<PAGE> 1
[PHOTO]
OPPENHEIMER GOLD & SPECIAL MINERALS FUND
Semiannual Report December 31, 1996
"I need to
diversify
to protect
the overall
performance of
my investment
portfolio."
[OPPENHEIMERFUNDS LOGO]
<PAGE> 2
THIS FUND IS FOR PEOPLE WHO WANT A GROWTH INVESTMENT THAT IS INTENDED TO HELP
OFFSET SOME OF THE RISKS OF THE OTHER INVESTMENTS IN THEIR PORTFOLIO.
NEWS
BEAT THE AVERAGE
Cumulative Total Return for the
10-Year Period Ended 12/31/96:
Oppenheimer Gold & Special Minerals Fund
Class A (at net asset value)(1)
163.48%
Lipper Gold Oriented Funds Average for 18 Funds
for the 10-Year Period Ended 12/31/96(3)
74.24%
HOW YOUR FUND IS MANAGED
Oppenheimer Gold & Special Minerals Fund invests primarily in the stocks of
companies engaged in mining, processing, fabricating or distributing gold and
other metals or minerals. Investing in stocks of gold and other precious and
strategic metals producers may provide a hedge against inflation and declines
in stock prices that reflect a weakening U.S. dollar. So, as a Fund
shareholder, you may benefit from having a portion of your overall portfolio
allocated to potentially offset the risks of your other investments.
PERFORMANCE
Total returns for the six months ended 12/31/96 for Class A, B and C shares
were (1.92)%, (2.34)% and (2.34)%, respectively, without deducting sales
charges.(1)
Your Fund's average annual total returns for Class A shares for the
1-, 5- and 10-year periods ended 12/31/96 were 0.00%, 6.14% and 9.52%,
respectively. For Class B shares, average annual total returns for the 1-year
period and since inception on 11/1/95 were 0.11% and 6.46%, respectively. For
Class C shares, average annual total returns for the 1-year period and since
inception on 11/1/95 were 4.26% and 9.98%, respectively.(2)
OUTLOOK
"Our outlook for the Fund is favorable. We've proven the effectiveness of our
investment strategy during this slow period, so we're looking forward to
participation in an expanding cycle."
Diane Sobin, Portfolio Manager
December 31, 1996
Total returns include change in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
IN REVIEWING PERFORMANCE AND RANKINGS, PLEASE REMEMBER THAT PAST PERFORMANCE
DOES NOT GUARANTEE FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. For more complete
information, please review the prospectus carefully before you invest.
1. Includes change in net asset value per share without deducting any sales
charges. Such performance is not annualized and would have been lower if sales
charges were taken into account.
2. Class A returns include the current maximum initial sales charge of 5.75%.
The Fund's maximum sales charge rate for Class A shares was higher during a
portion of some of the periods shown, and actual investment results would have
been less. Class B returns include the contingent deferred sales charge of 5%
(1-year) and 4% (since inception). Class C returns include the deduction of the
1% contingent deferred sales charge for the 1-year result. An explanation of
the different performance calculations is in the Fund's prospectus. Class B and
Class C shares are subject to an annual .75% asset-based sales charge.
3. Source: Lipper Analytical Services, 12/31/96. The Lipper average is shown
for comparative purposes only. Funds included in the index may have different
investment policies and risks than the Fund. Oppenheimer Gold & Special
Minerals Fund is characterized by Lipper as a gold oriented fund. Lipper
performance is based on total return and does not take sales charges into
account.
2 Oppenheimer Gold & Special Minerals Fund
<PAGE> 3
[PHOTO]
Bridget A. Macaskill
President
Oppenheimer Gold &
Special Minerals Fund
DEAR SHAREHOLDER,
As 1996 has drawn to a close, we can look back and say that the past year has
certainly been one for the record books. But it has not necessarily been easy
for the faint of heart. During the first five months of the year, the stock
market reported tremendous gains, thanks in part to strong corporate earnings,
low inflation and stabilized interest rates. However, on the trail of a
six-year bull market and with indices reporting all-time highs, many experts
felt a correction was inevitable.
The stock market volatility that jolted investors in June and July did
not come as a complete surprise, but remarkably enough, by the end of September
the stock market had rebounded and resumed its record-setting pace. During the
fourth quarter, the Dow passed 6,500, both the S&P 500 and the technology-laden
NASDAQ posted all-time highs, and the Russell 2000 came very close to hitting
record levels.
What does the new year have in store for the stock market and its
investors? Of course, no one can predict the events of 1997 with complete
accuracy. Instead, the experts rely on several economic indicators to offer
clues about the market's direction. For example, the rate of unemployment has
dropped to its lowest level in seven years and wage growth continues to make
gains. As a result, consumer confidence is at its highest level since 1989.
