DEAR SHAREHOLDERS:
- --------------------------------------------------------------------------------
The price of gold bullion was $293.80 an ounce on June 30, 1998. It began
the year at $289.05 an ounce. Lexington Goldfund had a negative return of 5.25%*
for the six month period ending June 30, 1998 as compared to the negative return
of 8.92% for the average gold fund monitored by Lipper Analytical Services, Inc.
As the most recent quarter ended, a change was made in the portfolio
management team. Robert Radsch, the portfolio manager, and a member of the
natural resources investment team left Lexington. The Fund will continue to be
managed by other members of that team, which include Robert M. DeMichele and
James Vail.
Throughout the year gold suffered from a litany of woes that included
seemingly endless central bank sales, record lending of gold to producers, Far
Eastern gold sales and concern over the soon-to-be constituted European Central
Bank. Talk of $250 an ounce gold dissipated as it became clear that the European
Central Bank would hold gold bullion in its reserves, probably in excess of 15%.
It also began to appear likely that further sales of gold bullion by individual
European Central Banks would not be a factor for the rest of the year. Although
the Fund is diversified in its portfolio holdings on a worldwide basis, it was
also impacted by the consolidation taking place in the South African gold mining
industry.
Gold from time to time appears to trade in correlation to other commodities
such as oil or currencies such as the yen. However, such correlation does not
last indefinitely. As we look forward, we expect to see the supply and demand
fundamentals for gold to improve. It appears that the new European Central Bank
will have a significant position of its reserves in gold. It also appears that
strict limits on further Central Bank sales will be imposed by the stronger
members of the new governing council.
Finally, the deficit of gold production versus fabrication appears to have
been seriously understated due to a major underestimation of gold loans. With a
change in sentiment and perception, the huge short position (including sales by
producers) may have a severe squeeze, particularly should the new European
Central Bank decide to increase rates on gold bullion. The expectation of
gradual improvement in markets around the world should bode well for gold.
Sincerely,
[GRAPHIC OMITTED]
Robert M. DeMichele
President
August, 1998
*-32.81%, -9.68% and -4.06% are the one, five and ten year average annual
standard total returns, respectively, for the period ended June 30, 1998.
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 and is not predictive of
future results.
1
<PAGE>
LEXINGTON GOLDFUND, INC.
STATEMENT OF NET ASSETS
(INCLUDING THE PORTFOLIO OF INVESTMENTS)
June 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Number
of Value
Shares Security (Note 1)
- ----------------------------------------------------------------------------
<S> <C> <C>
GOLD BULLION: 13.9%
25,458 fine ounces (cost $9,832,907)2 ...... $7,559,622
----------
GOLD MINING COMMON STOCKS: 79.4%
AUSTRALIA: 14.6%
1,605,000 Acacia Resources, Ltd.2 ..................... 1,709,493
900,000 Delta Gold NL .............................. 1,103,498
607,900 Emperor Mines, Ltd.2 ........................ 173,163
280,000 Great Central Mines, Ltd. .................. 267,019
550,000 Lihir Gold, Ltd.2 ........................... 677,766
15,000 Lihir Gold, Ltd. (ADR)2 ..................... 370,313
1,470,000 Menzies Gold NL2 ........................... 172,956
100,000 Newcrest Mining, Ltd. ........................ 122,611
493,750 Niugini Mining, Ltd.2 ........................ 733,808
1,752,539 Normandy Mining, Ltd. ........................ 1,432,536
450,000 Otter Gold Mines, Ltd.2 ..................... 292,594
70,000 Otter Gold Mines, Ltd. (Options)2 ............ 4,551
191,000 Ranger Minerals NL2 ........................ 424,611
292,857 Resolute, Ltd. .............................. 177,724
62,755 Resolute, Ltd. (Rights)2 ..................... 700
114,285 Sons of Gwalia, Ltd. ........................ 283,083
----------
7,946,426
----------
GHANA: 3.0%
133,709 Ashanti Goldfields Company, Ltd. ............ 1,022,874
72,642 Ashanti Goldfields Company, Ltd. (GDR) ...... 590,216
----------
1,613,090
----------
NEW ZEALAND: 0.2%
200,000 Macraes Mining Company, Ltd. ............... 86,695
----------
NORTH AMERICA: 50.1%
700,000 Augusta Gold (Warrants)1,2 .................. --
75,000 Banro Resources Corporation2 ............... 204,006
54,407 Barrick Gold Corporation ..................... 1,043,934
</TABLE>
2
<PAGE>
LEXINGTON GOLDFUND, INC.
