Annual Financial Report

BAKER STEEL RESOURCES TRUST LIMITED

(Incorporated in Guernsey with registered number 51576 under the provisions of The Companies (Guernsey) Law, 2008 as amended)

28 April 2025

BAKER STEEL RESOURCES TRUST LIMITED

(the "Company")

LEI: 213800JUXEVF1QLKCC27

Annual Report and Audited Financial Statements

For the year ended 31 December 2024

The Company has today, in accordance with DTR 6.3.5, released its Annual Report and Audited Financial Statements for the year ended 31 December 2024. The Report is available via www.bakersteelcap.com/baker-steel-resources-trust/ and the National Storage Mechanism.

Further details of the Company and its investments are available on the Baker Steel Capital Managers website www.bakersteelcap.com

Enquiries:

Baker Steel Resources Trust Limited +44 20 7389 8237

Francis JohnstoneTrevor Steel

Shore Capital +44 20 7408 4050

Henry Willcocks (Corporate Broking)

Gillian Martin, Daphne Zhang (Corporate)

Adam Gill (Sales)

Aztec Financial Services (Guernsey) Limited

Company Secretary +44 1481 749771

BAKER STEEL RESOURCES TRUST LIMITED

For the year ended 31 December 2024

Dear Shareholders,

I would like to start my first statement as your new Chair by paying tribute to Howard Myles, who stepped down as Chairman of BSRT on 31 December 2024. The Board would like to express its gratitude for his wise and steady leadership since the inception of the Company in 2010, during which time he steered it through a number of commodity cycles and challenges.

It is worth noting that 2024 was not a year, like some, when the rising tide lifted all the boats. Instead, somewhat unusually, there was significant divergence in price performance between the precious metals (gold and silver both up by more than 20%); the base metals (copper up 2%, tin by 14%, tungsten by 11%); and the steel making minerals (benchmark prices for iron ore down 27% and coking coal down by 40%). Precious metals were buoyed up by falling interest rates and, in the latter part of the year, increasing geopolitical uncertainties arising from the US elections. Bulk commodity prices, on the other hand, were hurt by weaker demand and shifting trade flows from China (the largest customer for the seaborne products).

Company Strategy

It is perhaps worthwhile restating our strategy which is focussed on offering unique exposure to high alpha opportunities in the Mining sector amongst both public and private companies. Our investment manager, Baker Steel, is a specialist natural resources asset manager and the experienced team of fund managers running this portfolio benefit from the broader activities, and expert knowledge, in the wider Baker Steel Capital Group. 

Our strategy has always been to have a globally diverse portfolio of investments. Currently, it contains exposure to a number of commodities likely to be the focus of future government and industry spending on the energy transition, critical mineral supply chains and defence capabilities. These, such as copper, tin, tungsten, silver and potash, represent a small percentage at present, but should offer promising future optionality.

We are also mindful that Futura Resources and CEMOS Group represent a higher concentration in our portfolio than is ideal, largely due to their success having grown 83% and 90% since the time of investment. Over time we aim to see a better balance achieved, both through disposals and successful future growth of some of the smaller investments.

Over the medium term, we will seek to grow the net asset value of the Company to create a broader portfolio, with critical mass, to attract an increased level of investor interest and to provide stronger cash flows to allow distributions to shareholders. We will continue to prioritise lower risk structures, such as royalties and convertibles, and develop selective and profitable exposure to future facing commodities. More detail on our strategy and activities is to be found in the Investment Manager's Report.

Company Performance

The Company's NAV rose by 16.2% over the year, from 77.2p to 89.7p. Detailed progress reviews on all the investments are set out in the Investment Manager's Report. The rise in NAV was primarily driven by increased carrying values at Nussir (copper in Norway), the Bilboes Gold Royalty, Futura Resources (metallurgical coal in Australia) and CEMOS Group (cement production in Morocco) - these latter two largest holdings now represent 65% of the asset value. Their continued success in sourcing funding and progressing production helped to offset falls in the values of the holdings in Kanga Investments, First Tin and Azarga Metals Corp.

We are pleased that CEMOS Group and Futura Resources will be moving towards a free cash generative phase. 2025 is expected to be a further ramp up year at both, with the full benefits to the Company's cash flow profile thus expected to be in the years 2026/27 and beyond.

Futura Resources continued to ramp up production at its Wilton mine in Queensland, Australia, following a successful raising of A$30m in September 2023, and reached run of mine annualised production of c.1Mtpa in Q3 2024. In the wake of securing a further US$24m in offtake financing from a major trading company in July 2024, it gained access to its second mine, Fairhill, in December 2024. Whilst subject to a 6-month delay, first coal was mined at Fairhill in April 2025, with a combined saleable coal target of approximately 900,000 tonnes in 2025. In recent months, coking coal prices have deteriorated further to lows of around US$170/tonne which has put pressure on the entire global metallurgical coal industry. It has also negatively impacted Futura's margins and cashflows making its ramp up stage more challenging. Despite this, the outlook for the price of coking coal looks well supported by long term supply-demand fundamentals.

CEMOS Group aims to complete the installation of its own clinker plant during the second quarter of 2025, enhancing profit margins as it becomes an integrated cement producer. In 2026, production capacity is forecast to double as a second grinding plant is put in place, of similar scale to the current line at Tarfaya. Morocco's buoyant economy remains a positive environment in which to operate. Representatives of the Board spent a week in Morocco last Autumn and saw first-hand the quality of the executive team and the staff, the sites, and the scale of the opportunity available to the Company.

Share Price Performance and Discount

Following a challenging year in 2023, we saw a pleasing 43% rise in the BSRT share price during 2024, from 39.5p to 56.5p. Although the Company does not have a formal benchmark, it is worth noting that over the same period, the MSCI Metals and Mining Index fell by 13.5%. This is not an ideal comparison given that the index is dominated by large cap mining groups, with typically heavy exposure to the so-called bulk commodities, but at least it provides some kind of external benchmark.

Despite the positive share price performance, the shares ended the year at a 37% discount to NAV. This is clearly disappointing, and it is no solace that similar scale discounts are to be found across the investment trust sector. We monitor closely the actions taken by other companies to address this issue, and the extent to which they are successful.

I would like to assure our shareholders that we are keenly focussed on strategies and actions which we believe should ensure the share price reflects the underlying value of our assets more accurately, notwithstanding the illiquid nature of a number of our investments.

Capital Allocation

As we look towards growing forecast dividend income and royalty flows, we aim to supplement these with selected asset disposals, either where we see an attractive opportunity to realise good returns, or where we perceive a development project could be more attractive to another industry player. Evidence of the Investment Management team's ability to execute creative exits for such assets can be seen in the successful vending of the Nussir copper project into the Canadian listed company, Blue Moon, over the year end.

As a Board, we are fully committed to a capital allocation policy that will reward our shareholders with the fruits of this more predictable future cash flow. We would like to be in a position to announce a distribution with the release of our 2025 accounts, which will reflect the extent of the income or capital receipts during the year. This could be in the form of a dividend, share buybacks and / or tender offers, in order to best satisfy the different requirements of our diverse shareholder base.

Board and Advisers

As mentioned above, Howard Myles retired from the Board on 31 December 2024 after 14 years' service.

We were pleased to welcome Patrick Meier to the Board in June. He recently stepped down as Chairman of Ecora Resources plc, the leading royalty and streaming business listed on the London Stock Exchange. He also acted as Chairman of Firestone Diamonds plc, which was traded on the Alternative Investment Market of the London Stock Exchange. Additionally, he brings over 30 years of valuable experience in investment banking at RBC Capital Markets with specialist knowledge of the mining sector. 

We were also pleased to announce the appointment of Shore Capital as the Company's broker in October 2024. We look forward to working with them to improve the liquidity in BSRT shares, and to take appropriate steps to reduce the share price discount to NAV.

Outlook

The immediate outlook for commodities demand from slower economic growth in China had already become a concern in the second half of 2024. Since the change of administration in the US at year end, the multiple and variable tariff measures imposed on America's trading partners have introduced another level of uncertainty into the outlook for global economic growth. While precious metals continue to be beneficiaries of investment flows seeking a safe haven from the upheaval in the global geopolitical context, the demand and pricing impact on base metals and bulk commodities is less clear.

The impact of disrupted global trade flows and tariffs on the inflation outlook (and hence mining costs) is particularly difficult to forecast. What is already becoming clear, however, is that the current environment of uncertainty is causing many companies to slow investment decisions. It has also increased the volatility in exchange rates and borrowing costs, making financial forecasting significantly more challenging.

Despite this backdrop of heightened macro-economic uncertainty, we will continue to focus on harvesting the value of our investment portfolio. With our two largest assets likely to move into a free cash generative phase, we see an exciting few years ahead during which we expect to reward our shareholders with the returns they deserve.

Fiona Perrott-Humphrey

Chairman

25 April 2025

Financial Performance

The audited Net Asset Value per Ordinary Share ("NAV") as at 31 December 2024 was 89.7 pence, an increase of 16.2% in the year compared with the decrease in the MSCI World Metals and Mining Index of 13.5% in Sterling terms.

For the purpose of calculating the NAV per share, unquoted investments were carried at fair value as at 31 December 2024 as determined by the Directors and quoted investments were carried at their quoted prices as at that date.

Net assets at 31 December 2024 comprised the following:

Investment Update

Review

At the year end, the Company was fully invested, holding 15 investments of which the top 10 holdings comprised 97.7% of the portfolio by value. In terms of commodity, the portfolio has exposure to cement, copper, gold, iron, lead, lithium, potash, silver, steel making coal, tin, tungsten, vanadium, and zinc. Its projects were located in Australia, Canada, Germany, Indonesia, Madagascar, Morocco, Norway, Peru, the Philippines, Republic of Congo, Russia, the UK and Zimbabwe.

During the year, mining market performance showed diversity by commodity and particularly with stage of development. It remained difficult for junior companies to raise funds to continue exploration and those looking to develop new projects found risk capital difficult to source. The MSCI World Metals and Mining Index composed of large and mid-cap companies fell 13.5% in Sterling terms. The Company's NAV rose 16.2% during the year.

In 2024, gold rose by 27.2% and silver increased by 21.5%. Base metals prices remained reasonably strong, with copper up 2.2%, tin up 14.6%, and tungsten up 10.6%. However, steel-making mineral prices declined due to weaker economic output in China, with iron ore falling by 27.7% and metallurgical coal decreasing by 40.4% (all expressed in US dollar terms).

The Company's NAV rose 16.2% in Sterling terms during the year largely due to rises in the carrying values of Futura and CEMOS notwithstanding reductions in the quoted prices of First Tin and Azarga Metals Corporation together with a reduction in the valuation of Kanga Investments. Several of the companies in the portfolio including Futura and Cemos are moving towards positive free cashflow which should provide significant royalties and dividends to the Company in the coming years and also provide opportunities to realise some part of our investments.

The Company's main investments at the year-end:

Futura Resources Ltd ("Futura")

Futura owns the Wilton and Fairhill steel making coal projects in the Bowen Basin in Queensland, Australia which hold Measured and Indicated resources of 843 million tonnes of coal.

Investment: 11,309,005 ordinary shares (26.9%) valued at £12.4 million

1.5% Gross Revenue Royalty valued at £16.8 million

A$4.7 million convertible loan valued at £2.7 million

Following a A$30 million financing package in September 2023 Futura successfully commissioned its Wilton open pit mine in Queensland, Australia with first coal delivered to the Gregory Crinum wash plant in February 2024. Run of Mine production was ramped up to full planned rates of 80,000 tonnes per month or an annualised c.1Mtpa by Q3 2024.

