Dear Shareholders:
- --------------------------------------------------------------------------------
We are pleased to report that the Lexington Goldfund, Inc., produced a total
return of 16.03%* for the first half of 1996 compared with an average total
return of 14.82% for the average gold fund monitored by Lipper Analytical
Services, Inc. Helping the Fund was a higher than average holding in South
African gold shares as well as some excellent gains in some of the exploration
companies such as Bre-X Minerals. While the gold shares in general have pulled
back recently, especially among some of the more extended exploration companies,
some good values have begun to appear and with better gold prices, should
provide the Fund with good opportunities ahead.
After an exciting rise in the gold price at the beginning of the year, from
$391 an ounce on January 2, 1996, to $415 on February 2, 1996, the price
subsequently entered a period of disheartening retreat only to end the period at
$380 an ounce.
CHART/BEGIN
Printed version of this shareholder report contains a
graphic chart indicating the spot price of gold per
ounce from 12/29/95 through 6/28/96.
CHART/END
The gold price increase at the beginning of the year was given its impetus
largely by a reversal in the massive forward selling programs of the gold
producers which had risen to unprecedented levels in 1995. Barrick Gold
dramatically announced the repurchase of one third of its large forward sales
position due not only to lower premiums on forward sales but, more importantly,
to a perception that the supply/demand balance governing the gold market pointed
to a significantly improved outlook for gold prices. The rally in gold, however,
was shortly aborted due to a faltering
1
<PAGE>
in Far East demand as well as concern regarding Central Bank sales of gold. A
large sale by the Central Bank of Belgium reignited fears of further Central
Bank sales and these fears were compounded by talk of potential sales by the
International Monetary Fund and worries about renewed forward selling by the
producers.
The gold shares, as measured by the unmanaged Financial Times World Gold
Mines Index, broadly reflected the movement of the gold bullion price.
The shares enjoyed a heady 31.6% average gain from the levels prevailing at
the end of 1995 to the highs on February 5. While gold bullion faded steadily
with no significant rally after posting its early year high, the gold shares
halted their decline by mid-March showing a respectable performance through the
end of May. In June the shares finally succumbed to the weakening gold price and
finished the first half of the year with a modest full period gain of 5.4%.
CHART/BEGIN
Printed version of this shareholder report contains a
graphic chart indicating the Financial Times World Gold
Mines Index from 12/29/95 through 6/28/96.
CHART/END
Geographically, the gold mining shares showed less pronounced differences in
performance over the six month period than in 1995 with the more volatile South
African gold shares up an average of 7.0%, the North American gold shares up an
average of 5.3%, and the Australian gold shares up an average of 2.1 %. There
were, however, some spectacular performances among some of the exploration
company stocks after heady exploration results were announced by Bre-X Minerals
and a number of the others. Reality set in towards the end of the period as a
few companies began to show disappointing results and some sharp pullbacks were
experienced.
Looking ahead, the strong fundamentals which produced the heartening rally
of early 1996 are still in place. The deficit between physical demand on the one
hand and production of gold on
2
<PAGE>
the other remains intact. Demand has been significantly bolstered by robust gold
purchases from the fast growing countries in Asia. Meanwhile forward sales of
gold appear headed downward from the record levels of 1995. Fears of further
massive Central Bank sales of gold reserves seem to be overdone. The Central
Bank of Belgium now has its gold reserves adjusted to a level in keeping with
other European central banks which should greatly lessen pressure regarding
future sales. While European central banks have traditionally held a prudent
balance of gold bullion in their reserves, the Asian banks are far more
dependent on U.S. dollars for their reserve assets and any diversification into
gold bullion would be a major future source of potential demand. Gold sales by
the International Monetary Fund in order to provide aid to less developed
countries is an idea that has been advanced recently but the German bankers are
strongly opposed pointing out the one shot nature of the scheme and the dangers
of future temptations. We continue to be cautiously constructive towards the
price of gold and feel that the Fund's portfolio is well positioned to take
advantage of this outlook.
