Dear Shareholders:
- --------------------------------------------------------------------------------
Gold bullion in 1995 continued the long process of consolidation begun in
late 1993. Ending the year at $387.10 an ounce, gold was up only 1.0% from the
$383.20 an ounce level recorded at the end of 1994.
_____________________________________________________________________________
GRAPH
Paper version of this shareholder report contains a graph charting the spot
price of gold bullion from $330 - $410 an ounce between 1993 and 1995.
_____________________________________________________________________________
A strong base for the gold price was provided by growing physical demand,
especially for jewelry in the Far East powered by India and China. A robust
floor was established just above $370 an ounce. However, gold had difficulty
breaching the $395 level due to massive sales and gold loans from central banks
at these higher levels together with heavy forward selling by the producers.
Given the pressure from these two sources, as well as an absence of buying by
funds due to the low volatility of gold bullion, the ability of physical demand
to support the price was all the more critical.
Given the subdued movement in the gold market, it is not surprising that the
unmanaged Financial Times World Gold Mines Index showed only modest movement for
the year with a decline of 3.2%. However, this modest decline masks significant
divergences between the performance of two of
1
<PAGE>
the major geographical gold markets for 1995. Whereas the unmanaged Financial
Times North American Gold Index advanced 9.1%, the unmanaged Johannesburg All
Gold Index (which traces the South African gold shares) tumbled 25.8% in U.S.
dollar terms and a full 33.6% when measured in local currency terms.
_____________________________________________________________________________
GRAPH
Paper version of this shareholder report contains a graph charting the
Financial Times North American Gold Index vs. Johannesburg All Gold Index
during 1995.
_____________________________________________________________________________
Lower gold production in South Africa resulted from a plethora of newly
created holidays together with unauthorized work stoppages and lower grades.
Meanwhile, a steady local currency, despite much speculation that it would
decline after the financial and commercial rands were consolidated, meant that
South African gold producers received no relief from the higher gold prices that
would result from a weak currency. Lower production, higher costs, and no relief
from the gold price combined to crush profits and sharply reduce dividend
distributions. The shares were hard hit despite their modest valuations of gold
reserves (about $33 an ounce versus $150 plus for the North Americans) because
investors feared that extraction of those reserves might be only marginally
profitable. While the North American gold shares were modestly up and South
African shares were hard hit, the Australian gold shares were down a modest 3.5%
as measured by the unmanaged Financial Times Australian Gold Mine Index, about
the same decline as for the unmanaged Financial Times All Gold Index.
2
<PAGE>
During a year of sharply divergent share market performance among the major
geographical gold share indices, Lexington Goldfund showed a negative return of
1.89%* compared with a positive return of 1.68% for the average fund monitored
by Lipper Analytical Services, Inc. The Fund was hurt by its higher than average
holdings of South African shares at the beginning of the year (34% versus under
20% for most of the other gold funds) as well as by a somewhat higher than
average holding in Australian shares. Since that time, the exposure to South
African shares has been pared down considerably to under 20% of the Fund
awaiting an improvement in profitability for those mines warrant a move back
into this market with full conviction. The percentage held in Australian gold
shares has been increased due to their attractive valuations, an opportunity
that has been recognized by a number of the more highly valued North American
producers through share acquisitions down under.
Looking ahead, there are reasons to be optimistic regarding the dissipation
of forward selling and central bank sales of gold both of which have kept a lid
on the price despite the strong levels of fabrication demand. During the past
couple of years of low volatility in the gold price, producers, especially in
Australia, have become increasingly tempted to take advantage of the higher
forward prices of gold to sell increasing amounts of gold forward at little
perceived risk. This was fine as long as the forward prices were sufficiently
elevated in relation to current prices as a result of high interest rates and
also low lease rates on gold. With lower interest rates and with higher lease
rates, the pickup in revenues from forward selling in a flat gold market has
become significantly less. In fact, these factors have caused the recent
phenomenon of "backwardation" in the gold price, a situation where the current
price of gold is actually higher than the forward price. This rare occurrence
will significantly dampen the desire by producers to sell forward and may create
pressure to buy back some of these forward positions should producers be
convinced that gold prices are headed up-in effect a short squeeze. This could
have a dramatically positive impact on the gold price.
