CQS Natural Resources Growth and Income PLC (the "Company")

Annual Financial Report for the year ended 30 June 2025

 

This announcement contains regulated information

 

The statements below are extracted from the Company's Annual Report for the year ended 30 June 2025 (the "Annual Report"). The Annual Report, which includes the notice of the Company's forthcoming annual general meeting, will be posted to shareholders at the end of October 2025. Members of the public may obtain copies from Frostrow Capital LLP, 25 Southampton Buildings, London WC2A 1AL or from the Company's website at https://ncim.co.uk/cqs-natural-resources-growth-and-income-plc/ where up to date information on the Company, including daily NAV, share prices and fact sheets, can also be found.

 

The Annual Report will be submitted to the Financial Conduct Authority and will shortly be available in full, unedited text for inspection on the National Storage Mechanism (NSM): https://data.fca.org.uk/#/nsm/nationalstoragemechanism

 

 

Our Objective

To provide shareholders with capital growth and income predominantly from a portfolio of mining and resource equities and of mining, resource and industrial fixed interest securities.

 

 

Strategic Report

 

Key Metrics

for the year ended 30 June:

Net asset value total return1	Share price total return1
2025                                          2024	2025                                          2024
4.6%                                          7.2%	9.3%                                          17.1%
MSCI World Metals and Mining Index total return (sterling adjusted)2	MSCI World Energy Index total return (sterling adjusted)2
2025                                          2024	2025                                          2024
(4.5)%                                       7.3%	(7.7)%                                       17.4%
Dividend yield1,3	Dividend per share (pence)
2025                                          2024	2025                                          2024
4.0%                                          3.0%	8.03p                                         6.60p

 

 

 

 

Total return performance (cumulative)

	1 Year	3 Years	5 Years	Since inception*
Net asset value per share	4.6%	16.1%	155.8%	677.8%
Share price	9.3%	27.7%	206.8%	723.6%
MSCI World Metals and Mining Index (sterling adjusted)3	(4.5)%	15.5%	62.5%	457.8%
MSCI World Energy Index (sterling adjusted)3	(7.7)%	18.6%	128.6%	491.4%

 

*    31 July 2003.

 

1   Alternative Performance Measure ("APM"). A glossary of the terms used, including alternative performance measures, can be found on pages 88 to 90 of the Annual Report.

2   Used by the Company as a comparator, not a benchmark. As at 30 June 2025, 72.2% of the portfolio was attributable to the MSCI World Metals and Mining Index and 13.5% of the portfolio to the MSCI World Energy Index. Please refer to the 'by commodity' illustration on page 18 of the Annual Report for further detail.

3   Based on an annualised dividend of 8.03 pence per share (2024: annualised dividend, excluding special dividend, of 5.60 pence per share).

 

 

Performance Record

	Year ended 30 June 2025	Year ended 30 June 2024	Five years ended 30 June 2025
Total Return
Net asset value per share1	4.6%	7.2%	155.8%
Share price (mid market)1	9.3%	17.1%	206.8%
MSCI World Metals and Mining Index (sterling adjusted)2	(4.5)%	7.3%	62.5%
MSCI World Energy Index (sterling adjusted)2	(7.7)%	17.4%	128.6%

 

	As at 30 June 2025	As at 30 June 2024	% change
Capital Values
Net asset value per share1	212.56p	209.44p	1.5%
Share price (mid market)	199.50p	189.00p	5.6%
Share price discount to NAV per share1	6.1%	9.8%
Gearing1	4.8%	10.1%

 

	Year ended 30 June 2025	Year ended 30 June 2024	% change
Revenue Earnings and Dividends
Earnings per share	0.00p	6.39p	(100.0)%
Dividends per share	8.03p	6.60p3	21.7%
Dividend yield1,4	4.0%	3.0%
Ongoing charges ratio1	2.0%	1.9%
1   Alternative Performance Measure ("APM"). A glossary of the terms used, including alternative performance measures, can be found on pages 88 to 90 of the Annual Report. 2   The Company uses the MSCI World Energy Index (sterling adjusted) and MSCI World Metals and Mining Index (sterling adjusted) as comparator indices, not formal benchmarks, for its performance. 3   Including a special interim dividend of 1 penny which was paid on 2 September 2024. 4 Based on an annualised dividend of 8.03 pence per share (2024: annualised dividend, excluding special dividend, of 5.60 pence per share).

 

	Highest	Lowest
Highs and Lows during the year ended 30 June 2025
Net asset value per share	228.95p	176.08p
Share price (mid market)	216.00p	165.75p
Discount (positive = premium)	(14.2)%	2.0%

 

	Dividend per share	Ex-dividend date	Record date	Payment date
Dividend History
Fourth interim dividend 2025	4.25p	31 July 2025	1 August 2025	1 September 2025
Third interim dividend 2025	1.26p	1 May 2025	2 May 2025	30 May 2025
Second interim dividend 2025	1.26p	30 January 2025	31 January 2025	28 February 2025
First interim dividend 2025	1.26p	24 October 2024	25 October 2024	22 November 2024
Total for year ended 30 June 2025	8.03p
Special interim dividend 2024	1.00p	1 August 2024	2 August 2024	2 September 2024
Fourth interim dividend 2024	1.82p	1 August 2024	2 August 2024	2 September 2024
Third interim dividend 2024	1.26p	25 April 2024	26 April 2024	28 May 2024
Second interim dividend 2024	1.26p	25 January 2024	26 January 2024	23 February 2024
First interim dividend 2024	1.26p	26 October 2023	27 October 2023	27 November 2023
Total for year ended 30 June 2024	6.60p

 

 

Chairman's Statement

 

The Company is in good shape to create further value with a clear, uninterrupted pathway for growth. The supportive trends in the natural resources sector provide significant tailwinds for investors. We look forward to our future and thank our shareholders for their support.

 

Overview

Reflecting on the year ended 30 June 2025, my Board colleagues and I are very pleased that the Company can continue with the investment strategy unchanged and with a supportive shareholder base. We, alongside the Investment Manager, believe that the investment strategy can deliver further outperformance relative to the Company's comparator indices, given the flexibility to maximise allocation, and capitalising on the opportunities arising around broader macro trends.

 

Together with the commentary which follows, I would like to draw shareholders' attention to the timeline of events set out on page 7 of the Annual Report which I hope is helpful in aiding an understanding of the events which have developed during the Company's financial year and to date.

 

I invite shareholders to read the Investment Manager's Review for the team's views on your Company's investments, an update on the current position and an outlook for the year ahead and the longer-term future of your Company. However, this overview would not be complete without some observations on the recent performance of your Company.

 

Through an approach of analysing top-down macroeconomic trends, the portfolio managers increased the weighting in precious metals and that has led to very successful results. The uplift in the value of uranium miners has also added to the Company's NAV. This top-down approach, coupled with bottom-up stock analysis, has contributed to another period of outperformance of our comparator indices.

 

At the time of writing, the share price was 266 pence compared with 203 pence immediately after the General Meeting held on 25 June. Further, I am pleased to report that, having traded at a sustained premium, the Company has recently been able to sell, effectively re-issuing, shares from treasury. It is gratifying to see the shareholders who chose to remain invested in the Company rewarded.

 

Shareholder Activity and Strategic Review

During the year, the Board was served with two notices requisitioning general meetings by a major shareholder of the Company, Saba Capital Management, L.P. ("Saba"). The Company duly held a General Meeting in February (the "First General Meeting"), at which Saba's Requisitioned Resolutions were defeated by shareholders and, following constructive discussions with Saba, the second requisition notice was withdrawn.

 

The Board had already undertaken to commence a comprehensive Strategic Review designed to identify a way forward to enhance value for and in the best interests of all shareholders. This was expedited following the First General Meeting and, at the end of May, the Board proposed to offer shareholders a free choice between remaining invested in the Company with value enhancing initiatives, and/or exiting for cash through a Tender Offer.

 

The Tender Offer was approved by shareholders at the General Meeting of the Company held on 25 June 2025 (the "Second General Meeting") and closed on 30 June 2025. A total of 29,334,059 shares, representing 45.72% of the shares in issue (excluding shares held in treasury) were validly tendered. Saba undertook to tender all of the shares it owned, which, at the time, was equivalent to 29.07% of the Company's issued share capital (excluding shares held in treasury).

 

Going forward, the Company and shareholders will benefit from the following value-enhancing initiatives put in place by the Board:

 

●   a reduction of investment management fee, backdated with effect from 1 May 2025 to a flat 1 per cent. per annum of the NAV of the Company (a 20 basis point reduction on the previous highest tier of fee);

 

●   the adoption of an enhanced annual dividend of circa 8 per cent. of NAV via a quarterly dividend policy of 2 per cent. of the preceding quarter-end NAV per share using capital reserves as necessary and without any alteration to the current investment strategy; and

 

●   in order to provide shareholders who remain invested in the Company after the Tender Offer with a period of stability, a postponement of the next continuation vote until the AGM to be held in 2028 and biennial continuation votes thereafter, in accordance with good governance standards and as approved by shareholders at the Second General Meeting.

 

In addition, to further provide stability, the Board obtained agreement that the Investment Manager would not serve notice on the Investment Management Agreement other than for cause and entered into a Standstill Agreement with Saba until the conclusion of the 2028 AGM, committing that Saba will not requisition a general meeting or seek to remove the directors.

 

I invite you to refer to the circulars published by the Company on both 28 May and 7 January 2025 which can be found on the Company's website and provide far greater detail than I am able to within these few pages.

 

Performance, discount and gearing

During the year to 30 June 2025, the Company's net asset value ("NAV") total return per share returned 4.6%, outperforming the total return of (4.5)% of its performance comparator, the MSCI World Metals and Mining Index (sterling adjusted), to which 72.2% of the Company's portfolio (as at 30 June 2025) can be attributed. The Company similarly outperformed the total return of (7.7)% of the MSCI World Energy Index (sterling adjusted), however, the Company's portfolio has a smaller relative exposure (13.5% as at 30 June 2025) to this performance comparator.

 

As I highlighted in the Half Year Report, although the Company's short-term returns have the potential to be volatile, as explained by the Investment Manager, over the longer term, the Company's NAV per share total return has been an impressive 155.8% for the five years to 30 June 2025, compared with total returns of 62.5% for the MSCI World Metals and Mining Index (sterling adjusted) and 128.6% for the MSCI World Energy Index (sterling adjusted).

 

The Company's share price total return over the year was 9.3%, while the share price increased from 189 pence on 1 July 2024 to 199.5 pence as at 30 June 2025. As at 30 June 2025 the discount to NAV was 6.1%. Over the year the discount averaged 8%, compared with 15% over the course of the previous financial year.

 

During the year, the Company bought back a total of 2,002,114 shares into treasury at a cost of £3.6 million and at an average discount of 11.2%. The resulting NAV accretion was 0.4%. The Company's discount narrowed since the Company started buying back shares in April 2024, but also as Saba reported increases in its shareholding in the Company towards the end of the 2024 calendar year. The Company has not repurchased any of its own shares, other than under the Tender Offer, since 31 October 2024. As at 30 June 2025, the Company had 64,157,838 shares in issue (excluding 2,730,671 shares held in treasury).

 

The Company's £25 million credit facility with Scotiabank expired after a one-year term on 13 September 2024 and, following the Board's review of alternative credit facility providers, the Company entered into a two-year agreement with BNP Paribas for the provision of a £25 million secured revolving credit facility. On 11 September 2025, the Board met to consider the reduction of the Company's loan facility and determined to voluntarily decrease the facility limit from £25 million to £15 million to reflect the reduced size of the Company, following the Tender Offer. Further detail can be found within Note 12 to the Financial Statements.

 

Continued market volatility and several months of uncertainty for the Company as a result of the Strategic Review led the Investment Manager to reduce gearing over the year from 10.1% at the start of the year to 4.8% as at the year end. As at 30 June 2025, £9 million had been drawn down from this facility (30 June 2024: £17 million). As at the date of this report, £11.5 million has been drawn down.

 

Dividends and income

As I wrote following the six month reporting period to 31 December 2024, the Income Statement on page 66 of the Annual Report and Note 2 to the Financial Statements reports an overall reduction in income from investments during the year. This continues to be due to a conscious repositioning of the portfolio by the Investment Manager in leading a total return investment strategy, in anticipation of continued market turbulence. As shown by the 'by commodity' illustration on page 18 of the Annual Report, the Company's exposure to high-yielding shipping stocks was reduced by 16% between 30 June 2024 and 30 June 2025 and exposure to precious metals, which are typically lower yielding, was increased by 55% in the same period. Whilst having a positive effect on capital returns during the period, this inevitably created the reduction in income.

 

Your Company has paid four interim dividends totalling 8.03 pence per share in respect of the year. This compares with 6.60 pence per share paid in respect of the year ended 30 June 2024. Please see the following 'Post reporting period update' section for further detail in respect of changes to the Company's dividend policy.

 

Post reporting period update

A dividend of 4.25 pence per share was declared on 15 July and paid on 1 September to shareholders on the register on 1 August. Whilst this was the fourth interim dividend in respect of the year ended 30 June 2025, it was the first declared following the adoption of the enhanced dividend strategy announced as part of the value-enhancing initiatives put in place by the Board during the year and based on 2 per cent of the preceding quarter-end NAV per share. We know that many of the Company's shareholders already reinvest their dividends, however, we remind shareholders who hold their shares on retail investment platforms that many platforms offer customers the ability to automatically reinvest dividends.

 

Following the year end, your Company has experienced further share price growth of 33.3% with the share price reaching 266 pence at the time of writing (market close on 24 October). This has primarily been driven by strong performance in precious metals sector and the catch up of precious metals miners, and the Company's large weighting to the sector.

 

On 29 September, the Company's share price had consistently traded at a premium to its NAV and the Board took the decision to sell shares out of treasury. Since then, a total of 265,000 shares have been sold from treasury at an average price of 314.75 pence per share and at a premium of at least 2.0% to NAV.

 

The Board is conscious that, having issued shares at a premium to net asset value, the Company's shares should not trade at too wide of a discount to their NAV. Bearing in mind the underlying volatility of the markets in which the Company invests, the Board has determined to use share buybacks with the aim of maintaining a single digit discount to the Company's NAV per share in normal market conditions.

 

As announced by the Company separately, on 1 October Cavendish purchased, as principal, 29,334,059 shares validly tendered under the Tender Offer at the Tender Price of 208.33 pence per share. Cavendish then sold these shares back to the Company and 8,800,000 of the shares tendered were retained to be held in treasury and the remainder cancelled. As at 24 October, the latest practicable date prior to the publication of this Report, the Company's issued share capital (excluding shares held in treasury) comprised 46,354,450 shares, with 11,265,671 held in treasury and able to be re-issued.

 

Board of Directors

In August 2024, we were pleased to welcome Louise Hall and Seema Paterson to the Board ahead of the retirement of two long-standing and dedicated non-executive directors, Alun Evans and Helen Green, at the 2024 AGM. These changes resulted in my succession to the role of Chairman of the Board and Seema's succession to the role of Chair of the Audit Committee.

 

Shareholders may note that both Carole Cable and I have recently entered our ninth year of tenure having been non-executive directors of your Company since October 2017. Carole and I will both seek re-appointment by shareholders at the AGM in December, however, it is the current intention that Carole will retire at the conclusion of the AGM to be held in 2026, in-line with best practice corporate governance. Carole's contribution to the Board throughout her tenure has been admirable, but especially so during the course of this year in using the depth of her expertise to guide the Board and the Company's advisers to ensure the best possible communication and engagement with shareholders in difficult circumstances.

 

Following in-depth consideration of succession planning by the Nomination Committee, it is currently the intention that I shall continue to serve as Chairman until the conclusion of the AGM to be held in 2027, following which I shall retire. The Nomination Committee assessed the impact of the simultaneous retirement of both Carole and me following respective nine year tenures and concluded that this staggered retirement would be in the interests of orderly succession and facilitate continuity and stability of the Board. The Nomination Committee do not consider that my serving on the Board for more than nine years from the date of first appointment impacts my independence as a non-executive director. Further, given the events over the second half of the financial year, it is highly appropriate to have stability and continuity within your Board to deliver on the Company's strategy. Despite this anticipated delay to my expected retirement, succession planning efforts will continue to be a priority for the Nomination Committee, capably led by Paul Cahill.

 

The Board is proposing to increase the maximum aggregate amount potentially payable to Directors by way of fees for their services as Directors under Article 80 from £200,000 to £250,000 in any financial year. This proposed limit increase is not due to any unusual rise in Directors' fees, which are expected to be approximately £182,000 in the current financial year (excluding any expenses to be claimed), but to provide flexibility in the timing of future board recruitment and in order to ensure that the levels of remuneration continue to be sufficient to attract and retain directors of the Company.

 

Annual General Meeting ("AGM")

The business of the AGM is summarised in the Directors' Report on pages 43 and 44 of the Annual Report and the Notice of Meeting beginning on page 91 of the Annual Report. The AGM will be held at One Fleet Street Place, London, EC4M 7RA at 12 noon on Tuesday, 9 December 2025.

 

As mentioned earlier, the Board will not propose an annual continuation vote at this year's AGM. While the continuation vote at each AGM was not enshrined in the Company's articles, it had been a firm commitment from the Board since 2003, and an ordinary resolution to effect the change of policy for future continuation votes was approved by shareholders at the General Meeting held on 25 June. The Board believes that a biennial continuation vote following the AGM to be held in 2028 strikes a better balance between the ability of shareholders to discontinue the Company, which the Board considers an important feature, and the longer investment cycle over which performance and prospects should be judged given the cyclicality of the underlying investments in the natural resources sector.

 

As well as the formal proceedings, this will be an opportunity to meet the Board and to receive a presentation from our portfolio managers and we hope as many shareholders as possible will attend. Shareholders can submit questions in advance by writing to the Company Secretary, Frostrow Capital LLP ("Frostrow"), at cosec@frostrow.com.

