Half-yearly Report

BLACKROCK WORLD MINING TRUST plc Half yearly financial results for the six months ended 30 June 2008 Performance to 30 June 2008 Six months Five years Portfolio performance***: - capital only 9.6% 537.4% - with income reinvested 11.9% 591.2% Net asset value per share - undiluted: - capital only 5.8% 479.2% - with income and warrant reinvested ** 6.5% 516.9% Net asset value per share - diluted: - capital only 11.3% 469.9% - with income and warrant reinvested ** 12.1% 492.7% Ordinary share price: - capital only 8.5% 467.3% - with income and warrant reinvested ** 9.4% 508.9% HSBC Global Mining Index*: - capital only 11.4% 364.8% - with income reinvested 12.3% 412.9% * Adjusted for exchange rates relative to sterling. ** One warrant for every five ordinary shares. *** Performance of underlying portfolio excluding management fees, administration expenses and warrant exercise costs, as well as reinvestment of warrant proceeds. Dividends totalling 5.50p per share went ex-dividend on 20 February 2008. Where performance has income included, it is reinvested on the ex-dividend date. Sources: BlackRock, Datastream. For further information please contact: Jonathan Ruck Keene, Managing Director, Investment Company Division - 020 7743 2178 Graham Birch, Fund Manager - 020 7743 2690 Emma Phillips, Media & Communications - 020 7743 2922 BlackRock Investment Management (UK) Limited Or William Clutterbuck - 020 7379 5151 Maitland Consultancy Chairman's Statement Over the six months ended 30 June 2008, whilst broader equity markets have been turbulent, the mining sector continued to hold its own. Much of this was driven by takeover speculation within the sector and a boom in global commodity prices. Against this backdrop, I am pleased to report that during the period the Company's diluted net asset value increased by 12.1% and the share price by 9.4% (both with income and warrant proceeds reinvested). By comparison, your Company's benchmark index increased by 12.3%. Bonus warrants The second exercise date for the bonus warrants was 29 February 2008 and 20,867,250 warrants were exercised at the price of 478p for one new share. The final opportunity for remaining warrant holders to exercise their subscription rights will be 27 February 2009, the exercise price being 565p. At the period end, 8,947,605 warrants remain unexercised. Company name At a General Meeting held on 23 April 2008, shareholders resolved to change the Company's name to BlackRock World Mining Trust plc. The change of name was effective from 25 April 2008. As explained in the circular to shareholders posted in March, the change follows the merger of Merrill Lynch Investment Managers with BlackRock and a full product rebrand. The Investment Manager has borne all the costs associated with the name change and continues to invest in the BlackRock brand. Awards I am pleased to report that the Company won Money Observer's 2008 award for best large trust and in the "Moneywise Investment Trust awards 2008" was voted winner of the Specialist sector. The Company was also highly commended in the Best Report & Accounts for a Specialist Trust in the Association of Investment Companies "Best Information to Shareholders" awards. Outlook Since the period end, commodity prices have dropped sharply and markets remain volatile as shares continue to react nervously to newsflow related to credit market conditions and macroeconomic indicators. The long term outlook for mining equities remains promising but near term performance may continue to be erratic as global growth prospects fluctuate. A W Lea 14 August 2008 Interim Management Report and Responsibility Statement The Chairman's Statement and the Investment Manager's Report 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 Company can be divided into various areas as follows: ● Performance; ● Income/dividend; ● Regulatory; ● Operational; ● Resource; and ● Financial. The Board reported on the principal risks and uncertainties faced by the Company in the Annual Report and Accounts for the year ended 31 December 2007. A detailed explanation can be found on pages 20 and 21 of the Annual Report and Accounts which is available on the website maintained by the Investment Manager, BlackRock Investment Management (UK) Limited, at www.blackrock.co.uk/ its. In the view of the Board, there have not been any changes to the fundamental nature of these risks since the previous report and these principal risks and uncertainties are equally applicable to the remaining six months of the financial year as they were to the six months under review. Related party transactions The Investment Manager is regarded as a related party and details of the investment management fees payable are set out in note 3. Directors' responsibility statement The Disclosure 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 half yearly financial report has been prepared in accordance with 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 FSA's Disclosure and Transparency Rules. The half yearly financial report was approved by the Board on 13 August 2008 and the above responsibility statement was signed on its behalf by the Chairman. A W Lea By order of the Board 14 August 2008 Investment Manager's Report We are pleased to report that despite some choppy market conditions, the first six months of 2008 were positive for the Company's portfolio and share price. The period was characterised by bouts of volatility linked to concerns over the health of the banking system and the global economy. As a result, equity markets generally were depressed with the MSCI World Index falling by 11.7% and the FTSE 100 dropping 12.9% (all figures in this review are in sterling terms unless otherwise stated). Nevertheless, the Company's share price reached a new high and there was a good take-up of shares from warrant holders at the second exercise date at the end of February. With the notable exception of the lead/zinc and nickel companies, the mining sector enjoyed a favourable array of