What these events suggest to many experts is the likelihood of higher
inflation in 1997, countered by a possible increase in short-term interest
rates. However, an opposing view is that economic growth will taper off
sufficiently early in the year, calming fears of rising inflation and interest
rate increases. Although the Federal Reserve appeared to agree with this
reasoning in the third and fourth quarters of 1996, this may not be true in the
future.
The one thing we can accurately predict is that, regardless of the
scenario, OppenheimerFunds will continue to monitor significant events and act
appropriately. To that end, we view our outlook for the market as cautiously
optimistic. Whichever direction interest rates move, we expect the market's
volatile trading pattern to continue in the coming months. But while our
watchword may be "caution," in the near term, we are still finding plenty of
attractive investment opportunities today, both in the United States and
abroad. We believe the correct approach is to carefully evaluate companies
based on individual merits, such as strong management, fundamental business
policies and long-term prospects for the future. Based on this strategy and the
resilient performance the stock market has demonstrated in the past, our
long-term view remains positive.
Your portfolio managers discuss the outlook for your Fund in light of
these broad issues on the following pages. Thank you for your confidence in
OppenheimerFunds. We look forward to helping you reach your investment goals in
the future.
/s/ BRIDGET A. MACASKILL
Bridget A. Macaskill
January 22, 1997
3 Oppenheimer Gold & Special Minerals Fund
<PAGE> 4
Q + A
[PHOTO]
[PHOTO]
Q What areas
are you currently
targeting?
An interview with your Fund's managers.
HOW DID THE FUND PERFORM OVER THE PERIOD?
During the second half of 1996, the demand for gold and precious minerals was
slow across the globe. However, Oppenheimer Gold & Special Minerals Fund
performed well relative to its peers over the 1-year period ended December 31,
1996, finishing 14 out of 42 gold-oriented funds ranked by Lipper Analytical
Services.(1)
[PHOTO]
WHAT INVESTMENTS MADE POSITIVE CONTRIBUTIONS TO PERFORMANCE?
Oppenheimer Gold & Special Minerals Fund was conservatively positioned over the
sluggish period that we encountered during the second half of 1996. So, as the
demand and price of these materials dropped, the Fund weathered the events
well. Our flexible investment style enabled us to search the world over for the
best companies and then invest in them through stocks, bonds, convertible
securities, or other types of securities, to earn the best return. The result
was a diversified portfolio, through which we lowered the volatility inherent
in the mining industry.
In particular, we attribute the Fund's good performance to its
investments in senior gold producers. These companies are akin to "large-cap"
companies in the broader stock market, and as such, are also appealing in
slower times. They have generally demonstrated relatively solid growth in
production and have a history of increasing their resource and reserve base
through internally generated exploration efforts. Like most large-cap
companies, senior gold producers have a competitive cost structure and a
proven track record of international expansion.
Our investments in gold royalty companies also
1. Source: Lipper Analytical Services, 12/31/96. Oppenheimer Gold & Special
Minerals Fund was ranked 16 out of 27 funds for the 5-year period ended
12/31/96 and 3 out of 18 funds for the 10-year period ended 12/31/96.
Oppenheimer Gold & Special Minerals Fund is characterized by Lipper as a gold
oriented fund. Lipper performance is based on total return and does not take
sales charges into account.
4 Oppenheimer Gold & Special Minerals Fund
<PAGE> 5
FACING PAGE
Top left: Diane Sobin, Portfolio Manager
Top right: Frank Jennings, Member
of Global Investments Team
Bottom: Bill Wilby, Senior VP,
Director of Global Investments
THIS PAGE
Top: Robert Doll, Executive VP,
Director of Equity Investments
Bottom: Shanquan Li, Member
of Global Investments Team
A We're looking for companies
with strong
track records.
benefited the Fund. In fact, these companies reported significant profits since
June 30, 1996, and were the portfolio's best performers. During times of
lackluster price movement of gold, these companies become inviting because they
often generate consistent revenues.(2)
DID ANY INVESTMENTS OR MARKET FACTORS NEGATIVELY IMPACT
THE FUND?
Over the past six months, our investments in South Africa underperformed due to
the high leverage of these companies to the gold price. The weak gold price
coupled with operational difficulties at the mines and a weak South African
currency caused a slight economic slowdown in the country.
WHAT AREAS OF THE MARKET ARE YOU CURRENTLY TARGETING?