 

The Board encourages all shareholders to exercise their right to vote at the AGM and, where possible, to do so in respect of the meeting online in advance. Registering your vote in advance will not restrict you from attending and voting at the meeting in person should you wish to do so.

 

The Board recommends that shareholders vote in favour of all resolutions as each of the Directors intends to do in respect of their own shares.

 

Outlook

As our portfolio managers highlight in their review, the environment in which the Company invests remains subject to ongoing global macroeconomic uncertainty. However, the portfolio managers continue to keep investment allocation keenly under review and we share their optimism for future opportunities.

Amid persistent global economic uncertainty and rising government debt, the Company maintains a high allocation to undervalued precious metals equities, which continue to offer attractive fundamentals, despite recent volatility. Through active fund management, the team has taken profits in outperforming names and rotated into laggards to manage risk and capture value. Looking ahead, concerns over currency debasement and long-term demand for real assets - driven by themes such as energy security, decarbonisation, and AI infrastructure - are expected to support broader investor interest in commodities.

 

I must also inform shareholders that Ian "Franco" Francis will step away from his role as co-portfolio manager of the Company with effect from 28 October. My Board colleagues and I would like to thank Franco for his greatly valued expertise and contribution to the Company's performance over many years. We have full confidence in the ability of Robert Crayfourd and Keith Watson to manage the Company's investments and deliver out-performance against comparator indicies. Further detail can be found within the Investment Manager's Review.

 

I would like to extend our sincere thanks to shareholders for their continuing support of the Board, the Company and its Investment Manager during what has been an unusual and challenging year, and we look forward to seeing you at the forthcoming AGM.

 

Christopher Casey

Chairman

27 October 2025

 

Capitalised terms not otherwise defined in this Report have the meaning given to them in the circulars published by the Company on 7 January and 28 May 2025.

 

 

Investment Manager's Review

 

"The Company's large weighting to gold continues to drive performance"

 

Performance

The net asset value in total return terms was a positive 4.6% for the financial year to 30 June 2025, one that proved particularly turbulent. Encouragingly, this return has also been achieved against a headwind of sterling strength, with the pound having risen nearly 9% against the US dollar. This full year gain compares with sterling adjusted returns of (4.5)% and (7.7)% for the MSCI World Metals and Mining and MSCI World Energy indices, respectively.

 

Outperformance has primarily been led by the Company's large precious metals weighting (47% as at the year end), whilst a bounce back in uranium miners as we approached the Company's year end, after a bout of weakness, has also helped the Company's performance. In comparison, industrial base metals and iron ore have been weak, as have oil prices. These commodities have continued to struggle as a result of a still relatively muted demand growth outlook and in the case of energy, a shift in OPEC+ strategy targeting market share.

 

After the encouraging performance over the year, we believe the portfolio's fundamental positioning can sustain further momentum. Indeed, at the time of writing, since the financial year end, the Company has achieved 49.2% NAV total return while sterling adjusted returns for the MSCI World Metals and Mining and MSCI World Energy indices stand at 31.5% and 6.2% respectively.

 

While precious metals made the most significant contribution to the Company's returns, the performance of individual precious metal stocks has been somewhat disjointed, and as a result, provided attractive investment opportunities. Of note, having reduced holdings in gold producer, Emerald Resources, in 2024 after significant growth in performance, the Company rebuilt its position in the period under review following a substantial derating and this proved to be the right decision. The position in gold producer, Ora Banda, whose share price had outperformed the precious metal sector into calendar Q4 2024 was reduced ahead of some slower-than-expected progress in its underground development. Similarly, the position in producer, Greatland Gold, was pared back as has the holding in explorer, Collective Mining. Proceeds from such sales were reinvested, with positions taken in developer, Polymetals, which will produce significant quantities of silver from its mine restart, and explorers, Goliath Minerals and Southern Cross Gold, which both appear to be well positioned to delineate large-scale, high grade gold resources in Canda and Australia respectively.

 

One of the more significant detractors to the Company's returns was its exposure to lithium, principally via the holding in Sigma Lithium. While significantly reducing the allocation to this sector some time ago, a residual position was retained given Sigma's growth potential and industry leading economics. A sharp fall in lithium prices and equity derating across the sector has acted as a drag to the Company's performance. A supply correction appears to be underway and, to this end, some modest increase in the Sigma position took place early in the financial year although we have yet to see improvement in the underlying lithium price or indeed the share price.

 

Elsewhere, the Company has also topped up its position in Tamboran Resources, which has more recently consolidated its land position in the highly prospective Beetaloo gas field in Australia, which has the potential to exceed the Marcelus in its scale at more advantageous prices. Though some patience will be required, with its pre-eminent strategic position in this region the stock has the potential to grow into an E&P major, representing an extremely attractive risk/reward investment.

 

Portfolio Allocation

The portfolio positioning has remained much the same over our fiscal year. With currency devaluation increasingly coming under scrutiny, reflecting strained government borrowing requirements from a position of already extended indebtedness, and a backdrop of muted underlying economic growth, the Company's portfolio remains weighted towards precious metals. President Trump's "Big Beautiful Bill" ("BBB") is only the latest example of government spending which has focused attention on the value of currencies. Unfortunately, many other economies are in a similar boat. The "weaponisation" of the US dollar has been another significant contributor to its recent softness. These factors continue to underpin central banks' continued buying. In such an environment, and with equity valuations remaining near historic lows, precious metals remains the highest sector exposure for the Company. This is highlighted in the chart on page 12 of the Annual Report.

 

Exposure Trend

Adjusting for the acceleration of trade in an effort to beat incoming tariffs, underlying aggregate growth remains muted. In China, stimulus measures are being targeted selectively at consumers and productivity improvements rather than the struggling commodity-consuming property sector, which remains in the doldrums. Though the longer-term prospects for metals such as copper is positive, the near-term outlook warrants some caution, particularly given significant pre-emptive inventory building.

 

Furthermore, though the aggressive tariffs proposed by President Trump earlier in the calendar year were briefly watered down, they have since been reapplied and the underlying economic impact has yet to be felt. This uncertainty will continue to apply pressure on inflation, aggregate demand and industrial growth, which remain largely muted, with pockets of considerable weakness in regions such as Europe.

 

In light of factors such as pre-tariff stockpiling, which we expect to dampen demand in the near-term, together with the less attractive valuation of industrial metal miners, the Company's exposure to industrial metal producers remains relatively low.

 

Macro Position

President Trump's "liberation day" on 2 April, in which he stated the US would look to apply tariffs to the majority of its global trading partners, upended global markets, with the scale of threatened tariffs a shock when compared with market expectations. Global markets responded poorly, bottoming out on 8 April, before rebounding strongly. Behind this recovery, market perceptions adjusted to anticipate a dial-back in the overly aggressive tariff rates whilst significant front-loading of imports also played a role in disguising the impact of tariffs on the real economy.

 

Ultimately, these tariffs are a consumer tax that will be passed directly through to the US consumer and show via reduced consumption or inflation or a mix of the two. Perhaps more telling is the fact that despite the recovery in broader US equity markets, such as the S&P which has since reached new highs, in many non-US dollar currencies, US investments remain lower than at the start of the calendar year, testament to the impact of recent US dollar weakness. This may have repercussions with respect to previous momentum driven investment styles with the more recent focus on the currencies' worth potentially seeing more meaningful allocation into the commodity asset class more broadly and particularly into gold.

 

On the back of this uncertainty, precious metals have been the standout performer over the most recent six-month period, with gold and silver up 26% and 25%, respectively, benefiting the Company's large exposure to this equity sector.

 

Elsewhere, crude markets have been softer over the period, with benchmark prices falling 8%. The combination of weak global demand growth and OPEC shifting back to a market share over price protection strategy weighed on the oil price. The Company has a much reduced energy weighting, with the energy exposure more weighted to gas, limiting any impact from the oil move to performance.

 

US debt sustainability remains a keen focus behind the Company's portfolio allocation, though, as ever, the timing of any potential shift to this remains uncertain. While a rate reduction cycle appears likely, as the delayed impact of tariffs weighs, the pace of reduction is hindered by stubbornly high inflation. With President Trump's policies deterring foreign buyers of US assets combining with a demographic risk from an approaching peak in US boomers' savings, the pool of buyers for Treasuries creates a difficult backdrop for authorities to continue running a $2-3trn/yr deficit.

 

With this backdrop, we still believe gold remains one of, if not the most attractive asset classes. While understood by Central Banks who have been the primary drivers of demand and prices that have repeatedly made new highs over the last 12 months, financial market investors have largely been on the sidelines, adding only 7 million oz since February. While central banks are likely to remain solid buyers of gold, uncertainty around government debt sustainability may drive more financial market demand over the coming quarters.

 

Our other investment themes remain similarly intact from last year. Notably, AI and the huge spend by the world's largest tech companies continues to support investment in clean energy including nuclear power. While subsidies are increasingly under threat for intermittent renewable energy, primarily wind and solar, there has been a huge drive to roll out nuclear power, where the key positive remains its ability to generate carbon free base load generating ability. Recent power purchase agreements by large tech companies, bear testament to the resurgence in demand for fuel, which remains in deficit. Though uranium prices retreated from 2024 highs of over $100/lb, the outlook continues to improve with nations globally setting targets to triple generating capacity by 2050. China continues to roll out new reactors at a rate of c.10 a year in an effort to raise the sector's share of generating capacity from on 5% currently (versus 20% in established markets such as the US and Europe).

 

Meanwhile, following the burst of buying activity around 18 months ago, utilities have been dormant and with inventories now approaching critically low levels, there is an increasing risk that they will once again enter the market, which may sustain the performance of related equities which have latterly contributed to performance. Gas will also remain an important factor in the growth of tech-led energy demand and this, along with shipping, remains the most important exposure in the fossil sector allocation for the Company.

 

The Company has also begun to selectively add back lithium investments following the sharp correction in commodity prices and equity valuations.

 

Investment Management Team

Manulife | CQS Investment Management have been the Company's Investment Manager since 2007. Ian "Franco" Francis, the chief investment officer for the four investment companies managed by Manulife | CQS, has been a part of the investment management team since 2007 and has been responsible for the fixed interest, convertible and preferred stock investments in the portfolio.

 

The Company is now following a total return strategy with an increased dividend, which is being funded, in part, from capital growth and, as a result, the proportion of non-equity investments has reduced and is currently only 2.3% of the portfolio. Manulife | CQS have therefore agreed with the Board of Directors that Franco will step down from the Company's investment management team from 28 October to concentrate on his other fixed interest portfolio management clients. Robert Crayfourd and Keith Watson will continue as joint portfolio managers with day-to-day responsibility for managing the Company's portfolio.

 

Outlook

At time of writing, aggregate global economic growth remains elusive while underlying activity is potentially flattered by inventory building, a pre-emptive effort to smooth out the effects of US trade policies. With little to suggest an end is in sight for fractious international trade, which is acting as a considerable drag to economies, the sustainability of growing government indebtedness has moved rapidly into focus. In such an environment a high weighting to precious metals equities continues to appear appropriate, particularly as they have yet to fully appreciate the move up in underlying metal prices and they remain near historically low valuations. In this context, despite their recent strong performance, precious metal equities remain the largest sector allocation in the Company's portfolio. This remains the case despite significant recent sector volatility. To mitigate against the effect on performance from such volatility, the Company, during the latest run in prices, exited some positions such as Wheaton Precious Metals and also rotated from outperforming stocks, such as Equinox and Ora Banda, into laggards. Importantly, despite the recent volatility, there is little to suggest any fundamental change to the reasons for increasing investor allocations towards under-owned gold and the prospect of sector inflows, particularly via equities which remain attractively valued.

 

Outside of this safe-haven asset class, thematics behind the global nuclear renaissance remain supportive for continued investment which is reflected by holdings in Tier One developers such as NexGen.

 

Elsewhere, while distortions from stockpiling may still be propping up industrial commodity prices, related premium equity valuations are not sufficiently attractive to warrant more meaningful asset reallocation in the near-term. As a result, it appears prudent to wait for better opportunities to rebalance towards these sectors. This is the case for base metals such as copper, where the modest portfolio exposure is primarily directed at early-stage development assets that have the potential to deliver metal in the future.

 

The same is also true of traditional energy markets. Typically, a lead indicator on broader economic growth and at the forefront of the current geopolitics, crude oil markets are still absorbing a reversal in OPEC+ strategy towards volume over value, while China's strategic stockpiling is acting to support prices. Natural gas markets are also dealing with more recent expansion in production and export capacity from North America and production increases in the Middle East. On the related energy equities side, this situation has yet to be fully discounted. Natural gas (and nuclear as mentioned above) remains a favoured sector as a cleaner stopgap method of delivering power over the medium-term and longer term respectively, to replace coal fired power.

 

Looking ahead, we believe the fear of currency debasement, due to over indebted governments forced to allow inflation to run higher than they would otherwise tolerate via currency devaluation, will be a defining factor of the next decade. This is supportive for all real assets and a key driver of the recent strength in gold. Although current sentiment for the resources sector as a whole remains muted, growing demand for key commodities leveraged to economic growth, energy security, decarbonisation and the growth in AI data centres, will underpin the sector given expected future supply deficits. We believe this should support a broader reallocation of assets within generalist investor portfolios as they take advantage of these mega trends and will provide a tailwind to valuations beyond current attractive fundamentals. We will continue to identify smaller and emerging commodity specific cycles within this longer term thematic, with our key focus on creating value. The active allocation within the portfolio provides the flexibility to act on opportunities and we are watching carefully for the right time to shift the current high precious metal weighting into the likes of oil and copper when valuations are sufficiently depressed.

 

Ian (Franco) Francis, Keith Watson and Robert Crayfourd

Manulife | CQS Investment Management
27 October 2025

 

Top ten largest holdings

as at 30 June 2025

 

NexGen Energy

(8.2% of investments)

A tier 1 uranium development asset in the established Athabasca Basin uranium mining district in Saskatchewan, Canada, has the potential to be the lowest cost uranium mine globally. As a zero-carbon source of energy, civil nuclear power generation and hence uranium, may gain further traction in global energy mix.

 

£'000

▼

(530)

Fair value losses

 

Sales

-

 

Purchases

1,384

 

2024        10,874

2025        11,728

 

Emerald Resources

(5.7% of investments)

An Australian listed gold producer, with a producing mine in Cambodia and development asset in Australia. The company has successfully commissioned its low cost Okvau gold mine in Cambodia on time and budget. This strong management team has a long history of delivering mines on time and budget and are self-funded for the future growth profile.

 

£'000

▲

59

Fair value gains

 

Sales

(372)

 

Purchases

716

 

2024        7,750

2025        8,153

 

Greatland Gold

(4.9% of investments) (new investment in 2025)

The Company operates the Telfer gold mine, one of Australia's largest gold-copper mining complexes and is concurrently developing the nearby world-class Havieron gold-copper project and exploring across a significant regional portfolio.

 

£'000

▲

4,867

Fair value gains

 

Sales

(500)

 

Purchases

2,704

 

2024        -

2025        7,071

 

West African Resources

(4.5% of investments)

An Australian listed emerging mid-tier gold producer based in the West African region. The company acquires, explores and develops resource projects, and serves customers in West Africa and Australia.

 

£'000

▲

1,713

Fair value gains

 

Sales

(1,509)

 

Purchases

341

 

2024        5,941

2025        6,486

 

Frontline

(3.8% of investments)

A leading listed seaborne transporter of crude oil and refined products. The company owns and operates one of the largest and most modern fleets in the industry, consisting of VLCCs, Suezmax tankers and LR2 / Aframax tankers. Due to Frontline's brand, financial flexibility and significant scale, it holds a unique position among its peers.

 

£'000

▼

(2,101)

Fair value losses

 

Sales

(2,538)

 

Purchases

4,138

 

2024        5,902

2025        5,401

 

REA Holdings

(3.5% of investments)

A leading contributor to responsible palm oil production globally. REA has a commitment to produce sustainably and has also received Roundtable on Sustainable Palm Oil certification. Following substantial cost cutting measures the group is well placed to benefit from the recent recovery in the crude palm oil price.

 

£'000

▲

546

Fair value gains

 

Sales

(145)

 

Purchases

-

 

2024        4,681

2025        5,082

 

Ora Banda Mining

(3.5% of investments)

An Australian gold exploration and development company, with 100% ownership of the Davyhurst Gold Project in the highly productive eastern goldfields region of Western Australia.

 

£'000

▲

4,778

Fair value gains

 

Sales

(3,780)

 

Purchases

-

 

2024        3,948

2025        4,946

 

Southern Cross Gold

(3.4% of investments) (new investment in 2025)

An Australian gold exploration company with projects including Sunday Creek, Redcastle and MT ISA. The Company owns 100% of Sunday Creek epizonal-style gold project in Australia which is considered to be the best new high grade and large exploration discoveries to come out of Australia in recent times. The Company is also engaged exploring in antimony in the Victorian Goldfields.

 

£'000

▲

3,705

Fair value gains

 

Sales

-

 

Purchases

1,102

 

 

2024        -

2025        4,807

 

BW LPG

(3.3% of investments)

The world's largest independent LPG shipper, predominantly sending propane from the US and Middle East to Asia. Propane is a by-product of shale production, so benefits from increased activity in the US. Napha switching at refiners and displacing wood for propane as fuel in the likes of India are major drivers of demand growth. The company has a strong capital returns policy, primarily through dividends.

 

£'000

▼

(2,659)

Fair value losses

 

Sales

(930)

 

Purchases

1,402

 

2024        6,876

2025        4,689

 

Tamboran Resources

(3.2% of investments)

A US listed natural gas exploration and production company, which specialises in the transition to cleaner energy and supports the energy transition by developing commercial production of natural gas and net zero equity scope 1 and 2 emissions. Tamboran Resources conducts its business in Australia.