STATEMENT OF NET ASSETS
(INCLUDING THE PORTFOLIO OF INVESTMENTS)
June 30, 1998 (unaudited) (continued)
<TABLE>
<CAPTION>
Number
of Value
Shares Security (Note 1)
- --------------------------------------------------------------------------------------------
<S> <C> <C>
NORTH AMERICA (continued):
100,000 Barrick Gold Corporation Installment Receipts1 ............... $1,213,838
100,344 Battle Mountain Gold Company ................................. 586,830
150,000 Battle Mountain Gold Company ................................. 890,625
100,000 Black Hawk Mining, Inc.2 .................................... 16,661
95,400 Cambior, Inc. ................................................ 560,475
226,586 Canyon Resources Corporation2 ................................. 169,940
50,000 Colony Pacific Explorations, Ltd. (Warrants)1,2 ............... --
100,000 Dayton Mining Corporation1,2 ................................. 64,602
310,000 Dayton Mining Corporation2 .................................... 200,266
30,000 Francisco Gold Corporation2 ................................. 260,108
35,000 Franco Nevada Mining Corporation, Ltd. ........................ 693,792
102,600 Freeport McMoran Copper & Gold "A" ........................... 1,462,050
100,000 Freeport McMoran Copper & Gold "B" ........................... 1,518,750
433,400 Geomaque Explorations, Ltd.2 ................................. 589,443
62,169 Getchell Gold Corporation2 .................................... 932,535
100,000 Gold Reserve Corporation2 .................................... 192,446
170,000 Goldcorp, Inc."A"2 .......................................... 797,665
175,000 Golden Knight Resources, Inc.2 .............................. 98,773
379,000 Homestake Mining Company .................................... 3,932,125
110,600 IAMGOLD, International African Mining Gold Corporation2 ...... 282,039
112,000 International Pursuit Corporation1,2 ........................ 87,587
350,000 Kinross Gold Corporation2 .................................... 1,178,137
200,000 Meridian Gold, Inc.2 .......................................... 414,813
50,000 Nevsun Resources, Ltd.1,2 .................................... 64,602
50,000 Nevsun Resources, Ltd.2 ....................................... 64,602
22,750 New Venoro Gold Corporation2 ................................. 1,547
50,000 Newmont Gold Company .......................................... 1,234,375
40,420 Newmont Mining Corporation .................................... 954,922
50,000 Pangea Goldfields, Inc.2 .................................... 48,962
15,000 Pioneer Group, Inc. .......................................... 397,500
296,000 Placer Dome, Inc. ............................................. 3,478,000
150,000 Prime Resource Group, Inc. .................................... 1,050,633
120,000 Samax Gold, Inc.1,2 .......................................... 436,574
80,500 Samax Gold, Inc.2 ............................................. 292,868
</TABLE>
3
<PAGE>
LEXINGTON GOLDFUND, INC.