As always, we're looking for companies with strong track records and
consistently growing core assets that provide the financial flexibility for
continued development. With that in mind, we are using the drop in gold prices
to expand our positions among junior and intermediate gold producers. We search
for companies that are in partnership with larger, more-established producers.
As a result of lower gold prices, their current valuations are attractive.
In addition, we are looking for investments in South Africa, where
valuations are also attractive. So, our plan is to invest now, when the price
is right, and patiently wait for our investments to take root and prosper.
WHAT IS YOUR OUTLOOK FOR THE FUND?
Our outlook for the Fund is favorable. We've proven the effectiveness of our
investment strategy during this slow period, so we're looking forward to
participating in an expanding cycle. Also, as the U.S. economy nears a point
where inflation may soon become an issue, gold-related securities can be an
excellent investment choice because they have often served as protection
against inflation.
2. The Fund's portfolio is subject to change.
5 Oppenheimer Gold & Special Minerals Fund
<PAGE> 6
FINANCIALS
CONTENTS
<TABLE>
<S> <C>
STATEMENT OF INVESTMENTS 7
STATEMENT OF ASSETS AND LIABILITIES 11
STATEMENT OF OPERATIONS 12
STATEMENTS OF CHANGES IN NET ASSETS 13
FINANCIAL HIGHLIGHTS 14
NOTES TO FINANCIAL STATEMENTS 15
</TABLE>
6 Oppenheimer Gold & Special Minerals Fund
<PAGE> 7
STATEMENT OF INVESTMENTS December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
================================================================================================================================
<S> <C> <C>
CONVERTIBLE CORPORATE BONDS AND NOTES--1.0%
- --------------------------------------------------------------------------------------------------------------------------------
Lonrho Finance plc, 6% Gtd. Cv. Bonds, 2/27/04 (Cost $1,508,822) (GBP) 1,000,000 $ 1,552,407
<CAPTION>
SHARES
================================================================================================================================
<S> <C> <C>
COMMON STOCKS--90.9%
- --------------------------------------------------------------------------------------------------------------------------------
BASIC MATERIALS--89.4%
- --------------------------------------------------------------------------------------------------------------------------------
CHEMICALS--3.1%
Engelhard Corp. 110,000 2,103,750
-------------------------------------------------------------------------------------------------------------------------
Johnson Matthey plc 302,500 2,850,005
------------
4,953,755
- --------------------------------------------------------------------------------------------------------------------------------
GOLD AND PLATINUM--69.3%
- --------------------------------------------------------------------------------------------------------------------------------
GOLD--0.5%
Greenstone Resources Ltd.(2) 35,000 407,288
-------------------------------------------------------------------------------------------------------------------------
Manila Mining Corp., Cl. B 420,000,000 383,270
------------
790,558
- --------------------------------------------------------------------------------------------------------------------------------
GOLD MINING: AUSTRALIA--7.4%
Acacia Resources Ltd.(2) 350,000 681,073
-------------------------------------------------------------------------------------------------------------------------
Ashanti Goldfields Co. Ltd.(2) 88,888 1,058,996
-------------------------------------------------------------------------------------------------------------------------
Aurora Gold Ltd.(2) 200,000 381,242
-------------------------------------------------------------------------------------------------------------------------
Delta Gold NL(2) 1,000,000 1,874,441
-------------------------------------------------------------------------------------------------------------------------
Great Central Mines NL 267,000 759,196
-------------------------------------------------------------------------------------------------------------------------
Newcrest Mining Ltd. 400,000 1,588,509
-------------------------------------------------------------------------------------------------------------------------
Placer Pacific Ltd. 600,000 886,388
-------------------------------------------------------------------------------------------------------------------------
Plutonic Resources Ltd. 300,000 1,393,917
-------------------------------------------------------------------------------------------------------------------------
Renison Goldfields Consolidated Ltd. 66,000 128,431
-------------------------------------------------------------------------------------------------------------------------
Renison Goldfields Consolidated Ltd. 400,000 1,775,954
-------------------------------------------------------------------------------------------------------------------------
Sons of Gwalia Ltd. 230,000 1,357,302
------------
11,885,449
- --------------------------------------------------------------------------------------------------------------------------------
GOLD MINING: CANADA--25.1%
Barrick Gold Corp. 250,000 7,187,500
-------------------------------------------------------------------------------------------------------------------------
Battle Mountain Canada, Inc. 370,000 2,564,471
-------------------------------------------------------------------------------------------------------------------------
Cambior, Inc. 260,000 3,831,750
-------------------------------------------------------------------------------------------------------------------------
Dayton Mining Corp.(2) 468,000 3,107,132
-------------------------------------------------------------------------------------------------------------------------
Dayton Mining Corp.(2)(3) 288,000 1,912,081