We appreciate your continued support and welcome the opportunity to discuss
any questions you may have about your investment.
Sincerely,
Robert W. Radsch Robert M. DeMichele
Portfolio Manager President
July, 1996 July, 1996
*20.05%, 7.66% and 8.70% are the one, five and ten year average annual standard
total returns, respectively, for the period ended June 30, 1996. 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.
3
<PAGE>
Lexington Goldfund, Inc.
Statement of Net Assets
(Including the Portfolio of Investments)
June 30, 1996 (unaudited)
Number of Value
Shares Security (Note 1)
- --------------------------------------------------------------------------------
GOLD BULLION: 10.3%
36,741 fine ounces (cost $14,207,617) ............$ 13,974,588
------------
GOLD MINING COMMON STOCKS: 85.3%
AUSTRALIA: 18.9%
505,000 Acacia Resources, Ltd.2 ........................... 1,191,245
760,000 Climax Mining, Ltd.2 .............................. 836,623
950,000 Delta Gold NL2 .................................... 2,427,701
607,600 Eagle Mining Corporation NL2 ...................... 1,452,378
557,900 Emperor Mines, Ltd. ............................... 1,316,030
260,000 Gold Fields, Ltd.2 ................................ 592,870
1,240,423 Gold Mines of Kalgoorlie, Ltd. .................... 1,355,729
1,800,000 Golden Shamrock Mines, Ltd.2 ...................... 1,613,488
300,000 Great Central Mines NL ............................ 820,897
800,000 Gwalia Resources, Ltd. ............................ 2,044,380
15,000 Lihir Gold, Ltd. (ADR)2 ........................... 481,875
524,750 Mount Edon Gold Mines, Ltd. ....................... 944,879
100,000 Mount Edon Gold Mines, Ltd.1 ...................... 180,063
241,200 Newcrest Mining, Ltd. ............................. 967,243
493,750 Niugini Mining, Ltd.2 ............................. 1,028,824
500,000 Otter Gold Mines, Ltd. ............................ 786,300
300,000 Plutonic Resources, Ltd. .......................... 1,533,285
682,700 Posgold, Ltd. ..................................... 1,680,206
391,000 Ranger Minerals NL2 ............................... 1,291,262
492,857 Resolute Samantha, Ltd. ........................... 1,143,224
65,000 Ross Mining NL .................................... 72,064
146,107 Sons Of Gwalia, Ltd. .............................. 1,033,955
227,100 St. Barbara Mines, Ltd.1 .......................... 148,212
500,000 St. Barbara Mines, Ltd. ........................... 326,315
266,400 Wiluna Mines, Ltd. ................................ 230,417
-----------
25,499,465
-----------
GHANA: 1.4%
95,918 Ashanti Goldfields Company, Ltd. .................. 1,894,371
-----------
NEW ZEALAND: 0.3%
200,000 Macraes Mining Company, Ltd. ...................... 434,038
-----------
NORTH AMERICA: 45.6%
75,000 Agnico-Eagle Mines, Ltd. .......................... 1,218,750
15,000 Amax Gold Inc. (Preferred Shares) ................. 768,750
20,000 Arequipa Resources, Ltd.2 ......................... 272,787
30,000 Arequipa Resources, Ltd. (Warrants)1,2 ............ 409,181
4
<PAGE>
Lexington Goldfund, Inc.