commodity prices and despite sharply rising costs it would not be surprising if we saw fresh earnings and cash flow records for the six months to June and year to December. P/E multiples remain quite low in the mining sector - a factor which means the possibility of M&A activity is never far from investors' thoughts, particularly as the long running battle between BHP Billiton and Rio Tinto continues to cast a shadow over the entire industry. Base metals Base metals were generally strong in the first half of the year with the MG base metals index re-testing its 2007 highs. There was however a large dispersion between the individual metals. As was the case last year, China remains the main demand engine underpinning strong metal prices, but supply side disruptions continue to be important. Nickel was one of the worst performers over the half, reversing the strength of last year. The metal has been hit by the deluge of direct shipping laterite ore that has flooded the Chinese market with nickel units, albeit at high cost. As we have pointed out before, M&A activity has meant that most of the nickel exposure in the portfolio is now "hidden" within the major diversified companies following the takeovers of Falconbridge and Inco by Xstrata and Vale respectively. Our only "pure play", Eramet, was in fact one of the Company's star performers as the 134% US dollar rise in manganese-ore prices more than offset the weaker nickel price. % change % change Price six months to average Commodity 30 June 2008 30 June 2008 H1 2008/H1 2007 Gold bullion US$/oz 922.60 +10.3 +38.2 Silver US$/oz 17.65 +19.6 +30.3 Platinum US$/oz 2,064 +34.6 +56.9 Copper US$/tonne 8,775 +30.7 +19.2 Nickel US$/tonne 21,672 -17.8 -39.0 Aluminium US$/tonne 3,074 +30.4 +1.7 Zinc US$/tonne 1,872 -21.5 -36.5 Lead US$/tonne 1,735 -32.2 +31.2 Tin US$/tonne 23,307 +41.9 +50.5 Uranium US$/lb 57 -36.7 -27.7 Iron ore - lump US$/tonne* 128 - +96.5 Coking coal US$/tonne* 300 - +215.8 Thermal coal US$/tonne 125 - +125.2 Potash US$/tonne 625 - +131.5 *Annually negotiated price. Sources: Datastream, UBS equities. Lead and zinc were also rather weak amid signs of modest market surpluses. Companies with zinc exposure in the portfolio were amongst the worst performers in the first half, with Zinifex, Oxiana and Nyrstar among three of our ten most loss-making positions. During the half year Zinifex and Oxiana consummated a friendly merger - we have high hopes that this will prove to be a successful combination and perhaps lays the foundations for a new diversified mining company. Copper enjoyed another period of strength, with the price reaching successive new all time highs. Strikes and other production shortfalls meant that market balances were much tighter than seemed likely at the start of the year. Furthermore the mining licence review in the Democratic Republic of the Congo ("DRC"), a key area for copper production growth over the coming years, has slowed down the rate of new investment in that country helping to brighten the longer term outlook for copper prices. Against this background copper equities de-rated with P/E multiples shrinking and the shares underperforming the metal they produce. While most of our copper holdings rose in price (i.e. Freeport McMoran +14%, Kazakhmys +16%) some were very disappointing - for example Antofagasta declined in price by over 8% during the period. Those companies exposed to Zambia and the DRC also suffered from the worsening political and/or fiscal environment. First Quantum, Equinox and Katanga all fell by about 20%, which vindicated our decision to take some profits in these stocks early in the year. For some time we have been "bullish and wrong" about aluminium. Finally in 2008 we have begun to see our positive view coming true. High energy prices and shortages of energy have taken their toll on primary aluminium supply and aluminium proved to be one of the best performing metals over the period. However our main aluminium investments have not given us a good return. Alcoa fell by nearly 3% and Alumina fell by nearly 19%, both companies being adversely impacted by the knock on effects of the explosion at Apache's Western Australian natural gas facilities. Alcoa has a major share buy back programme underway and we believe that this limits the downside risk of the stock. Gold and precious commodities Gold equities turned in a better performance in the first half of 2008 but continued to perform disappointingly in comparison with the gold price (+8.2% versus +10.3%). Gold benefited greatly from the financial markets turmoil and during the height of the "Bear Stearns" crisis peaked at well over US$1,000 per ounce. At that level jewellery demand shrank and, with the Federal Reserve bailing out the banking sector, gold couldn't sustain these gains. The gold price seems now to have stabilised around the US$900/oz level with underlying support returning as physical buyers come back into the market. We made some significant changes to the gold content of the portfolio. In particular, we liquidated the South African holdings as we believe the headwinds being faced by these companies will remain strong. The South African gold companies are grappling with power shortages, safety related stoppages, as well as all the cost pressures being faced by the mining industry the world over. We have switched the proceeds of these disposals into companies such as Newcrest, Kinross and Lihir, all of which have better growth potential than their South African competitors. For some time gold has been the "poor relation" of platinum. During the first half of 2008 this situation persisted with platinum rising even faster than gold, reaching a new all time high of US$2,273 per ounce driven by strong supply/demand fundamentals. In particular, platinum has been positively impacted by the South African power crisis. South Africa accounts for 78% of the world's primary platinum supply and many of the growth projects in the pipeline have been stopped in their tracks by the inability