Meanwhile, the central banks, who have also put pressure on the gold price
through sales and loans of gold, have seen their gold sales well absorbed by the
market and have also seen their efforts at call writing become ever less
profitable. Reserve levels have been brought into line and some central banks,
such as Canada and Russia, have nearly depleted their gold reserves. In
addition, some of the Far Eastern central banks with low levels of gold reserves
have come under increasing pressure to buy gold bullion as prudent
diversification against fluctuations in their dollar, yen, and deutschmark
reserves. Also, the commodity and hedge funds, long absent from the gold market,
have begun to nibble at the laggard gold bullion market as other commodities
have started to weaken. All told, we feel that there is good reason to be more
optimistic about the gold price and feel strongly that the Lexington Goldfund is
well positioned to take advantage of this outlook through a flexible, well
diversified portfolio of precious metals shares as well as bullion itself.
3
<PAGE>
We appreciate your continued support and would welcome the opportunity to
discuss any questions you may have about your investment.
Sincerely,
Robert W. Radsch Robert M. DeMichele
Portfolio Manager President
January, 1996 January, 1996
_____________________________________________________________________________
GRAPH
Paper version of this shareholder report contains a graph comparing the
changes in value of a $10,000 investment in
Lexington Goldfund, Inc.,
the unmanaged Standard & Poor's 500 Stock Price Index
and Gold Bullion (London P.M. Fix, (U.S. Dollars))
_____________________________________________________________________________
*-1.89%, 4.88% and 7.45% are the one, five and ten year average annual standard
total returns, respectively, for the period ended December 31, 1995. Investment
return and principal value of an investment will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than at their
original cost. Total return represents past performance.
4
<PAGE>
Lexington Goldfund, Inc.
Statement of Net Assets
(Including the Portfolio of Investments)
December 31, 1995
<TABLE>
<CAPTION>
Number of Value
Shares Security (Note 1)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
GOLD BULLION: 11.4%
39,978 fine ounces (cost $15,468,090) ............................ $ 15,465,303
------------
GOLD MINING COMMON STOCKS: 84.6%
AUSTRALIA: 22.6%
805,000 Acacia Resources, Ltd.2 .......................................... 1,446,464
292,215 Burmine, Ltd. .................................................... 574,970
800,000 Climax Mining, Ltd.2 ............................................. 736,560
950,000 Delta Gold NL2 ................................................... 2,299,523
607,600 Eagle Mining Corporation NL2 ..................................... 1,168,460
600,000 Emperor Mines, Ltd. .............................................. 957,825
2,240,423 Gold Mines of Kalgoorlie, Ltd. ................................... 2,079,393
1,300,000 Golden Shamrock Mines, Ltd.2 ..................................... 801,158
750,000 Great Central Mines NL ........................................... 1,447,875
800,000 Gwalia Resources, Ltd. ........................................... 1,366,200
15,000 Lihir Gold, Ltd. (ADR)2 .......................................... 328,125
624,750 Mount Edon Gold Mines, Ltd. ...................................... 1,275,661
441,200 Newcrest Mining, Ltd. ............................................ 1,854,165
393,750 Niugini Mining, Ltd.2 ............................................ 757,211
1,000,000 Otter Gold Mines, Ltd.2 .......................................... 1,225,125
500,000 Plutonic Resources, Ltd. ......................................... 2,376,000
682,700 Posgold, Ltd. .................................................... 1,358,505
391,000 Ranger Minerals NL2 .............................................. 827,405
892,857 Resolute Samantha, Ltd ........................................... 1,889,397
65,000 Ross Mining NL ................................................... 61,293
2,000,000 St. Barbara Mines, Ltd. .......................................... 1,232,550
977,100 St. Barbara Mines, Ltd.1 ......................................... 602,162
814,100 Wiluna Mines, Ltd. ............................................... 840,212
500,000 WMC, Ltd ......................................................... 3,207,600
------------
30,713,839
------------
GHANA: 1.9%
125,000 Ashanti Goldfields Company, Ltd.1 ................................ 2,531,250
------------
NORTH AMERICA: 40.1%
25,000 Agnico-Eagle Mines, Ltd. ......................................... 315,625
15,000 Amax Gold Inc. (Preferred shares) ................................ 817,500
105,000 Barrick Gold Corporation ......................................... 2,769,375
70,000 Bre-X Minerals, Ltd.2 ............................................ 2,720,939
50,000 Cambior, Inc.1 ................................................... 543,750
195,400 Cambior, Inc. .................................................... 2,124,975
20,000 Cambior, Inc. (Warrants) ......................................... 8,750
165,000 Campbell Resources, Inc.2 ........................................ 159,736
</TABLE>
5
<PAGE>
Lexington Goldfund, Inc.