In July 2024, Futura secured US$24m (A$36.4m) in an offtake financing arrangement with a major trading company, which has funded the development of Futura's second mine, the Fairhill mine immediately to the North of Wilton. Futura moved on to the Fairhill property in December 2024 and first coal was mined in April 2025. The Run of Mine ("ROM") production is planned to be ramped up to a rate of around 145,000 tonnes per month or an annualised production rate of around 1.7Mtpa during the third quarter 2025. ROM production from both mines is expected to be around 2.1Mtpa in 2025 aiming to build up to 4Mtpa by 2030 based on the current mine plan. Saleable product coal in CY 2025 is expected to be 0.9 Mtpa building up to 1.9Mtpa by 2030.

The coking coal market remains subdued due primarily to on-going economic weakness in China which is the world's largest steel producer. Coking coal prices have declined further during 2024 from around US$320 per tonne at the end of 2023 to around US$200 per tonne at the end of the year, slightly below long-term consensus prices of US$200-225 per tonne. Since then coking coal prices have deteriorated further to lows of around US$170/tonne which has put increasing strain on the whole metallurgical coal industry including Futura. Accordingly Futura plans to seek further short-term working capital during its ramp up stage. This weakness in the market is currently viewed as temporary and does not impact the longer-term positive outlook for coking coal with medium-term supply constraints coupled with expected strong demand increases anticipated for seaborne imports, most notably from India. It should be recognised that since the imposition of a new tariff-based world order brought in by the Trump administration, this has introduced a heightened level of uncertainty especially regarding trade with China in which the circumstances appear to change on a daily basis.

CEMOS Group Plc (''CEMOS'')

CEMOS is a private cement producer with production operations at Tarfaya in Morocco.

Investment: 50,129,247 ordinary shares (31.3%) valued at £30.0 million

The cement market in CEMOS's southern area of Morocco was stable in 2024, with sales for the year totalling 209,000 tonnes, approximately 15% higher than the 182,000 tonnes achieved in 2023. As a result, the unaudited EBITDA for the year was estimated at around €9 million (2023: €6 million).

During 2024, CEMOS commenced the construction of a Compact Calcination Unit at the Tarfaya cement plant site to produce its own clinker and supplementary cementitious materials, the principal raw materials in cement production and representing approximately 70% of cost of the cement. This will not only provide security of supply of clinker but should materially reduce costs as well as lowering the carbon footprint associated with cement production. Commissioning of the calcination plant is expected to take place in May 2025 with the full benefit realised from the second half of 2025.

During 2024, CEMOS identified a site and commenced the permitting process for its second grinding plant acquired in 2022, essentially identical to the existing plant at Tarfaya. CEMOS plans to start construction of this second plant around the middle of 2025 which will allow it to double its production rate from 2026 onwards.

Major Moroccan Government and foreign investment and development initiatives including the football World Cup in 2030 are expected to provide a boost to the Moroccan cement market over the coming years. CEMOS expects increased profitability in 2025 following the commencement of production from the clinker plant and thereafter once the second grinding line is installed.

Bilboes Gold Royalty

The Company holds a 1% Net Smelter Royalty ("NSR") over future production from the Bilboes' gold project in Zimbabwe owned by Caledonia Mining Corporation Plc ("Caledonia"), see below

Investment: 1% NSR valued at £8.4 million

The Bilboes properties host a JORC compliant Proved and Probable Reserve containing 1.8 million ounces of gold out of a total Mineral Resource of 3.8 million ounces of gold.

In June 2024, Caledonia released the results of the Preliminary Economic Assessment ("PEA") for the Bilboes project, indicating production of 1.5 million ounces of gold over a 10-year period. Caledonia concluded that a single-phase development of the project would provide the best economic return, having considered alternative development options, including multi-phase development and changes to certain other aspects of the project. At a gold price of US$1,884 per ounce used in the PEA, the economic model calculated a Net Present Value ("NPV") with a 10% discount rate of US$309 million and an Internal Rate of Return ("IRR") of 34%. During March 2025 Caledonia also announced that whilst it had been making good progress on the Feasibility Study for the Bilboes project, (initially targeted for completion in Q1 2025), it had decided to extend the timeline to fully explore several material optimisation opportunities. This includes engaging with the authorities to explore the potential for selling concentrate directly which could potentially reduce up-front capital expenditures significantly by deferring capital expenditure on a BIOX (Biological Oxidation) processing circuit, at least for the first few years of production.

At the current gold price of US$3,000 per ounce, the Company should receive around US$4 million per annum after withholding tax from its 1% Net Smelter Royalty on the Bilboes mine. Caledonia are yet to suggest a date for commencement of the mine but should development commence in 2026, production could commence in 2028.

Nussir ASA ("Nussir")

Nussir is a Norwegian private company whose key asset is the Nussir copper project in northern Norway.

Investment: 31,385,361 ordinary shares (21.6%) valued at £6.9 million

In 2023, Nussir completed the update of the Definitive Feasibility Study ("DFS") on its Nussir copper project in northern Norway changing the operations from diesel based to one based on a fully electrified mine producing around 14,000 tonnes of copper per year over a 14 year mine life. The updated DFS economics gave an NPV of US$191 million at an 8% discount rate, with an IRR of 22% based on a copper price of US$8,000 per tonne.

Nussir ASA ("Nussir") (continued)

In December 2024, over 99% of shareholders of Nussir agreed to sell their shares in Nussir to Blue Moon Metals Inc. ("Blue Moon"), a company listed on the TSX-V stock exchange, in return for shares in Blue Moon. The transaction valued Nussir at US$55.3 million based on the price at which Blue Moon raised C$30 million of new equity capital as part of the transaction. Blue Moon shares were suspended until the completion of the transaction on 27 February 2025, following approval by the TSX. As a result, the Company holds 11.3% of the shares of Blue Moon. The Company's shares in Blue Moon are subject to gradual lock-up arrangements as prescribed by the TSX and therefore, in accordance with the Company's valuation policy, are held at a discount to the listed price. In addition, at the year-end, a further discount had been applied to allow for transaction risk, giving a total discount to the fundraising price of 28.6% at the year-end. The value of the investment in Nussir increased by 77% in Sterling terms during 2024.

Metals Exploration plc ("Metals Ex")

Metals Ex is an AIM listed company which owns the Runruno gold mine in the Philippines.

Investment: 62,460,000 ordinary shares (3.6%) valued at £3.3 million

During 2024, Metals Ex produced annual gold sales of 83,897 ounces from its Runruno gold mine in the Philippines generating record annual positive free cash flow of US$96.7 million. This strong performance allowed it to pay down the remainder of its debt and to buy back all the shares of its second largest shareholder. Metals Ex has forecast production for 2025 of 70,000-75,000 ounces of gold at an AISC of between US$1,225 and US$1,325 per ounce of gold. Metals Ex has identified an exploration target called Dupax located approximately 20km SW of the Runruno mine site. With a target of 10Mt to 20Mt of potential ore according to Metals Ex, this could extend Runruno operations by several years beyond the currently modelled depletion of the existing Runruno mine in 2027.

In January 2025, Metals Ex completed the acquisition of Condor Gold plc, whose main project is the La India gold project in Nicaragua. Metals Ex's internal studies have suggested that La India could produce an average of 145,000 ounces of gold per annum from open pit and underground over a 12.4 year period. Initial capex of US$122 million can be covered by projected cashflow from Runruno with first production targeted by the end of 2026. Given that Metals Ex expects to be able to put La India into production without incurring debt, once in production in 2027, Metals Ex should be in a position to start paying dividends.

Caledonia Mining Corporation Plc ("Caledonia")

Caledonia is a NYSE, AIM and Victoria Falls Exchange listed gold producer whose primary assets are the producing Blanket Mine and the Bilboes gold project (outlined above) both in Zimbabwe.

Investment: 425,000 ordinary shares (2.4%) valued at £3.2 million

Caledonia reported annual gold production at its Blanket gold mine in Zimbabwe of 76,656 oz in 2024, in line with guidance. Production guidance for 2025 is similar to 2024 at 73,500 to 77,500 with all-in sustaining cost ("AISC") is expected to be in the range of $1,690/oz to $1,790/oz.

The higher gold price in the year resulted in operating profit for the full year of US$77.0 million (2023 US$44.5 million).

Caledonia currently pays a dividend of US$0.14 per quarter. It is expected that at least this level of dividend will continue until the Bilboes project can be brought into production.

Tungsten West Plc (''Tungsten West'')

Tungsten West owns the Hemerdon Tungsten Mine in Devon, United Kingdom and is quoted on the AIM market of the London Stock Exchange.

Investment: 28,846,515 ordinary shares (15.4%) valued at £1.08 million

£1,200,000 convertible loan valued at £2.06 million

1,657,195 second options valued at £0.03 million

1,657,195 third options valued at £0.02 million

Tungsten West Plc (''Tungsten West'') (continued)

On 16 January 2023 Tungsten West announced the results of its updated feasibility study on the Hemerdon tungsten and tin mine in Devon. The feasibility study detailed a mine with average annual production of 2,900 tonnes of tungsten (WO3) and 310 tonnes of tin in concentrate over 27 years. The economics showed a post-tax NPV5% of £297 million with an Internal Rate of Return (IRR) of 25%. It also highlighted an upside case post-tax NPV5% of £416 million with an IRR of 32%. Total pre-production capex, corporate commitments and working capital was estimated at £54.9 million.

During 2024 Tungsten West received the two remaining major licences to be able to commence production: a revised Section 73 authority, to vary the tonnage cap associated with the existing permission for 50 truck movements per day from the site which will enable the production of secondary aggregates and the permit to operate the Mineral Processing Facility. Tungsten West is currently updating the feasibility study which is expected to be complete in the first half of 2025 with a view to raising the capital for redevelopment later in 2025. This will enable it to recommence production of tungsten and tin in 2026.

First Tin PLC ("First Tin")

First Tin is a company listed on the London Stock Exchange which owns the Taronga tin project in Australia and the Tellerhäuser and Gottesburg tin projects in Germany.

Investment: 46,628,014 ordinary shares (10.3%) valued at £2.6 million

On 2 May 2024, First Tin PLC announced the results of the DFS for its 100% owned Taronga open pit tin project located in New South Wales, Australia. The DFS outlines an open pit mine mining 5 million tonnes of ore per annum followed by a crushing and a gravity processing facility. This is forecast to produce an average of 3,600 tonnes of tin per annum at an All-In-Sustaining costs of US$15,843 per tonne of tin sold. Pre-production capex is estimated at US$116 million with the economic model based on US$30,000 per tonne of tin showing an NPV8% of 120 million and an IRR of 28%.

First Tin has planned a 10,000m drilling programme at Taronga to convert the in-pit Inferred resource to Indicated and Measured status and to outline the other interpreted lode structures and is scheduled to be undertaken in early 2025 which should translate to additional ore reserves and ultimately a longer life of mine. This will form the basis of a revised, optimised and value enhanced update to the feasibility study, planned to be completed during 2025.

In addition, an exploration review has shown a large pipeline of tin projects close to Taronga. First Tin intends to advance these projects concurrently with the development of Taronga. This strategy could ultimately position the proposed processing facility at Taronga as a central processing hub.