of the state utility, Eskom, to guarantee electricity. This has contributed to a shortfall of production and a market deficit. The publicity surrounding the power crisis, together with some sharp earnings upgrades, meant that all of the platinum equities contributed positively to portfolio returns - the star performer was Aquarius, up by over 40%. Subsequent to the period end, Xstrata announced its intention to make a hostile cash bid for Lonmin. As a result of this we have disposed of our holding in Lonmin. Our main silver investment, Industrias Penoles, performed well over the period benefiting from the strong price of silver and the spin-out of its precious metals division, Fresnillo. Diversified mining companies and industrial minerals The diversified mining companies performed well during the period rising on average by 13.5%. The reasons for this strength are not hard to find; the companies have enjoyed a combination of excellent bulk commodity prices together with a heightened market focus on potential M&A transactions in the sector. M&A is at the forefront of mining investors' minds. BHP Billiton and Rio Tinto have both been showcasing the quality of their assets and the long term potential of their organic growth pipelines and this has certainly helped their share prices. Chinalco/Alcoa's raid on the Rio Tinto shareholder register early in the period also helped to focus attention on value in the sector. The presence of a potential sovereign buyer of assets adds a new dimension to the market and in our view holds out the possibility of a break-up bid for Rio Tinto. Market speculation has also centred on Vale's corporate strategy; during the period under review Vale failed to consummate its attempted friendly merger with Xstrata, with the transaction foundering on a mixture of price issues and marketing rights. Vale also found that the capital markets were uneasy towards such a large transaction. At the time of writing Vale is raising US$15 billion to bolster its balance sheet, with no specified use of the proceeds. We can only conclude that this is being earmarked for opportunistic acquisitions. The business backgrounds for the large diversified miners have proved to be very solid. The record iron ore price settlement is very good news for Vale, BHP Billiton and Rio Tinto. They also benefited from a spectacular rise in the coking coal price which has risen sharply due to tight supply exacerbated by weather related production problems in Asia. Indeed, Rio Tinto and BHP have virtually the perfect business mix for the 2008 commodity market. The strength in the thermal coal market prompted us to increase exposure to this area significantly. We bought new stakes in three Indonesian coal miners, the largest of the positions by far being Bumi Resources which is now one of the largest coal mining companies in the world following its acquisition of Kaltim Prima. Bumi is now one of the portfolio's ten largest investments. In the industrial minerals area we benefited from the small positions we built up last year in the phosphate and potash mining groups. These companies have enjoyed spectacular returns as they have exploited the rising profitability of arable farming. Over the period, Potash rose by over 60% and Mosaic rose by over 50%. Uranium has been rather weak, retreating from the high levels of 2007. Much of the excitement has left the uranium stocks and we have recently begun to increase the size of our holdings in this area through our positions in UEX and Uranium Participation. Derivatives activity As usual, the Group from time to time enters into derivatives contracts, mostly involving the sale of "puts" and "calls". These are subject to strict investment guidelines which limit their magnitude to an aggregate 10% of the portfolio. Gearing At 30 June 2008 the Company had no net debt. Outlook Once again the mining sector as a whole seems likely to break all previous financial records. However, the weakness in global financial markets means that the sector is starting to derate again and investors are not being properly rewarded. One should never forget that this is a volatile sector and that sharp corrections are to be expected from time to time. The downtrend we are in is the severest we have seen in over a decade. From its high point of 876 in mid May the HSBC Global Mining Index has now fallen by 32%. Given the magnitude of this drop and the de-rating of shares we believe it is likely that we will see some consolidation of share prices until such time as the world economic picture clarifies and investors recover their appetite for risk taking. As has been the case for some years, China holds the key and if the urbanisation of the population and industrialisation of the economy continues then this should underpin commodity demand and hence earnings going forward. The battle for Rio Tinto will dominate the mining sector headlines for the second half of the year - especially if China steps up its apparent opposition to the transaction. Whatever the outcome it will be sure to have a profound effect on the mining industry as both producers and consumers recognise the strategic power of Rio Tinto and BHP Billiton in the current constrained supply-side environment. Graham Birch and Evy Hambro BlackRock Investment Management (UK) Limited 14 August 2008 Ten Largest Investments 30 June 2008 Vale - 12.8% (2007: 14.7%) formerly known as CVRD, is the world's largest producer of iron ore. Based in Brazil, the company also has significant interests in other commodities such as nickel, aluminium, copper, gold and coal. In addition Vale owns and operates transport infrastructure. The company made a "transformational" acquisition in 2006 by purchasing Inco for cash. This considerably broadened the company's asset mix and made it a formidable competitor in the global mining industry. In January 2008, Vale announced they were in discussions with Xstrata over a potential takeover; however these ended unsuccessfully in March 2008. Rio Tinto - 