 

£'000

▼

(542)

Fair value losses

 

Sales

(66)

 

Purchases

-

 

2024        5,171

2025        4,563

 

To see a full breakdown of our investments as at 30 June 2025 see Investment Portfolio

 

 

Portfolio at a glance

 

By commodity

	2025 % of total investments	2024 % of total investments
Precious Metals	44.8%	32.2%
Uranium	14.8%	10.3%
Oil & Gas	13.5%	24.3%
Shipping	7.3%	9.1%
Base Metals*	6.1%	5.3%
Copper	4.4%	3.9%
Fixed Interest Securities	3.9%	3.2%
Rare Earth	2.2%	1.5%
Lithium	1.8%	5.4%
Coal	1.0%	4.0%
Royalty	0.4%	0.5%
Diversified Minerals	-	0.3%
Palm Oil	-	0.1%

 

* Comprises polymetallic investee companies.

 

By location of listing

 

	2025 % of total investments	2024 % of total investments
Canada	35.3%	34.7%
Australia	28.2%	21.3%
US	17.2%	22.3%
UK	12.3%	10.8%
Europe	5.7%	7.6%
Unquoted	1.3%	3.4%

 

 

Investment Portfolio

as at 30 June 2025

 

Company	Sector	Valuation £'000	% of total investments
NexGen Energy	Uranium	11,728	8.2
Emerald Resources	Precious Metals	8,153	5.7
Greatland Gold	Precious Metals	7,071	4.9
West African Resources	Precious Metals	6,486	4.5
Frontline	Shipping	5,401	3.8
REA Holdings1	Fixed interests	5,082	3.5
Ora Banda Mining	Precious Metals	4,946	3.5
Southern Cross Gold	Precious Metals	4,807	3.4
BW LPG	Shipping	4,689	3.3
Tamboran Resources	Oil & Gas	4,563	3.2
Top ten investments		62,926	44.1
Equinox	Precious Metals	4,354	3.0
Ur-Energy	Uranium	4,075	2.8
Wheaton Precious Metals	Precious Metals	3,276	2.3
Transocean	Oil & Gas	3,191	2.2
Robex Resources	Precious Metals	3,102	2.2
Lynas Corporation	Rare Earth	3,090	2.2
Polymetals Resources	Precious Metals	2,750	1.8
Westgold Resources	Precious Metals	2,574	1.7
Peyto Exploration & Development	Oil & Gas	2,493	1.7
Diamondback Energy	Oil & Gas	2,475	1.7
Top twenty investments		94,306	65.7
G Mining	Precious Metals	2,398	1.7
Solaris Resources	Copper	2,264	1.6
Collective Mining	Base Metals	2,185	1.5
Talon Metals	Base Metals	2,112	1.5
Vermilion Energy	Oil & Gas	1,804	1.3
ISOEnergy	Uranium	1,802	1.3
Denison Mines	Uranium	1,751	1.2
TDG Gold	Precious Metals	1,682	1.2
Americas Gold and Silver	Precious Metals	1,664	1.2
Afentra	Oil & Gas	1,607	1.1
Top thirty investments		113,575	79.3
Metals X	Base Metals	1,592	1.1
Paladin Energy	Uranium	1,458	1.0
MAG Silver	Precious Metals	1,422	1.0
Thungela Resources	Coal	1,403	1.0
EOG Resources	Oil & Gas	1,396	1.0
Foran Mining	Base Metals	1,272	0.9
WESDOME Gold Mines	Precious Metals	1,223	0.9
Solgold	Copper	1,094	0.8
Cerrado Gold	Base Metals	1,076	0.8
Sigma Lithium Resources	Lithium	1,043	0.7
Top forty investments		126,554	88.5
Integra Resources	Precious Metals	957	0.7
Leo Lithium	Lithium	932	0.7
True North Copper	Copper	893	0.6
Newcore Gold	Precious Metals	892	0.6
Eldorado Gold	Precious Metals	884	0.6
Osisko Development	Precious Metals	849	0.6
Vizsla Silver	Precious Metals	683	0.5
New World Resources	Copper	680	0.5
Ero Copper	Copper	667	0.5
Greenheart Gold	Precious Metals	624	0.4
Top fifty investments		134,615	94.2
Spartan Delta	Oil & Gas	606	0.4
Central Asia Metals	Copper	603	0.4
Golden Horse Minerals	Precious Metals	561	0.4
CVW Cleantech	Royalty	548	0.3
Patriot Battery Metals	Lithium	518	0.3
Platinum Group Metals	Precious Metals	481	0.3
Shelf Drilling	Oil & Gas	443	0.3
Euronav	Fixed interests	436	0.3
Firefinch	Precious Metals	431	0.3
Ithaca Energy	Oil & Gas	394	0.3
Top sixty investments		139,636	97.5
2020 Bulkers	Shipping	392	0.3
Mawson Finland	Precious Metals	386	0.3
Rupert Resources	Precious Metals	384	0.3
NorAm Drilling	Oil & Gas	356	0.2
Cosa Resources	Uranium	330	0.2
Castile Resources	Base Metals	316	0.2
C3 Metals	Precious Metals	313	0.2
Tharisa	Precious Metals	270	0.2
Silver Mountain Resources	Precious Metals	231	0.2
Odyssey Gold	Precious Metals	163	0.1
Top seventy investments		142,777	99.7
Other investments		489	0.3
Total		143,266	100.0
1   Includes REA Holdings 9% preference shares valued at £4,581,000 (2024: £4,063,000) and REA Finance 8.75% 31/08/2025 valued at £502,000 (2024: £460,000).

 

Further details on the Company's top ten largest holdings within its Investment Portfolio are on pages 15 to 17 of the Annual Report.

 

 

Principal Risks, Uncertainties and Mitigations

Risks are inherent in the investment process and it is important that their nature and magnitude are understood so that they can be identified and can be controlled to the extent possible. The Board is responsible for managing risks faced by the Company and, through delegation to the Audit Committee, has established a detailed framework to manage the key risks to which the business is exposed with associated policies and processes devised to mitigate, to the extent possible, those risks.

 

A risk management process has been established to identify and assess risks, their likelihood and the possible severity of impact. For each risk identified, during the year the Audit Committee considers both the likelihood and impact of the risk and then assigns an inherent risk score. The scoring of the risk is then reconsidered once the respective key mitigations are applied, and a residual risk score is assigned.

 

Principal risks and mitigations are discussed regularly at Audit Committee meetings and the summarised conclusions of such meetings held during the year are set out below.

 

Risk trend and levels

Change in inherent risk assessment over the last financial year:

 

↑    Increasing        →    Stable              ↓    Decreasing

 

Risk and trend	Principal Risks and Uncertainties	Controls and mitigations
Investment and Strategy Risk →	Underperformance of Company resulting in loss of shareholder interest. Inappropriate investment strategy, including country and sector allocation, stock selection and the use of gearing, could lead to poor returns for shareholders. Investment objectives are not met, Company does not perform well against peers/benchmark, internal targets are not met. Loss of shareholder interest could result in widening of discount and diminished ability to issue new shares and grow the Company. Liquidity of the Company's shares in the market would be reduced.	Board and Committees •    The Board has appointed Manulife | CQS as Investment Manager as they have long and deep natural resources knowledge, networks and experience. The portfolio managers understand the global trends of energy transition, digital and economic growth and energy security. The Board receives and reviews the explanation of significant asset selection decisions and the rationale for the composition of the investment portfolio provided by Manulife | CQS at quarterly Board meetings and interim dividend review meetings. •    The Company spreads investment risk over a portfolio of global resource quoted equities and fixed-interest securities and the Board regularly monitors the spread of investments to ensure that it is adequate to minimise the risk associated with specific countries or sectors. •    The Management Engagement Committee reviews Manulife | CQS's appointment and performance annually.   Key Service Providers •    Manulife | CQS has a well-defined investment strategy and process and an investment management contract, which includes safeguards such as provision of service termination, is in place which defines their duties and responsibilities. •    Manulife | CQS produces monthly factsheets, which include an investment commentary. •    Reports and updates on the Company's investment portfolio, including currency exposures, and recent transaction, latest income and expense forecasts are prepared by Manulife | CQS and Frostrow for the Board's review at each quarterly meeting. •    Frostrow produces a monthly compliance report, confirming the Company's compliance with its published Investment Policy and restrictions, or reporting any breaches or issues.
Market, Sector and Geopolitical Risk ↑	By the nature of its investing activities, the Company's portfolio is exposed to fluctuations in market prices (both individual security prices and foreign exchange) and also risks associated with the specific sectors in which its portfolio companies operate, such as inflation, interest rates, commodity and energy prices.   Geopolitical developments and regional conflicts could affect the environment in which the Company operates, resulting in volatilities in prices, foreign exchange rates and interest rates, which can negatively impact the value of the Company's investments and/or demand for its shares.   Excess exposure to any stocks or sectors, geographies or currencies could reduce diversification and lead to unacceptable volatility of returns.	Board and Committees •    The closed-end structure of the Company is an essential part of the Board's management of this risk, ensuring that parts of the portfolio do not have to be sold to raise liquidity to fund redemptions at short notice. •    Limits and restrictions set out in the Company's Investment Policy are intended to mitigate the Company's specific risk exposures. These are reviewed monthly by the Board. •    The Board reviews the Company's performance against comparator indices on an ongoing basis and receives a formal report from Manulife | CQS at quarterly meetings. •    The Board has a regular dialogue with Manulife | CQS to assess the impact of geopolitical events and to evaluate both the risks and opportunities and considers asset allocation and concentration of the portfolio to minimise the risk associated with sector and/or geopolitical exposures.   Key Service Providers •    Geopolitical risk forms part of Manulife | CQS's investment process and decisions and Manulife | CQS reports sector risks arising from the general market and/or specific geopolitical environments to the Board at each quarterly meeting. •    The Company does not hedge against any foreign currency movements, but income received from foreign investee companies is converted into sterling upon receipt. •    Reports and updates on the Company's investment portfolio, including currency exposures and recent transactions, latest income and expense forecasts, as well as a monthly compliance report, confirming the Company's compliance with its published Investment Policy and restrictions, or reporting any breaches or issues are prepared by Manulife | CQS and Frostrow for the Board's review regularly and at each quarterly meeting.
Widening discount to NAV ↓	Demand for shares in the Company declines due to failure to promote the Company, meet investors' objectives, poor investment performance, and/or poor communication with shareholders (including information published on the Company's website), resulting in falling share price and widening of discount, threat from arbitrageurs and/or reputational damage. This risk is heightened by persistent wide discounts to NAV per share in the investment trust sector.	Board and Committees •    During the year the Company offered shareholders a free choice between remaining invested in the Company with value enhancing initiatives, and/or exiting for cash through the Tender Offer. •    The enhancement of dividends to circa 8% p.a. aims to reach an even wider potential investor base by making the Company's shares more attractive. •    The Board monitors the share price, and any signs of demand reduction are discussed, and actions are taken, including buying back the Company's shares. •    Periodically the Board holds a strategy meeting to review the investment objectives and strategy, and action identified to support demand for the shares. •    The Board has appointed an investment research firm to provide independent research for retail shareholders to support demand. •    The Board receives regular feedback on key service providers' interactions with investors. Shareholder registers and key shareholder activities are provided to and reviewed by the Board at quarterly meetings with negative trends identified. The Company has entered into a Standstill Agreement with Saba until the conclusion of the 2028 AGM. •    The Company offers shareholders a continuation vote every two years (the next vote being postponed to the AGM in 2028. Please refer to the Chairman's Statement for further details.
		Key Service Providers •    Manulife | CQS regularly meets with investors to discuss their objectives to make sure the Company's objectives remain appropriate and some of those meetings are attended by the Chair of the Board. •    A range of marketing activities is carried out by Manulife | CQS, Cavendish Capital Markets, Frostrow's Investor Relations Team and Tavistock Communications to promote demand for the shares. •    Manulife | CQS produces a monthly factsheet which is published on the Company's website and the regulatory news service and is circulated to key investors by Manulife | CQS's marketing department. •    The Company's website is maintained by the and regularly updated by Manulife | CQS and reviewed by the Board.
Key Person Risk ↑	Performance of the Company may be negatively affected by a change or loss of key personnel in the investment management team.   The risk of manager loss is material given the specialist nature of the Company.   Loss of key personnel could result in poor performance, lower investor demand and/ or a widening of any share price discount to NAV which could limit the strategic options of the Board.	Board and Committees •    The Management Engagement Committee reviews Manulife | CQS's appointment and performance annually. •    The Board receives regular updates on developments and succession planning, where appropriate, and any key personnel changes at the Investment Manager. •    The Company's agreement with Manulife | CQS contains a six-month notice period, which helps minimise any potential disruptions from changes in key personnel. •    Board members spend time with the management team outside of meetings to build a rapport and understand any issues they may have.   Key Service Providers •    There are currently three portfolio managers who are responsible for day-to-day portfolio management which reduces the risk of any one fund manager's departure. •    An Investment Committee at Manulife | CQS oversees key stock selection and could support the Company in the event of a period of change. •    Manulife is a large asset management firm with a wide network across geographies and sectors including resources and commodities. They can pull on internal resources in the short term should the need arise.
Non-Compliance with Laws and Regulations ↓	The Company is subject to laws and regulations, including the UK AIFMD, the Companies Act 2006, the FCA Listing Rules, the Bribery Act 2010, the Criminal Finances Act 2017, GDPR, relevant accounting standards and tax regulations, Market Abuse Regulations, the AIC Corporate Governance Code 2024 ("AIC Code") or other applicable regulations. A breach of legal and/or regulatory rules could lead to a suspension of the Company's stock exchange listing or financial penalties. This could ultimately result in the Company winding up and/or damage to its reputation. Provision 34 of the AIC Code for accounting periods beginning on or after 1 January 2026 will introduce the requirement for company boards to disclose how internal controls are monitored and make declarations of the effectiveness of material controls in the annual report.	Board and Committees •    The Board rigorously reviews internal controls and compliance reports, and key policies put in place by the Company's key service providers as part of the annual service provider review. •    The Board has established procedure for Directors share dealings, and PDMR and PCA lists are maintained by the Frostrow and reviewed at Board meetings. •    Annual results are reviewed and approved by the Board prior to external release to shareholders.   Key Service Providers •    Third party materials and links, including all factsheets, presentations and promotional materials are reviewed by Manulife | CQS Compliance before being circulated externally or uploaded onto the Company's website. •    Manulife | CQS's Compliance Officer provides a compliance report for the Board's review annually. •    Frostrow have extensive experience of the regulatory environment applicable to investment trusts and produce a regular compliance report, which includes any exceptions in the Company's compliance with applicable legal and regulatory requirements. •    Key service providers with access to market sensitive information receive regular and continuous training to ensure clear understanding of the regulations.
Operational Risk - Key Service Providers ↓	The Company relies upon the services provided by third parties and is reliant on the internal control systems of the Investment Manager and the Company's other service providers. Failures at these third parties could adversely impact the security and maintenance of, inter alia, the Company's assets, dealing and settlement procedures, and accounting records. Business interruption could mean inability to process financial transactions and wider negative impact on shareholders. This could result in reputational damage and reduced demand for the shares with various knock-on negative impacts.	Board and Committees •    The operating effectiveness of third-party service providers is monitored, and each provider updates the Board on its activities at each Board meeting. •    The Audit Committee receives, and reviews internal controls reports such as ISAE 3402 on the description of controls placed in operation, their design and operating effectiveness from all key services providers on an annual basis. •    The Management Engagement Committee reviews the performance and controls of all its service providers annually.   Key Service Providers •    Manulife | CQS delivers a risk based internal audit plan which covers different areas of its operations that are subject to internal audit, including front, middle and infrastructure audits. Any areas of concern relevant to the Company are discussed with the Audit Committee. •    The Depositary, BNP, maintains a daily record of the Company's portfolio assets. •    The principal software packages used by Frostrow/BNP are standard commercial systems. •    Manulife | CQS maintains separate records. •    Frostrow, Manulife | CQS, BNP and Equiniti have business continuity plans, which are regularly reviewed and tested. •    Information systems allow for efficient operation when staff of CQS, Frostrow, BNP and Equiniti are working remotely in a virtual office environment. •    Frostrow produces a regular compliance report, which includes any exceptions noted in any of the Company's key service providers' operations.

 

Emerging risks

During Board discussions on principal risks and uncertainties, the Board considered any risks that were not an immediate threat but could arise in the longer term and have significant impact on the ability of the Company to continue to meet its objectives.

 

Focus areas have been the further escalation of emerging geopolitical tensions in the Middle East and elsewhere, and the wide share price discount to NAV per share across the board in the investment trust sector. The Board will continue to assess newly emerging risks on a regular basis to ensure that the implications for the Company are properly assessed and mitigating controls introduced where necessary.

 

 

Business Review

 

Introduction

This Business Review is designed to provide information primarily about the Company's business and results for the year ended 30 June 2025. It should be read in conjunction with the Chairman's Statement, and the Investment Manager's Review, which give a detailed review of the investment activities for the year and look to the future.

 

Within the Business Review we discuss our approach to our stakeholder responsibilities within our S. 172 Statement and the Board's review of the Company's purpose, culture and values during the year. We also discuss our approach to people, social and governance matters and the environment on page 39 of the Annual Report.

 

Business model

The business model of the Company is described in more detail below.

 

Investment objective

The Company seeks to provide shareholders with capital growth and income predominantly from a portfolio of mining and resource equities and of mining, resource and industrial fixed interest securities.

 

Investment policy

The Company invests predominantly in mining and resource equities and mining, resource and industrial fixed interest securities (including, but not limited to, preference shares, loan stocks and corporate bonds, which may be convertible and/or redeemable). The Company may invest in companies regardless of country, sector or size and the Company's portfolio is constructed without reference to the composition of any stock market index or benchmark. Exposure to higher yielding securities may also be obtained by investing in other sectors, including closed-end investment companies and open-ended collective investment schemes.