Whilst the main focus of First Tin is on Taronga, it also continues to make progress on its second project, the Tellerhäuser tin project in Saxony, Germany. The review of a large amount of additional historic drilling data discovered in the Saxony archives closed gaps in the mineral resource statement and provided additional resource volume, without additional cost. This led to a 35% increase in total Indicated plus Inferred Mineral Resources in April 2024 to 138,600 tonnes of contained tin.

Silver X Mining Corporation ("Silver X")

Silver X is a TSX-V listed company whose Recuperada silver/lead/zinc project in Peru comprises 11,261 Ha of mining concessions centred around a 600 tonne per day processing plant.

Investment: 19,502,695 ordinary shares (9.7%) valued at £2.1 million

In February 2023 Silver X released the results of a PEA under Canadian National Instrument 43-101 Standards for the expansion of the Tangana Mining Unit at Nueva Recuperada. The PEA outlined the potential to increase annual production to 4.2 million ounces silver equivalent by constructing an additional recovery plant at a capital cost of US$61 million to give a post-tax NPV10% of US$175 million. On 26 February 2025 Silver X announced a significant upgrade to its NI 43-101 mineral resource estimate at its Nueva Recuperada Property in Huancavelica, Peru. Overall measured and indicated resources grew from 3.60 million tonnes to 4.26 million tonnes, a +18% increase, and inferred resources increased from 11.89 million tonnes to 17.18 million tonnes, a +45% increase. The updated resource estimate included the nearby Plata Mining Unit for the first time which contains 5.81 million ounces of silver in the indicated category and 26 million ounces of silver in the inferred category. Silver X is currently updating the PEA to incorporate additional mining areas such as Plata and further expanding processing capacity and is planned to be completed by the middle of 2025.

Kanga Investments Ltd ("Kanga")

Kanga is a private company which holds the Kanga potash project, in the Republic of the Congo.

Investment: 56,042 ordinary shares (7.8%) valued at £1.4 million

Kanga completed a positive Feasibility Study in 2020 on its Kanga Potash project in the Republic of Congo for a mine producing 600,000 tonnes per annum of Muriate of Phosphate ("MOP"). The DFS economic model gave a NPV at a 10% discount rate of US$511 million with an IRR of 22% based on an MOP price of US$282 per tonne compared to the current price of around US$300 per tonne. There has continued to be good interest in attracting potential partners to acquire or finance the Kanga potash project but negotiations have been protracted and in the meantime, Kanga has struggled to attract short term financing to fund working capital and as a result the carrying value was reduced by 53% in 2024 until such time as a definitive transaction is achieved.

Polar Acquisition Limited ("PAL")

PAL is a private company which holds a 1.8% to 0.9% (reducing over 10 years) net smelter royalty over the Prognoz silver project ("Prognoz"), 444km north of Yakutsk in Russia, from Solidicore Resources. Prognoz has a 267-million-ounce silver equivalent Indicated and Inferred Mineral Resource at a grade of 755 g/t silver equivalent.

Investment: 16,352 ordinary shares (49.99%) valued at £1.0 million

In March 2024 Solidcore, sold off its Russia business which included the Prognoz silver project. However, the liability to pay the net smelter royalty to PAL remains with Soldicore (which is now domiciled in Kazakstan) and the royalty contract has no Russian entities as parties to the Agreement. Ore was transported and processed at the Nezhda mine concentrator in the second half of 2024, although the level of sales and therefore royalty is yet to be ascertained, which would trigger commencement of the payment obligation. We are considering the potential for a sale of the royalty whilst at the same time evaluating the contractual rights to payment under our Agreement with Solidcore.

Baker Steel Capital Managers LLP

Investment Manager

25 April 2025

*See accompanying notes to the financial statements on Page 46

Company Structure

The Company is a registered closed-ended investment scheme pursuant to the Protection of Investors (Bailiwick of Guernsey) Law, 2020 ("POI Law") and the Registered Collective Investment Scheme Rules and Guidance, 2021 issued by the Guernsey Financial Services Commission ("GFSC"). The Company is not authorised or regulated as a collective investment scheme by the Financial Conduct Authority. The Company is subject to the Listing Rules and the Disclosure Guidance and Transparency Rules of the UK Listing Authority.

The Articles of the Company contain provisions as to the life of the Company. At the Annual General Meeting ("AGM") falling in 2018 and at each third AGM convened by the Board thereafter, the Board will propose a special resolution to discontinue (the Company) which if passed will require the Directors, within 6 months of the passing of the special resolution, to submit proposals to shareholders that will provide shareholders with an opportunity to realise the value of their Ordinary Shares. At the recent AGM held on 12 September 2024, the vote to discontinue the Company was not passed and therefore a vote with regard to continuation will not be proposed by the Board until the AGM in three years' time as is required by the Company's Articles.

Company Purpose and Values

The purpose of the Company is to carry out business as an investment company and to provide returns to shareholders through achieving its investment objective as described on page 12.

The values of the Company are discussed and agreed upon by the Board. The Board seeks to run the Company with a culture of openness, high integrity and accountability. It aims to demonstrate these values through its behaviour both within itself and its dealings with its stakeholders. It seeks to act in the spirit of mutual respect, trust and fairness. The Board is robust in its challenge of the Investment Manager and other service providers but tries always to be constructive and collegiate. The Board expects its members to exhibit an independence of mind and not to be wary of asking difficult questions. Moreover, it expects and encourages its key service providers to exhibit similar values.

Role and Composition of the Board

The Board is the Company's governing body; it sets the Company's strategy and is collectively responsible for its long-term performance. The Board, which is comprised entirely of independent Non-Executive Directors, is responsible for appointing and subsequently monitoring the activities of the Manager and other service providers to ensure that the investment objectives of the Company continue to be met. The Board also ensures that the Manager adheres to the investment restrictions described in the Company's Prospectus and acts within the parameters set by it in any other respect. It also identifies and monitors the key risks facing the Company.

Investment activities are predominantly monitored through quarterly Board meetings at which the Board receives detailed reports and updates from the Investment Manager, who attends each Board meeting. Services from other key service providers are reviewed as appropriate.

Subject to meeting solvency requirements, if the Ordinary Shares trade at a discount in excess of 15 per cent to their NAV, the Board will consider whether the Company should buy back its own Ordinary Shares, taking into account the Company's liquidity, conditions in the stock market and mining markets. At the year end the Company's Ordinary Shares traded at a discount to NAV of 37%, as stated in the Chairman's Statement, the Board will actively assess share buy backs and other forms of distributions as liquidity and opportunities arise.

The Board continues to review the Company's expenditure to ensure that the total costs incurred in the running of the Company remain competitive. An analysis of the Company's costs, including management fees (which are based on the market capitalisation of the Company), Directors' fees and general expenses, is submitted to each Board meeting.

As at 31 December 2024, the Board comprised four Directors (2023: four).

Investment Management

The Manager, Baker Steel Capital Managers (Cayman) Limited, is a company incorporated in the Cayman Islands on 10 April 2002 with registration number 117030 and is an affiliate of the Investment Manager.

The Manager was appointed pursuant to a management agreement with the Company dated 31 March 2010 (the "Management Agreement"). Under the Management Agreement, the Manager acts as manager of the Company, subject to the overall control and supervision of the Directors and was authorised to appoint the Investment Manager to manage and invest the assets of the Company.

Baker Steel Capital Managers LLP acts as Investment Manager of the Company and was constituted in England and Wales on 19 December 2001. It is authorised and regulated by the Financial Conduct Authority in the United Kingdom. The Investment Manager is a limited liability partnership with registration number OC301191 and is an affiliate of the Manager. The Investment

Manager has been appointed by the Company to act as its Alternative Investment Fund Manager ("AIFM") and is responsible for the portfolio management and investment risk management of the Company.

Investment Management (continued)

The Investment Manager manages the Company in accordance with the Alternative Investment Fund Managers Directives ("AIFMD"). The Investment Manager is a specialist natural resources asset management and advisory firm operating from its head office in London and its branch office in Sydney. It has an experienced team of fund managers covering the precious metals, base metals and minerals sectors worldwide, both in relation to commodity equities and the commodities themselves.

Amendments have been made to the Management Agreement and Investment Management Agreements with the Manager and Investment Manager respectively, such that, that proportion of the Management Fee associated with discretionary fund management is now paid directly to the Investment Manager i.e. the Manager now receives no income from its appointment as a discretionary fund manager pursuant to the Management Agreement, and this is paid directly to the Investment Manager. There is no impact whatsoever on the overall Management Fee paid by the Company. The amendments are effective from 1 July 2024.

The Directors formally review the performance of the Investment Manager on an annual basis and remain satisfied that the Investment Manager has the appropriate resources and expertise to manage the portfolio of the Company in the best interests of the Company and its shareholders.

Investment Objective

The Company's investment objective is to seek capital growth over the long-term through a focused, global portfolio consisting principally of the equities, loans or related instruments of natural resources companies. The Company invests predominantly in unlisted companies (i.e. those companies that have not yet made an initial public offering ("IPO") but also in listed securities (including special situations opportunities and less liquid securities) with a view to making attractive investment returns through the uplift in value resulting from the development progression of the investee companies' projects and through exploiting value inherent in market inefficiencies and pricing anomalies.

Investment Policy

The core of the Company's strategy is to invest in natural resources companies, predominantly unlisted, that the Investment Manager considers to be undervalued and that have strong fundamentals and attractive growth prospects. Natural resources companies, for the purposes of the investment policy, are those involved in the exploration for and production of base metals, precious metals, bulk commodities, thermal and metallurgical coals, industrial minerals and energy, and include single-asset as well as diversified natural resources companies.

It is intended that unlisted investments be realised through an IPO, trade sale, management repurchase or other methods.

The Company focuses primarily on making investments in companies with producing and/or tangible assets such as resources and reserves that have been verified under internationally recognised standards for reporting, such as those of the Australasian Joint Ore Reserves Committee ("JORC"). The Company may also invest from time to time in exploration companies whose activities are speculative by nature.

The Company has flexibility to invest in a wide range of investments in addition to unlisted and listed equities and equity-related securities, including but not limited to commodities, convertible bonds, debt securities, royalties, options, warrants and futures. Derivatives may be used for efficient portfolio management, hedging and for the purposes of obtaining investment exposure. The Company may also have exposure from time to time to other companies within the wider resources and materials sector, including services companies, transport and infrastructure companies, utilities and downstream processing companies.

The Company may take legal or management control of a company from time to time. The Company may invest in other investment funds or vehicles, including any managed by the Manager or Investment Manager, where such investment would be complementary to the Company's investment objective and policy.

Borrowing and Leverage

The Company may, at the discretion of the Investment Manager and within limits set by the Board, incur leverage for liquidity purposes by borrowing funds from banks, broker-dealers or other financial institutions or entities. The costs and impact of leverage, positive and negative, will affect the operating results of the Company.

During the current and prior year, no leverage was used by the Company.

Investment Restrictions

There are no fixed limits on the allocation between unlisted and listed equities or equity-related securities and cash although, as a guideline, typically the Investment Manager will aim for the Company to be invested over the long-term as follows:

• between 40 and 100 per cent of the value of its gross assets in unlisted equities or equity-related securities;

• up to 50 per cent of the value of its gross assets in listed equities or equity-related securities;

• up to 10 per cent of the value of its gross assets in cash or cash-like holdings; and

• in 10 to 20 core positions to provide adequate diversification whilst retaining a focused core approach. Core positions will be between 5 per cent and 15 per cent of NAV as at the date of acquisition.