Statement of Net Assets
(Including the Portfolio of Investments)
June 30, 1996 (unaudited) (continued)
Number of Value
Shares Security (Note 1)
- --------------------------------------------------------------------------------
NORTH AMERICA (continued)
80,000 Barrick Gold Corporation .........................$ 2,170,000
250,000 Bre-X Minerals, Ltd.2 ............................ 4,179,805
195,400 Cambior, Inc. .................................... 2,613,475
50,000 Cambior, Inc.1 ................................... 668,750
165,000 Campbell Resources, Inc.2 ........................ 187,541
290,000 Canarc Resource Corporation2 ..................... 361,516
500,000 Control Science Corporation (Warrants)1,2 ........ 769,964
450,000 Dayton Mining Corporation2 ....................... 2,705,874
100,000 Dayton Mining Corporation (Warrants)1,2 .......... 601,305
75,000 Echo Bay Mines, Ltd. ............................. 806,250
80,500 Euro Nevada Mining Corporation, Ltd. ............. 3,453,289
25,000 Franco Nevada Mining Corporation, Ltd. ........... 1,585,759
68,600 Freeport Mcmoran Copper & Gold "A" ............... 2,049,425
500,000 Geomaque Explorations, Ltd.2 ..................... 997,287
32,169 Getchell Gold Corporation2 ....................... 1,061,577
125,000 Gold Reserve Corporation2 ........................ 962,455
25,000 Goldcorp, Inc. "A" ............................... 414,314
100,000 Golden Knight Resources, Inc. .................... 619,638
400,000 Golden Queen (Warrants) .......................... 1,2659,969
120,000 Golden Star Resources, Ltd. (Warrants)1,2 ........ 1,200
200,000 Gran Columbia Resources, Inc. (Warrants)1,2 ...... 300,653
500,000 Granges, Inc.2 ................................... 696,634
300,000 Granges, Inc. (Warrants)1,2 ...................... 417,980
75,000 Greenstone Resources, Ltd.2 ...................... 879,959
237,800 Hemlo Gold Mines, Inc. ........................... 2,526,625
225,000 Homestake Mining Company ......................... 3,853,125
250,000 International Pursuit Corporation (Warrants)1,2 .. 898,291
200,000 Laminco Resources, Inc.2 ......................... 156,926
950,000 Lone Star Exploration NL2 ........................ 626,971
30,000 Newmont Gold Company ............................. 1,511,250
31,691 Newmont Mining Corporation ....................... 1,564,743
62,000 North American Palladium, Ltd.2 .................. 302,250
202,400 Pangea Goldfields, Inc.2 ......................... 734,678
50,000 Pangea Goldfields, Inc. (Warrants)1,2 ............ 181,492
150,000 Pegasus Gold, Inc. ............................... 1,837,500
70,000 Placer Dome, Inc. ................................ 1,671,250
150,000 Prime Resource Group, Inc. ....................... 1,110,948
107,000 Rea Gold Corporation2 ............................ 227,543
243,000 Rea Gold Corporation (Warrants)1,2 ............... 516,756
5
<PAGE>
Lexington Goldfund, Inc.
Statement of Net Assets
(Including the Portfolio of Investments)
June 30, 1996 (unaudited) (continued)
Number of Value
Shares Security (Note 1)
- --------------------------------------------------------------------------------
NORTH AMERICA (continued)
157,800 Royal Oak Mines, Inc.2 ............................$ 578,573
239,002 Santa Fe Pacific Gold Corporation ................. 3,375,903
100,000 South Pacific Resources, Inc.2 .................... 458,312
75,000 Stillwater Mining Company2 ........................ 1,748,438
625,000 Tombstone Explorations Company, Ltd. (Warrants)1,2 769,964