 

The Company may, but is not obliged to, invest in derivatives, financial instruments, money market instruments and currencies for the purpose of efficient portfolio management.

 

The Company may acquire securities that are unquoted at the time of investment but which are about to be, or are immediately convertible at the option of the Company into securities which are, listed or traded on a stock exchange, and may continue to hold securities that cease to be quoted or listed if the Investment Manager considers this appropriate. In addition, the Company may invest up to 10 per cent. of its gross assets in other securities that are unlisted or unquoted at the time of investment.

 

The Company will not invest more than 15 per cent. in aggregate of the value of its total assets (measured at the time of investment) in other investment trusts or investment companies which are listed on the Official List except that this restriction does not apply to investments in other investment trusts or investment companies which themselves have published investment policies to invest no more than 15 per cent. of their total assets in other investment trusts or investment companies which are listed on the Official List.

 

The Company may borrow an amount up to 25 per cent. of shareholders' funds (measured at the time of drawdown).

 

The Investment Manager expects that the Company will normally be fully invested. However, during periods in which changes in economic circumstances, market conditions or other factors so warrant, the Company may reduce its exposure to securities and increase its position in cash, money market instruments and derivative instruments in order to seek protection from stock market falls.

 

The Company's performance in meeting its objectives is measured against key performance indicators ("KPIs") as set out on pages 30 and 31 of the Annual Report.

 

Purpose, values and culture

The Board and the Investment Manager have taken time during the year to consider the expectations of the AIC Corporate Governance Code (the "AIC Code") in the areas of corporate purpose, values and culture. The Board has identified the following for each on behalf of the Company:

 

Purpose - The Company's purpose is defined as the Board working collaboratively with the Investment Manager to deliver its agreed investment approach within its chosen natural resource and mining sectors of the global economy to generate capital growth and income for investors, whilst cognisant of its regulatory, stakeholder and societal responsibilities.

 

Values - Given the Company's status as a listed investment trust, and lack of direct employees, the Company's values are essentially those of the Board and its interactions with its key third party advisers, which are defined by trust, rigorous review, and foresight amongst others.

 

Culture - The Board emphasises open collaboration between directors and the Company's third-party advisers, including the Investment Manager, to create an environment conducive to effective decision-making. This also facilitates prompt and appropriate response to material issues by the Board. Where necessary, the Board challenges to ensure that performance is maintained on behalf of investors and stakeholders.

 

Investment Manager and management fees

The Company's investments are managed by CQS (UK) LLP, which was acquired by Manulife Investment Management in April 2024 and now trades as Manulife | CQS Investment Management. Ian Francis, Keith Watson and Robert Crayfourd are the responsible portfolio managers. Further information about the portfolio managers can be found on page 3 of the Annual Report.

 

CQS (UK) LLP is a global diversified asset manager, running multiple strategies with, as at 30 June 2025, assets of US$17.0 billion under management.

 

The Board keeps under review the appropriateness of the Investment Manager's appointment. In doing so the Management Engagement Committee considers the investment performance of the Company and the capability and resources of the Investment Manager to deliver satisfactory investment performance. It also considers the length of the notice period of the investment management contract and the fees payable to the Investment Manager, together with the standard of the other services provided. The Directors are satisfied with the Investment Manager's ability to deliver satisfactory investment performance, and the quality of other services provided. It is therefore their opinion that the continuing appointment of the Investment Manager on the terms agreed is in the interests of shareholders as a whole.

 

Previously, CQS (UK) LLP was entitled to receive a management fee of 1.2 per cent. on net assets up to £150 million; 1.1 per cent. on net assets above £150 million and up to £200 million; 1.0 per cent. on net assets above £200 million and up to £250 million; and, 0.9 per cent. on net assets above £250 million until the completion of the Board's Strategic Review of the Company at the end of May 2025. Effective from 1 May 2025, the investment management fee has been reduced to 1.0 per cent. on net assets.

 

Frostrow Capital LLP is appointed as Company Secretary and Administrator as well as providing Investor Relations and Marketing services. Equiniti Limited is appointed as the Company's share registrar.

 

UK Alternative Investment Fund Managers Directive ("UK AIFMD")

The Company has appointed CQS (UK) LLP, trading as Manulife | CQS Investment Management, as the Company's alternative investment fund manager ("AIFM"). The AIFM has been approved by the FCA to act as AIFM of the Company. A requirement of the UK AIFMD is for the Company to appoint a depositary to oversee the custody and cash arrangements and undertake other UK AIFMD required depositary responsibilities. The Board appointed BNP Paribas as the Company's depositary.

 

Further UK AIFMD disclosures are shown on pages 97 and 98 of the Annual Report.

 

Long-term viability statement

In accordance with the provisions of the AIC Code, the Directors have assessed the viability of the Company over a period of three years, which reflects the long-term nature of its investment objective, and the longer-term view adopted by the Investment Manager when making investment decisions and delivering total returns to shareholders.

 

The Board has reviewed the Company's financial position and its ability to liquidate its portfolio and meet its expenses as they fall due and, in doing so, noted the following:

 

●   the assumption that the loan facility is rolled over annually rather than repaid. The Company has an unsecured loan facility with BNP Paribas, agreed on 13 September 2024 for a two-year period. In order to assess the impact of underperformance of the portfolio on the loan, the Board reviewed a series of stress tests and detailed financial modelling including in particular the effects of any substantial future falls in investment value on the ability to repay and re-negotiate borrowings, potential breaches of loan covenants and the maintenance of dividend payments. All tests concluded that there was no uncertainty over the Company's financial viability over the assessment period;

 

●   Directors monitor and discuss the effects of any risks such as geopolitical events, inflation levels and adverse market conditions on the Company's investment strategy, outlook and financial position. Underlying core revenue income from the Company's portfolio continues to be strong and the Board believes that the Company is well placed to withstand the wider economic effects of the ongoing geopolitical events. The Board was therefore comfortable to declare a fourth quarterly interim dividend and special interim dividend payment, to be drawn from the Company's strong reserves, and also firmly consider it is appropriate to adopt the going concern basis as at 30 June 2025;

 

●   that the continuation vote should not be a factor to affect the three-year period given the ongoing support of major shareholders. As part of the proposed Tender Offer and proposed value enhancing initiatives announced by the Company on 28 May 2025, and as approved by shareholders at the General Meeting held on 25 June 2025, the postponement of the annual continuation vote to the AGM in 2028 and a move to biennial votes thereafter;

 

●   that the diverse nature of investments held gives stability and liquidity along with flexibility to be able to react positively to market and political forces outside of the Board's control;

 

●   the assumption that there are no significant changes in market conditions or the tax and regulatory environment that could not reasonably have been foreseen;

 

●   the impact of potential regulatory change and the controls in place surrounding significant third-party providers, including the Investment Manager. The Board also noted the liquidity risk in the portfolio where the percentage of Level 1 listed investments held at the year end was 97.4% (2024: 95%);

 

●   the Company's processes for monitoring investment revenue and costs, with the use of frequent revenue forecasts, and the Investment Manager's compliance with the investment objective and policies. The Directors have concluded that there is a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due;

 

●   Directors do not currently expect there to be any significant change to the current principal risks facing the Company. Furthermore, the Directors do not envisage any change in strategy which would prevent the Company from operating over the three-year period; and

 

●   Directors have carried out a robust assessment of the principal risks facing the Company. These risks and their mitigations are set out on pages 22 to 27 of the Annual Report. The principal risks identified as most relevant to the assessment of the viability of the Company were those relating to a future macro-event likely to have a material impact on the financial position of the Company and the potential under-performance of the portfolio and its effect on the ability to pay dividends. When assessing these risks, the Directors have considered the risks and uncertainties facing the Company in severe but plausible scenarios, taking into account the controls in place and mitigating actions that could be taken.

 

After making enquiries of the Company's Investment Manager, and having considered the Company's investment objective, nature of the investment portfolio and expenditure projections, the Directors consider that the Company has adequate resources to continue in operational existence for the foreseeable future. The Board has considered a detailed assessment of the Company's ability to meet its liabilities as they fall due, in the context of the Company's investment objective, nature of the investment portfolio and expenditure projections, and is satisfied that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason, and in light of the Company's long-term investment record, the Directors are satisfied that it is appropriate to adopt the going concern basis in preparing the accounts.

 

Based on the results of its review and taking into account the long-term nature of the Company and its financing, the Board has a reasonable expectation that the Company will be able to continue its operations and meet its expenses and liabilities as they fall due for the foreseeable future, taken to mean at least the next three years. The Board has chosen this period as the timeframe being deemed most appropriate to the cycles within which the Company's investee companies operate and the sectors of the economy in which the portfolio is concentrated. The Board continues to consider that this period also reflects the long-term objectives of the Company, being a Company with no fixed life, whilst considering the impact of uncertainties in the markets.

 

Performance Measurement and Key Performance Indicators ("KPIs")

The Board uses a number of performance measures to assess the Company's success in meeting its objectives. The tables and data on page 4 of the Annual Report show how the Company has performed against those KPIs, and a glossary of terms and alternative performance measures is included on pages 88 to 90 of the Annual Report.

 

The KPIs, which are used to measure progress and performance over time and which are comparable with those reported by other investment trusts are as follows:

 

●   Investment Performance

To assess investment performance, the Board monitors the NAV per share performance relative to that of two comparator indices: the MSCI World Metals and Mining Index (sterling adjusted) and the MSCI World Energy Index (sterling adjusted).

 

The Company invests principally in equity-related investments in companies, usually mid and small cap companies, with a wide range of commodity exposures as well as a number of fixed interest securities. The Company does not utilise a formal benchmark but rather publishes its NAV per share performance alongside two comparative indices: the MSCI World Metals and Mining Index (sterling adjusted) and the MSCI World Energy Index (sterling adjusted) as these best reflect the potential returns.

 

The performance of the NAV and comparative indices are shown on page 1 with statistics also shown on page 4 of the Annual Report. Over a five year period, the Company's share price and NAV total returns have both outperformed its comparator indices, as shown by the graph on page 31 of the Annual Report.

 

Refer to the Chairman's Statement for the Chairman's commentary on the Company's development and performance during the year as well as position of the Company's business as at the year end.

 

●   Dividend per share

As part of the proposed Tender Offer and value enhancing initiatives announced on 28 May 2025, the Company also announced the adoption of an enhanced annual dividend of circa 8 per cent. of NAV via a quarterly dividend policy of 2 per cent. of the preceding quarter-end NAV per share using capital reserves as necessary, starting from the quarter ended 30 June 2025. In respect of the year under review, four interim dividends per share totalling 8.03 pence per share were declared (2024: 5.60 pence per share). The Company declared a 1 penny per share special interim dividend due to strong underlying core revenue income from the Company's portfolio in respect of the year ended 30 June 2024.

 

●   Ongoing charges ratio

The ongoing charges ratio is a measure of the total expenses incurred by the Company expressed as a percentage of the average shareholders' funds over the year. The Board regularly reviews the ongoing charges and monitors all expenses. For the year under review the ongoing charges ratio is 2.0% (2024: 1.9%).

 

Dividend per share and ongoing charges ratio fall within the definition of "Alternative Performance Measures" ("APMs") under guidance issued by the European Securities and Markets Authority ("ESMA"). Additional information explaining how these are calculated is set out in the Glossary.

 

The Directors have carefully selected these KPIs as in their view these combine to provide the most appropriate measures of performance, both in terms of managing the business and presentation to shareholders and stakeholders. The Board is satisfied that performance against each measure has been satisfactory in the context of the events in the financial year.

 

Further information regarding forward looking assessments for the KPIs can be found in the Chairman's Statement and Investment Manager's Review.

 

Future prospects

The Chairman's Statement and the Investment Manager's Review include a review of developments during the year as well as information on investment activity within the Company's portfolio and the factors likely to affect the future performance of the Company.

 

Employees, Social, Human Rights and Environmental matters

As a UK listed investment trust, the Company has no direct employees and accordingly it has no direct social or community impact and very limited environmental impact from its operations. Nevertheless, the Board determines that, given the profile of the natural resource sectors on which the investment strategy focuses, it is important that the Investment Manager monitors performance across these areas, specifically including human rights and health and safety performance, in finalising investment decisions. The investment portfolio is also increasingly focusing on low greenhouse gas businesses, commodities and solutions.

 

The Directors recognise that their first duty is to act in the best financial interests of the Company's shareholders and to achieve good financial returns against acceptable levels of risk, in accordance with the objectives of the Company.

 

In asking the Company's Investment Manager to deliver against these objectives, the Directors have also requested that the Investment Manager take into account the broader social, ethical and environmental issues of all companies within the Company's portfolio, acknowledging that companies failing to manage these issues adequately run a long-term risk to the sustainability of their businesses.

 

More specifically, to access capital they now expect companies to demonstrate ethical conduct, effective management of their stakeholder relationships, responsible management and mitigation of social and environmental impacts, as well as due regard for wider societal issues. The Investment Manager is increasingly expected to engage with investee companies around these themes, in line with the expectations of the UK Stewardship Code.

 

The Company's Investment Manager, CQS (UK) LLP (trading as Manulife | CQS Investment Management), has in turn stated that they view ESG factors as a key driver of financing costs, valuations and performance, while also being capable of acting as a lever to shape and influence the world for generations to come. The integration and assessment of ESG factors is a crucial part of this commitment, and a key factor in their decision-making. Through embedding ESG into the investment process, the Investment Manager seeks to enhance their ability to identify value, investment opportunities and, critically, to generate the best possible returns for their clients. CQS (UK) LLP is a signatory to the internationally recognised Principles for Responsible Investment ("PRI"), fully supporting all the PRIs.

 

 

Stakeholder Interests (S. 172 statement)

 

The following 'Section 172' disclosure, which is required by the Companies Act 2006 and the AIC Code, describes how the directors have had regard to the views of the Company's stakeholders in their decision-making. The Board regularly reviews its responsibilities vis-à-vis Section 172 of the Companies Act 2006, in conjunction with the Company Secretary. The key areas, being only those relevant to the Company as a listed investment trust, are applied to all relevant board decision-making:

 

(a) the likely consequences of any decision in the longer term;

 

(c) the need to foster the Company's business relationships with suppliers, customers and others;

 

(d)           the impact of the Company's operations on the community and the environment;

 

(e) the desirability of the Company maintaining a reputation for high standards of business conduct; and

 

(f)  the need to act fairly between members of the Company.

 

The Board considers the factors outlined under Section 172 and the wider interests of stakeholders as a whole in all decisions it takes on behalf of the Company.

 