The actual percentage of the Company's gross assets invested in listed and unlisted equities and equity-related securities and cash and cash-like holdings and the number of positions held may fall outside these ranges from time to time. The portfolio may become focused on fewer holdings as certain investments mature and increase in value. Once such investments are realised it is intended that the consideration will be reinvested in several new investments thereby diversifying the portfolio.

Listed securities might exceed the above guideline following a significant number of IPOs or in certain market conditions and likewise cash balances may exceed the above guideline following the realisation of one or more investments or following the issue of new equity in the Company, pending investment or distribution of the proceeds.

The investment policy has the following limits:

• Save in respect of cash and cash-like holdings awaiting investment, and except as set out below, the Company will invest or lend no more than 20 per cent in aggregate of the value of its gross assets in or to any one particular company or group of companies, as at the date of the relevant transaction.

• The Company's investment in Futura Resources Limited ("Futura") may exceed the limit set out above provided that the Company will not invest or lend more than 35 per cent in aggregate of the value of its gross assets in Futura as at the date of the relevant transaction.

• No more than 10 per cent in aggregate of the value of the gross assets of the Company may be invested in other listed closed-ended investment funds, except for those which themselves have stated investment strategies to invest no more than 15 per cent of their gross assets in other listed closed-ended investment funds.

Where derivatives are used for investment exposure, these limits will be applied in respect of the investment exposures so obtained.

The Company will avoid (a) cross-financing between the businesses forming part of its investment portfolio and (b) the operation of common treasury functions between it and the investee companies. When deemed appropriate, the Company may borrow up to 10 per cent of NAV for temporary purposes such as settlement of mis-matches. Borrowings will not however be incurred for the purposes of any Share repurchases. Any material change in the investment objective, investment policy or borrowing policy will only be made with the prior approval of holders of Ordinary Shares by Ordinary Resolution. In the event of any breach of the investment restrictions the Investment Manager would report the breach to the Board and shareholders would be informed of any corrective action required.

No breaches of investment restrictions occurred during the year ended 31 December 2024.

Hedging

The Investment Manager will not normally hedge the exposure of the Company to currency fluctuations.

Performance

The Company monitors NAV against the MSCI World Metals and Mining Index, whilst this is not a benchmark, it is used as a reference for general mining share performance. An outline of performance, market background, investment activity and portfolio strategy during the year under review, as well as outlook, is provided in the Chairman's Statement on pages 1 to 2 and the Investment Manager's Report on pages 3 to 8.

Principal Risk and Uncertainties

The Board is responsible for the Company's system of risk management and internal control and for reviewing its effectiveness.

The Board has adopted a detailed matrix of principal risks affecting the Company's business as an investment company and has established associated policies and processes designed to manage and, where possible, mitigate those risks, which are monitored by the Audit Committee on an ongoing basis. This system assists the Board in determining the nature and extent of the risks it is willing to take in achieving the Company's strategic objectives.

Although the Board believes that it has a robust framework of internal controls in place this can provide only reasonable, and not absolute, assurance against material financial misstatement or loss and is designed to manage, not eliminate, risk. Actions taken by the Board and, where appropriate, its committees, to manage and mitigate the Company's principal risks and uncertainties are discussed in more detail below.

Emerging Risks and Uncertainties

During the year, the Board also discussed and monitored a number of risks that could potentially impact the Company's ability

to meet its strategic objectives. The principal emerging risk continues to be climate change. Climate change risk includes how climate change could affect the Company's investments, and potentially shareholder returns. 

The Board has implemented an environmental, social and governance ("ESG") policy which has been developed from the Investment Manager's own ESG policy. The Company's ESG policy is available on its website. Despite the need for many metals to enable the global move away from fossil fuels, mining is perceived to be harmful to the environment which can result in delays to licences being awarded by government bodies.

The Board will continue to monitor the growing risks identified by ESG and the resulting pressures on its investments.

Fund Concentration Risk

As at reporting date, the two largest investments that now comprise some 65% of the Company's net assets are CEMOS (31.4%) and Futura (33.4%). Although these are above the 20% of NAV investment limits, these have increased as a result of relative performance and were compliant at the time of investments, in the case of Futura, subsequent approval from shareholders to increase its limit to 35%. The Investment Manager reviews top holdings on an ongoing basis and the Board reviews concentration risk at each Board meeting. The Board has reasonable expectation of some significant dividends and royalty payments in the coming years which will support both distributions to our shareholders as well as enabling the Company to diversify its portfolio when attractive opportunities arise.

Geopolitical Risk

The recent US election results have introduced additional geopolitical uncertainty. Market turmoil following recent policy changes by the United States, such as higher tariffs on imported goods, has led to significant stock market declines, inflation concerns, and fear of potential recession. These tariffs could lead to reciprocal measures by other countries potentially slowing global growth and affecting commodity prices.

Additionally, the invasion of Ukraine and resulting sanctions on Russia, increased the risk of investing in companies with interests in Russia. It has also increased the uncertainty around previous projections made by those companies, in the face of growing financial and operational constraints. As a result in 2022, the Company reduced its carrying values of PAL to reflect the risk that Polymetal may not be able to pay the royalty over the Prognoz silver project in Russia when due and the question of whether PAL is able to receive payments either due to the risk of potential sanctions, or the lack of willingness of participants in the banking system to deal with relevant counterparties. In 2024 Polymetal, sold off its Russian business which included Prognoz, changed its name to Solidcore and its domicile to Kazakhstan. However, the liability to pay the net smelter royalty to PAL remains with Soldicore and the royalty contract has no Russian entities as parties to the Agreement.

Inflation Risk

Notwithstanding the improved inflationary position, there remains a risk that geopolitical tensions may again cause rising energy prices and disrupt supply chains causing further inflationary pressures. This, plus monetary tightening undertaken by central banks to curb inflation, raises the risk of a global recession which would be negative for commodity prices.

There is a growing risk that measures imposed by governments in response to cost-of-living challenges will impact on the Company's investments, specifically increased taxes or royalties imposed by governments may have implications on net sales prices received by investee companies. To mitigate this the Company uses real term models in its valuations using consensus long term commodity prices.

Principal risk and uncertainties (continued)

Market and Financial Risks

Market risk arises from volatility in the prices of the Company's underlying investments which, in view of the Company's investment policy, are in turn particularly sensitive to commodity prices. Market risk represents the potential loss the Company might suffer through holding investments in the face of negative market movements. The Board has set investment restrictions and guidelines to help mitigate this risk. These are monitored and reported on by the Investment Manager on a regular basis. Further details are disclosed in note 4 on pages 50 to 54.

The Company's investment activities also expose it to a variety of financial risks including in particular foreign currency risk. An analysis of sensitivity to foreign exchange is presented on pages 50 to 51.

Portfolio Management and Performance Risks

The Board is responsible for determining the investment strategy to allow the Company to fulfil its objectives and also for monitoring the performance of the Investment Manager to which has been delegated day to day discretionary management of the Company's portfolio. An inappropriate strategy may lead to poor performance. The investment policy of the Company allows for a highly focused portfolio which can lead to a concentration of risk. To manage this risk, the Investment Manager provides to the Board, on an ongoing basis, an explanation of the significant stock selection recommendations and the rationale for the composition of the investment portfolio. The Board mandates and monitors an adequate diversification of investments, both geographically and by commodity, in order to reduce the risks associated with particular sectors, based on the diversification requirements inherent in the Company's investment policy. The nature of the investment strategy means that portfolio diversification cannot be rebalanced on a short-term basis.

The Company invests in certain companies whose projects are located in emerging markets. In such countries governments can exercise substantial influence over the private sector and political risk can be a significant factor. In adverse social and political circumstances, governments have been involved in policies of expropriation, confiscatory taxation, nationalisation, intervention in the securities markets and imposition of foreign exchange controls and investment restrictions. The Investment Manager and the Board take into account specific political and other such risks through its approach to pricing when entering into an investment, and seek to mitigate them by diversifying geographically.

The Company's ability to implement its investment policy depends on the Investment Manager's ability to identify, analyse and invest in investments that meet the Company's investment criteria. Failure by the Investment Manager to find additional investment opportunities meeting the Company's investment objectives and to manage investments effectively could have a material adverse effect on the Company's business, financial condition, and results of operations.

The Company has no employees and, subject to oversight by the Board, is reliant on the Investment Manager, which has significant discretion as to the implementation of the Company's operating policies and strategies. The Company is subject to the risk that the Investment Manager or its key investment professionals will cease to be involved in the management of any part of the Company's assets and that no suitable replacement will be found. The Board regularly monitors the performance and capabilities of the Investment Manager and its key man risk plans.

There is the risk that the market capitalisation of the Company (on which the Investment Manager's fee is calculated) falls to such an extent that it will no longer be viable for the Investment Manager to provide the services that it currently provides. The Board monitors this possibility and, should it start to become an issue, would review it with the Investment Manager.

Risk of a vote to wind-up the Company

The Articles contain provisions for a special resolution to be proposed to shareholders at the AGM in 2018 and every three years thereafter on whether to discontinue the Company. The Board tabled such resolutions in previous AGMs held in 2018 and 2021 and on each occasion, the resolution was not passed. At the recent AGM held on 12 September 2024, the vote to discontinue the Company was not passed and therefore a vote with regard to continuation will not be proposed by the Board until the AGM in three years' time as is required by the Company's Articles. Should there be a catastrophic loss of value in the Company's assets, possibly as a result of the risks above, or merely a change in sentiment towards the mining sector generally by a sufficient proportion of investors, there is the risk of shareholders voting to wind-up the Company at that time. As the Company's investments are largely unlisted it could then take a protracted amount of time to realise them or they may need to be sold at a discount to Fair Value if an accelerated timetable is required.

To be passed, the discontinuation vote requires a majority of 75% of those shareholders voting. To understand the requirements of the Company's major shareholders, the Investment Manager regularly liaises with the Company's broker and meets major shareholders. The Chairman is also available to meet with shareholders as required. 

In the event of a winding up of the Company, Shareholders will rank behind any creditors of the Company.

Viability Statement

In accordance with provision 31 of the UK Corporate Governance Code, published by the Financial Reporting Council ("FRC") in January 2024 (the "UK Code"), the Directors, as advised by the Audit Committee, have assessed the prospects of the Company over 3 years. The Board considers that this is an appropriate timeframe to assess the viability of the Company as, in relation to the types of investments the Company makes, three years generally provides sufficient time for major milestones to be reached on mining projects together with some realisations and new investments to be made by the Company. Beyond three years, the Board considers the mining and minerals markets to be too difficult to predict to be sufficiently helpful. 

The Company has previously seen pressures from falls in commodity prices and a move by its share price to an increased discount to its NAV. The mining market is inherently cyclical and dependent on world economic output. Notwithstanding this, it is a feature of closed-ended investment companies such as BSRT that the greatest risk to viability is that the investments lose value to an extent where the expense ratio becomes excessive such that the Company becomes an unattractive investment proposition. In such conditions, it may also be a risk that liquidity (i.e. the ability to sell or realise cash from the portfolio, or raise borrowings should that be necessary) is insufficiently available to meet liabilities.

In the case of the Company, which has no gearing, the Investment Manager has conducted stress and sensitivity tests of future income and expenditure and the ability to realise assets, and it and the Board have concluded that, even in circumstances representing a deterioration in value of 50% of net assets over the three-year period and a complete inability to sell any of the unlisted assets in the portfolio, the Company should remain viable. The key factor in this assessment is that currently the Company's greatest expense is the management fee which is calculated on the market capitalisation of the Company. Should net assets fall, market capitalisation would be expected to fall in line or at a higher rate, such that the costs of the Company would also fall. It is also assumed that expected income from interest, royalties and dividends is projected to cover budgeted expenses over the three-year period. In addition over the three-year period and under the highly stressed conditions modelled, regular realisations of the Company's listed equities could replace expected income if required. The Directors believe this to be reasonable given that the majority of these equities are traded at sufficient volumes in the context of the positions the Company's holdings represent.