200,000 Triton Mining Corporation1,2 ...................... 953,289
400,000 TVX Gold, Inc. .................................... 2,900,000
182,000 Venoro Gold Corporation2 .......................... 64,061
223,650 Viceroy Resource Corporation2 ..................... 1,295,619
-----------
61,698,594
-----------
SOUTH AFRICA: 19.1%
61,428 Anglo American Platinum (ADR)2 .................... 383,005
15,000 Anglovaal Ltd. "N" ................................ 547,597
235,000 Beatrix Mines, Ltd. ............................... 1,886,842
304,000 Driefontein Consolidated, Ltd. .................... 4,073,937
49,200 Durban Roodepoort Deep, Ltd.2 ..................... 443,346
19,680 Durban Roodepoort Deep, Ltd. (Preferred Shares)2 .. 186,433
19,680 Durban Roodepoort Deep, Ltd. (Options)2 ........... 86,396
1,299,000 East Rand Gold & Uranium Company, Ltd. ............ 3,091,428
370,000 Elandsrand Gold Mining Company, Ltd. .............. 2,094,501
70,000 Free State Consolidated Gold Mines, Ltd. .......... 659,080
150,000 Free State Development & Investment, Ltd. ......... 93,577
100,000 JCI, Ltd. ......................................... 981,978
58,443 JCI, Ltd. (ADR) ................................... 573,583
100,000 Kinross Mines, Ltd. ............................... 1,062,847
125,000 Kloof Gold Mining Company, Ltd. ................... 1,184,150
30,500 Kloof Gold Mining Company, Ltd. (ADR) ............. 295,468
360,000 Randex, Ltd.2 ..................................... 189,648
71,600 Rustenburg Platinum Holdings, Ltd. ................ 1,116,682
1,990 Rustenburg Platinum Holdings, Ltd. (ADR) .......... 31,025
177,000 St. Helena Gold Mines, Ltd. ....................... 1,022,412
6,600 Vaal Reefs Exploration & Mining Company, Ltd. ..... 539,071
221,849 Western Areas Gold Mining Company, Ltd. ........... 3,459,983
25,000 Western Deep Levels, Ltd. ......................... 924,214
99,000 Winkelhaak Mines, Ltd. ............................ 823,475
-----------
25,750,678
-----------
TOTAL GOLD MINING COMMON STOCKS:
(Cost $97,394,056) ............................. 115,277,146
-----------
6
<PAGE>
Lexington Goldfund, Inc.
Statement of Net Assets
(Including the Portfolio of Investments)
June 30, 1996 (unaudited) (continued)
Number of
Shares
or
Principal Value
Amount Security (Note 1)
- --------------------------------------------------------------------------------
CONVERTIBLE NOTES: 1.6%
$750,000 Canyon Resources Corporation
6.00%, due 06/01/981 ...........................$ 750,000
750,000 Golden Shamrock Mines, Ltd.
7.50%, due 05/09/00 ............................ 948,750
500,000 Horsham Corporation
3.00%, 01/29/211 ............................... 470,000
------------
TOTAL CONVERTIBLE NOTES (Cost $1,985,147) ........ 2,168,750
------------
SHORT-TERM INVESTMENTS: 1.1%
500,000 U.S. Treasury Bills, 4.93%, due 07/25/96 ......... 498,357
1,000,000 U.S. Treasury Bills, 4.975%, due 08/15/96 ........ 993,781
------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $1,492,138) .............................. 1,492,138
------------
TOTAL INVESTMENTS: 98.3%
(Cost $115,078,958+) (Note 1) .................. 132,912,622
Other assets in excess of liabilities: 1.7% ...... 2,321,733
------------
TOTAL NET ASSETS: 100.0%
(Equivalent to $7.24 per share on
18,683,589 shares outstanding) ...................$135,234,355
============
1Restricted securities. (Note 7).
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.
7
<PAGE>
<TABLE>
Lexington Goldfund, Inc.