Statement of Net Assets
(Including the Portfolio of Investments)
December 31, 1995 (continued)
<TABLE>
<CAPTION>
Number of Value
Shares Security (Note 1)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
NORTH AMERICA (continued)
340,000 Canarc Resource Corporation2 ..................................... $ 349,102
500,000 Dayton Mining Corporation2 ....................................... 2,108,544
125,000 Echo Bay Mines, Ltd. ............................................. 1,296,875
80,500 Euro Nevada Mining Corporation, Ltd. ............................. 2,937,202
32,169 First Mississippi Corporation .................................... 707,718
45,000 Franco Nevada Mining Corporation, Ltd. ........................... 2,632,013
118,600 Freeport McMoran Copper & Gold (Preferred shares) ................ 3,320,800
526,000 Geddes Resources, Ltd.2 .......................................... 501,503
500,000 Geomaque Explorations, Ltd.2 ..................................... 674,734
100,000 Golden Knight Resources, Inc. .................................... 577,558
120,000 Golden Star Resources, Ltd.1,2 ................................... 615,000
120,000 Golden Star Resources, Ltd. (Warrants)1,2 ........................ 1,200
17,800 Golden Star Resources, Ltd.2 ..................................... 91,225
500,000 Granges, Inc.2 ................................................... 825,083
100,000 Greenstone Resources, Ltd.2 ...................................... 286,029
15,400 Guyanor Resources S.A.2 .......................................... 38,401
237,800 Hemlo Gold Mines, Inc. ........................................... 2,229,375
548,100 International Gold Resources Corporation2 ........................ 1,447,129
200,000 Laminco Resources, Inc.2 ......................................... 205,354
525,000 Loki Gold Corporation (Warrants) ................................. 1,2904,840
130,000 Newmont Gold Company ............................................. 5,687,500
31,691 Newmont Mining Corporation ....................................... 1,434,018
62,000 North American Palladium, Ltd.2 .................................. 364,250
100,000 Pegasus Gold, Inc. ............................................... 1,387,500
90,000 Placer Dome, Inc. ................................................ 2,171,250
150,000 Prime Resource Group, Inc.2 ...................................... 1,031,353
239,002 Santa Fe Pacific Gold Corporation ................................ 2,897,899
75,000 Stillwater Mining Company2 ....................................... 1,462,500
200,000 Triton Mining Corporation (Warrants)1,2 .......................... 733,407
850,000 TVX Gold, Inc. ................................................... 6,056,250
182,000 Venoro Gold Corporation2 ......................................... 32,034
------------
54,468,296
------------
SOUTH AFRICA: 19.3%
59,925 Anglo American Platinum (ADR)2 ................................... 341,093
15,000 Anglovaal Ltd. "N" ............................................... 609,137
235,000 Beatrix Mines, Ltd. .............................................. 2,111,744
640,600 Deelkraal Gold Mining Company, Ltd. .............................. 509,738
304,000 Driefontein Consolidated, Ltd. ................................... 3,857,868
19,680 Durban Roodepoort Deep, Ltd.2 .................................... 172,797
49,200 Durban Roodepoort Deep, Ltd.2 .................................... 425,244
19,680 Durban Roodepoort Deep, Ltd. (Options)2 .......................... 65,474
</TABLE>
6
<PAGE>
Lexington Goldfund, Inc.