STATEMENT OF NET ASSETS
(INCLUDING THE PORTFOLIO OF INVESTMENTS)
June 30, 1998 (unaudited) (continued)
<TABLE>
<CAPTION>
Number of
Shares or
Principal Value
Amount Security (Note 1)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
NORTH AMERICA (continued):
500,000 Steppe Gold Resources, Ltd.1,2 .......................................... $ 79,903
55,000 Stillwater Mining Company2 ................................................ 1,491,875
250,000 Vista Gold Corporation2 ................................................... 42,501
500,000 X-Cal Resources, Ltd.2 ................................................... 170,005
-----------
27,200,309
-----------
SOUTH AFRICA: 11.5%
71,600 Anglo American Platinum Corporation, Ltd. ................................. 784,072
2,045 Anglo American Platinum Corporation, Ltd. (ADR) ........................... 22,495
72,672 Anglogold, Ltd. ......................................................... 2,948,820
304,000 Driefontein Consolidated, Ltd. .......................................... 1,584,511
150,000 Free State Development & Investment, Ltd.2 .............................. 52,207
56,808 Gold Fields, Ltd.2 ...................................................... 241,120
1,517 JCI, Ltd. (ADR) ......................................................... 7,945
9,405 Randfontein Estates Gold Mining Company Witwatersrand, Ltd. (Options)2 . 5,269
177,000 St. Helena Gold Mines, Ltd. ............................................. 375,635
72,349 Western Areas Gold Mining Company, Ltd.2 ................................. 233,383
-----------
6,255,457
-----------
TOTAL GOLD MINING COMMON STOCKS (cost $69,883,432) ..................... .. 43,101,977
-----------
CONVERTIBLE NOTES: 0.7%
$500,000 Trizec Hahn Corporation 3.0%, due 1/29/21 (cost $500,000) ............... 371,250
-----------
</TABLE>
4
<PAGE>
LEXINGTON GOLDFUND, INC.
STATEMENT OF NET ASSETS
(INCLUDING THE PORTFOLIO OF INVESTMENTS)
June 30, 1998 (unaudited) (continued)
<TABLE>
<CAPTION>
Principal Value
Amount Security (Note 1)
- ------------------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENT: 3.7%
U.S. Government Agency Obligation
$2,000,000 Federal Home Loan Bank, 5.40%, due 07/01/98 (cost $2,000,000) $ 2,000,000
-----------
TOTAL INVESTMENTS: 97.7%
(cost $82,216,339\^) (Note 1) .............................. 53,032,849
Other assets in excess of liabilities: 2.3% .................. 1,237,403
-----------
TOTAL NET ASSETS: 100.0%
(equivalent to $3.07 per share on
17,696,011 shares outstanding) .............................. $54,270,252
===========
</TABLE>
1 Restricted security (Note 7).
2 Non-income producing security.
ADR-American Depository Receipt.
GDR-Global Depository Receipt.
+ Aggregate cost for Federal income tax purposes is $83,823,982.
The Notes to Financial Statements are an integral part of this statement.
5
<PAGE>
LEXINGTON GOLDFUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1998 (unaudited)
ASSETS
Investments, at value (cost $82,216,339)
(Note 1) .................................... $ 53,032,849
Cash .......................................... 688,411
Receivable for shares sold ..................... 686,206
Dividends and interest receivable ............... 35,273
------------
Total Assets ................................. 54,442,739
------------
LIABILITIES
Due to Lexington Management Corporation
(Note 2) .................................... 43,474
Payable for shares redeemed ..................... 12,539
Accrued expenses .............................. 116,474
------------
Total Liabilities ........................... 172,487
------------
NET ASSETS (equivalent of $3.07 per share on
17,696,011 shares outstanding) (Note 4) ...... $ 54,270,252
============
NET ASSETS consist of:
Capital stock-authorized 500,000,000 shares,
$.001 par value per share ..................... $ 17,696
Additional paid-in capital ..................... 107,655,733
Accumulated deficit ........................... (865,769)
Accumulated net realized loss on investments
and foreign currency holdings ............... (23,351,638)
Unrealized depreciation on investments and
foreign currency holdings ..................... (29,185,770)
------------
Total Net Assets .............................. $ 54,270,252
============
LEXINGTON GOLDFUND, INC.
STATEMENT OF OPERATIONS
Six months ended June 30, 1998 (unaudited)
INVESTMENT INCOME
Dividends .............................. $ 534,288
Interest .............................. 72,534
------------
606,822
Less: foreign tax expense ............ 13,345
------------
Total investment income ............... $ 593,477
EXPENSES
Investment advisory fee (Note 2) ...... 282,956
Transfer agent and shareholder
servicing expenses (Note 2) ......... 64,653
Printing and mailing expenses ......... 28,546
Distribution expenses (Note 3) ......... 27,781
Accounting expenses (Note 2) ......... 27,445
Custodian expenses ..................... 16,960
Registration fees ..................... 15,952
Professional fees ..................... 15,720
Directors' fees and expenses ......... 9,445
Computer processing fees ............... 7,608
Other expenses ........................ 24,899
------------
Total expenses ........................ 521,965
------------
Net investment income ............... 71,512
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTE 5)
Net realized loss on:
Investments .......................... (6,823,059)
Foreign currency transactions ......... (22,722)
------------
Net realized loss .................. (6,845,781)
Net change in unrealized
depreciation on:
Investments ........................ 4,288,754
Foreign currency translation of
other assets and liabilities .... 16,156
------------
Net change in unrealized
depreciation ................... 4,304,910
------------
Net realized and unrealized
loss ............................. (2,540,871)
------------
DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS ........................ $ (2,469,359)
============
The Notes to Financial Statements are an integral part of these statements.