Who? - Stakeholder group: Shareholders

Why? The benefit of engagement with the Company's stakeholders	How? How the Board and the Company's service providers have engaged with the Company's stakeholders
Clear communication of the Company's strategy and the performance against the Company's objective can help the share price trade closer to its NAV per share which benefits shareholders. New shares may be issued to meet demand without net asset value per share dilution to existing shareholders. Increasing the size of the Company can benefit liquidity as well as spread costs. The Board operates an investment strategy designed to deliver strong performance over the medium to longer term, based on exposure to valuable commodity markets. While share buybacks will not necessarily prevent the discount from widening further, particularly in times of market volatility, they may, to a limited extent, mitigate a widening trend. In addition, buybacks enhance the net asset value per share for remaining shareholders, provide some additional liquidity and help to dampen discount volatility which can damage shareholder returns. The Board recognised the need to act in the interests of all shareholders following approach by the Company's major shareholder, Saba Capital Management, L.P., and ensure that as many of the Company's shareholders as possible were made aware of the situation and the potential implications for their investments. Following a comprehensive Strategic Review designed to identify a way forward to enhance value for all shareholders, the Board proposed to offer shareholders a free choice between remaining invested in the Company with value enhancing initiatives (an enhanced dividend, lower management fees), and/or exiting for cash through the Tender Offer.	The AIFM and the Investment Manager, on behalf of the Board, complete a programme of investor relations throughout the year. An analysis of the Company's shareholder register is provided to the Directors at each Board meeting along with investor relations and marketing reports from the Company Secretary and Administrator. The Board reviews and considers the marketing plans on a regular basis. Reports from the Company's broker are submitted to the Board on investor sentiment and industry issues. At each meeting the Board reviews movements in the Company's shareholder register. There are regular interactions and engagement with shareholders (including at the AGM). Regular feedback from shareholders is received from the Company's broker. Shareholders' rights are protected under the Company's Articles of Association which require any proposal that may materially change those rights to be subject to prior approval by a majority of shareholders in general meeting. In order to effectively communicate with as many shareholders as possible, the Board with support from its advisers, inter alia undertook to: ●   As a foundation for the Company's campaign, the Board and its advisers created a retail shareholder-focused 'messaging house', which was used across investor presentations, press releases and official communications to shareholders; ●   Developed a 'microsite' (http://www.cynprotectyourinvestment.com/) which was kept up-to-date and provided a dedicated channel for shareholders to gain information ahead of general meetings and provide, so far as possible, jargon-free information on the intricacies of Saba's proposals and the Board's recommendations. The microsite also included a facility for shareholders to register to be sent further information as it became available, such as help with how and when to vote; ●   As well as regular shareholder focused webinars with the portfolio managers, a dedicated webinar was held to help ensure the Company's messaging reached as many shareholders as possible. Over 200 shareholders took part and allowed shareholders to ask questions of the Chairman and portfolio managers; ●   The Board engaged advisers to engage with shareholders by telephone to gauge voting sentiment, obtain feedback and offer further information on the proposals and the Board's recommendations; ●   The Company's messaging was distributed to a broad network of financial journalists at national and trade publications; ●   Edison Group were engaged to produce research and video material for shareholders. Together, the material made over 19,000 impressions; and ●   The Company engaged with major investment platforms to ensure voting mechanics were fully available to shareholders and offer platforms guidance on the unusual circumstances of the general meetings.
What? The key areas of engagement	Outcomes and Actions The actions, principal decisions and outcomes
Ongoing dialogue with shareholders concerning the strategy of the Company, performance and the portfolio. Key mechanisms of engagement include: ●   The Annual General Meeting, whereby shareholders are invited to attend, ask questions and vote; ●   The Chairman and non-executive directors make themselves available to engage with shareholders; ●   The Company's website hosts reports, video interviews with the portfolio managers and monthly factsheets; and ●   One-on-one investor meetings facilitated by the Company Secretary and Administrator who actively engage with professional investors, typically discretionary wealth managers, some institutions and a range of execution-only platforms. Regular engagement helps to attract new investors and retain existing shareholders, and over time results in a stable share register made up of diverse, long-term holders. In the event of any significant (defined as 20% or more of those voting) vote against any of the resolutions put to shareholders at the AGM, the Board will explain in its announcement of the results of the AGM the actions it intends to take to consult shareholders in order to understand the reasons behind any significant votes against resolutions. Following the consultation, an update will be published no later than six months after the AGM and the annual report will detail the impact the shareholder feedback has had on any decisions the Board has taken and any actions or resolutions proposed. The Board considered the following options available to preserve value for all shareholders: ●   Maintaining the current investment policy and management arrangements, given the best practice annual continuation vote, together with providing liquidity to shareholders by means of buybacks, tenders and other similar actions; ●   Introducing an increased dividend, to be funded in part by capital growth; ●   Pursuing further discount management mechanisms; ●   Providing a full cash exit at NAV for all shareholders; and ●   If a suitable partner can be identified, to negotiate terms of a combination with another investment trust or open-ended investment company that would provide an ongoing investment opportunity with a natural resources and energy focus, together with the option of a full cash exit at NAV for all shareholders. On 12 February 2025, the Company announced the receipt of a requisition served on behalf of Saba for a second general meeting of shareholders. The Board has engaged in a series of very constructive discussions with Saba, who agreed to withdraw the requisition to enable the Board and its advisers to complete the Strategic Review that was outlined in the circular to shareholders.	Shareholders are provided with performance updates via the Company's website as well as the annual and half-year financial reports and monthly factsheets. The Investment Manager and the Company Secretary and Administrator meet regularly with shareholders and potential investors to discuss the Company's strategy, performance and portfolio. Both the Investment Manager and the Company Secretary and Administrator also engage with the Press on the Company's behalf. Information on how to vote your Company shares on a selection of major platforms can be found by following the link within the Notice of Meeting on page 96 of the Annual Report. The Board reviews the Company's share price discount/premium on a daily basis and in April 2024, following discussion with advisers, the Board agreed a limited programme of purchases of its own shares. The Company bought back 728,557 shares in the financial year to 30 June 2024, and a further 2,002,114 shares in the financial year to 30 June 2025, with the most recent share buyback taking place on 31 October 2024. The discount had narrowed since the Company started buying back shares in April 2024, but also as Saba reported increases in their shareholding in the Company towards the end of the 2024 calendar year. The Board consider that the considerable efforts that went into engaging with shareholders and ensuring the widest-possible audience had access to timely information resulted in the best possible outcome for shareholders, given the challenging circumstances, and the continuation of the Company. At the General Meeting of the Company held on Tuesday, 4 February 2025, all Requisitioned Resolutions were defeated on a poll by a majority of shareholders. Over 59% of the votes cast were against Saba's Requisitioned Resolutions, representing approximately 40% of the issued share capital. Total votes cast represented over 68% of the issued share capital. By contrast, just 8% of the Company's issued share capital was voted at the AGM held in December 2024. The Company has been shortlisted among seven other investment trusts in the 'Best Shareholder Engagement' category of the AIC Shareholder Communications Awards 2025. The results will be announced at an awards ceremony held in November. Shareholders overwhelmingly voted in favour of the resolutions which enabled the Company to undertake the Tender Offer and the change of annual continuation votes at every annual general meeting to every two years, with a postponement of continuation votes until the AGM to be held in 2028. 45.72% of the Company's issued share capital was tendered, Saba's holding. Continuing shareholders benefit from the value-enhancing initiatives put in place by the Board and measures put in place to provide a period of stability. Shareholders remaining invested in the Company will not bear the cost of the Tender Offer.

 

Who? - Stakeholder group: AIFM and Investment Manager

Why? The benefit of engagement with the Company's stakeholders	How? How the Board and the Company's service providers have engaged with the Company's stakeholders
Engagement with the Company's Investment Manager is necessary to: ●   evaluate their performance against the Company's stated strategy and to understand any risks or opportunities this may present; and ●   better understand the internal controls in place at Manulife | CQS. The Board ensures that the Investment Manager's ESG approach meets standards set by the Board. In order to achieve, what the Board consider to be, the best possible outcome for shareholders as a result of the Board's Strategic Review, it was necessary to seek extraordinary engagement with and support from the Company's Investment Manager.	Representatives of the AIFM attend each quarterly Board meeting and present a report on investment performance and other related matters. Between meetings the Board maintains regular contact with the Investment Manager. The Audit Committee annually review reports from the AIFM's Money Laundering Reporting Officer and Compliance Officer to assess the adequacy and effectiveness of both functions. The Board involved and took advice from the investment management team at each stage of its Strategic Review, given their importance in maintaining the investment strategy and performance of the Company.
What? The key areas of engagement	Outcomes and Actions The actions, principal decisions and outcomes
Portfolio composition, performance, ESG matters, outlook, and business updates. The integration of ESG into the Investment Manager's investment processes. The Board sought advice from the investment management team on each of the options it assessed under the Strategic Review and the implications of each option: ·      Maintaining the existing investment policy and management arrangements; ·      Introducing an increased dividend; ·      Pursuing further discount management mechanisms; ·      Providing a full cash exit at NAV for all shareholders; and ·      Exploring suitable partners for a combination that would provide an ongoing investment opportunity with a natural resources and energy focus, together with the option of a full cash exit at NAV for all shareholders.	The Board's appointed Investment Manager is committed to integrating environmental, social and governance themes into both its research engagement and investment activities. Manulife | CQS is also a signatory to the Principles for Responsible Investment, amongst other initiatives. Further details of the Investment Manager's ESG related activities and reports can be found on page 39 of the Annual Report. The Tender Offer and value enhancing initiatives (as discussed under Stakeholder group: Shareholders).

 

Who? - Stakeholder group: Service Providers

Why? The benefit of engagement with the Company's stakeholders	How? How the Board and the Company's service providers have engaged with the Company's stakeholders
As an externally managed investment company, the Company does not have employees. Its main stakeholders therefore comprise its shareholders and a small number of service providers. The Board has delegated a wide range of activities to external agents, in addition to the Investment Manager. The Company contracts with third parties for other services including: depositary, investment accounting & administration as well as company secretarial and registrars. The Company ensures that the third parties to whom the services have been outsourced complete their roles in line with their service level agreements and are able to continue to provide these services, thereby supporting the Company in its success and ensuring compliance with its obligations. In order to achieve, what the Board consider to be, the best possible outcome for shareholders as a result of the Board's Strategic Review, it was also necessary to seek extraordinary engagement with the Company's service providers.	Each of these contracts was entered into after full and proper consideration by the Board of the quality and cost of the services offered, including the control systems in operation in so far as they relate to the affairs of the Company. The Directors have frequent engagement with the Company's other service providers through the annual cycle of reporting and due diligence meetings or site visits by the Company Secretary and Administrator. This engagement is completed with the aim of maintaining an effective working relationship and oversight of the services provided. The Board regularly evaluates the performance of its third-party service providers. The Board involved and took advice from its key service providers at each stage of its Strategic Review, given their importance in supporting the operation of the Company.
What? The key areas of engagement	Outcomes and Actions The actions, principal decisions and outcomes
The Board met regularly with representatives of the Company Secretary and Administrator which attend every Board meeting to provide updates on risk management, accounting, administration and corporate governance matters. In August 2024, representatives of the Company Secretary and Administrator conducted an oversight visit to the Company's registrar, Equiniti, on the Board's behalf. An industry update, presentations on cyber security, dividend payment processes, the shareholder register and online shareholder engagement were received. The Board sought advice from its key service providers on each of the options it assessed under the Strategic Review and the implications of each option: ·      Maintaining the existing investment policy and management arrangements; ·      Introducing an increased dividend; ·      Pursuing further discount management mechanisms; ·      Providing a full cash exit at NAV for all shareholders; and ·      Exploring suitable partners for a combination that would provide an ongoing investment opportunity with a natural resources and energy focus, together with the option of a full cash exit at NAV for all shareholders.	All service providers engaged and supplied requested information for the due diligence exercise to be completed. Reviews of the Company's service providers in July 2025 were positive, and the Directors believe their continued appointment is in the best interests of the Company. The Audit Committee met with BDO LLP to review the audit plan for the year, agree their remuneration, review the outcome of the annual audit and to assess the quality and effectiveness of the audit process. Please refer to the Audit Committee Report beginning on page 55 of the Annual Report for further information. The Tender Offer and value enhancing initiatives (as discussed under Stakeholder group: Shareholders).

 

Who? - Stakeholder group: The Company's Lender

Why? The benefit of engagement with the Company's stakeholders	How? How the Board and the Company's service providers have engaged with the Company's stakeholders
Investment companies have the ability to borrow with a view to enhancing long-term returns to shareholders. Engagement with the Company's lender ensures that it fully understands the nature of the Company's business, the strategy adopted by the Investment Manager and the extent to which the Company complies with its loan covenants.	Regular reporting to the lender with respect to adherence with loan covenants and ad hoc meetings with the AIFM. The AIFM engaged with the provider of the Company's previous loan facility in advance of expiry in September 2024. Following the year end, the AIFM engaged with BNP Paribas following the announcement of the result of the Tender Offer which would result in a reduction in the size of the Company.
What? The key areas of engagement	Outcomes and Actions The actions, principal decisions and outcomes
Continued compliance with covenants set out within the loan agreement between the Company and the lender. The AIFM sought quotations from the previous and alternative lenders. In order to reflect the reduced size of the Company and to ensure compliance with loan covenants, it was agreed that the loan facility due to expire in September 2026 should be reduced.	The Board ensures compliance with loan covenants throughout the year. As detailed on page 8 of the Annual Report , the Company entered into a two-year agreement with BNP Paribas with improved commercial terms on 13 September 2024. The Board met on 11 September 2025 to consider the reduction of the Company's loan facility and review an Amendment Agreement relating to the Company's Facility Agreement with BNP Paribas. The Amendment Agreement was approved and the Company's secured revolving credit facility was reduced from £25 million to £15 million with effect from 16 September 2025.

 

Relations with shareholders

The Directors place a great deal of importance on communication with shareholders. The annual report is widely distributed to other parties who have an interest in the Company's performance. Shareholders and investors may obtain up to date information on the Company through the Investment Manager's website. The Company responds to correspondence from shareholders on a wide range of issues.

 

A regular dialogue is maintained with the Company's institutional shareholders and with private client asset managers. Reference to significant holdings in the Company's ordinary shares can be found under "Substantial Interests in the Company's Shares" on page 42 of the Annual Report. The Notice of the annual general meeting included within the annual report and financial statements is sent out at least 20 working days in advance of the AGM. All shareholders have the opportunity to put questions to the Board or Investment Manager, either formally at the Company's AGM or subsequent to the meeting when light refreshments will be offered to shareholders.

 

Disclosure and transparency rules

Other information required to be disclosed pursuant to the Disclosure Guidance and Transparency Rules has been placed in the Directors' Report on pages 41 to 44 of the Annual Report because it is information which refers to events that have taken place during the course of the year.

 

By order of the Board

 

Christopher Casey

Chairman

27 October 2025

 

 

Statement of Directors' Responsibilities

 

The Directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company Law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the Financial Statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland", and applicable law).

 

Under Company Law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that year. In preparing the financial statements, the Directors are required to:

●   select suitable accounting policies and then apply them consistently;

●   state whether applicable United Kingdom Accounting Standards, comprising FRS 102, have been followed, subject to any material departures disclosed and explained in the financial statements;

●   make judgements and accounting estimates that are reasonable and prudent; and

●   prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

 

The Directors are also responsible for:

●   safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities;

●   keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006;

●   preparing a Strategic Report, Directors' Report, Directors' Remuneration Report and Corporate Governance Statement that comply with relevant laws and regulations; and

●   the maintenance and integrity of the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

 

Responsibility Statement

The Directors consider that the Annual Report and Financial Statements, taken as a whole, are fair, balanced, understandable and provide the information necessary for shareholders to assess the Company's position, performance, business model and strategy.

 

Each of the Directors, whose names and functions are listed in the 'Board of Directors' section on page 40 of the Annual Report confirms that, to the best of their knowledge:

●   the Company's Financial Statements, which have been prepared in accordance with United Kingdom Accounting Standards give a true and fair view of the assets, liabilities, financial position and profit of the Company; and

●   the Strategic Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

 

On behalf of the Board

 

Christopher Casey

Chairman

27 October 2025

 

Note to those who access this document by electronic means:

The Annual Report for the year ended 30 June 2025 has been approved by the Board of CQS Natural Resources Growth and Income PLC. Copies of the Company's annual report and half year report are circulated to shareholders and, where possible to potential investors. It is also made available in electronic format for the convenience of readers. Printed copies are available from the Company Secretary's office in London.

 

Income Statement

 

		Year ended 30 June 2025			Year ended 30 June 2024
	Notes	Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
Gains on investments held at fair value through profit or loss	9	-	6,425	6,425	-	6,095	6,095
Exchange (losses)/gains on foreign currencies		-	(118)	(118)	-	14	14
Income	2	2,571	1,324	3,895	6,426	768	7,194
Investment management fee	3	(391)	(1,175)	(1,566)	(416)	(1,248)	(1,664)
Other expenses	4	(1,803)	-	(1,803)	(976)	-	(976)
Net return before finance costs and tax		377	6,456	6,833	5,034	5,629	10,663
Finance costs	5, 11	(234)	(701)	(935)	(311)	(734)	(1,045)
Net return before tax		143	5,755	5,898	4,723	4,895	9,618
Taxation	6, 11	(143)	(25)	(168)	(454)	(38)	(492)
Net return for the year		-	5,730	5,730	4,269	4,857	9,126
Basic and diluted return per ordinary share (pence)	8	0.00p	8.88p	8.88p	6.39p	7.27p	13.66p

 

The "total" column of this statement is the Income Statement of the Company, prepared in accordance with Financial Reporting Standard 102 ("FRS 102"). The supplementary revenue and capital columns are presented in accordance with the Statement of Recommended Practice issued by the AIC ("AIC SORP").

 

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued during the period.

 

There is no other comprehensive income, and therefore the net return for the period is also the total comprehensive income.

 

The Notes form part of these Financial Statements.

 

 

Balance Sheet

 

		As at	As at
		30 June	30 June
	Notes	2025	2024
		£'000	£'000
Fixed assets
Investments at fair value through profit or loss	9	143,266	152,627
Current assets
Debtors	10	406	645
Cash at bank		2,404	2,952
		2,810	3,597
Current liabilities
Creditors: amounts falling due within one year	11	(700)	(658)
Bank loan	12	(9,000)	(17,000)
Net current liabilities		(6,890)	(14,061)
Net assets		136,376	138,566
Capital and reserves
Called-up share capital	13	16,722	16,722
Treasury shares	13	(683)	(182)
Special distributable reserve		21,449	27,127
Share premium		4,851	4,851
Capital reserve		94,037	88,307
Revenue reserve		-	1,741
Equity shareholders' funds		136,376	138,566
Net asset value per ordinary share (pence)	14	212.56p	209.44p

 

Company number: 02978531

 

These Financial Statements were approved by the Board of Directors and authorised for issue on 27 October 2025 and were signed on its behalf by:

 

Christopher Casey

Chairman

 

The Notes form part of these Financial Statements.

 

 

Statement of Changes in Equity

 

	Notes	Share capital	Treasury shares	Share premium	Special distributable reserve	Capital reserve	Revenue reserve	Total
		£'000	£'000	£'000	£'000	£'000	£'000	£'000
For the year ended 30 June 2025
Balance at 30 June 2024		16,722	(182)	4,851	27,127	88,307	1,741	138,566
Net return for the year		-	-	-	-	5,730	-	5,730
Shares bought back into treasury		-	(501)	-	(3,135)	-	-	(3,636)
Dividends paid	7	-	-	-	(2,543)	-	(1,741)	(4,284)
Balance at 30 June 2025		16,722	(683)	4,851	21,449	94,037	-	136,376
For the year ended 30 June 2024
Balance at 30 June 2023		16,722	-	4,851	28,571	83,454	2,962	136,560
Net return for the year		-	-	-	-	4,857	4,269	9,126
Shares bought back into treasury		-	(182)	-	(1,182)	(4)	-	(1,368)
Dividends paid	7	-	-	-	(262)	-	(5,490)	(5,752)
Balance at 30 June 2024		16,722	(182)	4,851	27,127	88,307	1,741	138,566

 

The special distributable reserve, capital reserve (excluding the unrealised losses on Level 2 and Level 3 investments detailed in Note 9) and the revenue reserve are distributable by way of dividend. The Company's distributable reserve balance is £136,347,000 (2024: £144,270,000) and the net distributable reserve is £115,486,000 (2024: £117,175,000) after taking into account the unrealised cumulative losses of £20,861,000 (2024: £27,095,000) relating to Level 2 and Level 3 investments in the portfolio.

 

The Notes form part of these Financial Statements.