10.0% (2007: 12.2%) arguably sets the standard to which the mining industry aspires. The company has interests over a broad range of metals and minerals including iron ore, aluminium, copper, coal, industrial minerals, gold and uranium. In October 2007, Rio Tinto acquired Alcan making it the world's largest bauxite and aluminium producer. In November 2007, BHP Billiton approached the company with regards to a potential merger to create an industry behemoth that would dominate the mining sector. Rio Tinto has rejected both of BHP Billiton's offers, initially a 3-for-1 share exchange and subsequently 3.4-for-1. In addition, the Chinese in collusion with Alcoa have purchased 9% of Rio Tinto to ensure a "seat at the table". BHP Billiton - 7.9% (2007: 6.1%) is the world's largest diversified natural resource company, formed in 2001 from the merger of BHP and Billiton. The company is an important global player in a number of commodities including iron ore, copper, coal, manganese, aluminium, diamonds and uranium. In addition, the company is the only sizeable holding in the portfolio with significant oil and gas assets. BHP Billiton is awaiting regulatory approval for the potential merger with Rio Tinto before they make their next move. Teck Cominco - 4.1% (2007: 2.8%) is a Canadian diversified miner and a leader in the production of metallurgical coal through its 52% economic stake in Elk Valley Coal - the world's premier metallurgical coal operation. Teck owns Red Dog, the largest zinc mine in the world, as well as one of the world's largest zinc-lead refining and smelting facilities. The company is also a significant producer of copper and gold and in 2005 it made its first investment in the oil sands industry. In August 2007, the company acquired Aur Resources, a copper producer with operations in North and South America. Impala Platinum - 3.9% (2007: 4.1%) is the world's second largest producer of platinum group metals, with mining and refining operations in South Africa. The company also owns a number of substantial assets in Zimbabwe and is a major shareholder in Aquarius Platinum. The company restructured in 2006, converting the Bafokeng tribe's royalty into an equity stake. Alcoa - 3.9% (2007: 4.4%) is a Dow Jones Industrial Average constituent; it is the world's second largest alumina producer and a leader in aluminium production. In downstream activities, Alcoa serves the aerospace, automotive, packaging, building and construction, commercial transportation, and industrial markets. Following the takeover of Alcan by Rio Tinto in 2007, Alcoa has been the subject of significant market speculation as it is seen as a potential acquirer/acquiree going forward. Bumi Resources - 3.8% (2007: nil) is Indonesia's largest thermal coal producer and the third largest thermal coal exporter in the world. The company is controlled by the Bakrie family and has grown aggressively through acquisitions since 2002. Bumi primarily exports into Asia and has therefore benefited from the increased level of demand for coal out of this region. Eramet - 3.3% (2007: 2.0%) is a French mining and metallurgical group with interests in nickel, manganese and metal alloys. It is the world's largest producer of ferronickel, nickel chlorides and one of only three producers of high purity nickel. It is also a world leader in manganese ores, ferro-manganese alloys and speciality steels. In 2007, the company benefited from record nickel prices and despite a considerable pull back in the nickel price, the company's earnings have been supported by a rapid increase in manganese prices over the first half of 2008. Minas Buenaventura - 3.2% (2007: 3.5%) is South America's premier precious metals company. Its main asset is a stake in the Yanacocha gold mine in Peru, which it jointly owns with Newmont. Buenaventura also has interests in a number of other mines and exploration projects throughout Peru. OZ Minerals - 2.9% (2007: Oxiana 1.1%, Zinifex 3.5%) is a new diversified mining company formed in June 2008 by the merger of Oxiana Resources and Zinifex. Zinifex was one of the world's largest zinc and lead producers, with mining operations in Australia. Oxiana was a copper, gold and zinc producer with operations in Laos and Australia. The combined company is now Australia's third largest diversified mining company and the world's largest zinc producer. All percentages reflect the value of the holding as a percentage of total investments. Percentages in brackets represent the value of the holding as at 31 December 2007. Portfolio Analysis 30 June 2008 Commodity Exposure* BlackRock World Mining Trust plc HSBC Global Mining Index 30 June 2008 31 December 2007 30 June 2008 % % % Zinc 0.9 5.2 0.8 Gold 4.1 5.9 13.9 Aluminium 5.4 6.3 3.3 Silver & Diamonds 6.6 5.1 1.4 Platinum 7.8 7.7 5.3 Copper 7.7 9.8 8.9 Coal 8.3 3.2 5.3 Diversified 47.1 48.0 57.1 Other 12.1 8.8 4.0 Geographic Exposure* 30 June 2008 31 December 2007 % % Latin America 24 25 Global 19 21 South Africa 12 14 Canada 8 7 USA 8 7 Australia 7 8 Europe 4 3 Other 18 *** 15 ** * Based on the principal commodity exposure and place of operation of each investment. ** Consists of Congo, India, Indonesia, Kazakhstan, Laos, Lesotho and Zambia. *** Consists of China, Congo, India, Indonesia, Kazakhstan, Laos, Lesotho, Mongolia, Zambia and Zimbabwe. Source: BlackRock. Investments 30 June 2008 Main Market geographic value % of exposure £'000 investments Diversified Vale Latin America 195,728 12.8 Rio Tinto Global 152,070 10.0 BHP Billiton Global 120,000 7.9 Teck Cominco Canada 63,019 4.1 OZ Minerals Australia 44,444 2.9 Vedanta Resources India 37,179 2.4 African Rainbow Minerals South Africa 33,127 2.2 Eurasian Natural Resources Kazakhstan 31,992 2.1 Sterlite Industries India 16,778 1.1 Pan Australian Resources Laos 10,523 0.7 Anglo American Global 8,815 0.6 Metorex South Africa 4,037 0.2 Xstrata Global 1,851 0.1 ------- ---- 719,563 47.1 ------- ---- Coal Bumi Resources Indonesia 58,095 3.8 Peabody Energy USA 33,167 2.2 Riversdale Mining