As a result, the Board has a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment.

Environmental, Social and Governance

The Company believes that monitoring environmental, social and governance ("ESG") factors is important not only to support sustainable and ethical investment but because ESG considerations are key for creating and maintaining shareholder value. The Company has developed an ESG Investment Policy which draws from international best practice and builds upon the principles

and processes outlined in the United Nations Principles for Responsible Investment, of which the Investment Manager is a signatory. A copy of the Company's ESG policy is available on the Company's website.

ESG considerations are considered as an enhanced risk management tool and, as such, are incorporated into the Investment Manager's investment decision process at multiple levels during stock screening and company analysis, as well as being directly addressed with company management during meetings and on-site visits.

The Company is an active investor and will use its voting rights to influence company direction in a sustainable way where deemed appropriate. The Company considers that social and environmental responsibility, along with good governance, are an integral element of running a successful mining company.

For example, the Nussir copper project in Norway aims to become the first zero carbon mine globally through being fully electric with the electricity generated from entirely renewable sources. The Company has used its representation on the Board of Nussir to actively promote this evolution to electrification. CEMOS, with the support of the Company as its largest shareholder, is constructing a calcination unit at its Morocco operations which it is aimed will allow production of cement with an associated lower carbon footprint and the offer of 'greener' cement products to customers.

Non-Mainstream Pooled Investment

The Directors intend to operate the Company in such a manner that its shares are not categorised as non-mainstream pooled investments.

Stakeholder Engagement

During the year ending 31 December 2024, the Board sought to voluntarily comply with the requirements of Section 172 of the Companies Act 2006 to promote the success of the Company for the benefit of its members as a whole, having regard to the interests of all stakeholders.

Identification of key stakeholders

As an externally managed investment company, the Company has no employees, operations or premises. The Board has identified its key stakeholders as the Company's shareholders, the Investment Manager, other service providers and the Investee Companies.

Engagement with stakeholders

The table below explains how the Board have engaged with all stakeholders.

Key Decisions

Key decisions are those that are material or of strategic importance to any of the Company's key stakeholders as described above. An example of a key decisions made during the year were the conversion of the convertible loan notes in CEMOS into equity and the subscription for new shares in Nussir at NOK 0.5 per share which allowed Nussir the working capital to continue marketing its project which led to Blue Moon's offer to acquire Nussir at the equivalent of NOK 4.25 per share. It is anticipated that the acquisition of Nussir by Blue Moon will enable the financing of the Nussir project into production.

Future Developments

The future performance of the Company depends upon the success of the Company's investment strategy and, as to its share price and market rating, partly on investors' view of mining related investments as an asset class. Further comments on the outlook for the Company can be found in the Chairman's Statement on pages 1 and 2 and the Investment Manager's Report on pages 3 to 8.

Signed on behalf of the Board of Directors by:

Fiona Perrott-Humphrey

25 April 2025

BOARD OF DIRECTORS

The Board of Directors is listed below. In 2018, the Board implemented a succession plan to refresh its membership while maintaining continuity. Since then, the Board has successfully integrated new members, ensuring a balance between continuity of knowledge and experience, and refreshing the Board's composition in terms of skills, diversity, and length of service. In 2019, David Staples joined the Board, bringing extensive experience and contributing to the ongoing renewal process, followed by Fiona Perrott-Humphrey in 2020 and John Falla in 2022. Additionally, Patrick Meier joined the Board in 2024, further enhancing the diversity and expertise of the Board.

Fiona Perrott-Humphrey: Fiona Perrott-Humphrey has over 30 years' experience in the mining finance industry in London. She moved to the UK in 1987 after a period in academia in South Africa, and over the next 15 years, was a rated mining analyst for a number of stockbroking firms including James Capel, Cazenove and Citigroup (the latter as head of European Mining Research). After leaving full time broking, Fiona has had a portfolio of roles drawing on her experience of covering the global mining sector. She is a founder of a mining strategic consulting business, and director of AIM Mining Research and in 2007 published a book entitled Understanding Junior Miners. In 2004, she was appointed Adviser to the Mining team at Rothschild and Co. Fiona was a non-executive director of Dominion Diamonds, located in northern Canada, for two years from 2014. She is invited to present regularly at global mining conferences.

Fiona was appointed in 2020 as a non-executive director and is a member of the Company's Audit Committee. Fiona was appointed as Chair of the Company with effect from 31 December 2024, succeeding Howard Myles. 

Charles Hansard: Charles Hansard has over 40 years' experience in the investment industry as a professional and in a non-executive capacity. He currently serves as a non-executive director on a number of boards which include JJJ Moore part of the Moore Capital group of funds of which he was a director for 25 years. He is a director of NYSE listed Los Gatos Silver Inc and Electrum Ltd., a privately owned US gold exploration company. He formerly served as a director of Apex Silver Mines Ltd., where he chaired the finance committee during its capital raising phase and as chairman of the board of African Platinum Plc, which he led through reorganisation and feasibility prior to its sale to Impala Platinum. He commenced his career in South Africa with Anglo American Corporation and Fleming Martin as a mining analyst. He subsequently worked in New York as an investment banker for Hambros before returning to the UK to co-found IFM Ltd., one of the earliest European hedge fund managers. Charles holds a B.B.S. from Trinity College Dublin.

Notwithstanding that Charles's tenure extends beyond 14 years, the Board is satisfied that he continues to demonstrate independence from the Investment Manager.

John Falla: John qualified as a chartered accountant with Ernst and Young in London, before transferring to its Corporate Finance Department, specialising in the valuation of unquoted shares and securities. On his return to Guernsey in 1996 he worked for an international bank before joining The International Stock Exchange (formerly the Channel Islands Stock Exchange) on its launch in 1998 as a member of the Market Authority. In 2000 Mr Falla joined the Edmond de Rothschild Group, where he provided corporate finance advice to international clients including open and closed-ended funds, and institutions with significant property interests. He was a director of a number of Edmond de Rothschild operating and investment entities, retiring in 2015.

John has been a non-executive director of London listed companies for over 10 years and is an experienced audit committee chair. He is currently a director and audit committee chair of NB Private Equity Partners Limited.

John was appointed as a non-executive director in 2022 and has been the Chairman of the Audit Committee since 31 December 2022. 

Patrick Meier: Patrick has over 30 years of experience in investment banking with specialist knowledge of the mining sector. He headed up the investment banking activities for RBC Capital Markets in Europe and Asia and drove a major expansion of RBC's European presence. Prior to this role, he headed up RBC's activities in the Metals and Mining sector in Europe, Africa and Asia for many years, and continues to enjoy strong relationships within the sector. Mr. Meier also served as a Director on the Board of RBC's main operating subsidiary in Europe. In May 2024, Patrick stepped down as Chairman of Ecora Resources plc, the metals streaming business listed on the London Stock Exchange. Mr. Meier was instrumental in leading Ecora's growth and transformation. He also previously acted as Chairman of AIM-Listed Firestone Diamonds plc.

Patrick Meier was appointed as a non-executive director with effect from 25 June 2024.

The Directors of the Company present their fifteenth annual report and the audited financial statements (the "Annual Report") for the year ended 31 December 2024.

The Directors' Report contains information that covers this period and the period up to the date of publication of this Report. Please note that more up to date information is available on the Company's website www.bakersteelcap.com/baker-steel-resources-trust/.

Baker Steel Resources Trust Limited (the "Company") is a closed-ended investment company with limited liability incorporated on 9 March 2010 in Guernsey under the Companies (Guernsey) Law, 2008 with registration number 51576. The Company is a registered closed-ended investment scheme pursuant to the Protection of Investors (Bailiwick of Guernsey) Law, 2020, ("POI Law") and the Registered Collective Investment Scheme Rules and Guidance, 2021 issued by the Guernsey Financial Services Commission ("GFSC"). On 28 April 2010 the Ordinary Shares and Subscription Shares of the Company were admitted to the Official List of the UK Listing Authority and to trading on the Main Market of the London Stock Exchange.

Investment Objective

Details of the Company's investment objectives and policies are described in the Strategic Report on page 12.

In the year to 31 December 2024, the Company's NAV per Ordinary Share increased by 16.2% (2023: decreased by 2.8%). This compares with a decrease in the MSCI World Metals and Mining Index (capital return in Sterling terms) of 13.5% (2023: +13.8%). A more detailed explanation of the performance of the Company is provided within the Investment Manager's Report on pages 3 to 8.

The results for the year are shown in the Statement of Comprehensive Income on page 37 and the Company's financial position at the end of the year is shown in the Statement of Financial Position on page 36.

Critical accounting judgements and key sources of estimation uncertainty

The Directors makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions.

Significant estimates and assumptions arise in the valuation of investments. The variety of valuation bases to be adopted and the quality of management information provided by the underlying investee companies means there are inherent difficulties in determining the value of these investments. Amounts realised on the sale of those investments will inevitably differ from the values reflected in the underlying funds holding the investee and the difference may be significant.

During the year ended 31 December 2015 the Board introduced a capital returns policy whereby, subject to applicable laws and regulations, it will allocate cash for distributions to shareholders. The amount to be distributed will be calculated and paid following publication of the Company's audited financial statements for each year and will be no less than 15% of the aggregate net realised cash gains (after deducting losses) in that financial year. The Board will retain discretion for determining the most appropriate manner to make such distribution which may include share buybacks, tender offers and dividend payments. The Board also intends to formulate a more regular dividend policy once it starts to receive significant income from its investments by way of dividends and royalty interests. As there was no net realised cash gain during the year, the Board has determined that there will not be any distribution in respect of the year ended 31 December 2024.

The Directors of the Company who served during the year and up until the date of signing of the financial statements are:

Biographical details of each of the Directors who were on the Board of the Company at the time of signing the Annual Report are presented on page 18 of the Annual Report.

Each of the Directors is considered to be independent in character and judgement.

Each Director is asked to declare his or her interests at each Board meeting. No Director has any material interest in any other contract which is significant to the Company's business.

As of 31 December 2024, John Falla held 100,000 (2023: 100,000) shares in the Company. Patrick Meier held 82,261 shares in the Company. No other Director has a beneficial interest in the Company or any of its investee companies.

The share capital of the Company on incorporation was represented by an unlimited number of Ordinary Shares of no par value. The Company may issue an unlimited number of shares of a nominal or par value and/or of no par value or a combination of both.

Shares in issue

The Company has a total of 106,453,335 (2023: 106,453,335) Ordinary Shares outstanding with an additional 700,000 (2023: 700,000) held in treasury. The Company has 9,167 (2023: 9,167) Management Ordinary Shares in issue, which are held by the Investment Manager.

The Ordinary Shares are admitted to the Official List of the London Stock Exchange.

As at 31 December 2024, the Company had received notifications in accordance with the FCA's Disclosure Guidance and Transparency Rule 5.1.2 R of the following interests in 3% or more of the voting rights attaching to the Company's issued share capital.

The Investment Manager, Baker Steel Capital Managers LLP had an interest in 9,167 Management Ordinary Shares at 31 December 2024 (31 December 2023: 9,167).