 

 

Cash Flow Statement

 

		Year ended	Year ended
		30 June	30 June
	Notes	2025	2024
		£'000	£'000
Operating activities
Investment income received1		3,633	6,366
Deposit interest received		80	112
Investment management fees paid		(1,454)	(1,662)
Other expenses		(1,826)	(911)
Net cash inflow from operating activities		433	3,905
Investing activities
Purchases of investments		(37,869)	(35,310)
Disposals of investments		53,984	37,587
Net cash inflow/(outflow) from investing activities		16,115	2,277
Financing activities
Equity dividends paid		(4,284)	(5,752)
Shares bought back into treasury		(3,752)	(1,368)
(Repayment of)/drawdown from credit facility	12	(8,000)	1,000
Loan interest paid		(942)	(981)
Net cash outflow from financing activities		(16,978)	(7,101)
Decrease in net cash		(430)	(919)
Reconciliation of net cash flow movement to movement in net cash
Decrease in net cash during the year		(430)	(919)
Foreign exchange (losses)/gains on cash		(118)	14
Movement in net cash during the year		(548)	(905)
Opening cash balance at 1 July		2,952	3,857
Closing cash balance at 30 June		2,404	2,952
1    Net of withholding tax.

 

The Notes form part of these Financial Statements.

 

 

Notes to the Financial Statements

 

for the year ended 30 June 2025

 

1 Accounting policies

 

CQS Natural Resources Growth and Income PLC is a public company limited by shares, incorporated in accordance with the Laws of England and Wales. Details of the registered office are included on page 99 of the Annual Report.

 

A summary of the principal accounting policies adopted is set out below.

 

(a) Basis of accounting

The financial statements are prepared on a going concern basis, in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Principles ("UK GAAP") including FRS102 'The Financial Reporting Standard applicable in the UK and Ireland' and the Statement of Recommended Practice regarding the Financial Statements of Investment Trust Companies and Venture Capital Trusts ("SORP") issued by the Association of Investment Companies in July 2022.

 

The Company's financial statements are presented in sterling, being the functional and presentational currency of the Company. All values are rounded to the nearest thousand pounds (£'000) except where otherwise indicated.

 

Having considered the Company's investment objective, nature of the investment portfolio, loan facility, expenditure projections, suitable stress testing and the impact of the current geopolitical and market uncertainty, covering a period of 12 months from the date this Report is approved, the Directors are satisfied that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason, the Directors continue to adopt the going concern basis in preparing the Financial Statements.

 

(b) Financial assets

All financial assets are initially recognised at fair value, recorded at the date on which the Company became party to the contractual requirements of the financial asset, with the related transaction costs expensed under the capital column of the Income Statement. Subsequently, they are measured at fair value through profit or loss.

 

Cash at bank

Cash comprises cash at bank, which is carried at amortised cost.

 

(c) Financial liabilities

All financial liabilities are initially recognised at fair value net of transaction costs incurred, recorded on the date on which the Company becomes party to the contractual requirements of the financial liability, and subsequently carried at amortised cost with the exception of bank loans, which are measured at cost, being the fair value of the consideration received.

 

(d) Fixed asset investments

Financial assets which comprise equity shares, preference shares, fixed income securities and warrants, are classified as held at fair value through profit or loss as the financial assets are managed and their performance is evaluated on a fair value basis in accordance with the Company's investment strategy and this is also the basis on which information about investments is provided internally to the Board.

 

Purchases or sales of financial assets are recognised/derecognised on the date the Company trades the investments. On initial recognition investments are classified as fair value through profit or loss with any resultant gain or loss, including any gain or loss arising from a change in exchange rates, recognised in the Income Statement. For listed securities this is either the bid price or last traded price, depending on the convention of the exchange on which the investment is listed.

 

Financial assets which are not listed or where trading in the securities of an investee company is suspended are valued at the Board's estimate of fair value in accordance with International Private Equity and Venture Capital Valuation ("IPEV") guidance. Unquoted financial assets are valued on the basis of all the information available to them at the time of valuation. This includes a review of the financial and trading information of the Company, covenant compliance, ability to pay the interest due and cash held. Valuation methodologies for the Company's unquoted investments include:

 

•    the last published net asset value or traded share price of the security, after adjustment for factors that the AIFM and Board believe would affect the amount of cash that the Company would receive if the security were realised as at the reporting date; or

 

•    the estimated, discounted cash distribution based on information provided by the management or liquidators of the security. The discount applied will take account of various factors, including expected timings of the cash flow and the level of certainty on the estimate; or

 

•    in the case of warrants, a widely accepted valuation model, such as the Black-Scholes model.

 

Changes in fair value and gains or losses on disposal are included in the Income Statement as a capital item.

 

(e) Income

Dividends receivable on equity shares are recognised as income on the date that the related investments are marked ex-dividend. Dividends receivable on equity shares where no ex-dividend date is quoted are recognised as income when the Company's right to receive payment is established. Dividend income is recognised through the revenue or capital column of the Income Statement based on the nature of the distributions. Income from special dividends is taken to capital where relevant circumstances indicate that the dividends are capital in nature.

 

Fixed interest returns on non-equity shares are recognised on a time apportioned basis so as, if material, to reflect the effective interest rate on those instruments. Any difference between acquisition cost and maturity value is recognised as revenue over the life of the security using the effective yield basis of calculating amortisation. Other returns on non-equity shares are recognised when the right to the return is established. The fixed return on a debt security is recognised on a time apportioned basis so as to reflect the effective interest rate on each such security. Income from deposit interest and underwriting commission is recognised on an accruals basis.

 

(f) Taxation

The charge for taxation is based on net revenue for the year. The tax effect of different items of income/gain and expenditure/loss is allocated between capital and revenue on the same basis as the particular item to which it relates.

 

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except:

 

-   the recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and

 

-   any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

 

Deferred tax balances are not recognised in respect of permanent differences.

 

Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

 

Because the Company intends each year to qualify as an investment trust under Chapter 4 of Part 24 of the Corporation Tax Act 2010 (previously S842 of the Income and Corporation Taxes Act 1988), no provision is made for deferred taxation in respect of the capital gains that have been realised, or are expected in the future to be realised, on the sale of fixed asset investments.

 

(g) Expenses

All expenses are accounted for on an accruals basis. Expenses are charged through the Income Statement as a revenue item except the following which are charged to capital:

 

-  expenses which are incidental to the disposal of an investment are deducted from the disposal proceeds of the investment; and

 

-  the Company charges 75 per cent. of investment management fees to capital, in line with the Board's expected long-term return in the form of capital gains and income respectively from the investment portfolio of the Company. This split has been reassessed annually and remains appropriate. For further details refer to Note 3.

 

(h) Dividend payments

Dividends paid by the Company on its shares are recognised in the financial statements in the period in which they are paid and are shown in the Statement of Changes in Equity. Shares held in treasury carry no entitlement to dividends.

 

(i) Foreign currency

Transactions denominated in foreign currencies are recorded in the local currency at actual exchange rates at the date of the transaction. Overseas assets and liabilities denominated in foreign currencies at the year end are reported at the rates of exchange prevailing at the year end. Instruments held at fair value are translated at the rate prevailing at the time the fair value is determined.

 

Any gain or loss arising from a change in exchange rates subsequent to the date of a transaction and before the settlement date is included as an exchange gain or loss. The functional currency of the Company, being its statutory reporting currency, is pound sterling.

 

(j) Finance costs

Finance costs are accounted for on an accruals basis. Finance costs of debt, insofar as they relate to the financing of the Company's investments or to financing activities aimed at maintaining or enhancing the value of the Company's investments, are allocated between revenue and capital in accordance with the Board's expected long-term split of returns, in the form of income and capital gains respectively, from the Company's investment portfolio. For further details refer to Note 5.

 

(k) Capital and reserves

(i)  Share capital - represents the nominal value of authorised and allocated, called-up and fully paid shares issued. The reserve is non-distributable.

 

(ii) Share premium - the surplus of net proceeds received from the issuance of new shares over their par value is credited to this account and the related issue costs are deducted from this account. The reserve is non-distributable.

 

(iii)          Capital reserve - The following are accounted for in this reserve:

 

-   gains and losses on the realisation of investments;

 

-   realised and unrealised exchange differences on transactions of a capital nature;

 

-   capitalised expenses and finance costs, together with the related taxation effect; and

 

-   increases and decreases in the valuation of investments held.

 

This reserve, excluding the unrealised gains on Level 2 and Level 3 investments detailed in Note 9, is distributable by way of dividends.

 

(iv)          Special distributable reserve - created from the Court cancellation of the share premium account which had arisen from premiums paid at launch. This reserve is distributable by way of dividends.

 

(v) Revenue reserve - the net profit/(loss) arising in the revenue column of the Income Statement is added to or deducted from this reserve. This reserve is distributable by way of dividends.

 

(vi)          Treasury shares - shares that have been repurchased by the Company but not cancelled. These shares are held in a treasury account and remain part of the Company's share capital but do not carry any rights to receive dividends or vote at general meetings. This reserve is non-distributable.

 

(l) Single segmental reporting

The Company is engaged in a single segment of business, being an investment business, consequently no segmental analysis is provided.

 

(m) Critical accounting estimates and judgements

The only significant accounting estimate and judgement is the valuation of the unquoted investments which is described in Note 1(d) above.

 

The Company does not intend to acquire securities that are unquoted or unlisted at the time of investment with the exception of securities which, at the time of acquisition, are intending to list on a stock exchange or securities which are convertible into quoted securities.

 

The Board delegates to a formal Valuation Committee, which sits within the Company's AIFM and meets on a monthly basis to review developments in relation to unquoted investments in the portfolio and assess whether adjustments are required to reflect the latest fair value of those investments.

 

The valuation methodologies for unquoted investments are dependent on the type of instruments in the portfolio. For securities that have been delisted, fair value may be determined based on the expected future cash flow or the last price traded immediately prior to delisting, with appropriate illiquidity or similar discounts applied. Derivative instruments are fair valued using well established and commonly accepted techniques and models with inputs and assumptions determined by the VC. The Company uses the Black Scholes model for the valuation of warrants.

 

As illustrated above, the Company's valuation process for unquoted equities involved significant judgements and estimates, which could have a material impact on the reported balances at the year end.

 

As at 30 June 2025, the Company held £1,886,000 or 1.3% of the portfolio (2024: £7,525,000 or 4.9%), in Level 3 investments, of which £1,364,000 or 1.0% of the portfolio relate to unquoted equity investments (2024: £6,830,000 or 4.5%) and the remaining £522,000 or 0.3% relate to unquoted warrants (2024: £694,000 or 0.4%). Further details on valuation methodologies and sensitivity analysis can be found in Note 9.

 

2 Income

 

	2025	2025	2025	2024	2024	2024
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Income from investments
UK dividend income	291	-	291	450	-	450
Preference share dividend income	466	-	466	799	-	799
Overseas dividend income	1,596	1,324	2,920	4,874	768	5,642
Fixed interest	137	-	137	191	-	191
	2,490	1,324	3,814	6,314	768	7,082
Other income
Bank interest	81	-	81	112	-	112
Total income	2,571	1,324	3,895	6,426	768	7,194

 

3 Investment Management Fees

 

	2025	2025	2025	2024	2024	2024
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Investment management fee	391	1,175	1,566	416	1,248	1,664

 

The Company's Investment Manager is CQS (UK) LLP (trading as Manulife | CQS Investment Management).

 

With effect from 1 May 2025, the investment management fee payable by the Company was reduced to 1.0 per cent. of net assets per annum.

 

Previously, the Company's annual management fee was 1.2 per cent. on net assets up to £150m; 1.1 per cent. on net assets above £150m and up to £200m; 1.0 per cent. on net assets above £200m and up to £250m; and 0.9 per cent. on net assets above £250m.

 

The balance due to Manulife | CQS for management fees at the year end was £252,000 (2024: £140,000).

 

Investment management fees have been allocated 75% to capital and 25% to revenue (2024: 75% capital and 25% revenue) in the Income Statement. This capital and revenue split is reviewed by the Board annually.

 

4 Other Expenses

 

	2025	2025	2025	2024	2024	2024
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Secretarial and administration fees	266	-	266	201	-	201*
Directors' fees	193	-	193**	157	-	157
Employer's National Insurance contributions	14	-	14	6	-	6
Auditor's remuneration for the audit of the Company's financial statements	63	-	63	73	-	73
Tax advisor remuneration for tax services	72	-	72	31	-	31
Directors' and Officers' liability insurance	19	-	19	15	-	15
Registrar fees	39	-	39	23	-	23
Custody and depositary fees	91	-	91	79	-	79
Public relations	92	-	92	84	-	84
Broker fees	50	-	50	50	-	50
Stock exchange fees	29	-	29	22	-	22
Legal and professional fees***	826	-	826	178	-	178
Other	49	-	49	57	-	57
	1,803	-	1,803	976	-	976
*    Frostrow Capital LLP was appointed on 22 November 2023 to provide the Company with administration and Company Secretary services, as well as serve as the Company's investor relations and marketing adviser. All service provisions from Frostrow are included in a single fee figure. **   Directors' fees are higher in 2025 due to overlapping period between the two new directors joining and the two directors retiring from, the Board, and a one-off £15,000 payment to one of the Directors in compensation of the additional time and commitment given in respect of the Company's response following receipt of a requisition notice from Saba Capital Management, L.P. on 18 December 2025. Further details can be found in the Directors Remuneration Report on page 51 of the Annual Report. *** 2025 total includes £714,000 in relation to the dealings of the Requisitioned General Meeting by Saba Capital Management, L.P. and the subsequent Strategic Review carried out by the Board. Subsequent to the year end and pursuant to Section 316 of the Companies Act 2006, £5,540 was reclaimed from Saba in respect of the circulation of its statement to shareholders alongside notice of the Requisitioned General Meeting held on 4 February 2025. 2024 total includes £78,000 in relation to the renewal of the Company's loan facility, £33,000 in relation to the appointment of two non-executive directors and £15,000 in relation to the transition of the Company's Administrator and Company Secretary.

 

The Company does not have any employees and no pension contributions were payable in respect of any of the Directors.

 

5 Finance Costs

 

	2025	2025	2025	2024	2024	2024
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Interest on bank loan	234	701	935	245	734	979
Other interest (Note 11)	-	-	-	66	-	66
	234	701	935	311	734	1,045

 

Interest on the bank loan has been allocated 75% to capital and 25% to revenue (2024: 75% capital and 25% revenue) in the Income Statement. This capital and revenue split is reviewed by the Board annually.

 

6 Taxation

 

	2025	2025	2025	2024	2024	2024
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Corporation tax (Note 11)	-	-	-	122	-	122
Overseas withholding tax	143	25	168	332	38	370
	143	25	168	454	38	492

 

Reconciliation of Tax Charge

The tax in the Income Statement for the year is lower than the current standard rate of corporation tax in the UK of 25% (2024: 25%). A reconciliation of the total tax charge is set out below:

 

	2025	2024
	Total	Total
	£'000	£'000
Return on ordinary activities before taxation	5,898	9,618
Corporation tax at 25% (2024: 25%)	1,475	2,405
Effects of:
Non-taxable income	(588)	(1,594)
Non-taxable gains	(1,938)	(1,652)
Overseas withholding tax	168	370
Excess management expenses (deferred tax not recognised)	1,022	845
Non-taxable exchange (losses)/gains	29	(4)
Corporation tax - prior year adjustment (Note 11)	-	122
Current year tax charge	168	492

 

The Company has not provided for deferred tax on capital gains or losses arising on the revaluation and disposal of investments as it is exempt from tax due to its investment trust status. The Company can offset excess management expenses (management fees, other administrative expenses, and interest costs) against taxable income to eliminate any tax charge on such income, but it is unlikely to generate future taxable profits to utilise these amounts. The unrecognised deferred tax assets as at 30 June 2024 totalled £5,471,000 (2024: £4,449,000) arising as a result of having excess management expenses of £21,884,000 (2024: £17,798,000) and based on a prospective tax rate of 25% (2024: 25%).

 

7 Dividends

 

	2025	2024
	Revenue	Revenue
	£'000	£'000
Amounts recognised as distributions to equity holders in the year:
Fourth interim dividend for the year ended 30 June 2024 of 1.82p (2023: 1.82p) per share	1,198	1,217
Special interim dividend for the year ended 30 June 2024 of 1.00p (2023: 3.00p) per share	659	2,007
First interim dividend for the year ended 30 June 2025 of 1.26p (2024: 1.26p) per share	811	843
Second interim dividend for the year ended 30 June 2025 of 1.26p (2024: 1.26p) per share	808	843
Third interim dividend for the year ended 30 June 2025 of 1.26p (2024: 1.26p) per share	808	842
	4,284	5,752
Amounts relating to the year but not paid at the year end*:
Fourth interim dividend for the year ended 30 June 2025 of 4.25p (2024: 1.82p) per share	2,727	1,198
Special interim dividend for the year ended 30 June 2025 of nil (2024: 1.00p) per share	-	658
Total	2,727	1,856
*     Figures under the 2025 column above are calculated using the number of voting shares (excluding shares held in treasury) in issuance of 64,157,838 as at the record date of 2 August 2025, and the comparatives under the 2024 column were calculated using the number of voting shares (excluding shares held in treasury) in issuance of 65,809,800 as at the record date of 1 August 2025.

 

In accordance with FRS 102, the fourth and special interim dividends have not been included as a liability in these accounts and will be recognised in the period in which they are paid.

 

8 Return per ordinary share

 

Return per ordinary share attributable to shareholders reflects the overall performance of the Company in the year.

 

	Year ended	Year ended
	30 June	30 June
	2025	2024
	£'000	£'000
Revenue return	-	4,269
Capital return	5,730	4,857
Total Return	5,730	9,126
Weighted average number of ordinary shares in issue	64,516,804	66,817,536
Revenue return per share (pence)	0.00	6.39
Capital return per share (pence)	8.88	7.27
Total return per share (pence)	8.88	13.66

 

There were no dilutive instruments issued by the Company for the years ended 30 June 2025 and 30 June 2024.