Statement of Net Assets
(Including the Portfolio of Investments)
December 31, 1995 (continued)
<TABLE>
<CAPTION>
Number of Shares Value
or Principal Amount Security (Note 1)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
SOUTH AFRICA (continued)
1,299,000 East Rand Gold & Uranium Company ................................. $ 3,475,168
370,000 Elandsrand Gold Mining Company, Ltd. ............................. 1,776,650
20,000 Free State Consolidated Gold Mines, Ltd. ......................... 149,540
150,000 Free State Development & Investment, Ltd. ........................ 102,895
135,000 Impala Platinum Holdings, Ltd. ................................... 2,463,301
58,000 JCI, Ltd. (ADR) .................................................. 457,417
100,000 Kinross Mines, Ltd. .............................................. 946,632
30,500 Kloof Gold Mining Company (ADR) .................................. 289,750
125,000 Kloof Gold Mining Company, Ltd. .................................. 1,200,439
360,000 Randex, Ltd.2 .................................................... 148,168
71,600 Rustenburg Platinum Holdings, Ltd. ............................... 1,178,763
177,000 St. Helena Gold Mines, Ltd. ...................................... 971,327
6,600 Vaal Reefs Exploration & Mining Company, Ltd. .................... 427,384
221,849 Western Areas Gold Mining Company, Ltd. .......................... 3,789,298
99,000 Winkelhaak Mines, Ltd. ........................................... 706,270
------------
26,176,097
------------
UNITED KINGDOM: 0.7%
600,000 Cluff Resources Plc .............................................. 995,100
------------
TOTAL GOLD MINING COMMON STOCKS:
(Cost $106,998,782) ............................................ 114,884,582
CONVERTIBLE NOTES: 0.5%
$750,000 Canyon Resources Corporation1
6.00%, due 06/01/98 (Cost $692,265) ............................ 607,500
------------
SHORT-TERM INVESTMENTS: 3.0%
1,500,000 Federal Home Loan Bank 5.55%, due 02/13/96 ....................... 1,490,056
2,600,000 Federal Home Loan Mortgage Corporation 5.50%, due 01/02/96 ....... 2,599,603
------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $4,089,659) .............................................. 4,089,659
------------
TOTAL INVESTMENTS: 99.5%
(Cost $127,248,796+) (Note 1) .................................. 135,047,044
Other assets in excess of liabilities: 0.5% ...................... 731,618
------------
TOTAL NET ASSETS: 100.0%
(equivalent to $6.24 per share on
21,750,338 shares outstanding) ................................. $135,778,662
============
</TABLE>
7
<PAGE>
Lexington Goldfund, Inc.
Statement of Net Assets
(Including the Portfolio of Investments)
December 31, 1995 (continued)
- --------------------------------------------------------------------------------
Notes to Statement of Net Assets
1The following securities were purchased under Rule 144A of the Securities Act
of 1933 and, unless registered under the Act or exempted from registration, may
be sold only to qualified institutional investors.