-------------------------------------------------------------------------------------------------------------------------
Eldorado Gold Corp. Ltd.(2) 112,000 751,758
-------------------------------------------------------------------------------------------------------------------------
Glamis Gold Ltd.(2) 120,000 849,230
-------------------------------------------------------------------------------------------------------------------------
Goldcorp, Inc., Cl. A(2) 120,000 1,028,707
-------------------------------------------------------------------------------------------------------------------------
Kap Resources Ltd.(2) 525,000 1,244,845
-------------------------------------------------------------------------------------------------------------------------
Kinross Gold(2) 94,600 669,476
-------------------------------------------------------------------------------------------------------------------------
Meridian Gold, Inc.(2)(3) 120,000 284,536
-------------------------------------------------------------------------------------------------------------------------
Metallica Resources, Inc.(2) 150,000 503,410
-------------------------------------------------------------------------------------------------------------------------
Monarch Resources(2)(3) 88,900 129,719
-------------------------------------------------------------------------------------------------------------------------
Placer Dome, Inc. 275,000 5,981,250
-------------------------------------------------------------------------------------------------------------------------
Prime Resource Group, Inc. 255,000 1,804,614
</TABLE>
7 Oppenheimer Gold & Special Minerals Fund
<PAGE> 8
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
GOLD MINING: CANADA
(CONTINUED)
Rio Narcea Gold Mines Ltd. (New)(2) 200,000 $ 561,776
-------------------------------------------------------------------------------------------------------------------------
Royal Oak Mines, Inc.(2) 150,000 487,500
-------------------------------------------------------------------------------------------------------------------------
Teck Corp., Cl. B 150,000 3,474,621
-------------------------------------------------------------------------------------------------------------------------
TVX Gold, Inc.(2) 385,000 3,005,502
-------------------------------------------------------------------------------------------------------------------------
Viceroy Resources Corp.(2) 245,000 1,090,356
------------
40,470,234
- --------------------------------------------------------------------------------------------------------------------------------
GOLD MINING:
SOUTH AFRICA--6.2%
Anglo American Corp. of South Africa Ltd., ADR 37,000 2,016,500
-------------------------------------------------------------------------------------------------------------------------
Ashanti Goldfields Co. Ltd., Sponsored GDR 145,000 1,794,375
-------------------------------------------------------------------------------------------------------------------------
Driefontein Consolidated Ltd., ADR 135,000 1,350,000
-------------------------------------------------------------------------------------------------------------------------
Free State Consolidated Gold Mines Ltd., ADR 57,000 409,688
-------------------------------------------------------------------------------------------------------------------------
Southvaal Holdings Ltd., ADR 50,000 1,459,110
-------------------------------------------------------------------------------------------------------------------------
Vaal Reefs Exploration & Mining Co. Ltd., ADR 140,000 866,250
-------------------------------------------------------------------------------------------------------------------------
Western Areas Gold Mining Co. Ltd., Unsponsored ADR(2) 154,808 2,134,709
------------
10,030,632
- --------------------------------------------------------------------------------------------------------------------------------
GOLD MINING:
UNITED STATES--15.7%
Amax Gold, Inc.(2) 95,000 605,625
-------------------------------------------------------------------------------------------------------------------------
Battle Mountain Gold Co., Cl. A 170,000 1,168,750
-------------------------------------------------------------------------------------------------------------------------
Coeur d'Alene Mines Corp. 35,000 529,375
-------------------------------------------------------------------------------------------------------------------------
Crown Resources Corp.(2) 175,000 1,082,813
-------------------------------------------------------------------------------------------------------------------------
Getchell Gold Corp.(2) 87,000 3,338,625
-------------------------------------------------------------------------------------------------------------------------
Hecla Mining Co.(2) 130,000 731,250
-------------------------------------------------------------------------------------------------------------------------
Homestake Mining Co. 245,000 3,491,250
-------------------------------------------------------------------------------------------------------------------------
Newmont Mining Corp. 164,291 7,352,022
-------------------------------------------------------------------------------------------------------------------------
Santa Fe Pacific Gold Corp. 456,000 7,011,000
------------
25,310,710
- --------------------------------------------------------------------------------------------------------------------------------
GOLD RELATED INVESTMENT--11.2%
Cambiex Exploration, Inc.(2)(4) 1,500,000 1,258,523
-------------------------------------------------------------------------------------------------------------------------
Canarc Resource Corp.(2) 282,500 408,090
-------------------------------------------------------------------------------------------------------------------------
Canarc Resource Corp.(2) 450,000 650,055