 

9 Investments

 

	2025	2024
	£'000	£'000
Equity shares	137,154	146,952
Preference shares	4,580	4,063
Fixed income securities	951	929
Warrants	581	683
	143,266	152,627

 

All investments are designated at fair value through profit or loss at initial recognition, therefore all gains and losses arising on investments are designated at fair value through profit or loss.

 

Investments at fair value through profit or loss

 

	2025	2024
	£'000	£'000
Opening book cost	162,667	157,457
Opening investment holding gains	(10,040)	(7,992)
Opening fair value	152,627	149,465
Analysis of transactions made during the year
Purchase at cost	38,167	34,434
Sales proceeds received	(53,953)	(37,367)
Gains on investments	6,425	6,095
Closing fair value	143,266	152,627
Closing book cost	142,707	162,667
Closing investment gains/(losses)	559	(10,040)
Closing fair value	143,266	152,627

 

In line with the revised AIC SORP issued in July 2022, the presentations of gains and losses arising from disposals of investments and gains and losses on revaluation of investments have now been combined. Please see Accounting Policies Note 1(a). The gains and losses included in the table below have all been recognised within gains on investments held at fair value in the Income Statement.

 

	2025	2024
Gains/(losses) on investments	£'000	£'000
Realised (losses)/gains on sales of investments	(4,174)	8,397
Unrealised gains/(losses) on investments	10,599	(2,302)
Gains on investments	6,425	6,095

 

During the year the Company purchased £38,167,000 (2024 restated: £35,310,000) of investments and incurred a total transaction cost of £23,000 (2024: £33,000). Disposals of investments amounted to £53,953,000 (2024 £37,621,000) with a total transaction cost of £46,000 (2024: £34,000). As at 30 June 2025, £4,000 of the disposal proceeds were receivable (2024: £34,000).

 

FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland requires an analysis of investments valued at fair value based on the reliability and significance of information used to measure their fair value. The level is determined by the lowest (that is the least reliable or independently observable) level of input that is significant to the fair value measurement for the individual investment in its entirety as follows:

 

●   Level 1 - investments quoted in an active market;

 

●   Level 2 - investments whose fair value is based directly on observable current market prices or indirectly being derived from market prices; and

 

●   Level 3 - investments whose fair value is determined using a valuation technique based on assumptions that are not supported by observable current market prices or based on observable market data.

 

	Level 1	Level 2	Level 3	Total
As at 30 June 2025	£'000	£'000	£'000	£'000
Investments at fair value through profit or loss
Equities	135,790	-	1,364	137,154
Preference shares	4,580	-	-	4,580
Fixed income securities	-	940	11	951
Warrants	-	-	581	581
Total	140,370	940	1,956	143,266

 

	Level 1	Level 2	Level 3	Total
As at 30 June 2024	£'000	£'000	£'000	£'000
Investments at fair value through profit or loss
Equities	140,121	-	6,831	146,952
Preference shares	4,063	-	-	4,063
Fixed income securities	-	918	11	929
Warrants	-	-	683	683
Total	144,184	918	7,525	152,627

 

Level 2 investments are priced using evaluated prices from a third-party vendor, together with a price comparison made with secondary and tertiary evaluated third party sources. Evaluated prices are in turn based on a variety of sources, including broker quotes and benchmarks. As a result, these investments are disclosed as Level 2 as the fair values of these investments are not as visible as quoted equity investments and their higher inherent pricing risk. However, this does not mean that the fair values shown in the portfolio valuation are not achievable at point of sale.

 

Coppernico Metals commenced trading on the Toronto Stock Exchange in August 2024 and was transferred from Level 3 investment to Level 1 during the year at a valuation of £1,445,000. There has been no other transfer of financial assets between fair value levels during the year (2024: none).

 

The Level 3 investments at the year end, along with the respective valuation methods utilised, are as follows:

 

The fair value of Level 3 financial assets has been determined by reference to valuation techniques described in Note 1(d) of these Financial Statements. Judgement has been exercised in each of these valuations in determining the most appropriate valuation methodology and inputs into the valuation models used.

 

Unquoted equity investments:

As at 30 June 2025, the Company held two unquoted equity investments, respectively Leo Lithium (£932,000), whose share trading on the Australian Securities Exchange (ASX) has been suspended since September 2023, and Firefinch (£431,000), whose shares were delisted from the ASX on 1 July 2024 and its sole investment remaining is a stake in Leo Lithium.

 

Leo Lithium has been suspended from trading on the Australian Stock Exchange ("ASX") since September 2023 and has since then disposed its 40% holding in the Goulamina project in Mali to the 60% join venture partner, China Gangfeng Lithium. Cash flow from the disposal was received in two traches with the first being received in November 2024 and the second being received in July 2025. Cash from the first trance has been paid to shareholders by way of dividends, and Leo Lithium has been considering either to fully distribute cash from the second tranche to shareholders or use that cash to acquire suitable projects to continue its operations and listing. The ValCo valued Leo Lithium using a probability weighted approach, assuming 20% probability of receiving cash in full and 80% probability of the cash being reinvested, discounted by 63%, which is based on the last capital raise to current valuation impact as a baseline guidance.

 

The only remaining assets in Firefinch is a stake in Leo Lithium plus cash and therefore the Company values Firefinch on a look through basis. Due to the uncertainty over Leo Lithium's future strategic plans, a 50% discount has been applied on Firefinch's distributable value attributable to Leo Lithium.

 

A 10% decrease in the valuation of the unquoted equity investments would result in a £136,000 negative impact on the Company's net return for the year and NAV as at the year end date, and a 10% increase would result in an equal but opposite effect.

 

On 11 September 2025, Leo Lithium announced that no suitable projects which serve the best interest of shareholders had been identified and therefore the cash received in tranche 2 would be distributed to shareholders, via two dividends, with an expected timetable of Q4 2025. This announcement has the impact of lifting the valuations of Leo Lithium by approximately 68% from £932,000 to £1,566,000, and on 14 October 2025 the Company received circa. £1,029,000 (AUD 2,521,000) as the first of the two dividends. These changes are treated as a non-adjusting post balance sheet event and therefore no adjustments to the reported valuation has been made.

 

Unquoted warrants:

The Company's investments in unquoted warrants are valued using the Black Scholes Model and the inputs into the model require judgements and estimates, which are detailed as follows:

 

•    Volatility and time to maturity: for any warrants with a maturity greater than 1 year, the 90-day volatility is used and for any securities with a maturity less than 1 year, the 60-day volatility is used. These have been deemed appropriate periods to use, as often using the time to expiry has captured market or firm events that have artificially inflated the volatility which has in turn inflated the valuation. If the period used still yields an unreflective level of volatility, then the volatility period used is overridden. When appropriate to extend the period the time to maturity is used, up to a maximum of 400 days, which is in line with Bloomberg's option and warrant valuation model assumptions; and

 

•    Risk free rate: in determining the risk free rate, the swap price discount curve is used for the relevant currencies. The swap curve in the warrant currency is deemed an appropriate method for approximating the yield curve for the following reasons:

-      there is sufficient liquidity and depth of pricing to provide reliable valuations for the Swap curves for the points and currencies that the Company currently requires;

 

-      using Swaps allows for the same discount rate methodology to be used across the range of maturities of the Warrant portfolio, whereas using other instruments to construct a yield curve would typically be more limited across different tenors. This is relevant to the current portfolio as there is a wide range of time-to-maturities; and

 

-      using Swaps allows for the same discount rate methodology to be used across different currencies, which is applicable to the Company's current portfolio which contains warrants listed and traded in a range of currencies.

 

As at 30 June 2025, the fair value of warrants held by the Company was £581,000 (2024: £683,000). If the market value of the warrants were to fall by 10 per cent., the impact on the net return and the net asset value of the Company would be a reduction of £58,000 (2024: a reduction of £68,000). If the value of the Level 3 warrants were to rise by the same percentage, the effect on the Company's net return and net asset value would be equal and opposite.

 

All other Level 3 securities have been priced at nil, in the absence of any indicators of higher value. There are normal voting rights attached to all Level 3 equity holdings which are directly proportionate to the percentage holding in the company.

 

10 Debtors

 

	2025	2024
	£'000	£'000
Prepayments and accrued income	72	331
Overseas withholding tax recoverable	252	254
Other debtors	4	34
VAT recoverable	78	26
	406	645

 

11 Creditors: Amounts Falling Due Within One Year

 

	2025	2024
	£'000	£'000
Amounts due to brokers	-	116
Other creditors	578	420
Corporation tax	122	122
	700	658

 

Included within other creditors is £252,000 (2024: £140,000) due to the Investment Manager in respect of management fees.

 

Corporation tax liability relates to certain overseas dividend income recognised during the year ended 30 June 2009, which was treated as exempt for corporation tax following the ruling of the HMRC's First Tier Tribunal in December 2021. The ruling was reversed by the Upper Tribunal in January 2024 and consequently the Company has recognised a tax liability of £122,000. An interest charge of £66,000 has been provided in respect of this tax liability. The actual amount is subject to HMRC confirmation, however, the Company believes that the interest exposure provided for is a conservative estimate and may not materialise.

 

12 Bank Loan

 

	2025	2024
	£'000	£'000
Bank loan	9,000	17,000

 

The Company has a secured loan facility with BNP Paribas ("BNP"), on which drawdowns attract an interest rate of Sterling Overnight Index Average ("SONIA") plus 1.35%. As at 30 June 2025, £9 million was drawn down at an indicative rate of 5.6% fixed until 12 September 2025 (2024: £17 million was drawn down at an indicative rate of 6.3% fixed until 13 September 2024).

 

Covenant conditions under the BNP facility are as follows:

 

●   the borrower shall not permit the net asset value to be less than £45 million;

 

●   maximum loan to value ratio of 30%; and

 

●   minimum coverage ratio (total adjusted total assets value over debt) of 1.

 

The loan facility is rolled over every three months and can be cancelled at any time.

 

As at the date this Report was approved, £11.5 million was drawn down under this facility at an indicative rate of 5.6% fixed until 12 December 2025.

 

13 Share Capital

 

	2025	2024
	£'000	£'000
Allotted, called up and fully-paid:
64,157,838 (2024: 66,159,952) ordinary shares of 25p each	16,039	16,540
2,730,671 (2024: 728,557) ordinary shares held in treasury	683	182
66,888,509 (2024: 66,888,509) total ordinary shares of 25p each	16,722	16,722

 

No shares were issued by the Company during the year (2024: nil).

 

During the year, the Company bought back 2,002,114 shares to be held in treasury at a cost of £3,636,000 (2024: £1,368,000). Following the year end, the Company bought back a further 8,800,000 shares into treasury and 20,534,059 shares for cancellation pursuant to the Tender Offer. Between 29 September and 24 October 2025, the latest practicable date prior to the publication of this Report, the Company sold 265,000 shares from treasury. As at 24 October 2025 the Company had 46,354,450 shares in issue, including 11,265,671 shares held in treasury.

 

Capital management policies and procedures

The Company's capital management objectives are:

 

●   to ensure that the Company will be able to continue as a going concern; and

 

●   to maximise the capital return to its equity shareholders through an appropriate balance of equity capital and debt. The Board normally seeks to limit gearing to 25% of net assets. The maximum gearing during the course of the year was 14% and it was 4.8% at 30 June 2025.

 

The capital of the Company is managed in accordance with its investment policy detailed in the Business Review, and the details of the Company's reserves are shown in the Statement of Changes in Equity.

 

The Board monitors and reviews the broad structure of the Company's capital on an ongoing basis. This review includes the nature and planned level of gearing, which takes account of the Investment Manager's views on the market, and the extent to which revenue in excess of that which is required to be distributed should be retained. The Company has no externally imposed capital requirements.

 

14 Net Asset Value per ordinary share

 

The net asset value per ordinary share is based on net assets of £136,376,000 (2024: £138,565,000) and on 64,157,838 (2024: 66,159,952) ordinary shares, being the number of ordinary shares in issue, excluding shares held in treasury, at the year end.

 

There were no dilutive instruments issued by the Company for the years ended 30 June 2025 and 30 June 2024.

 

15 Financial Instruments

 

The Company's financial instruments comprise its investment portfolio, cash balances, bank facilities and debtors and creditors that arise directly from its operations. As an investment trust the Company holds a portfolio of financial assets in pursuit of its investment objective. The Company can make use of flexible borrowings for short-term purposes to achieve improved performance in rising markets and to seek to enhance the returns to shareholders, when considered appropriate by the Investment Manager. The downside risk of borrowings may be reduced by raising the level of cash balances held.

 

Financial assets designated at fair value through profit or loss (see Note 9) are held at fair value. For listed securities trading actively, fair value is considered to be equivalent to the most available recent bid price. Where listed securities are not trading actively, multiple broker quotes are referencing to estimate fair value. For unlisted securities, this is determined by the Board using valuation techniques based on unobservable inputs. The fair value of other receivables, cash, and other payables is represented by their carrying value in the Balance Sheet. These are short-term financial assets and liabilities whose carrying value approximate fair value.

 

The main risks that the Company faces arising from its financial instruments are:

 

(i)  market price risk, being the risk that the value of investment holdings will fluctuate as a result of changes in market prices caused by factors other than interest rate or currency rate movements;

 

(ii) interest rate risk, being the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates;

 

(iii) foreign currency risk, being the risk that the value of investment holdings, investment purchases, investment sales and income will fluctuate because of movements in currency rates;

 

(iv) credit risk, being the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Company; and

 

(v) liquidity risk, being the risk that the bank may demand repayment of a loan or that the Company may not be able to quickly liquidate its investments.

 

Financial assets and liabilities

The financial assets and liabilities of the Company are as follows:

 

	2025	2024
	£'000	£'000
Financial assets
Investments	143,266	152,627
Cash at bank	2,404	2,952
Accrued income	50	308
Other debtors	356	337
Financial liabilities
Bank loan	9,000	17,000
Amounts due to brokers	-	116
Other creditors	700	543

 

The bank loan balance was due for renewal on 12 September 2025 (2024: 13 September 2024) and the related interest payable until renewal was £124,000 (2024: £264,000).

 

Market price risk

Market price risk arises mainly from uncertainty about future prices of financial instruments held. It represents the potential loss the Company might suffer through holding market positions in the face of price movements. To mitigate the risk the Board's investment strategy is to select investments for their fundamental value. Stock selection is therefore based on disciplined accounting, market and sector analysis, with the emphasis on long-term investments. An appropriate spread of investments is held in the portfolio in order to reduce both the statistical risk and the risk arising from factors specific to a country or sector. The Investment Manager actively monitors market prices throughout the year and reports to the Board, which meets regularly in order to consider investment strategy.

 

Investment and portfolio performance are discussed in more detail in the Investment Manager's Review and further information on the investment portfolio is set out on pages 19 to 21 of the Annual Report.

 

If the investment portfolio valuation were to fall by 5% at 30 June 2025 (2024: 5%), the impact on the profit or loss and the net asset value would be a reduction of £7,163,000 (2024: a reduction of £7,631,000). If the investment portfolio valuation were to rise by 5% the impact would be equal and opposite. The calculations are based on the portfolio valuation as at the respective balance sheet dates and are not representative of the year as a whole and may not be reflective of future market conditions. A 5% sensitivity has been selected as this level of change is considered to be reasonable based on observations of post year end performance of the portfolio investments.

 

Interest rate risk

Financial assets

Fixed, floating rate and preference share yields and their prices are determined by market perception as to the appropriate level of yields given the economic background. Key determinants include economic growth prospects, inflation, the Government's fiscal position, short-term interest rates and international market comparisons. The Investment Manager takes all these factors into account when making any investment decisions as well as considering the financial standing of the potential investee company.

 

Interest rates on fixed income instruments are fixed at the time of purchase, as the fixed coupon payments are known, as are the final redemption proceeds. Consequentially, if a fixed income instrument is held until its redemption date, the total return achieved is unaltered from its purchase date. However, over the life of a fixed income instrument the market price at any given time will depend on the market environment at that time. Therefore, a fixed income instrument sold before its redemption date is likely to have a different price from its purchase level and a profit or loss may be incurred.

 

Interest rates on floating rate instruments vary throughout the life of the instrument based on movements in the applicable underlying base rate. Consequentially, the total return achieved on these positions changes throughout the life of position. In addition, over the life of the financial instrument, the market price of such instruments will depend on the market environment at that time. Therefore, a floating rate instrument sold before its redemption date is likely to have a different price from its purchase level and a profit or loss may be incurred.

 

Interest rates on floating rate instruments vary throughout the life of the instrument based on movements in the applicable underlying base rate. Consequentially, the total return achieved on these positions changes throughout the life of position. In addition, over the life of the financial instrument, the market price of such instruments will depend on the market environment at that time. Therefore, a floating rate instrument sold before its redemption date is likely to have a different price from its purchase level and a profit or loss may be incurred. Bond yields, and their prices, are determined by market perception as to the appropriate level of yields given the economic background. Key determinants include economic growth prospects, inflation, the Government's fiscal position, short-term interest rates and international market comparisons. The Investment Manager takes all these factors into account when making any investment decisions as well as considering the financial standing of the potential investee company.

 

Returns from bonds are fixed at the time of purchase, as the fixed coupon payments are known, as are the final redemption proceeds.

 

Consequentially, if a bond is held until its redemption date, the total return achieved is unaltered from its purchase date. However, over the life of a bond the market price at any given time will depend on the market environment at that time. Therefore, a bond sold before its redemption date is likely to have a different price from its purchase level and a profit or loss may be incurred.

 

The Company's exposure to floating interest rates gives rise to cash flow interest rate risk and its exposure to fixed interest rates gives rise to fair value interest rate risk. Interest rate risk on fixed rate interest instruments is considered to be part of market price risk as disclosed above.