<TABLE>
<CAPTION>
Average Cost
Per Share/
Acquisition Principal Unit Market % of Net
Issuer Date or Par Value Value Assets
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ashanti Goldfields Company, Ltd. ........... 1/6/95-11/3/95 $19.40 $2,531,250 1.86%
Cambior, Inc. .............................. 5/7/93 10.28 543,750 0.40%
Canyon Resource Corporation ................ 5/19/93-6/19/95 91.00 607,500 0.45%
Golden Star Resources, Ltd. ................ 1/24/94 16.01 615,000 0.45%
Golden Star Resources, Ltd. (Warrants) ..... 1/24/94 0.01 1,200 0.00%
Loki Gold Corporation (Warrants) ........... 9/28/95 1.34 904,840 0.67%
St. Barbara Mines, Ltd. .................... 5/13/93 0.53 602,162 0.44%
Triton Mining Corporation (Warrants) ....... 5/19/95 2.76 733,407 0.54%
---------- ----
$6,539,109 4.81%
========== ====
</TABLE>
Pursuant to guidelines adopted by the Fund's Board of Directors, these
unregistered securities have been deemed to be illiquid. The Fund currently
limits investment in illiquid securities to 15% of the Fund's net assets, at
market value, at the time of purchase.
2Non-income producing securities.
ADR-American Depository Receipt.
+Aggregate cost for Federal income tax purposes is identical.
The Notes to Financial Statements are an integral part of this statement.
8
<PAGE>
Lexington Goldfund, Inc.
Statement of Assets and Liabilities
December 31, 1995 (unaudited)
<TABLE>
<S> <C>
Assets
Investments, at value (cost $127,248,796) (Note 1) .......................................... $135,047,044
Cash ........................................................................................ 70,881
Receivable for investment securities sold ................................................... 1,296,575
Receivable for shares sold .................................................................. 355,242
Dividends and interest receivable ........................................................... 247,729
------------
Total Assets ........................................................................ 137,017,471
------------
Liabilities
Due to Lexington Management Corporation (Note 2) ............................................ 92,663
Payable for shares redeemed ................................................................. 770,735
Payable for investment securities purchased ................................................. 199,927
Accrued expenses ............................................................................ 175,484
------------
Total Liabilities ................................................................... 1,238,809
------------
Net Assets (equivalent to $6.24 per share on 21,750,338 shares outstanding) (Note 4) ........ $135,778,662
============
Net Assets consist of:
Capital stock-authorized 500,000,000 shares, $.001 par value per share ...................... $ 21,750
Additional paid-in capital (Note 1) ......................................................... 138,788,767
Accumulated net realized loss on investments (Notes 1 and 6) ................................ (10,830,199)
Net unrealized appreciation of investments .................................................. 7,798,344
------------
$135,778,662
============
</TABLE>
The Notes to Financial Statements are an integral part of this statement.
9
<PAGE>
Lexington Goldfund, Inc.
Statement of Operations
Year ended December 31, 1995
<TABLE>
<S> <C> <C>
Investment Income
Income
Dividends ....................................................... $ 2,567,136
Interest ........................................................ 449,967
-----------
3,017,103
Less: foreign tax expense ....................................... 353,770
-----------
Total investment income ....................................... $2,663,333
Expenses
Investment advisory fee (Note 2) ................................ 1,251,651
Accounting and shareholder services expense (Note 2) ............ 236,674
Custodian and transfer agent expenses ........................... 197,100
Printing and mailing ............................................ 243,618
Directors' fees and expenses .................................... 11,787
Audit and legal ................................................. 51,354
Registration fees ............................................... 52,087
Computer processing fees ........................................ 18,609
Distribution expenses (Note 3) .................................. 375,548
Other expenses .................................................. 120,975
-----------
Total expenses ................................................ 2,559,403
-----------
Net investment income ..................................... 103,930
Realized and Unrealized Gain (Loss)
on Investments (Note 5)
Net realized gain (loss) on:
Investments ..................................................... 9,673,019
Foreign currency transactions ................................... (1,808)
-----------
Net realized gain ............................................. 9,671,211
Net change in unrealized appreciation (depreciation) on:
Investments ..................................................... (11,866,711)
Foreign currency translations of other assets and liabilities ... 124
-----------
Net change in unrealized depreciation ......................... (11,866,587)
-----------
Net realized and unrealized loss .......................... (2,195,376)
-----------
Decrease in Net Assets Resulting from Operations .................. $(2,091,446)
===========
</TABLE>
The Notes to Financial Statements are an integral part of this statement.