South Africa 21,338 1.4 Aquila Resources Australia 6,526 0.4 Indo Tambangraya Megah Indonesia 3,668 0.2 Coal Africa South Africa 2,000 0.1 Homeland Energy Group South Africa 1,615 0.1 Indika Energy Indonesia 925 0.1 ------- --- 127,334 8.3 ------- --- Platinum Impala Platinum South Africa 59,502 3.9 Aquarius Platinum South Africa 21,748 1.4 Anglo Platinum South Africa 16,779 1.1 Lonmin South Africa 15,955 1.0 Ridge Mining South Africa 5,750 0.4 ------- --- 119,734 7.8 ------- --- Copper First Quantum Minerals Zambia 26,112 1.7 Cerro Verde Latin America 20,220 1.3 Freeport McMoran Copper & Gold Indonesia 19,617 1.3 Antofagasta Latin America 17,108 1.1 Kazakhmys Kazakhstan 15,124 1.0 Equinox Minerals Zambia 12,644 0.8 Southern Copper Latin America 5,358 0.4 Katanga Mining Congo 1,581 0.1 Ivanhoe Mines Warrants* Mongolia 754 0.0 ------- --- 118,518 7.7 ------- --- Silver & Diamonds Industrias Penoles Latin America 39,648 2.6 Fresnillo Latin America 24,450 1.6 Gem Diamonds Lesotho 19,466 0.3 Harry Winston Diamond Canada 16,922 1.1 ------- --- 100,486 6.6 ------- --- Aluminium Alcoa USA 59,499 3.9 Alumina Australia 22,664 1.5 ------ --- 82,163 5.4 ------ --- Gold Minas Buenaventura 'B' shares Latin America 48,522 3.2 Newcrest Mining Australia 7,052 0.5 Minera IRL Latin America 2,656 0.2 Lihir Gold Australia 1,582 0.1 Kinross Gold Canada 1,193 0.1 Gold Fields South Africa 425 0.0 AngloGold Ashanti South Africa 11 0.0 ------ --- 61,441 4.1 ------ --- Zinc Nyrstar Belgium 11,133 0.7 Volcan Latin America 1,888 0.1 Griffin Mining China 1,621 0.1 Soc Min El Brocal Latin America 406 0.0 ------ --- 15,048 0.9 ------ --- Other Eramet France 49,943 3.3 Potash Corp. Canada 26,014 1.7 Iluka Resources Australia 17,784 1.2 Mosaic USA 16,358 1.1 Minsur Latin America 13,808 0.9 Agrium USA 10,142 0.6 UEX Canada 7,731 0.5 Uranium Participation Canada 7,243 0.5 Norilsk Nickel Russia 6,351 0.4 Mondi South Africa 5,930 0.4 Atlas Iron Australia 2,756 0.2 Australian Energy* Australia 2,580 0.2 ArcelorMittal Global 2,482 0.2 Noventa South Africa 2,201 0.1 GobiMin Canada 1,143 0.1 Mirabela Nickel Australia 748 0.0 ------- --- 173,214 11.4 ------- --- Cash Fund BlackRock Institutional Liquidity Fund 10,000 0.7 ------ --- 10,000 0.7 ------ --- Portfolio 1,527,501 100.0 --------- ----- * Unquoted investments, at Directors' valuation. All investments shown are in ordinary shares unless otherwise stated. The total number of investments held at 30 June 2008 was 69 (31 December 2007: 58). CONSOLIDATED INCOME STATEMENT for the six months ended 30 June 2008 Revenue return £'000 Capital return £'000 Total £'000 Six months Six months Year Six months Six months Year Six months Six months Year ended ended ended ended ended ended ended ended ended 30.06.08 30.06.07 31.12.07 30.06.08 30.06.07 31.12.07 30.06.08 30.06.07 31.12.07 Note (unaudited) (unaudited) (audited) (unaudited) (unaudited) (audited) (unaudited) (unaudited) (audited) Income from investments held at fair value through profit or loss 2 12,801 13,721 26,123 - - - 12,801 13,721 26,123 Other income 2 1,905 3,507 8,668 - - - 1,905 3,507 8,668 ------ ------ ------ ------ ------ ------ ------ ------ ------ Total revenue 14,706 17,228 34,791 - - - 14,706 17,228 34,791 ------ ------ ------ ------ ------ ------ ------ ------ ------ Gains on investments held at fair value through profit or loss - - - 156,402 253,300 457,306 156,402 253,300 457,306 Realised (losses)/ gains on foreign exchange - - - (115) 520 361 (115) 520 361 ------ ------ ------ ------- ------- ------- ------- ------- ------- 14,706 17,228 34,791 156,287 253,820 457,667 170,993 271,048 492,458 ------ ------ ------ ------- ------- ------- ------- ------- ------- Expenses Investment management fees 3 (9,198) (6,899) (14,864) - - - (9,198) (6,899) (14,864) Other expenses 4 (844) (446) (1,274) - - - (844) (446) (1,274) ------ ------ ------- ------ ------ ------ ------ ------ ------- Total operating expenses (10,042) (7,345) (16,138) - - - (10,042) (7,345) (16,138) ------- ------ ------- ------ ------ ------ ------- ------ ------- Profit before finance costs and taxation 4,664 9,883 18,653 156,287 253,820 457,667 160,951 263,703 476,320 Finance costs (179) (947) (1,547) - - - (179) (947) (1,547) ----- ----- ------ ------- ------- ------- ------- ------- ------- Profit before taxation 4,485 8,936 17,106 156,287 253,820 457,667 160,772 262,756 474,773 ----- ----- ------ ------- ------- ------- ------- ------- ------- Taxation (563) (2,006) (3,715) - - - (563) (2,006) (3,715) ----- ------ ------ ------- ------- ------- ------- ------- ------- Net profit for the period 6 3,922 6,930 13,391 156,287 253,820 457,667 160,209 260,750 471,058 ===== ===== ====== ======= ======= ======= ======= ======= ======= Earnings per ordinary share - undiluted 6 2.30p 4.17p 8.25p 91.84p 152.58p 281.94p 94.14p 156.75p 290.19p ===== ===== ===== ====== ======= ======= ====== ======= ======= Earnings per ordinary share - diluted 6 2.28p 4.12p 8.01p 91.02p 150.86p 273.64p 93.30p 154.98p 281.65p ===== ===== ===== ====== ======= ======= ====== ======= ======= The total column of this statement represents the Group's Income Statement, prepared in accordance with International Financial Reporting Standards ("IFRS"). The supplementary revenue and capital return columns are both prepared under guidance published by the Association of Investment Companies. All items in the above statement derive from continuing operations. No operations were acquired or disposed of during the period. All income is attributable to the equity shareholders of BlackRock World Mining Trust plc. There are no minority interests. The final dividend of 3.00p and the special dividend of 2.50p in respect of the year ended 31 December 2007 were declared on 14 February 2008 and paid on 17 April 2008. These can be found in the Consolidated Statement of Changes in Equity for the six months ended 30 June 2008. