Trust plc? 2 Performance record 4 Chairman’s statement 5 Investment manager’s report 9 Section 2: Portfolio Ten largest investments 27 Investments 29 Portfolio analysis 32 Section 3: Governance Governance structure 36 Directors’ biographies 37 Strategic report 39 Directors’ report 54 Directors’ remuneration report 63 Directors’ remuneration policy 66 Corporate governance statement 68 Report of the audit & management engagement committee 73 Statement of directors’ responsibilities in respect of the annual report and financial statements 78 Section 4: Financial statements Independent auditors’ report 82 Consolidated statement of comprehensive income 91 Consolidated and parent company statements of changes in equity 92 Consolidated and parent company statements of financial position 94 Consolidated and parent company cash flow statements 95 Notes to the financial statements 96 Section 5: Additional information Shareholder information 130 Analysis of ordinary shareholders 133 Historical record 134 Management and other service providers 135 AIFMD disclosures 136 Information to be disclosed in accordance with Listing Rule 9.8.4 137 Glossary 138 Section 6: Annual general meeting Notice of annual general meeting 144 Rio Tinto’s Pilbara network, the largest privately-owned and operated rail system in Australia. COVER PHOTO COURTESY OF RIO TINTO Section 1: Overview and performance 3 Job No: 44037 Proof Event: 17 Black Line Level: 6 Park Communications Ltd Alpine Way London E6 6LA Customer: BlackRock Project Title: World Mining Annual Rpt 2020 T: 0207 055 6500 F: 020 7055 6600 Performance record 31 December 31 December 2020 2019 Net assets (£’000)¹ 930,825 757,110 Net asset value per ordinary share (NAV) (pence) 536.34 433.17 Ordinary share price (mid-market) (pence) 522.00 383.00 Reference Index4 – net total return 4,566.93 3,786.17 Discount to net asset value 2, 3 2.7% 11.6% Performance Net asset value per share (with dividends reinvested)3 +31.8% +17.2% Ordinary share price (with dividends reinvested)3 +46.7% +19.4% Reference Index4 +20.6% +15.3% 1 The change in net assets reflects market movements, dividends paid and the buyback of ordinary shares into treasury during the year. 2 This is the difference between the share price and NAV per share with debt at par. Further details of the calculation of the discount are given in the Glossary on page 138. 3 Alternative Performance Measures, see Glossary on pages 138 to 141. Performance figures are calculated in sterling terms with dividends reinvested. 4 MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net total return). Year ended Year ended 31 December 31 December Change 2020 2019 % Revenue Net revenue profit after taxation (£’000) 35,451 39,561 -10.4 Revenue return per ordinary share (pence) 20.40 22.46 -9.2 Dividend per ordinary share (pence) – 1st interim 4.00 4.00 – – 2nd interim 4.00 4.00 – – 3rd interim 4.00 4.00 – – Final 8.30 10.00 -17.0 Total dividends paid and payable 20.30 22.00 -7.7 Long-term capital and dividend returns 1300 1250 1200 1150 1100 1050 1000 950 900 850 800 750 700 650 600 550 500 450 Rebased to 100 400 350 300 250 200 150 100 50 0 2019 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2020 • Capital only share price • Dividend reinvested returns 4 BlackRock World Mining Trust plc l Annual Report and Financial Statements 31 December 2020 Job No: 44037 Proof Event: 17 Black Line Level: 6 Park Communications Ltd Alpine Way London E6 6LA Customer: BlackRock Project Title: World Mining Annual Rpt 2020 T: 0207 055 6500 F: 020 7055 6600 Chairman’s Statement Dear Shareholder Highlights • NAV per share +31.8%1 (with dividends reinvested) • Share price +46.7%1 (with dividends reinvested) • Dividend -7.7% I am pleased to present the Annual Overview Financial Report for the year ended The year ended 31 December 2020 saw 31 December 2020. enormous disruption brought on by the global pandemic, which led to the Performance partial shutdown of many economies It is very pleasing to report that over the across the world for much of the period. twelve months to 31 December 2020, The nature and scale of the disruption David Cheyne the Company’s net asset value per was unparalleled but the significant Chairman share (NAV) returned +31.8%1 and the fiscal and monetary response was share price +46.7%1.
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