10
<PAGE>
Lexington Goldfund, Inc.
Statements of Changes in Net Assets
Years ended December 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
Net investment income .................................................. $ 103,930 $ 783,023
Net realized gain from security transactions ........................... 9,671,211 5,641,763
Decrease in unrealized appreciation of investments ..................... (11,866,587) (19,365,629)
------------ -------------
Net decrease in net assets resulting from operations ........... (2,091,446) (12,940,843)
Distributions to shareholders from net investment income ............... (244,385) (704,103)
Increase (decrease) in net assets from capital share transactions
(Note 4) ............................................................. (21,320,113) 13,600,482
------------ -------------
Net decrease in net assets ..................................... (23,655,944) (44,464)
Net Assets
Beginning of period .................................................... 159,434,606 159,479,070
------------ -------------
End of period (including undistributed net investment income of
$100,368 for the year ended December 31, 1994) ....................... $135,778,662 $159,434,606
============ =============
</TABLE>
The Notes to Financial Statements are an integral part of this statement.
11
<PAGE>
Left Col.
Lexington Goldfund, Inc.
Notes to Financial Statements
December 31, 1995 and 1994
1. Significant Accounting Policies
Lexington Goldfund, Inc. (the ``Fund") is an open end non-diversified management
investment company registered under the Investment Company Act of 1940, as
amended. The Fund's objective is to attain capital appreciation and such hedge
against loss of buying power as may be obtained through investment in gold and
equity securities of companies engaged in mining or processing gold throughout
the world. The following is a summary of significant accounting policies
followed by the Fund in the preparation of its financial statements:
Investments Security transactions are accounted for on a trade date basis.
Realized gains and losses from investment transactions are reported on the
identified cost basis. Investments in securities traded on a national securities
exchange are valued at the last sale price on the last business day of the
fiscal period. Securities traded on the over-the-counter market and gold bullion
are valued at the mean between the last reported bid and asked price. Securities
for which market quotations are not readily available and other assets are
valued at fair value as determined by management and approved in good faith by
the Board of Directors. Short-term securities are stated at amortized cost,
which approximates market value. Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Interest income is accrued as
earned.
Foreign Currency Transactions Foreign currencies (and receivables and payables
denominated in foreign currencies) are translated into U.S. dollar amounts at
current exchange rates. Translation gains or losses resulting from changes in
exchange rates and realized gains and losses on the settlement of foreign
currency transactions are reported in the statement of operations. In addition,
the Fund may enter into forward foreign exchange contracts in order to hedge
against foreign currency risk in the purchase or sale of securities denominated
in foreign currency. The Fund may also enter into such contracts to hedge
against changes in foreign currency exchange rates on portfolio positions. These
contracts are marked to market daily, by recognizing the difference between the
contract exchange rate and the current market rate as unrealized gains or
losses. Realized gains or losses are recognized when contracts are closed and
are reported in the statement of operations.
12
Right Col.
Distributions In accordance with Statement of Position 93-2: Determination,
Disclosure and Financial Statement Presentation of Income, Capital Gain and
Return of Capital Distributions by Investment Companies, as of December 31,
1995, foreign exchange losses of $1,808 were reclassified from accumulated net
realized losses to distributions in excess of net investment income. In
addition, book and tax differences amounting to $41,895 have been reclassified
from distributions in excess of net investment income to additional paid-in
capital. As of December 31, 1994, book and tax basis differences amounting to
$26,684 have been reclassified from undistributed net investment income to
additional paid-in capital. In addition, foreign exchange losses of $7,999 were
reclassified from accumulated net realized losses to undistributed net
investment income.
Federal Income Taxes It is the Fund's intention to comply with the
requirements of the Internal Revenue Code applicable to ``regulated investment
companies" and to distribute all of its taxable income to its shareholders.
Therefore, no provision for Federal income taxes has been made.