Statement of Assets and Liabilities
June 30, 1996 (unaudited)
Assets
<S> <C>
Investments, at value (cost $115,078,958) (Note 1) ................................... $132,912,622
Cash ................................................................................. 2,327,449
Receivable for investment securities sold ............................................ 666,935
Receivable for shares sold ........................................................... 83,080
Dividends and interest receivable .................................................... 68,391
------------
Total Assets ......................................................................... 136,058,477
------------
Liabilities
Due to Lexington Management Corporation (Note 2) ..................................... 95,248
Payable for shares redeemed .......................................................... 515,909
Accrued expenses ..................................................................... 212,965
------------
Total Liabilities ............................................................ 824,122
------------
Net Assets (equivalent to $7.24 per share on 18,683,589 shares outstanding) (Note 4) . $135,234,355
============
Net Assets consist of:
Capital stock-authorized 500,000,000 shares, $.001 par value per share ............... $ 18,684
Additional paid-in capital ........................................................... 115,196,706
Accumulated deficit .................................................................. (311,185)
Accumulated net realized gain on investments ......................................... 2,496,832
Net unrealized appreciation of investments ........................................... 17,833,318
------------
$135,234,355
============
</TABLE>
The Notes to Financial Statements are an integral part of this statement.
8
<PAGE>
<TABLE>
Lexington Goldfund, Inc.
Statement of Operations
Six months ended June 30, 1996 (unaudited)
Investment Income
<S> <C> <C>
Income
Dividends ...................................................... $ 756,726
Interest ....................................................... 208,370
----------
965,096
Less: foreign tax expense ........................................ 33,904
----------
Total investment income ........................................ $ 931,192
Expenses
Investment advisory fee (Note 2) ............................... 643,912
Distribution expenses (Note 3) ................................. 193,978
Transfer agent and shareholder servicing expense (Note 2) ...... 123,785
Accounting expenses (Note 2) ................................... 59,102
Printing and mailing expenses .................................. 55,594
Custodian fees ................................................. 42,322
Registration fees .............................................. 23,204
Professional fees .............................................. 22,908
Computer processing fees ....................................... 11,055
Directors' fees ................................................ 5,869
Other expenses ................................................. 60,648
----------
Total expenses ............................................... 1,242,377
-----------
Net investment loss ........................................ (311,185)
Realized and Unrealized Gain (Loss)
on Investments (Note 5)
Net realized gain on investments ................................. 13,327,031
Net change in unrealized appreciation on:
Investments ................................................ 10,035,416
Foreign currency translations of other assets and liabilities (442)
----------
Net change in unrealized appreciation ...................... 10,034,974
Net realized and unrealized gain ......................... 23,362,005
-----------
Increase in Net Assets Resulting from Operations ................. $23,050,820
===========
</TABLE>
The Notes to Financial Statements are an integral part of this statement.
9
<PAGE>
<TABLE>
Lexington Goldfund, Inc.
Statements of Changes in Net Assets
Six months Year
ended ended
June 30, 1996 December 31,
(unaudited) 1995
------------- ------------
<S> <C> <C>
Net investment income (loss) .......................................... $ (311,185) $ 103,930
Net realized gain from investments and foreign currency transactions .. 13,327,031 9,671,211
Change in unrealized appreciation (depreciation) of investments and
foreign currencies translations ..................................... 10,034,974 (11,866,587)
------------ ------------
Increase (decrease) in net assets resulting from operations ....... 23,050,820 (2,091,446)
Distributions to shareholders from net investment income .............. - (244,385)
Decrease in net assets from capital share transactions
(Note 4) ............................................................ (23,595,127) (21,320,113)
------------ ------------
Net decrease in net assets ...................................... (544,307) (23,655,944)
Net Assets
Beginning of period ................................................. 135,778,662 159,434,606
------------ ------------
End of period ....................................................... $135,234,355 $135,778,662
============ ============
</TABLE>
The Notes to Financial Statements are an integral part of this statement.
10
<PAGE>
Lexington Goldfund, Inc.
Notes to Financial Statements
June 30, 1996 (unaudited) and December 31, 1995
(LEFT COLUMN)
1. Significant Accounting Policies
Lexington Goldfund, Inc. (the "Fund") is an open-end diversified management
investment company registered under the Investment Company Act of 1940, as
amended. The Fund's investment 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. Securities traded on a recognized stock exchange are
valued at the last sales price reported by the exchange on which the securities
are traded. If no sales price is recorded, the mean between the last bid and
asked prices is used. Securities traded on the over-the-counter market and gold
bullion are valued at the mean between the last current bid and asked price.
