Their 2017 annual report went up overnight -...

Their 2017 annual report went up overnight - https://www.blackrock.com/uk/indivi...rock-world-mining-trust-plc-annual-report.pdf


The flagship base metal, copper, continued its upward
momentum in 2017 increasing by 30.5% year-on-year. Supply
side disruptions dominated the market during the first half of
the year, resulting in the first fall in mined copper output for
many years. While we see production growth returning, which
should result in a broadly stable copper market in 2018, this
year sees the last of the copper megaprojects being
commissioned that were committed to during the previous
cycle. The supply-driven copper deficit which has been ‘three
years away’ for much of the past five years, is now only 18-24
months away from impact. The Company has 20.2% of the
portfolio exposed to pure play copper producers (a
combination of debt and equity), seeing it well positioned to
benefit from a tightening in the copper market over the
medium-term. Our copper exposed equities were among the
strongest contributors to relative performance during the year,
led by our royalty and equity position in Avanco Resources, as
well as the Company’s holding in Sociedad Minera Cerro Verde
(3.8% of the portfolio) which successfully ramped-up its Cerro
Verde mine during the year and Glencore targeting 25% growth
in copper between 2018 and 2020 as it ramps-up its Katanga
operations in the Democratic Republic of Congo.

Royalties and illiquid investments

The Company currently has one unquoted investment, the
Avanco Royalty contract, representing 2.1% of the portfolio as
at the year end. This, and any future investments, will be
managed in line with the guidelines set by the Board as
outlined to shareholders in this Annual Report.

Avanco royalty contract

In October 2013, the Company signed a non-binding
memorandum of understanding with Avanco Resources for a
contractual royalty covering its exploration licenses within the
world-class mineral district of Carajas in Brazil. A binding
royalty agreement was subsequently signed in July 2014 in
which the Company committed US$12 million in return for 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 their Antas North and Pedra Branca (Stage 1
and Stage 2) licenses. In addition, there will be a flat 2%
royalty over all metals produced from any other discoveries
within Avanco’s license area as at the time of the agreement.
In its second year of operation, the Antas mine has continued
to perform well exceeding the upper end of production
guidance for both copper and gold of 14,000 tonnes and
10,500 ounces respectively. While operating costs have
increased modestly, largely driven by the strengthening of the
Brazilian currency, the additional production and higher
copper price has resulted in better than expected royalty
payments which totalled US$3.1 million in 2017. As Avanco
continues to build cash, exploration spend is being selectively
increased with some exciting results around the existing Antas
mine which has the potential to add life to the existing
operation. We await results of the recent drilling programme at
Antas which are due out early in 2018.

Avanco continues to progress its second and larger copper
project Pedra Branca. As noted in the Interim Report, an
updated pre-feasibility study on the project was released in
May 2017, with the Pedra Branca East orebody expected to
support 24ktpa copper and 16kozpa gold, and the Pedra
Branca West deposit adding an additional 10ktpa copper at a
later time. The box cut and portal for the mine are already
established, with the decline to begin in early 2018. Avanco is
in the process of refining the pre-feasibility study to include
new drilling information and project enhancements to further
improve returns. The definitive feasibility study is due to be
completed by the middle of 2018, with the company targeting
first production in mid-2020.

Since making our first payment to Avanco in July 2014, the
Company has paid out a total of US$12 million and received
royalty payments totalling US$5.7 million in the last two years.
Exposure to the royalty combined with the holding of shares in
Avanco was 3.4% at the end of the year. In line with guidance
relating to unquoted investments, exposure to the shares was
reduced during the year.


(My bold...thanks Damo for the link I didn't have time to find)