2. Investment Advisory Fee and Other Transactions with Affiliate
The Fund pays an investment advisory fee to Lexington Management Corporation
("LMC") at the annual rate of 1% of the Fund's average daily net assets up to
$50 million and 0.75% of average daily net assets in excess of $50 million. The
investment advisory contract provides that the total annual expenses of the Fund
(including management fees, but excluding interest, taxes, brokerage commissions
and extraordinary expenses) will not exceed the level of expenses which the Fund
is permitted to bear under the most restrictive expense limitation imposed by
any state in which shares of the Fund are offered for sale. No reimbursement was
required for the year ended December 31, 1995.
The Fund also reimburses LMC for certain expenses, including accounting and
shareholder servicing costs, which are incurred by the Fund, but paid by LMC.
3. Distribution Plan
The Fund has adopted a Distribution Plan (the "Plan") which allows payments to
finance activities associated with the distribution of the Fund's shares. The
Plan provides that the Fund may pay distribution fees on a reimbursement basis,
including payments to Lexington Fund Distributors, Inc. ("LFD"), the Fund's
distributor in amounts not exceeding
<PAGE>
Left Col.
Lexington Goldfund, Inc.
Notes to Financial Statements
December 31, 1995 and 1994 (continued)
3. Distribution Plan (continued)
.25% per annum of the Fund's average daily net assets. Total distribution
expenses for the year ended December 31, 1995 were $375,548 and are set forth in
the statement of operations.
4. Capital Stock
Transactions in capital stock were as follows:
Year ended Year ended
December 31, 1995 December 31, 1994
------------------------- -------------------------
Shares Amount Shares Amount
----------- ------------ ----------- ------------
Shares sold ............. 22,030,928 $132,527,053 29,889,582 $196,803,590
Shares issued to share-
holders on reinvest-
ment of dividends ...... 32,429 212,081 93,509 615,486
----------- ------------ ----------- ------------
22,063,357 132,739,134 29,983,091 197,419,076
Shares redeemed ......... (25,332,729) (154,059,247 (28,084,616) (183,818,594)
----------- ------------ ----------- ------------
Net increase (decrease). (3,269,372) $(21,320,113) 1,898,475 $13,600,482
=========== ============ =========== ============
5. Purchases and Sales of Investments
The cost of purchases and proceeds from sales of investments for the year ended
December 31, 1995, excluding short-term securities, were $57,413,783 and
$78,604,155, respectively.
At December 31, 1995, aggregate gross unrealized appreciation for all
investments in which there is an excess of value over tax cost amounted to
$19,555,949 and aggregate gross unrealized depreciation for all investments in
which there is an excess of tax cost over value amounted to $11,757,605.
Right Col.
6. Federal Income Taxes-Capital Loss Carryforwards
Capital loss carryforwards available for federal income tax purposes as of
December 31, 1995 are approximately:
$5,283,213 expiring in 1999;
$8,266,551 expiring in 2000; and,
$2,280,435 expiring in 2001.
To the extent any future capital gains are offset by these losses, such gains
would not be distributed to shareholders.
Treasury regulations were issued in early 1990 which provide that capital losses
incurred after October 31 of a fund's taxable year should be deemed to have
occurred on the first day of the following year (i.e.: January 1). The
regulations indicate that a fund may elect to retroactively apply these rules
for purposes of computing taxable income. Accordingly, the capital loss
carryforwards for Lexington Goldfund, Inc. have been adjusted to reflect prior
years' post-October losses in the next fiscal year.
7. Investment and Concentration Risks
The Fund makes significant investments in foreign securities and has a policy of
investing in gold and in the securities of companies engaged in mining or
processing gold. There are certain risks involved in investing in foreign
securities or concentrating in specific industries, such as mining and
processing gold, that are in addition to the usual risks inherent in domestic
investments. The price of gold in particular, is subject to substantial price
fluctuations over short periods of time. These risks also include those
resulting from future adverse political and economic developments as well as the
possible imposition of foreign exchange or other foreign governmental
restrictions or laws.