6
<PAGE>
LEXINGTON GOLDFUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997
--------------- ------------
<S> <C> <C>
Net investment income ............................................. $ 71,512 $ 145,946
Net realized loss from investment and foreign currency
transactions ...................................................... (6,845,781) (12,371,463)
Net change in unrealized appreciation (depreciation) of investments
and foreign currency translation ................................. 4,304,910 (32,727,335)
----------- -----------
Decrease in net assets resulting from operations ............... (2,469,359) (44,952,852)
Distributions to shareholders from net investment income ......... - (3,835,168)
Increase (decrease) from capital share transactions (Note 4) ...... 3,032,518 (6,791,980)
----------- -----------
Net increase (decrease) in net assets ........................... 563,159 (55,580,000)
NET ASSETS:
Beginning of period ............................................. 53,707,093 109,287,093
----------- -----------
End of period (including accumulated deficit of $865,769 and
distributions in excess of net investment income of $937,281,
1998 and 1997, respectively) .................................... $54,270,252 $53,707,093
=========== ===========
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
7
<PAGE>
LEXINGTON GOLDFUND, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 1998 (unaudited) and December 31, 1997
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 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 Securities 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 prices.
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 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. There were no forward
foreign currency exchange contracts outstanding at June 30, 1998.
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 Dividends from net investment income and net realized capital
gains are normally declared and paid annually, but the Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code. 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, 1997,
reclassifications were made to the Fund's capital accounts to reflect permanent
book/tax differences and income and gains available for distribution under
income tax regulations. Net investment income, net realized gains and net assets
were not affected by this change.
USE OF ESTIMATES The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent asset and liabilities at the date of the financial
statements and the reported amounts of increases and decreases in net assets
from operations during the reporting period. Actual results could differ from
those estimates.
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. For 1998, the investment
advisor has voluntarily agreed to reimburse the Fund if total annual expenses
(including management fees, but excluding interest, taxes, brokerage commissions
and extraordinary expenses) exceed 2.50% of the Fund's average daily net assets.
No reimbursement was required for the six months ended June 30, 1998.
The Fund reimburses LMC for certain expenses, including accounting and
shareholder servicing costs of $57,124, which are incurred by the Fund, but paid
by LMC.
8
<PAGE>
LEXINGTON GOLDFUND, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 1998 (unaudited) and December 31, 1997 (continued)
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,
including payments to Lexington Funds Distributor, 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,
1998 were $27,781 and are set forth in the statement of operations.
4. CAPITAL STOCK
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
Six months ended
June 30, 1998 Year ended
(unaudited) December 31, 1997
----------------------------- -------------------------------
Shares Amount Shares Amount
--------- ------------- ---------- -------------
<S> <C> <C> <C> <C>
Shares sold ............ 9,158,656 $ 31,650,872 15,430,852 $ 74,102,304
Shares issued on
reinvestment of
dividends ............ -- -- 799,300 3,400,114
--------- ------------- ---------- -------------
9,158,656 31,650,872 16,230,152 77,502,418
Shares redeemed ......... (8,064,471) (28,618,354) (17,932,580) (84,294,398)
---------- ------------- ----------- -------------
Net increase (decrease) . 1,094,185 $ 3,032,518 (1,702,428) $ (6,791,980)
========== ============= =========== =============
</TABLE>
5. PURCHASES AND SALES OF INVESTMENT SECURITIES
The cost of purchases and proceeds from sales of securities for the six months
ended June 30, 1998, excluding short-term securities, were $13,363,434 and
$11,412,713, respectively. At June 30, 1998, the aggregate gross unrealized
appreciation for all securities in which there is an excess of value over tax
cost amounted to $1,145,705 and aggregate gross unrealized depreciation for all
securities in which there is an excess of tax cost over value amounted to
$31,936,838.