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Ordinary Share Capital share premium Special redemption Capital Revenue capital account reserve reserve reserve reserve Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 For the six months ended 30 June 2008 (unaudited) At 31 December 2007 8,607 28,452 122,457 22,779 1,057,877 27,948 1,268,120 Profit after taxation for the period - - - - 156,287 3,922 160,209 Exercise of warrants 1,043 98,702 - - - - 99,745 Costs of warrant exercise - (6) - - - - (6) Shares purchased during the period - - (330) - - - (330) Ordinary dividend paid of 3.00p (b) - - - - - (4,731) (4,731) Special dividend paid of 2.50p (b) - - - - - (3,943) (3,943) ----- ------- ------- ------ --------- ------ --------- At 30 June 2008 9,650 127,148 122,127 22,779 1,214,164 23,196 1,519,064 ===== ======= ======= ====== ========= ====== ========= For the six months ended 30 June 2007 (unaudited) At 31 December 2006 8,415 11,767 203,244 22,779 600,210 22,130 868,545 Profit after taxation for the period - - - - 253,820 6,930 260,750 Exercise of warrants 192 16,685 - - - - 16,877 Shares purchased during the period - - (71,905) - - - (71,905) Ordinary dividend paid of 2.50p (a) - - - - - (4,207) (4,207) Special dividend paid of 2.00p (a) - - - - - (3,366) (3,366) ----- ------ ------- ------ ------- ------ --------- At 30 June 2007 8,607 28,452 131,339 22,779 854,030 21,487 1,066,694 ===== ====== ======= ====== ======= ====== ========= For the year ended 31 December 2007 (audited) At 31 December 2006 8,415 11,767 203,244 22,779 600,210 22,130 868,545 Profit after taxation for the year - - - - 457,667 13,391 471,058 Exercise of warrants 192 16,685 - - - - 16,877 Shares purchased during the year - - (80,787) - - - (80,787) Ordinary dividend paid of 2.50p (a) - - - - - (4,207) (4,207) Special dividend paid of 2.00p (a) - - - - - (3,366) (3,366) ----- ------ ------- ------ --------- ------ --------- At 31 December 2007 8,607 28,452 122,457 22,779 1,057,877 27,948 1,268,120 ===== ====== ======= ====== ========= ====== ========= The transaction costs incurred on the acquisition and disposal of investments are included within the capital reserve. Purchases and sales costs amounted to £1,081,000 and £300,000 respectively for the period ended 30 June 2008 (six months ended 30 June 2007: £348,000 and £251,000; year ended 31 December 2007: £481,000 and £512,000). (a) The final and special dividends for the year ended 31 December 2006, declared on 14 February 2007 and paid on 29 March 2007. (b) The final and special dividends for the year ended 31 December 2007, declared on 14 February 2008 and paid on 17 April 2008. CONSOLIDATED BALANCE SHEET as at 30 June 2008 30 June 30 June 31 December 2008 2007 2007 £'000 £'000 £'000 Note (unaudited) (unaudited) (audited) Non current assets Investments held at fair value through profit or loss 1,522,509 1,091,447 1,266,714 Current assets Cash and cash equivalents 880 - - Investments 4,992 - 5,508 Other receivables 2,019 1,190 1,772 Amounts due from brokers 548 18,680 - ----- ------ ----- 8,439 19,870 7,280 --------- --------- --------- Total assets 1,530,948 1,111,317 1,273,994 Current liabilities Other payables (6,181) (5,242) (5,235) Amounts due to brokers (5,703) (984) - Bank overdrafts - (38,257) (543) ------- ------- ------ (11,884) (44,483) (5,778) ------- ------- ------ Total assets less current liabilities 1,519,064 1,066,834 1,268,216 Non current liabilities Deferred tax - (140) (96) --------- --------- --------- Net assets 1,519,064 1,066,694 1,268,120 ========= ========= ========= Equity attributable to equity holders Ordinary share capital 9,650 8,607 8,607 Share premium account 127,148 28,452 28,452 Special reserve 122,127 131,339 122,457 Capital redemption reserve 22,779 22,779 22,779 Capital reserve 1,214,164 854,030 1,057,877 Revenue reserve 23,196 21,487 27,948 --------- --------- --------- Total equity 1,519,064 1,066,694 1,268,120 ========= ========= ========= Net asset value per ordinary share - undiluted 6 850.93p 670.54p 804.13p ======= ======= ======= Net asset value per ordinary share - diluted 6 837.28p 640.15p 752.28p ======= ======= ======= CONSOLIDATED CASH FLOW STATEMENT for the six months ended 30 June 2008 Six months Six months Year ended ended 30 June ended 30 June 31 December 2008 2007 2007 £'000 £'000 £'000 (unaudited) (unaudited) (audited) Net cash (outflow)/inflow from operating activities before financing (89,203) 30,993 78,735 ------ ----- ----- Financing activities Buy back of ordinary shares (330) (70,918) (80,787) Exercise of warrants 99,745 16,877 16,877 Dividends paid (8,674) (7,573) (7,573) ------ ------ ------ Net cash inflow/(outflow) from financing 90,741 (61,614) (71,483) ------ ------- ------- Increase/(decrease) in cash and cash equivalents 1,538 (30,621) 7,252 Effect of foreign exchange rate changes (115) 520 361 ------ ------- ------ Change in cash and cash equivalents 1,423 (30,101) 7,613 Cash and cash equivalents at start of period (543) (8,156) (8,156) ------ ------- ------ Cash and cash equivalents at end of period 880 (38,257) (543) === ======= ==== RECONCILIATION OF NET INCOME BEFORE TAX TO NET CASH FLOW FROM OPERATING ACTIVITIES Six months Six months Year ended ended 30 June ended 30 June 31 December 2008 2007 2007 £'000 £'000 £'000 (unaudited) (unaudited) (audited) Operating activities Profit before taxation 160,772 262,756 474,773 Add back interest paid 179 947 1,547 Gains on investments held at fair value through profit or loss including transaction costs (156,402) (253,300) (457,306) Net movement on foreign exchange 115 (520) (361) Net sales of current asset investments by subsidiary 1,887 16,914 12,327 Sales of investments held at fair value through profit or loss 182,249 141,640 262,398 Purchases of investments held at fair value through profit or loss (281,638) (112,161) (203,847) Decrease/(increase) in other receivables 555 (1,702) (596) (Increase)/decrease in amounts due from brokers (548) (16,593) 307 Increase in amounts due to brokers 5,703 - - Increase in other payables 814 618 1,317 Dealing profits (1,371) (2,964) (4,228) ------ ------ ------ Net