Short-term securities having a maturity of 60 days or less are stated at
amortized cost, which approximates market value. Securities for which market
quotations are not readily available and other assets are valued by Fund
management in good faith under the direction of the Fund's Board of Directors.
All investments quoted in foreign currencies are valued in U.S. dollars on the
basis of the foreign currency exchange rates prevailing at the close of
business. Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Interest income, adjusted for amortization of premiums and
accretion of discounts, 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
(RIGHT COLUMN)
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.
Federal Income Taxes It is the Fund's policy 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 is required.
Distributions The character of income and gains to be distributed are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. At December 31, 1995 reclassifications
were made to the Fund's capital accounts to reflect permanent book/tax
differences and income and gains available for distributions under income tax
regulations. Net investment income, net realized gains and net assets were not
affected by this change.
2. Investment Advisory Fee and Other Transactions
with Affiliate
The Fund pays an investment advisory fee to Lexington Management Corporation
("LMC") at an annual rate of 1.00% of the Fund's average daily net assets up to
$50 million and at an annual rate of 0.75% thereafter. The investment advisory
contract provides that the total annual expenses of the Fund (including
management fees, but excluding interest, taxes, brokerage commission 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 six months ended June 30, 1996.
The Fund also reimbursed LMC for certain expenses, including accounting and
shareholder servicing costs of $126,651, which are incurred by the Fund, but
paid by LMC.
3. Distribution Plan
The Fund has 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,
includ-
11
<PAGE>
Lexington Goldfund, Inc.
Notes to Financial Statements
June 30, 1996 (unaudited) and December 31, 1995 (continued)
(LEFT COLUMN)
3. Distribution Plan (continued)
ing payments to Lexington Fund Distributors, Inc. ("LFD"), the Fund's
distributor, in amounts not exceeding 0.25% per annum of the Fund's average
daily net assets. Total distribution expenses for the six months ended June 30,
1996 were $193,978 and are set forth in the statement of operations.
4. Capital Stock
Transactions in capital stock were as follows:
Six months ended
June 30, 1996 Year ended
(unaudited) December 31, 1995
--------------------------- --------------------------
Shares Amount Shares Amount
----------- ----------- ---------- ------------
Shares sold ........ 9,891,696 $73,902,887 22,030,928 $132,527,053
Shares issued on
reinvestment
of dividends ...... - - 32,429 212,081
----------- ----------- ---------- ------------
9,891,696 73,902,887 22,063,357 132,739,134
----------- ----------- ---------- ------------
Shares redeemed ....(12,958,445) (97,498,014 (25,332,729) (154,059,247)
----------- ----------- ---------- ------------
Net decrease ....... (3,066,749) $(23,595,127) (3,269,372) $(21,320,113)
=========== ============ ========== ============
5. Purchases and Sales of Investment Securities
The cost of purchases and proceeds from sales of securities for the six months
ended June 30, 1996, excluding short-term securities, were $ 23,890,064 and $
46,795,751, respectively.
At June 30, 1996, the aggregate gross unrealized
appreciation for all securities in which there is an excess of value over tax
cost amounted to $ 26,044,888 and aggregate gross unrealized depreciation for
all securities in which there is an excess of tax cost over value amounted to
$8,211,570.
6. 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 of gold. There are certain risks involved in investing in foreign
securities or concentrating in specific industries that are in addition to the
usual risks inherent in domestic investments. These risks include those
resulting from potentially adverse political and economic developments as well
as the possible imposition of foreign exchange or other foreign governmental
restrictions or laws, all of which could affect the market and/or credit risk of
the investments.
(RIGHT COLUMN)
In addition to the risks described above, risks may arise from forward foreign
currency contracts as a result of the potential inability of counterparties to
meet the terms of their contracts.