David Baker and Trevor Steel, Directors of the Manager, are interested in the shares held by Northcliffe Holdings Pty Limited and The Sonya Trust respectively.

The Directors are responsible for preparing the annual report and financial statements in accordance with applicable Guernsey law, Listing Rules, Disclosure Guidance and Transparency Rules, UK Corporate Governance Code and generally accepted accounting principles.

Guernsey company law requires the Directors to prepare financial statements for each financial year which 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 these financial statements the Directors should:

- select suitable accounting policies and then apply them consistently;

- make judgements and estimates that are reasonable;

- state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; 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 responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and which enable the Directors to ensure that the financial statements comply with the Companies (Guernsey) Law, 2008. 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.

The Directors confirm that to the best of their knowledge:

- the financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union ("EU") and give a true and fair view of the assets, liabilities and financial position and profit or loss of the Company;

- the Annual Report includes a fair review of the position and performance of the business of the Company together with the description of the principal risks and uncertainties that the Company faces, as required by the Disclosure Guidance and Transparency Rules of the UK Listing Authority;

- the Annual Report and Financial Statements, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position and performance, business and strategy; and

- they have carried out a robust assessment of the emerging and principal risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity.

The Directors at the date of approval of this Report confirm that, so far as each of the Directors is aware, there is no relevant audit information of which the Company's auditor is unaware and each Director has taken all the reasonable steps he or she ought to have taken as a director to make himself or herself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

The Directors are not aware of any other material uncertainties that may cast significant doubt upon the Company's ability to continue as a going concern.

Related party transactions

Transactions with related parties are based on terms equivalent to those that prevail in an arm's length transaction and are disclosed in Note 10.

The Company is a member of the Association of Investment Companies.

The Board has therefore considered the Principles and Provisions of the AIC Code of Corporate Governance ("AIC Code"). The AIC Code addresses the Principles and Provisions set out in the UK Corporate Governance Code (the "UK Code"), as well as setting out additional Provisions on issues that are of specific relevance to the Company.

The Board considers that reporting against the Principles and Provisions of the AIC Code, which has been endorsed by the Financial Reporting Council and the Guernsey Financial Services Commission, provides more relevant information to shareholders.

The Company has complied with the Principles and Provisions of the AIC Code and therefore the UK Code except as where explained in the Annual Report on pages 22 to 29 relating to:

· The requirement for a Senior Independent Director

· Nomination and Remuneration Committees

· The requirement for an internal audit function

The AIC Code is available on the AIC website (www.theaic.co.uk). It includes an explanation of how the AIC Code adapts the Principles and Provisions set out in the UK Code to make them relevant for investment companies.

The Code includes provisions relating to:

· The role of the Chief Executive

· Executive Directors' remuneration

The Board considers these provisions are not relevant for the Company as it is an externally managed investment entity. The Company has therefore not reported further in respect of these provisions. The Directors are all independent and non-executive and the Company does not have employees, hence no Chief Executive is required for the Company.

The Board is satisfied that any relevant issues can be properly considered by the Board as explained further on the following pages.

There have been no other instances of non-compliance, other than those noted above.

· Composition and Independence

The Board has no executive directors and has contractually delegated responsibility to service providers for the management of the Company's investment portfolio, the arrangement of custodial and cash flow monitoring and oversight services and the provision of accounting and company secretarial services. The Company has no employees.

The Board consists entirely of independent non-executive Directors, of whom Fiona Perrott-Humphrey is the Chairman. Each of the Directors confirms that they have no other significant commitments that adversely impact on their ability to act for the Company and its shareholders, and that they have sufficient time to fulfil their obligations to the Company.

There is no formal policy in respect of the tenure of the Chairman. The Board have initiated a process of refreshing its membership with new appointments made in recent years. Howard Myles also stepped down from the Board on 31 December 2024 retiring as Chairman after 14 years as part of this succession programme.

· Senior Independent Director

In view of its non-executive nature and small size, the Board considers that it is not necessary for a Senior Independent Director to be appointed.

· Appointment and re-election

The Company has a transparent procedure for the appointment and re-election of the Directors and independent recruitment consultants may be used where appropriate as was the case in 2024 when OSA assisted in the recruitment of Mr. Meier. There are no service contracts in place for the Directors. The Directors are not required to retire by rotation. Instead each director puts himself or herself forward for re-election on an annual basis at the AGM. The AGM also includes a resolution whereby shareholders are able to approve the maximum cumulative remuneration for the Board.

Corporate Governance Compliance (continued)

All the Directors are responsible for reviewing the size, structure and skills of the Board and considering whether any changes are required or new appointments are necessary to meet the requirements of the Company's business and to maintain a balanced Board. The Board will seek the assistance of recruitment specialists to identify suitable candidates for the Board to consider.

Charles Hansard has served as a Director for 14 years. The Board believes that Mr Hansard continues to demonstrate independence from the Manager and to make a valuable contribution to the Company. Mr Myles stepped down at the end of the year and Patrick Meier was appointed as an independent non-executive director with effect from 25 June 2024. The Board sought assistance from OSA, Guernsey to assist with identifying a diverse list of suitable candidates as part of the selection process. The Board has a succession plan under which its membership will be refreshed over time. Specialists will be engaged as the Board consider necessary to assist with future appointments.

The Board receives full details of the Company's performance, assets, liabilities and other relevant information in advance of Board meetings, including information on regulatory and accounting developments.

The performance of the Board and the Audit Committee is evaluated each year through a formal and annual rigorous assessment process led by the Chairman and facilitated by the Company Secretary. The performance of the Chairman is evaluated by the other Directors.

The Investment Manager was appointed pursuant to an investment management agreement with the Manager dated 31 March 2010 and which was amended and restated, with the Company joining as a party, on 14 November 2014 (the Investment Management Agreement. The Investment Management Agreement pursuant to which the Company and the Manager have appointed the Investment Manager is terminable by any party giving the other parties not less than 12 months' written notice.

Amendments have been made to the Management Agreement and Investment Management Agreements with the Manager and Investment Manager respectively, such that, that proportion of the Management Fee associated with discretionary fund management is now paid directly to the Investment Manager i.e. the Manager now receives no income from its appointment as a discretionary fund manager pursuant to the Management Agreement, and this is paid directly to the Investment Manager. There is no impact whatsoever on the overall Management Fee paid by the Company. The amendments are effective from 1 July 2024.

The Investment Manager prepares regular reports to the Board to allow it to review and assess the Company's activities and performance on an ongoing basis. The Board and the Investment Manager have agreed clearly defined investment criteria, exposure limits and specified levels of authority. The Board completes a formal assessment of the Investment Manager on an annual basis. The assessment covers such matters as the performance of the Company relative to its peers and sector, the management of investor relations and the reasonableness of fee arrangements. Based on its assessment it is the opinion of the Board that the continuation of the appointment of the Investment Manager is in the best interests of shareholders of the Company.

The Board generally meets at least four times a year, at which time the Directors review the management and performance of the Company's assets and all other significant matters so as to ensure that the Directors maintain overall control and supervision of the Company's affairs. The Board is responsible for the appointment and monitoring of all service providers to the Company. Between these quarterly meetings there is regular contact with the Investment Manager and Company Secretary. The Directors are kept fully informed of investment and financial controls and other matters which are relevant to the business of the Company and which should be brought to the attention of the Directors. The Directors also have direct access to the Company Secretary (through its appointed representatives who are responsible for ensuring that Board procedures are followed and that applicable rules and regulations are complied with) and, where necessary in the furtherance of their duties, to independent professional advice at the expense of the Company.

Attendance at the quarterly Board and Audit Committee meetings during the year was as follows:

*Howard Myles stepped down from the Board on 31 December 2024.

**Patrick Meier was appointed as an independent non-executive director effective 25 June 2024 and therefore eligible to attend only three meetings.

In addition to the quarterly meetings, adhoc Board and committee meetings are convened as required. All Directors contribute to a significant exchange of views with the Investment Manager on specific matters, in particular in relation to developments in the portfolio.

The Board believes that the maintenance of good relations with shareholders is vital for the long-term prospects of the Company. The Company's stockbrokers, Shore Capital, and the Investment Manager are responsible for managing relationships with shareholders and each provides the Board with feedback on a regular basis that includes a shareholder contact report and any concerns the shareholder has raised. The Chairman and the Board are also available to meet with shareholders at the Company's Annual General Meeting or otherwise.

The Board considers its key stakeholders, along with its shareholders, to be the Company's Investment Manager, Administrator, Company Secretary, Stockbroker and Investee Companies. Engagement with each Stakeholder is formalised by quarterly reporting at the Board meetings but outside of the formal meetings, is continuous as required by the operations of the Company. The Board is very aware of the importance to the success of the Company of these key stakeholders and encourages open and frequent dialogue to facilitate improvements to the way that the Company functions. The engagement with stakeholders is covered in more detail in the Strategic Report on pages 16 to 17.

The Board has delegated responsibility for the assessment of its key risks to the Audit Committee. The Audit Committee has documented the key risks and controls in a detailed risk matrix and meets on a quarterly basis to update it and to assesses the adequacy and completeness of the controls. As the Audit Committee identifies changes that affect the risk profile of the Company it will recommend to the Board any actions required to effectively manage risk. More details on the Principal and Emerging Risks are presented in the Strategic Report.

The Board has established an Audit Committee. The Audit Committee meets at least four times a year and is responsible for ensuring that the financial performance of the Company is properly reported on and monitored and provides a forum through which the Company's external auditor may report to the Board. The Audit Committee operates within established Terms of Reference. The Directors consider there is no need for an internal audit function because the Company operates through regulated service providers and the Directors receive control reports on its key service providers.

John Falla is the Chairman of the Audit Committee with Fiona Perrott-Humphrey and Patrick Meier as the other members. As Chairman of the Board, Fiona Perrott-Humphrey will not Chair the Audit Committee but is considered independent and therefore sits as a committee member.

Given the size and nature of the Company and the fact that all the Directors are independent and non-executive it is not deemed necessary to form separate Nomination, Remuneration, and Management Engagement Committees. The Board itself considers new Board appointments, remuneration and the engagement of service providers.

The Board has delegated to service providers the day to day responsibilities for the management of the Company's investment portfolio, the provision of depositary services and administration, registrar and corporate secretarial functions including the independent calculation of the Company's NAV and the production of the Annual Report and Financial Statements which are independently audited.

Formal contractual agreements have been put in place between the Company and providers of these services.

Even though the Board has delegated responsibility for these functions, it retains accountability for them and is responsible for the systems of internal control. However, it has delegated the regular review and oversight of the systems of internal control to the Audit Committee which reports back to the Board following each Audit Committee meeting. At each quarterly Board meeting, compliance reports are provided by the Administrator and Investment Manager.

The Company's risk matrix continues to be the core element of the Company's risk management process in establishing the Company's system of internal financial and reporting control. The risk matrix is prepared and maintained by the Investment Manager and reviewed regularly by the Audit Committee which initially identifies the risks facing the Company and then collectively assesses the likelihood of each risk, the impact of those risks and the strength of the controls mitigating each risk. The system of internal financial and operating control is designed to manage rather than to eliminate the risk of failure to achieve business objectives and by its nature can only provide reasonable and not absolute assurance against misstatement and loss. These controls aim to ensure that assets of the Company are safeguarded, proper accounting records are maintained and the financial information for publication is reliable. The Audit Committee confirms to the Board that there is an ongoing process for identifying, evaluating and managing the significant risks faced by the Company.