cash (outflow)/inflow from operating activities before interest and taxation (87,685) 35,635 86,331 ------- ------ ------ Interest paid (179) (947) (1,547) Tax paid (788) (3,097) (4,830) Tax on overseas income (551) (598) (1,219) ------ ------ ------ Net cash (outflow)/inflow from operating activities (89,203) 30,993 78,735 ======== ====== ====== NOTES TO THE HALF YEARLY FINANCIAL STATEMENTS 1. Principal activity and basis of preparation The principal activity of the Company is that of an investment trust company within the meaning of section 842 of the Income and Corporation Taxes Act 1988. The principal activity of its subsidiary undertaking, BlackRock World Mining Investment Company Limited, is investment dealing. The other subsidiary, BlackRock Gold Limited, is no longer trading. The half yearly financial statements have been prepared using the same accounting policies as set out in the Company's Report and Accounts for the year ended 31 December 2007 and in accordance with International Accounting Standard 34, with one exception. The Company has refined its policy for accounting for option premium income to allocate this to capital to the extent that it has arisen as an incidental part of a larger capital transaction. Previously all option premia were taken to revenue. The impact on the accounts for the six month period to 30 June 2008 is that £8.7 million of option premium income that would previously have been included within other income in the revenue column of the Consolidated Income Statement has instead been taken to capital. The taxation charge has been calculated by applying an estimate of the annual effective tax rate to any profit for the period. 2. Income Six months Six months Year ended ended ended 30 June 30 June 31 December 2008 2007 2007 £'000 £'000 £'000 (unaudited) (unaudited) (audited) Investment income: UK listed dividends 2,377 1,837 4,504 UK listed special dividends - 498 276 Overseas listed dividends 9,920 11,156 20,806 Overseas listed special dividends 504 230 537 ------ ------ ------ 12,801 13,721 26,123 ------ ------ ------ Other operating income: Deposit interest 386 143 298 Dealing profits 1,371 2,964 4,228 Stock lending commission 31 28 - Underwriting commission 117 - 43 Option premium income - 372 4,099 ----- ----- ----- 1,905 3,507 8,668 ------ ------ ----- Total income 14,706 17,228 34,791 ====== ====== ====== Dealing profits are presented after deducting transaction costs incurred on the purchases and sales of investments. 3. Investment management fees Six months Six months Year ended ended ended 30 June 30 June 31 December 2008 2007 2007 £'000 £'000 £'000 (unaudited) (unaudited) (audited) Investment management fees 9,198 6,381 14,371 VAT - 518 493 ----- ----- ------ 9,198 6,899 14,864 ===== ===== ====== The investment management fee is levied quarterly at a rate of 1.25% per annum, based on the value of the gross assets on the last day of each quarter, and is charged wholly to the revenue account. 4. Other expenses Six months Six months Year ended ended ended 30 June 30 June 31 December 2008 2007 2007 £'000 £'000 £'000 (unaudited) (unaudited) (audited) Custody fee 215 99 278 Administration fee 423 282 676 Registrar's fees and other administrative costs 156 24 238 Directors' emoluments 50 41 82 --- --- ----- 844 446 1,274 === === ===== 5. Dividend The Board has not declared an interim dividend, as dividends are considered and paid annually in respect of each accounting period. The final and special dividends of 3.00p and 2.50p per share, respectively, for the year ended 31 December 2007 were paid on 17 April 2008. 6. Earnings and net asset value per ordinary share Total revenue and capital returns per share are shown below and have been calculated using the following: Six months Six months Year ended ended ended 30 June 2008 30 June 2007 31 December 2007 (unaudited) (unaudited) (audited) Net revenue return attributable to ordinary shareholders (£'000) 3,922 6,930 13,391 Net capital return attributable to ordinary shareholders (£'000) 156,287 253,820 457,667 ------- ------- ------- Total earnings attributable to ordinary shareholders (£'000) 160,209 260,750 471,058 ======= ======= ======= Equity shareholders' funds (£'000) 1,519,064 1,066,694 1,268,120 The weighted average number of ordinary shares in issue during each period, on which the earnings per ordinary share were calculated, was: 170,173,722 166,348,592 162,326,817 The weighted average number of ordinary shares in issue during each period, on which the diluted earnings per ordinary share were calculated, was: 171,710,189 168,246,697 167,248,221 The actual number of ordinary shares in issue at the end of of each period, on which the net asset value was calculated, was: 178,517,729 159,079,858 157,700,479 Warrants in issue 8,947,605 29,814,855 29,814,855 The actual number of ordinary shares in issue at the end of each period, on which the diluted net asset value was calculated was: 187,465,334 188,894,713 187,515,334 Undiluted: Revenue earnings per share 2.30p 4.17p 8.25p Capital earnings per share 91.84p 152.58p 281.94p ------ ------- ------- Total earnings per share 94.14p 156.75p 290.19p ====== ======= ======= Diluted: Revenue earnings per share 2.28p 4.12p 8.01p Capital earnings per share 91.02p 150.86p 273.64p ------ ------- ------- Total earnings per share 93.30p 154.98p 281.65p ====== ======= ======= Net asset value per share - undiluted* 850.93p 670.54p 804.13p Net asset value per share - diluted* 837.28p 640.15p 752.28p Share price 710.50p 570.00p 655.00p Warrant price 160.50p 114.00p 175.00p * Excludes 14,492,800 ordinary shares bought back and held in treasury. The diluted net asset value per share of 837.28p at 30 June 2008 has been calculated by adjusting equity shareholders' funds for consideration receivable on the exercise of 8,947,605 warrants at an exercise price of 565p per share and dividing by the total number of shares that would have been in issue had all the warrants at 30 June 2008 been exercised. The calculation of the diluted revenue and capital returns per ordinary share is carried out in accordance with International Accounting Standard 33. For the purposes of calculating diluted revenue and capital returns per ordinary share, the number of ordinary shares is the weighted average used in the basic calculation plus the number of ordinary shares deemed to be issued (for no consideration) on exercise of all warrants by reference to the average price of the ordinary shares during the period. 