7. Restricted Securities
The following securities were purchased under Rule 144A of the Securities Act of
1933 or issued in private placements and, unless registered under the Act or
exempted from registration, may be sold only to qualified institutional
investors.
Average Cost
Per Share/
Acquisition Principal Market % of Net
Security Date Amount Value Assets
-------- ---- ------ ----- --------
Arequipa Resources,
Ltd. (Warrants) 1/18/96 $ 4.02 $ 409,181 0.30%
Cambior, Inc. 5/07/93 10.28 668,750 0.49%
Canyon Resources
Corporation 5/19/93 91.00 750,000 0.56%
Control Science
Corporation (Warrants) 5/21/96 1.65 769,964 0.57%
Dayton Mining
Corporation (Warrants) 1/15/96 4.77 601,305 0.44%
Golden Queen (Warrants) 5/2/96 1.84 659,969 0.49%
Golden Star Resources,
Ltd. (Warrants) 1/24/94 .01 1,200 0.00%
Gran Columbia
Resources, Inc.
(Warrants) 5/29/96 2.62 300,653 0.22%
Granges, Inc. (Warrants) 4/11/96 1.92 417,980 0.31%
Horsham Corporation 1/16/96 100.00 470,000 0.35%
International Pursuit
Corporation (Warrants) 4/24/96 3.30 898,291 0.67%
Mount Edon Gold
Mines, Ltd. 2/2/96 2.46 180,063 0.13%
Pangea Goldfields,
Inc. (Warrants) 5/14/96 4.09 181,492 0.13%
Rea Gold Corporation
(Warrants) 1/19/96 2.20 516,756 0.38%
St. Barbara Mines, Ltd. 5/13/93 0.53 148,212 0.11%
Tombstone Explorations
Company, Ltd. (Warrants) 5/2/96 1.10 769,964 0.58%
Triton Mining
Corporation 5/19/95 2.76 953,289 0.70%
---------- -----
$8,697,069 6.43%
---------- -----
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, but, pursuant to state regulations, the
Fund's investment in such securities is effectively limited to 10%.
12
<PAGE>
<TABLE>
Lexington Goldfund, Inc.
Financial Highlights
Selected per share data for a share outstanding throughout the period:
Six months
ended Year ended December 31,
June 30, 1996 --------------------------------------
(unaudited) 1995 1994 1993 1992
----------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........ $6.24 $6.37 $6.90 $3.70 $4.68
----- ----- ----- ----- -----
Income (loss) from investment operations:
Net investment income (loss) ................ (0.02) - 0.03 0.01 0.02
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions ............................ 1.02 (0.12) (0.53) 3.21 (0.98)
----- ----- ----- ----- -----
Total income (loss) from investment
operations ................................ 1.00 (0.12) (0.50) 3.22 (0.96)
----- ----- ----- ----- -----
Less distributions:
Dividends from net investment income ...... - (0.01) (0.03) (0.02) (0.02)
----- ----- ----- ----- -----
Net asset value, end of period .............. $7.24 $6.24 $6.37 $6.90 $3.70
===== ===== ===== ===== =====
Total return ................................ 34.94%* (1.89%) (7.28%) 86.96% (20.51%)
Ratio to average net assets:
Expenses .................................. 1.60%* 1.70% 1.54% 1.63% 1.69%
Net investment income ..................... (.40%)* .07% .50% .25% .58%
Portfolio turnover .......................... 32.62%* 40.41% 23.77% 28.41% 13.18%
Average commissions paid on equity
security transactions ..................... $0.02 - - - -
Net assets, end of period (000's omitted) ...$135,234 $135,779 $159,435 $159,479 $71,856
*Annualized
</TABLE>
13
<PAGE>
(RIGHT COLUMN)
The Lexington Group of
No Load Investment Companies
Lexington Worldwide Emerging Markets Fund, Inc.-Seeks long-term growth of
capital primarily through investment in equity securities of companies domiciled
in, or doing business in, emerging countries and emerging markets.