This process has been in place for the year under review and up to the date of approval of this Annual Report and Audited Financial Statements and is reviewed by the Board by way of reporting from the Audit Committee.

The Board therefore believes that the Company has adequate and effective systems in place to identify, mitigate and manage the risks to which it is exposed.

All Directors are non-executive and in view of the relatively small size of the Board a Remuneration Committee has not been established. The Board as a whole considers matters relating to the Directors' remuneration. No advice or services were provided by any external person in respect of its consideration of the Directors' remuneration.

The Company's policy is that the fees payable to the Directors should reflect the time spent by the Directors on the Company's affairs and the responsibilities borne by the Directors and be sufficient to attract, retain and motivate directors who have the experience and qualities required to run the Company successfully. The Chairs of the Board and the Audit Committee are paid a higher fee in recognition of their additional responsibilities. The fee levels are reviewed annually. Effective 1 October 2022 the Board, recognising the Board remuneration was below market rates having not changed since the Company's flotation in 2010, resolved to increase their remuneration to £32,500 per annum for each Director. The Chairman receives a supplement of £10,000 per annum and the Chairman of the Audit Committee a supplement of £5,000 per annum.

There are no long-term incentive schemes provided by the Company and no performance fees are paid to Directors. No Director has a service contract with the Company but each of the Directors is appointed by a letter of appointment which sets out the main terms of their appointment. Directors hold office until they retire or cease to be a director in accordance with the Articles of Incorporation or by operation of law.

The Directors recognise the benefits of diversity in terms of gender and ethnicity and will take these into account when considering future appointments to the Board. However, their principal criteria will remain the skills and experience of new directors and the Board will select the candidates whom it believes will add most value.

The Directors are remunerated for their services at such rate as the Directors determine provided that the aggregate amount of such fees may not exceed £200,000 per annum (or such sum as the Company in general meeting shall from time to time determine).

For the year ended 31 December 2024, the total remuneration of the Directors was £162,229 (2023: £145,000).

Directors are remunerated in the form of fees, payable quarterly in arrears, to the Director personally. The fees paid to each Director in respect of the years ended 31 December 2024 and 31 December 2023 are shown below.

*Howard Myles stepped down from the Board on 31 December 2024 after 14 years as Chairman. Fiona Perrott-Humphrey was appointed as Chair of the Company with effect from 31 December 2024.

** Patrick Meier was appointed as an independent non-executive director with effect from 25 June 2024.

The independent auditor, BDO Limited, has indicated their willingness to continue in office and a resolution for their re-appointment will be proposed at the Annual General Meeting.

Please refer to Note 13 of the financial statements on page 59.

Signed on behalf of the Board of Directors by:

Fiona Perrott-Humphrey

25 April 2025

Report of the Audit CommitteE

For the year ended 31 December 2024

The function of the Audit Committee as described in its Terms of Reference is to ensure that the Company maintains high standards of integrity in its financial reporting and internal controls. John Falla is the Chairman of the Audit Committee. Fiona Perrott-Humphrey and Patrick Meier are the other members of the Audit Committee. The Chair of the Board, will not Chair the Audit Committee but is considered independent and therefore sits as a committee member.

The Audit Committee is appointed by the Board and all members are considered to be independent both of the Investment Manager and the external auditor. The Audit Committee typically meets four times a year, aligned to Board meeting dates, to discuss the Interim and Annual Report and Audited Financial Statements, the audit plan and engagement letter, and the Company's risks and controls, via discussion of its risk matrix. The Board is satisfied that the Audit Committee is properly constituted with members having recent and relevant financial experience, including one member who is a Chartered Accountant.

The Board, advised by the Audit Committee considers the nature and extent of the Company's risk management framework and the risk profile that is acceptable in order to achieve the Company's strategic objectives. As a result, it is considered that the Board has fulfilled its obligations under the AIC Code and the UK Code.

The Audit Committee continues to be responsible for reviewing the adequacy and effectiveness of the Company's on-going risk management systems and processes. The Company's system of internal controls, along with its design and operating effectiveness, is subject to review by the Audit Committee through reports received from all key service providers.

In the event of any deficiencies or breaches being reported, the Board would consider the actions required to remedy and prevent significant failings or weaknesses. During the year ended 31 December 2024, no significant weaknesses or failings were identified.

Fraud, Bribery and Corruption

The Audit Committee continues to monitor the fraud, bribery and corruption policies of the Company. The Board receives a confirmation from all service providers that they are not aware of any instances of fraud or bribery.

The Audit Committee considers the adequacy and security of the arrangements for the employees of its service providers to raise concerns, in confidence, about possible wrongdoing in financial reporting or other matters. The Audit Committee is satisfied it has the ability and resources to investigate any matters that are brought to its attention and to follow up on any conclusion reached by such investigation.

Primary Areas of Judgement

As part of its review of the Company's financial statements, the Audit Committee takes account of the most significant issues and risks, both operational and financial, likely to impact on the financial statements and the mitigating controls to address these risks. The Audit Committee has determined that the key risk of misstatement is the valuation of investments for which there is no readily observable market price. Such investments are recorded at fair value which is the price that would be expected to be received to sell an asset in an orderly transaction between market participants at the measurement date. Significant judgements are required in respect of the valuation of the Company's investments for which there is no observable market price. Further information on the Company's methodologies is provided in Note 3 to the financial statements.

The risk is mitigated through the review by the Audit Committee and Board of detailed reports prepared by the Investment Manager on portfolio valuation including valuation methodology, the underlying assumptions and the valuation process.

The Investment Manager also provides information to the Audit Committee and Board on relevant market indices, recent transactions in similar assets and other relevant information to allow an assessment of appropriate carrying value having regard to the relevant factors.

The ultimate responsibility for ensuring that investments are carried at fair value lies with the Board.

Report of the Audit CommitteE (continued)

For the year ended 31 December 2024

Through its meetings during the year ended 31 December 2024 and its review of the Company's Annual Report and Audited Financial Statements, the Audit Committee considered the principal risks and uncertainties described on pages 14-15 which were its primary area of focus as well as the following significant risks.

The Audit Committee also provides a forum through which the Company's external auditor reports to the Board. The Board, advised by the Audit Committee, approves all non-audit work carried out by the auditor in advance and the fees paid to the auditor in this respect.

External Audit

The Company's external auditor is BDO Limited ("BDO").

The fees due to the auditor during the year were as follows:

Report of the Audit CommitteE (continued)

For the year ended 31 December 2024

External Audit (continued)

The external auditor provides an audit planning report in advance of the annual audit. The Audit Committee has the opportunity to question and challenge the auditor in respect of their work. Based on levels of interaction with the auditor, and the assessment of auditor reporting, the audit planning, adherence to audit standards, competence of the audit team and feedback from the Investment Manager, the Audit Committee and the Board are satisfied that the reappointment of the external auditor should be proposed at the Annual General Meeting of the Company.

The Audit Committee has reviewed the effectiveness of the auditor including:

· Independence: The auditor discusses with the Audit Committee, at least annually, the steps it takes to ensure independence and confirms the same to the Audit Committee. The audit fees paid to BDO are presented on Page 28 of the Annual Report. The only non-audit fees paid to BDO are in relation to the Agreed Upon Procedures work completed on the Interim Report and Accounts. The audit director will rotate after 5 years; this is the fifth year of the current audit director.

· Quality of Audit Work: The Audit Committee assess the completion of the audit versus the plan and will seek feedback from the Investment Manager and the Administrator on any issues experienced through the Audit. The Chairman of the Audit Committee will separately engage with the audit director to discuss progress and issues with the audit.

Internal Audit

The Audit Committee believes that the Company does not require an internal audit function because it delegates its day-to-day functions to market leading regulated third party service providers, although the Audit Committee oversees these operations and receives regular control reports in this respect.

Risk Management and Internal Controls

The Board is responsible for the Company's system of internal controls and risk management. The Audit Committee has been delegated the responsibility for reviewing the ongoing effectiveness of the Company's internal controls and it discharges its duties in this area by assessing the nature and extent of the significant risks the Company is willing to accept in achieving the Company's objectives, and ensuring that effective systems of risk identification, assessment and mitigation have been implemented. The Strategic Report on pages 11 to 17 outlines the principal risks and uncertainties affecting the Company and the section on Internal Controls in the Directors Report on pages 19 to 26 gives details of the work performed by the Audit Committee in this area.

By their nature, the control mechanisms can only provide reasonable rather than absolute assurance against misstatement or loss. The Audit Committee seeks continual improvement in the Company's internal control mechanisms. The Audit Committee is not aware of any significant failings or weaknesses in the Company's internal controls in the year under review nor up to the date of this report.

Financial Reporting

The primary role of the Audit Committee in relation to financial reporting is to review the Annual Report and Financial Statements and the Half Year Report with the Administrator and the Investment Manager and assess their appropriateness. It focuses in this respect, amongst other matters, on:

· the clarity of the disclosures in the financial reporting and compliance with statutory, regulatory and other financial reporting requirements;

· the quality and acceptability of accounting policies and practices;

· material areas where significant judgements and estimates have been applied or where there has been discussion with the auditor; and

· taken as a whole, whether the financial statements are fair, balanced and understandable and provide shareholders with the necessary information to assess the Company's position and performance, business and strategy, reporting to the Board in this respect.

Going Concern and Viability

The Audit Committee has made an assessment of the Company's ability to continue as a going concern and of its viability, see pages 16 and 21, and has advised the Board accordingly.

John Falla

Audit Committee Chairman

25 April 2025

Opinion on the financial statements

In our opinion, the financial statements of Baker Steel Resources Trust Limited ("the Company"):

· give a true and fair view of the state of the Company's affairs as at 31 December 2024 and of its profit for the year then ended;

· have been properly prepared in accordance with International Financial Reporting Standards as endorsed by the European Union; and

· have been prepared in accordance with the requirements of the Companies (Guernsey) Law, 2008.

We have audited the financial statements of the Company for the year ended 31 December 2024 which comprise the Statement of Financial Position, the Statement of Comprehensive Income, the Statement of Changes in Equity, the Statement of Cash Flows and notes to the financial statements, including a summary of the material accounting policy information.

The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards as endorsed by the European Union ("IFRS").

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) ("ISAs (UK)") and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our audit opinion is consistent with the additional report to the audit committee.

Independence

We remain independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the Directors' assessment of the Company's ability to continue to adopt the going concern basis of accounting included:

· Obtaining the paper prepared by those charged with governance and management in respect of going concern and discussing this with both the Directors and management;

· Challenging the Directors' cash flow forecasts for the twelve months from the authorisation of these financial statements by stress testing future income and expenditure, the ability to realise the Company's assets and the impact on the going concern assessment;

· Challenging the key inputs into the cash flow forecasts by comparing these with historic results of the Company and whether they were consistent with our understanding of the Company; and

· Reviewing the minutes of the Board meetings, the RNS announcements and the compliance reports for any indicators of concerns in respect of going concern.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

In relation to the Company's reporting on how it has applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to the Directors' statement in the financial statements about whether the Directors considered it appropriate to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.

Overview

An overview of the scope of our audit

Our audit was scoped by obtaining an understanding of the Company and its environment, including the Company's system of internal control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of management override of internal controls, including assessing whether there was evidence of bias by the Directors that may have represented a risk of material misstatement.

We tailored the scope of our audit taking into account the nature of the Company's investment portfolio, involvement of the Investment Manager and the Company's Administrators, the accounting and reporting environment and the industry in which the Company operates. 