7. Share capital Ordinary Treasury shares shares number number Total (nominal) (nominal) shares £'000 Authorised share capital: Ordinary shares of 5p each At 1 January 2008 157,700,479 14,442,800 172,143,279 8,607 Shares transferred into treasury (50,000) 50,000 - - Ordinary shares issued as a result of warrants exercised 20,867,250 - 20,867,250 1,043 ----------- ---------- ----------- ----- At 30 June 2008 178,517,729 14,492,800 193,010,529 9,650 =========== ========== =========== ===== During the period, 20,867,250 warrants were exercised for a total consideration of £99,745,000. On 4 April 2008, 50,000 ordinary shares were bought back and held in treasury for a total consideration of £330,000. 8. Distributable status of capital reserve The Institute of Chartered Accountants in England and Wales has issued guidance (TECH 01/08) stating that profits arising out of a change in fair value of assets, recognised in accordance with Accounting Standards, may be distributed, provided the relevant assets can be readily converted into cash. Securities listed on a recognised stock exchange are generally regarded as being readily convertible into cash and hence unrealised profits less losses amounting to £864,763,000 at 30 June 2008 (six months ended 30 June 2007: £639,877,000; year ended 31 December 2007: £772,757,000) included within "capital reserves", may be regarded as distributable. However, under the terms of the Company's Articles of Association, sums within "capital reserves" are available for distribution only by way of redemption or purchase of any of the Company's own shares. In addition, in order to maintain investment trust status, the Company may only distribute accumulated "realised" profits by way of dividends. 9. Contingent asset On 5 November 2007, the European Court of Justice ruled that management fees should be exempt from VAT. HMRC has announced its intention not to appeal this decision to the UK VAT Tribunal. The VAT cost suffered by the Company in relation to management fees invoiced since launch is estimated at £3 million The Board is currently in discussions with the Investment Manager to quantify any potential repayment that might be due. However, the amounts to be refunded and the time scale for receipt are uncertain and hence the Company has made no provision in these half yearly financial statements for any such repayment. 10. 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 2008 and 2007 has not been audited. The information for the year ended 31 December 2007 has been extracted from the latest published audited financial statements, which have been filed with the Registrar of Companies. The report of the auditors on those accounts contained no qualification or statement under section 498(2) or (3) of the Companies Act 2006. 11. Annual results The Board expects to announce the annual results for the year ended 31 December 2008 in mid February 2009. Copies of the preliminary announcement can be obtained from the Secretary on 020 7743 3000. The annual report should be available by the end of February, with the Annual General Meeting being held in April 2009. 12. Copies of the half yearly financial report will be posted to shareholders on 22 August 2008. Copies will also be available to the public from the Company's registered office at 33 King William Street, London EC4R 9AS and on BlackRock Investment Management's website at www.blackrock.co.uk/its. 14 August 2008 33 King William Street London EC4R 9AS Independent Review Report to BlackRock World Mining Trust plc Introduction We have been engaged by the Company to review the condensed set of financial statements in the half yearly financial report for the six month period ended 30 June 2008 which comprises the Consolidated Income Statement, Consolidated Statement of Changes in Equity, Consolidated Balance Sheet, Consolidated Cash Flow Statement, Reconciliation of Net Income before Tax to Net Cash Flow from Operating Activities, and the related notes. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the condensed set of financial statements. This report is made solely to the Company in accordance with guidance contained in ISRE 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed. Directors' responsibilities The half yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half yearly financial report in accordance with the Listing Rules of the Financial Services Authority. As disclosed in note 1, the annual financial statements of the Company are prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union. The condensed set of financial statements included in this half yearly financial report has been prepared in accordance with the Accounting Standards Board Statement "Half Yearly Financial Reports". Our responsibility Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half yearly financial report based on our review. Scope of review We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters and applying analytical and other review procedures. A review is substantially less in scope than an audit performed in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Review conclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half yearly financial report for the six month period ended 30 June 2008 is not prepared, in all material respects, in accordance with the Accounting Standards Board Statement "Half Yearly Financial Reports" and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority. Ernst & Young LLP London 14 August 2008

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