Lexington Troika Dialog Russia Fund, Inc.-Seeks long term capital appreciation
through investments primarily in equity securities of Russian companies.
Lexington Global Fund, Inc.-Seeks long-term growth of capital primarily through
investment in common stocks of companies domiciled in foreign countries and the
United States.
Lexington International Fund, Inc.-Seeks long-term growth of capital
through investment in companies domiciled in foreign countries.
Lexington Crosby Small Cap Asia Growth Fund, Inc.-Seeks long-term capital
appreciation through investment in companies domiciled in the Asia Region with a
market capitalization of less than $1 billion.
Lexington Ramirez Global Income
Fund-Seeks high current income. Capital appreciation is a secondary objective.
The Fund invests in a combination of foreign and domestic high-yield, lower
rated debt securities.
Lexington Goldfund, Inc.-Seeks capital appreciation
through investment in gold bullion and shares of gold mining companies.
Lexington Growth and Income Fund, Inc.-Seeks capital appreciation over the
long-term through investments in the stocks of large, ably managed and well
financed companies.
Lexington Corporate Leaders Trust Fund-Seeks capital growth
and reasonable income through investment in an equal number of shares of an
established list of American blue chip corporations.
Lexington SmallCap Value
Fund, Inc.-Seeks long-term capital appreciation through investment in common
stocks of companies domiciled in the United States with a market capitalization
of less than $1 billion.
Lexington Convertible Securities Fund-Seeks total
return by providing capital appreciation, current income and conservation of
capital through investments in a diversified portfolio of securities convertible
into shares of common stock.
Lexington GNMA Income Fund, Inc.-Seeks to achieve a
high level of current income, consistent with liquidity and safety of principal,
through investment primarily in mortgage-backed GNMA ("Ginnie Mae") certificates
that are guaranteed as to the timely payment of principal and interest by the
United States Government.
Lexington Money Market Trust-Seeks a high level of
current income consistent with preservation of capital and liquidity through
investments in interest bearing short-term money market instruments.
Lexington
Tax Free Money Fund, Inc.-Seeks current income exempt from Federal income taxes
while maintaining stability of principal, liquidity and preservation of capital.
For more complete information about any of the Lexington Funds and a prospectus
which includes management fee and expenses call the distributor toll-free at
1-800-526-0056. Read the prospectus carefully before you invest or send money.
(LEFT COLUMN)
LEXINGTON
INVESTOR SERVICES
As a Lexington shareholder, you should be aware of the many services available
to you.
No Load-The Lexington Funds are no load funds. That is, investments and
redemptions are made without any sales charges, commissions or redemption fees.
------------
Free Telephone Exchange-Investments in the Lexington Funds may be exchanged for
shares of a different Lexington Fund at any time.
------------
Check Writing Privileges-Lexington Money Market Trust and Lexington Tax Free
Money Fund permit investors immediate access to their funds with check writing
for withdrawals from their account.
------------
Tax Sheltered Plans-IRA, Keogh, Pension, and Profit Sharing Prototype Plans are
available to qualified individuals. These plans offer investment flexibility
through the Share Exchange Service, simplified record keeping, convenience and
investment supervision.
------------
Custodial Accounts for Minors-Investments may be made on behalf of minors under
the Uniform Gifts to Minors Act currently in effect in all states.
------------
Systematic Withdrawal Plan-An investor may elect to receive a fixed amount from
his or her account each month or quarter, subject to certain minimums.
------------
Complete Record Keeping-A statement is provided for every transaction in
addition to a year-end statement with tax information.
14
<PAGE>
(LEFT COLUMN)
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 COLUMN)
---------------
LEXINGTON
---------------
------------------------------------
LEXINGTON
GOLDFUND,
INC.
-----------------------------------
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.
---------------------------------
SEMI-ANNUAL REPORT
JUNE 30, 1996
The Lexington Group
of No Load
Investment Companies
----------------------------------