This assessment took into account the likelihood, nature and potential magnitude of any misstatement. As part of this risk assessment, we considered the Company's interaction with the Investment Manager and the Company's Administrators. We considered the control environment in place at the Investment Manager and the Company Administrators to the extent that it was relevant to our audit. Following this assessment, we applied professional judgement to determine the extent of testing required over each balance in the financial statements.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Our application of materiality

We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that are taken on the basis of the financial statements.

In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as follows:

Reporting threshold 

We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £45,000 (2023: £43,000). We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Corporate governance statement

The Listing Rules require us to review the Directors' statement in relation to going concern, longer-term viability and that part of the Corporate Governance Statement relating to the parent company's compliance with the provisions of the UK Corporate Governance Statement specified for our review.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit.

Other Companies (Guernsey) Law, 2008 reporting

We have nothing to report in respect of the following matters where the Companies (Guernsey) Law, 2008 requires us to report to you if, in our opinion:

· proper accounting records have not been kept by the Company; or

· the financial statements are not in agreement with the accounting records; or

· we have failed to obtain all the information and explanations which, to the best of our knowledge and belief, are necessary for the purposes of our audit.

Responsibilities of Directors

As explained more fully in the Statement of Directors' Responsibilities within the Directors' Report, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Extent to which the audit was capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Non-compliance with laws and regulations

Based on:

· Our understanding of the Company and the industry in which it operates;

· Discussion with management and those charged with governance; and

· Obtaining an understanding of the Company's policies and procedures regarding compliance with laws and regulations.

We considered the significant laws and regulations to be the International Financial Reporting Standard as adopted by the European Union and the Companies (Guernsey) Law, 2008.

The Company is also subject to laws and regulations where the consequence of non-compliance could have a material effect on the amount or disclosures in the financial statements, for example through the imposition of fines or litigation. We identified such laws and regulations to be The Protection of Investors (Bailiwick of Guernsey) Law, 2020.

Our procedures in respect of the above included:

· Review of minutes of meetings of those charged with governance for any instances of non-compliance with laws and regulations;

· Review of correspondence with the Guernsey Financial Services Commission, internal compliance reports, complaint registers and breach registers to identify and consider any instances of non-compliance with laws and regulations;

· Review of financial statement disclosures and agreeing to supporting documentation; and

· Review of legal expenditure accounts to understand the nature of expenditure incurred.

Auditor's responsibilities for the audit of the financial statements (continued)

Fraud

We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included:

· Enquiry with management and those charged with governance regarding any known or suspected instances of fraud;

· Obtaining an understanding of the Company's policies and procedures relating to:

o  Detecting and responding to the risks of fraud; and

o  Internal controls established to mitigate risks related to fraud.

· Review of minutes of meetings of those charged with governance for any known or suspected instances of fraud;

· Discussion amongst the engagement team as to how and where fraud might occur in the financial statements; and

· Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud.

Based on our risk assessment, we considered the areas most susceptible to fraud to be management override of controls and valuation of unquoted investments.

Our procedures in respect of the above included those detail in key audit matter above and also:-

· Considering whether there are any journal entries throughout the year, which may not be covered by testing of material financial statements class of transactions or balances; and

· A review of estimates and judgements applied by Management in the financial statements to assess their appropriateness and the existence of any systematic bias.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. 

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.

A further description of our responsibilities is available on the Financial Reporting Council's website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

The engagement director on the audit resulting in this independent auditor's opinion is Justin Hallett.

Use of our report

This report is made solely to the Company's members, as a body, in accordance with Section 262 of the Companies (Guernsey) Law, 2008. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.

For and on behalf of BDO Limited

Chartered Accountants and Recognised Auditor

Plaza House

2nd Floor, Admiral Park

St Peter Port

Guernsey

Fiona Perrott-Humphrey John Falla

Director Director

* As permitted under IFRS, purchases and sales of financial assets at fair value through profit or loss are classified as investing activities due the nature and intention to generate future income and cash flows from these investments.

Baker Steel Resources Trust Limited (the "Company") is a closed-ended investment company with limited liability incorporated and domiciled on 9 March 2010 in Guernsey under the Companies (Guernsey) Law, 2008 with registration number 51576. The Company is a registered closed-ended investment scheme pursuant to the Protection of Investors (Bailiwick of Guernsey) Law, 2020 and the Registered Collective Investment Scheme Rules and Guidance, 2021 issued by the Guernsey Financial Services Commission ("GFSC"). On 28 April 2010, the Ordinary Shares of the Company were admitted to the Official List of the UK Listing Authority and to trading on the Main Market of the London Stock Exchange under Equity shares category.

The Company's portfolio is managed by Baker Steel Capital Managers (Cayman) Limited (the "Manager"). The Manager has appointed Baker Steel Capital Managers LLP (the "Investment Manager") as the Investment Manager to carry out certain duties. The Company's investment objective is to seek capital growth over the long-term through a focused, global portfolio consisting principally of the equities, or related instruments, of natural resources companies. The Company invests predominantly in unlisted companies (i.e. those companies which have not yet made an Initial Public Offering ("IPO")) and also in listed securities (including special situations opportunities and less liquid securities) with a view to exploiting value inherent in market inefficiencies and pricing anomalies.

Baker Steel Capital Managers LLP was authorised to act as an Alternative Investment Fund Manager ("AIFM") of Alternative Investment Funds ("AIFs") on 22 July 2014. On 14 November 2014, the Investment Manager signed an amended Investment Management Agreement with the Company, to take into account AIFM regulations. AIFMD focuses on regulating the AIFM rather than the AIFs themselves, so the impact on the Company is limited.

a) Basis of preparation

The financial statements have been prepared on a historical cost basis, except for Financial Instruments at Fair Value Through Profit or Loss ("FVTPL"), in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union. The financial statements have been prepared on a going concern basis.

The Company's functional currency is the Great Britain pound Sterling ("£"), being the currency in which its Ordinary Shares are issued and in which returns are made to shareholders. The presentation currency is the same as the functional currency. The financial statements have been rounded to the nearest £. The Company invests in companies around the world whose shares are denominated in various currencies.

Income encompasses both revenue and capital gains/losses. For a listed investment company, it is best practice to distinguish revenue from capital. Revenue includes items such as dividends, interest, fees and other equivalent items. Capital is the return, positive or negative, from holding investments other than that part of the return that is revenue. The format of the Statement of Comprehensive Income follows the recommendations of the AIC Statement of Recommended Practice.

Assets and liabilities are presented in order of liquidity. Their maturities are disclosed in Note 4(b).

a) Basis of preparation (continued)

New standards, interpretations and amendments adopted from 1 January 2024

The following amendments are effective for the period beginning 1 January 2024:

- Supplier Finance Arrangements (Amendments to IAS 7 & IFRS 7);

- Lease Liability in a Sale and Leaseback (Amendments to IFRS 16);

- Classification of Liabilities as Current or Non-Current (Amendments to IAS 1);and

- Non-current Liabilities with Covenants (Amendments to IAS 1).

These amendments to various IFRS Accounting Standards are mandatorily effective for reporting periods beginning on or after 1 January 2024. These amendments were adopted and have been applied consistently throughout the year. The adoption of these did not have a material impact on the financial statements.

New standards, amendments and interpretations which are not yet effective for the current year

There are a number of new standards, amendments to standards and interpretations that are effective for the annual period beginning on or after 1 January 2025 which were not adopted early and are not expected to have a material impact on the Company's financial statements.

The following amendments are effective for the annual reporting period beginning 1 January 2025:

- Lack of Exchangeability (Amendment to IAS 21 The Effects of Changes in Foreign Exchange Rates);

b) Significant accounting judgements and estimates

The preparation of the Company's financial statements requires the Directors to make judgements, estimates and assumptions that affect the reported amounts recognised in the financial statements and disclosure of contingent liabilities. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability in future periods.

(i) Judgements

In the process of applying the Company's accounting policies, the Directors have made the following judgements, which have had the most significant effect on the amounts recognised in the financial statements:

Going Concern

The Directors, as advised by the Audit Committee, have made an assessment to satisfy themselves that it is reasonable to assume that the Company is a going concern and considered it appropriate to adopt the going concern basis of accounting. The Directors have considered carefully the liquidity of the Company's investments and the level of cash. As at 31 December 2024, approximately 13.7% of the Company's assets were represented by cash and unrestricted listed and quoted investments which are readily realisable. The Board are satisfied that the Company has the resources to continue in business for at least 12 months following the signing of these financial statements.

At the AGM in 2024, the vote to discontinue the Company was not passed and therefore a vote with regard to continuation will not be proposed by the Board until the AGM in 2027 as is required by the Company's Articles.

The Directors are not aware of any material uncertainties that may cast significant doubt upon the Company's ability to continue as a going concern.

(ii) Estimates and assumptions

The key assumptions concerning the future and other key sources of uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. However, existing circumstances and assumptions about future developments may change due to market changes or circumstances arising beyond the control of the Company. Such changes are reflected in the assumptions when they occur. Please refer to Note 3 for further information.

b) Significant accounting judgments and estimates (continued)

(ii) Estimates and assumptions (continued)

 Fair value of financial instruments

When the fair values of financial assets and financial liabilities recorded in the Statement of Financial Position cannot be derived from active markets, their fair value is determined using a variety of valuation techniques that include the use of valuation models. The inputs to these models are taken from observable markets where possible, but where this is not feasible, estimation is required in establishing fair values. The estimates include considerations of liquidity and model inputs related to items such as credit risk, correlation and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments in the Statement of Financial Position and the level where the instruments are disclosed in the fair value hierarchy. To assess the significance of a particular input to the entire measurement, the Company performs sensitivity analysis or stress testing techniques. Please refer to Note 3 for further information. Investments in associates are carried at fair value as they are held as part of the investment portfolio which is valued on a fair value basis.

c) Translation of foreign currencies

Foreign currency transactions during the year are translated into Sterling at the rate of exchange ruling at the date of the transaction. Assets and liabilities denominated in foreign currencies are translated into Sterling at the rate of exchange ruling at the Statement of Financial Position date. Exchange differences including those arising from adjustment to fair value of financial instruments during the year, are included in the Statement of Comprehensive Income. The foreign exchange movements relating to financial assets form part of the fair value movement in the Statement of Comprehensive Income.

d) Segment information

The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors as a whole. The key measure of performance used by the Directors to assess the Company's performance and to allocate resources is the Company's NAV, as calculated under IFRS, and therefore no reconciliation is required between the measure of profit or loss used by the Board and that contained in the Annual Report.

The Directors are of the opinion that the Company is engaged in a single segment of business: investing in natural resources companies and therefore no aggregation of segments.

e) Interest on investments

These comprise of interest accrued and interest received from convertible loans where interest is payable throughout the life of the instrument which are accounted for on an accruals basis and recognised in the Statement of Comprehensive Income.

f) Royalty income

Royalty income is recognised on an accruals basis in accordance with the substance of the relevant agreements. It is measured at the fair value of the consideration received or receivable and is recognised in the Statement of Comprehensive Income when the right to receive payment is established.

g) Dividend income

Dividend income is accrued on an ex-dividend basis and recognised in the Statement of Comprehensive Income and is presented net of withholding tax. No withholding taxes were suffered during the year (2023: £Nil).

3. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

3. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)

The following table analyses net losses on financial assets at fair value through profit or loss for the years ended31 December 2024 and 31 December 2023.

The following table analyses investments by type and by level within the fair valuation hierarchy at 31 December 2024.