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. 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.
<TABLE>
<CAPTION>
Average
Aquisition Cost Market Percent of Net
Security Date Shares Per Share Value Assets
-------- ------------ ------ --------- ----- ------
<S> <C> <C> <C> <C> <C>
Augusta Gold (Warrants) 1/17/97 700,000 $ 0.00 $0.00 0.00%
Barrick Gold Corporation
Installment Receipts 1/27/98 100,000 10.84 1,213,838 2.24
Colony Pacific
Explorations, Ltd.
(Warrants) 4/28/97 50,000 0.00 0.00 0.00
Dayton Mining
Corporation 1/15/96 100,000 4.77 64,602 0.12
International Pursuit
Corporation 4/24/96 112,000 3.30 87,587 0.16
Nevsun Resources, Ltd. 9/05/96 50,000 7.29 64,602 0.12
Samax Gold, Inc. 12/06/96 120,000 3.31 436,574 0.80
Steppe Gold Resources,
Ltd. 5/21/96 500,000 1.65 79,903 0.15
---------- ----
$1,947,106 3.59%
========== ====
</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.
9
<PAGE>
LEXINGTON GOLDFUND, INC.
FINANCIAL HIGHLIGHTS
Selected per share data for a share outstanding throughout the period:
<TABLE>
<CAPTION>
Six months Year ended December 31,
ended -----------------------------------------------------
June 30, 1998
(unaudited) 1997 1996 1995 1994
----------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ............ $ 3.24 $ 5.97 $ 6.24 $ 6.37 $ 6.90
--------- -------- ------- ------- -------
Income (loss) from investment operations:
Net investment income ........................ 0.01 -- 0.02 -- 0.03
Net realized and unrealized gain (loss) on
investments and foreign currency
transactions ................................. (0.18) (2.52) 0.50 (0.12) (0.53)
--------- -------- ------- --------- -------
Total income (loss) from investment
operations .................................... (0.17) (2.52) 0.52 (0.12) (0.50)
--------- -------- ------- --------- -------
Less distributions:
Distributions from net investment income -- (0.21) (0.79) (0.01) (0.03)
--------- -------- ------- --------- -------
Net asset value, end of period .................. $ 3.07 $ 3.24 $ 5.97 $ 6.24 $ 6.37
========= ======== ======= ========= =======
Total return .................................... (10.58)%* (42.98)% 7.84% (1.89)% (7.28)%
Ratio to average net assets:
Expenses ....................................... 1.77%* 1.65% 1.60% 1.70% 1.54%
Net investment income (loss) .................. 0.24%* 0.17% (0.32)% 0.07% 0.50%
Portfolio turnover rate ........................ 40.10%* 38.32% 31.04% 40.41% 23.77%
Average commission paid on equity security
transactions** ................................. $ 0.01 $ 0.02 $ 0.02 -- --
Net assets, end of period (000's omitted) ...... $ 54,270 $ 53,707 $109,287 $135,779 $159,435
</TABLE>
* Annualized.
** In accordance with recent SEC disclosure guidelines, average commissions are
calculated beginning with the year ended December 31, 1996, but not for
prior periods.
10
<PAGE>
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 permits 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.
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 GLOBAL CORPORATE LEADERS 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 TROIKA DIALOG RUSSIA FUND, INC.--Seeks long-term capital appreciation
through investments primarily in the equity securities of Russian companies.
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 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.
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.
*Redemptions on shares of Lexington Troika Dialog Russia Fund, Inc. held less
than 365 days are subject to a redemption fee of 2% of the redemption proceeds.
<PAGE>
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
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ALL SHAREHOLDER REQUESTS FOR SERVICES OF
ANY KIND SHOULD BE SENT TO:
TRANSFER AGENT
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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 o Account Balances o Exchanges o
Last Transactions o Total Return o 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.
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LEXINGTON
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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, 1998
The Lexington Group
of NO LOAD
Investment Companies