 

If the bank base rate were to increase by 1%, the impact on the Company's net return would be a reduction of £66,000 (2024: a reduction of £140,000). If the bank base rate were to decrease by 1%, the impact on the profit or loss would be equal and opposite. The calculations are based on borrowings as at the respective balance sheet dates and are not representative of the year as a whole.

 

Floating rate

When the Company retains cash balances they are held in floating rate deposit accounts. The benchmark rate which determines the interest payments received on cash balances is the bank base rate for the relevant currency for each deposit.

 

Financial liabilities

The Company may utilise drawdowns from the credit facility, which provides borrowings in pound sterling at a variable rate based on the SONIA rate. The Board sets borrowing limits to ensure gearing levels are appropriate to market conditions and reviews these on a regular basis.

 

Fixed rate

The Company holds fixed interest investments and the interest rate profiles are as follows:

 

			2025			2024
			Weighted			Weighted
			average			average
		2025	period for		2024	period for
		Weighted	which the		Weighted	which the
		average	rate is		average	rate is
	2025	interest	fixed	2024	interest	fixed
	£'000	rate (%)*	(years)	£'000	rate (%)*	(years)
Assets:
Fixed income securities	951	7.6	0.7	929	7.6	1.7
*     The "weighted average interest rate" is based on the current yield of each asset, weighted by their market value.

 

Foreign currency risk

The Company invests in overseas securities and may hold foreign currency cash balances which give rise to currency risks. The Company does not hedge its currency exposure and as a result the movement of exchange rates between pound sterling and the other currencies in which the Company's investments are denominated may have a material effect, unfavourable or favourable, on the returns otherwise experienced on the investments made by the Company. Although the Investment Manager may seek to manage all or part of the Company's foreign exchange exposure, there is no assurance that this can be performed effectively.

 

The Company's foreign currency exposure as at 30 June 2025 and 30 June 2024 were as follows:

 

					Sensitivity	Sensitivity
					Impact	Impact
			Net		Sterling	Sterling
			current		weakens	strengthens
	Investments	Cash	assets	Total	by 5%	by 5%
30 June 2025	£'000	£'000	£'000	£'000	£'000	£'000
Canadian Dollar	51,040	4	32	51,076	2,688	(2,432)
Australian Dollar	40,939	55	4	40,998	2,158	(1,952)
US Dollar	25,998	64	80	26,142	1,376	(1,245)
Norwegian Krone	7,680	7	-	7,687	405	(366)
Euro	-	6	127	133	7	(6)
	125,657	136	243	126,036	6,634	(6,001)

 

					Sensitivity	Sensitivity
					Impact	Impact
			Net		Sterling	Sterling
			current		weakens by	strengthens
	Investments	Cash	assets	Total	5%	by 5%
30 June 2024	£'000	£'000	£'000	£'000	£'000	£'000
Canadian Dollar	53,683	205	41	53,929	2,838	(2,568)
US Dollar	36,464	81	7	36,552	1,924	(1,741)
Australian Dollar	34,730	95	147	34,972	1,841	(1,665)
Norwegian Krone	11,175	423	-	11,598	610	(552)
Euro	-	8	145	153	8	(7)
Brazilian Real	-	26	-	26	1	(1)
	136,052	838	340	137,230	7,222	(6,534)

 

If the value of pound sterling were to strengthen against the foreign currencies the portfolio is exposed to by 5%, the impact on the Company's net return and the net asset value would be a reduction of £6,001,000 (2024: a reduction of £6,534,000). If the value of pound sterling were to weaken by the same amount, the impact on the Company's net return and the net asset value would have been an increase of £6,634,000 (2024: an increase of £7,222,000). The calculations are based on the portfolio valuation, cash balances and net current assets/(liabilities) as at the respective balance sheet dates and are not representative of the year as a whole and may not be reflective of future market conditions.

 

A 5% sensitivity has been selected as this level of change is considered to be reasonable based on observations of current market conditions.

 

The Investment Manager does not intend to hedge the Company's foreign currency exposure at the present time.

 

Credit risk

Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Company. The Investment Manager has in place a monitoring procedure in respect of counterparty risk which is reviewed on an ongoing basis. The carrying amounts of financial assets best represent the maximum credit risk exposure at the balance sheet date.

 

At the reporting date, the Company's financial assets exposed to credit risk amounted to the following:

 

	2025	2024
	£'000	£'000
Fixed interest investments	951	929
Cash at bank	2,404	2,952
Interest, dividends and other receivables	406	645
	3,761	4,526

 

As at 30 June 2025 and as at 30 June 2024 there were no debtors that were overdue.

 

Credit risk arising on transactions with brokers relates to transactions awaiting settlement. Risk relating to unsettled transactions is considered to be small due to the short settlement period involved and the high credit quality of the brokers used. The Board monitors the quality of service provided by the brokers used to further mitigate this risk.

 

The cash held by the Company and all the assets of the Company which are traded on a recognised exchange are held by BNP Paribas, the Company's custodian. Bankruptcy or insolvency of the custodian may cause the Company's rights with respect to securities held by the custodian to be delayed or limited. The Board monitors the Company's risk by reviewing the custodian's internal control reports. Should the credit quality or the financial position of BNP Paribas deteriorate significantly the Investment Manager will move the cash holdings to another bank.

 

The latest credit ratings for BNP Paribas are: A+ by Standard & Poor's, AA- by Fitch and A2 rated by Moody's.

 

There were no significant concentrations of credit risk to counterparties as at 30 June 2025 and as at 30 June 2024. The Company's largest single holding represented 8.2% of its total investments as at 30 June 2025 (2024: 7.1%).

 

Liquidity risk

The Company's liquidity risk is managed on an ongoing basis by the Investment Manager in accordance with policies and procedures in place as described in the Directors' Report. The Company's overall liquidity risks are monitored on a quarterly basis by the Board. The Company maintains sufficient cash and readily realisable securities to pay accounts payable and accrued expenses.

 

The contractual maturities of the financial liabilities at each Balance Sheet date, based on the earliest date on which payment can be required, were as follows:

 

		More than
	Three	three months
	months	but less than	More than
	or less	one year	one year	Total
30 June 2025	£'000	£'000	£'000	£'000
Current liabilities	700	-	-	700
Bank loan (including accrued interest)	9,124	-	-	9,124
	9,824	-	-	9,824

 

		More than
	Three	three months
	months	but less than	More than
	or less	one year	one year	Total
30 June 2024	£'000	£'000	£'000	£'000
Current liabilities	543	-	-	543
Bank loan (including accrued interest)	17,264	-	-	17,264
	17,807	-	-	17,807

 

16 Net Debt Reconciliation

 

	As at	Currency		As at
	30 June 2024	differences	Cash flows	30 June 2025
	£'000	£'000	£'000	£'000
Cash at bank	2,952	(118)	(430)	2,404
Bank loan	(17,000)	-	8,000	(9,000)
	(14,048)	(118)	7,570	(6,596)

 

	As at	Currency		As at
	30 June 2023	differences	Cash flows	30 June 2024
	£'000	£'000	£'000	£'000
Cash at bank	3,857	14	(919)	2,952
Bank loan	(16,000)	-	(1,000)	(17,000)
	(12,143)	14	(1,919)	(14,048)

 

17 Significant Interests

 

	Valuation	Ownership
Investments as at 30 June 2025	£'000	%
REA Holdings 9% 31/12/49	4,581	7.2%
True North Copper	893	3.5%
Cosa Resources	330	3.4%
Castile Resources	316	4.1%

 

	Valuation	Ownership
Investments as at 30 June 2024	£'000	%
REA Holdings 9% 31/12/49	4,063	7.2%
Calidus Resources	1,690	3.6%
Newcore Gold	1,031	3.2%
Galena Mining	707	7.1%
Ascendant Resources	550	12.7%
TDG Gold	414	5.0%
GT Resources	295	3.3%
Castile Resources	288	3.1%
Odyssey Gold	263	3.5%

 

18 Related Party Transactions and Transactions with the Investment Manager

 

The following are considered related parties: the Board of Directors (the "Board") and CQS (UK) LLP (trading as Manulife | CQS Investment Management) (the "Investment Manager").

 

Details of the fee arrangement with the Investment Manager are included in Note 3.

 

There are no other transactions with the Board other than aggregated remuneration for services as Directors as disclosed in the Directors' Remuneration Report on pages 51 to 53 of the Annual Report, and as set out in the Note 4 to the accounts. The beneficial interests of the Directors in the ordinary shares of the Company are disclosed on page 53 of the Annual Report.

 

The balance due to Directors for fees at the year end was £nil (2024: £nil).

 

19 Post Balance Sheet Events

 

Tender Offer

On 1 July 2025, the Company announced that a total of 29,334,059 shares, representing 45.72% of the shares in issue (excluding shares held in treasury) were validly tendered. Going forward, the Company and shareholders will benefit from the following value-enhancing initiatives put in place by the Board:

 

·    a reduction of investment management fee with backdated effect from 1 May 2025 to a flat 1 per cent. per annum of the NAV of the Company (a 20 basis point reduction on the previous highest tier of fee);

 

·    the adoption of an enhanced annual dividend of circa 8 per cent. of NAV via a quarterly dividend policy of 2 per cent. of the preceding quarter-end NAV per share using capital reserves as necessary; and

 

·    in order to provide shareholders who remain invested in the Company after the Tender Offer with a period of stability, a postponement of the next continuation vote until the AGM to be held in 2028 and biennial continuation votes thereafter, in accordance with good governance standards and as approved by shareholders at the General Meeting.

 

The Company has also entered into a Standstill Agreement with Saba Capital Management, L.P. ("Saba") until the 2028 AGM, pursuant to which it has agreed, amongst other things: that Saba shall not, and shall procure that its affiliates shall not, during the Standstill Period (i) require the Board to convene a general meeting of the Company pursuant to section 303 of the Companies Act; or (ii) exercise any voting rights available to remove, or publicly propose the removal of, any member of the Board. In addition, following the completion of the Tender Offer until the expiry or termination of the Standstill Period, Saba shall not, and shall use its best endeavours to procure that its affiliates shall not, vote against the recommendation of the Board on any other resolutions at any general meeting or annual general meeting of the Company.

 

All investments in the Tender Pool have now been realised. On 30 September 2025, the Company announced a Tender Price of 208.33 pence per Tender Exit Share and payment of these proceeds to shareholders who validly elected to participate in the Tender Offer has now been fully settled. Cavendish purchased, as principal, the 29,334,059 shares validly tendered under the Tender Offer at the Tender Price. Following completion of those purchases, Cavendish then sold all the Tender Exit Shares back to the Company at the Tender Price pursuant to the Repurchase Agreement by way of an on-market transaction on the main market for listed securities of the London Stock Exchange. The Company kept 8,800,000 shares bought back in treasury with the remainder cancelled.

 

Dividend declaration

The fourth interim dividend of 4.25 pence per share in relation to the year ended 30 June 2025 was announced on 15 July 2025 and paid on 1 September 2025 to shareholders on the register on 1 August 2025, having an ex-dividend date of 31 July 2025.

 

There are no other post balance sheet events which would require adjustment of or disclosure in the Financial Statements.

 

Loan facility

On 11 September 2025, the Board met to consider the reduction of the Company's loan facility and determined to voluntarily decrease the facility limit from £25 million to £15 million.

 

 

Glossary of Terms and Definitions

 

AIC	Association of Investment Companies. The AIC represents a broad range of investment companies, investment trusts, VCTs and other closed-ended funds.
UK Alternative Investment Fund Managers Directive ("UK AIFMD")	Agreed by the European Parliament and the Council of the European Union and transposed into UK legislation, the AIFMD classifies certain investment vehicles, including investment companies, as Alternative Investment Funds ("AIF"s) and requires them to appoint an Alternative Investment Fund Manager ("AIFM") and depositary to manage and oversee the operations of the investment vehicle. The Board of the Company retains responsibility for strategy, operations and compliance and the Directors retain a fiduciary duty to shareholders.
Alternative Performance Measure ("APM")	A financial measure of historical or future financial performance, financial position, or cash flows, other than a financial measure defined or specified in the applicable financial reporting framework.
Dividend Yield (APM)	The annual dividend expressed as a percentage of the share price.
				Year ended		Year ended
				30 June 2025		30 June 2024
	Total non-special interim dividends paid and declared (pence)			8.03		5.60
	Closing share price (pence)			199.50		189.00
	Dividend yield			4.0%		3.0%
Gearing (APM)	Net debt (bank loan net of cash) as a percentage of net asset value. Gearing amplifies the impact of gains or losses on the net asset value of the Company. It can be positive for a company's performance, although it can have negative effects on performance when underlying assets fall in value. It is the Company's policy to determine the adequate level of gearing appropriate to its own risk profile. The Company may borrow an amount up to 25 per cent. of shareholders' funds (measured at the time of drawdown). Gearing is calculated in accordance with guidance from the AIC as follows:
			Year ended			Year ended
			30 June 2025			30 June 2024
			£'000			£'000
	Cash at bank		2,404			2,952
	Bank loan		(9,000)			(17,000)
	Net debt		(6,596)			(14,048)
	Net asset value		136,376			138,566
	Gearing		4.8%			10.1%
Net Asset Value ("NAV")	The value of total assets less all liabilities of the Company. Liabilities for this purpose include current and long-term liabilities.
NAV per share (APM)	NAV per ordinary share is calculated by dividing total net asset value by the total number of ordinary shares in issue (excluding shares held in treasury).
NAV per share Capital Return (APM)	The movement between opening NAV per share (209.44p) and closing NAV per share (212.56p), which shows the capital return element (without the impact of dividend reinvestment) of the Company's NAV per share during the year.
NAV per share Total Return (APM)	The theoretical total return on an investment over a specified period assuming dividends paid to shareholders are reinvested at net asset value per share at the time the shares were quoted ex-dividend. This is a way of measuring investment management performance of investment companies which is not affected by movements in discounts or premiums. The Directors regard the Company's net asset value total return per share as being the overall measure of value delivered to shareholders over the long term.
		Year ended			Year ended	5 years ended
		30 June 2025			30 June 2024	30 June 2025
	Opening NAV per share (pence)	209.44			204.16	98.64
	Closing NAV per share (pence)	212.56			209.44	212.56
	Percentage change in NAV per share	1.5%			2.6%	115.5%
	Impact of dividend reinvestment	3.2%			4.6%	40.4%
	NAV per share total return	4.6%			7.2%	155.8%
Ongoing Charges Ratio (APM)	A measure of all operating costs incurred in the reporting period, calculated as a percentage of average net assets in that year. Operating costs exclude costs suffered within underlying investee funds, costs of buying and selling investments, interest costs, taxation and the costs of buying back or issuing ordinary shares.
				Year ended		Year ended
				30 June 2025		30 June 2024
	Total expenses (per Note 3 and 4) (£'000)			3,369		2,640
	Less non-recurring expenses - Strategic Review (£'000)			(714)		-
	Ongoing expenses (£'000)			2,655		2,640
	Average net assets value (£'000)			131,290		136,919
	Ongoing charges ratio			2.0%		1.9%
Share Price Capital Return	The movement between opening share price (189.00p) and closing share price (199.50p), which shows the capital return element (without the impact of dividend reinvestment) of the Company's share price during the year.
Share Price Total Return (APM)	The change in capital value of a company's shares over a given time period, plus dividends paid to shareholders, expressed as a percentage of the opening value. The assumption is that dividends paid to shareholders are re-invested in the shares at the time the shares are quoted ex-dividend. The Directors regard the Company's share price total return to be a key indicator of performance. This reflects share price growth of the Company which the Board recognises is important to investors.
		Year ended			Year ended	5 years ended
		30 June 2025			30 June 2024	30 June 2025
	Opening share price (pence)	189.00			169.50	79.30
	Closing share price (pence)	199.50			189.00	199.50
	Percentage change in share price	5.6%			11.5%	151.6%
	Impact of dividend reinvestment	3.7%			5.6%	55.2%
	Share price total return	9.3%			17.1%	206.8%
Share Price Discount or Premium to NAV per share (APM)	The amount by which the market price per share of an investment trust is lower or higher than the net asset value per share. The discount or premium is normally expressed as a percentage of the net asset value per share. If the share price is higher than the net asset value per share the result is a premium. If the share price is lower than the net asset value per share, the shares are trading at a discount. The Board regularly reviews the level of the discount/premium of the Company's share price to the net asset value per share and considers ways in which share price performance may be enhanced, including the effectiveness of share buybacks, where appropriate.
			Year ended			Year ended
			30 June 2025			30 June 2024
	Closing NAV per share (pence)		212.56			209.44
	Closing share price (pence)		199.50			189.00
	Share price discount to NAV per share		6.1%			9.8%
TCFD	The Financial Stability Board created the Task Force on Climate-related Financial Disclosures ("TCFD") to improve and increase reporting of climate-related financial information.
Treasury shares	Shares previously issued by a company that have been bought back from shareholders to be held by the company for potential re-issuance or cancellation at a later date. Shares held in treasury do not carry voting rights or rights to dividends.

 

The figures and financial information for 2025 are extracted from the Annual Report and financial statements for the year ended 30 June 2025 and do not constitute the statutory accounts for the year. The Annual Report and financial statements for the year ended 30 June 2025 include the Report of the Independent Auditor which is unqualified and does not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006. The Annual Report and financial statements have not yet been delivered to the Registrar of Companies.

The figures and financial information for 2024 are extracted from the published Annual Report and financial statements for the year ended 30 June 2024 and do not constitute the statutory accounts for that year. The Annual Report and financial statements for the year ended 30 June 2024 have been delivered to the Registrar of Companies and included the Report of the Independent Auditor which was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006.

- ENDS -

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

For further information please contact:

Administrator and Company Secretary
Frostrow Capital LLP
Tasmin Arthurton
Email: cosec@frostrow.com
Tel: 0203 709 2408

Investment Manager
Manulife | CQS Investment Management
Craig Cleland
Email: contactncim@cqsm.com
Tel: 0207 201 5368