13
<PAGE>
Lexington Goldfund, Inc.
Financial Highlights
Selected per share data for a share outstanding throughout the period:
<TABLE>
<CAPTION>
Year ended December 31,
---------------------------------------------------
1995 1994 1993 1992 1991
---------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .......... $6.37 $6.90 $3.70 $4.68 $5.03
----- ----- ----- ----- -----
Income from investment operations:
Net investment income ....................... - .03 .01 .02 .04
Net realized and unrealized gain (loss)
on investments ............................ (.12) (.53) 3.21 (.98) (.35)
----- ----- ----- ----- -----
Total income (loss) from investment
operations .................................. (.12) (.50) 3.22 (.96) (.31)
----- ----- ----- ----- -----
Less distributions:
Dividends from net investment income ........ (.01) (.03) (.02) (.02) (.04)
----- ----- ----- ----- -----
Net asset value, end of period ................ $6.24 $6.37 $6.90 $3.70 $4.68
===== ===== ===== ===== =====
Total return .................................. (1.89%) (7.28%) 86.96% (20.51%) (6.14%)
Ratio to average net assets:
Expenses .................................... 1.70% 1.54% 1.63% 1.69% 1.43%
Net investment income .07% .50% .25% .58% .81%
Portfolio turnover 40.41% 23.77% 28.41% 13.18% 22.14%
Net assets, end of period (000's omitted) ..... $135,779 $159,435 $159,479 $71,856 $96,316
</TABLE>
14
<PAGE>
Independent Auditors' Report
The Board of Directors and Shareholders
Lexington Goldfund, Inc.:
We have audited the accompanying statements of net assets (including the
portfolio of investments) and assets and liabilities of Lexington Goldfund, Inc.
as of December 31, 1995, the related statement of operations for the year then
ended, the statements of changes in net assets for each of the years in the
two-year period then ended, and the financial highlights for each of the years
in the five-year period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Lexington Goldfund, Inc. as of December 31, 1995, the results of its operations
for the year then ended, the changes in its net assets for each of the years in
the two-year period then ended, and the financial highlights for each of the
years in the five-year period then ended, in conformity with generally accepted
accounting principles.
KPMG Peat Marwick LLP
New York, New York
January 29, 1996
15
<PAGE>
Left Col.
Lexington
Goldfund, Inc.
Investment Adviser
- --------------------------------------------------------------------------------
LEXINGTON MANAGEMENT CORPORATION
P.O. Box 1515
Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
Distributor
- --------------------------------------------------------------------------------
LEXINGTON FUNDS DISTRIBUTOR, INC.
P.O. Box 1515
Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
---------------------------------------------------
All shareholder requests for services of
any kind should be sent to:
Transfer Agent
---------------------------------------------------
STATE STREET BANK AND
TRUST COMPANY
c/o National Financial Data Services
1004 Baltimore
Kansas City, Missouri 64105
Or call toll free:
Service and Sales: 1-800-526-0056
24 Hour Account Information:
1-800-526-0052
---------------------------------------------------
- --------------------------------------------------------------------------------
(800) 526-0052
``LEXLINE"
24 hour toll-free telephone access to your
Lexington Fund account
Price/Yield * Account Balances * Exchanges *
Last Transactions * Total Return * Duplicate Statements
- --------------------------------------------------------------------------------
This report has been prepared for the information of the shareholders of
Lexington Goldfund, Inc. and is authorized for distribution to the public only
if it is accompanied or preceded by a currently effective prospectus which sets
forth expenses and other material information.
Right Col.
LEXINGTON
LEXINGTON
GOLDFUND,
INC.
(filled box)
Seeks capital appreciation and such
hedge against loss of buying power
as may be obtained through
investment in gold and equity
securities of companies engaged in
mining or processing gold
throughout the world.
(filled box)
ANNUAL REPORT
DECEMBER 31, 1995
The Lexington Group
of No Load
Investment Companies