-------------------------------------------------------------------------------------------------------------------------
Euro-Nevada Mining Corp. 306,000 9,130,975
-------------------------------------------------------------------------------------------------------------------------
Franco-Nevada Mining Corp. Ltd. 110,000 5,035,921
-------------------------------------------------------------------------------------------------------------------------
Normandy Mining Ltd. 1,134,298 1,567,603
------------
18,051,167
- --------------------------------------------------------------------------------------------------------------------------------
PLATINUM MINING--3.2%
Anglo American Platinum Ltd., Sponsored ADR 136,195 807,990
-------------------------------------------------------------------------------------------------------------------------
Rustenburg Platinum Holdings Ltd., ADR 83,104 1,137,071
-------------------------------------------------------------------------------------------------------------------------
Stillwater Mining Co.(2) 180,000 3,262,500
------------
5,207,561
------------
111,746,311
</TABLE>
8 Oppenheimer Gold & Special Minerals Fund
<PAGE> 9
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
METALS--17.0%
- -------------------------------------------------------------------------------------------------------------------------------
ALUMINUM--0.5%
Nippon Light Metal Co. 200,000 $ 820,195
- -------------------------------------------------------------------------------------------------------------------------------
COPPER--4.9%
Freeport-McMoRan Copper & Gold, Inc., Cl. A 224,455 6,312,797
------------------------------------------------------------------------------------------------------------------------
Freeport-McMoRan Copper & Gold, Inc., Cl. B 5,000 149,375
------------------------------------------------------------------------------------------------------------------------
Phelps Dodge Corp. 22,000 1,485,000
-----------
7,947,172
- -------------------------------------------------------------------------------------------------------------------------------
METALS: DIVERSIFIED--6.7%
Aber Resources Ltd.(2) 80,000 1,085,614
------------------------------------------------------------------------------------------------------------------------
Aluminum Co. of America 21,000 1,338,750
------------------------------------------------------------------------------------------------------------------------
Ashton Mining Ltd. 600,000 1,043,651
------------------------------------------------------------------------------------------------------------------------
Broken Hill Proprietary Co. Ltd., Sponsored ADR 20,000 565,000
------------------------------------------------------------------------------------------------------------------------
Brush Wellman, Inc. 60,000 982,500
------------------------------------------------------------------------------------------------------------------------
Cominco Ltd. 20,000 497,573
------------------------------------------------------------------------------------------------------------------------
Elkem AS 150,000 2,478,318
------------------------------------------------------------------------------------------------------------------------
RTZ Corp. plc 93,000 1,494,319
------------------------------------------------------------------------------------------------------------------------
Western Mining Corp. Holdings Ltd. 199,988 1,259,612
-----------
10,745,337
- -------------------------------------------------------------------------------------------------------------------------------
METALS: MISCELLANEOUS--3.1%
J&L Specialty Steel, Inc. 50,000 568,750
------------------------------------------------------------------------------------------------------------------------
Korea Zinc Co. 60,000 1,135,423
------------------------------------------------------------------------------------------------------------------------
Pasminco Ltd. 1,250,000 1,965,780
------------------------------------------------------------------------------------------------------------------------
PT Tambang Timah, GDR(3) 76,000 1,383,276
-----------
5,053,229
- -------------------------------------------------------------------------------------------------------------------------------
NICKEL--1.8%
Eramet SA 25,000 1,308,010
------------------------------------------------------------------------------------------------------------------------
Falconbridge Ltd. 75,000 1,597,778
-----------
2,905,788
-----------
27,471,721
- -------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL--1.5%
- -------------------------------------------------------------------------------------------------------------------------------
MANUFACTURING--1.5%
Svedala Industri, AB Free 140,000 2,368,181
-----------
Total Common Stocks (Cost $112,697,071) 146,539,968
===============================================================================================================================
PREFERRED STOCKS--1.2%
- -------------------------------------------------------------------------------------------------------------------------------
Ashanti GSM Ltd. Redeemable Preferred, A Shares(2)(5) 88,888 199,998
------------------------------------------------------------------------------------------------------------------------
Battle Mountain Gold Co., $3.25 Cum. Cv. 34,500 1,725,000
-----------
Total Preferred Stocks (Cost $1,900,876) 1,924,998
</TABLE>
9 Oppenheimer Gold & Special Minerals Fund
<PAGE> 10
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
UNITS SEE NOTE 1
===================================================================================================================================
<S> <C> <C>
RIGHTS, WARRANTS AND CERTIFICATES--0.2%
- -----------------------------------------------------------------------------------------------------------------------------------
Kap Resources Ltd. Wts., Cl. A, Exp. 8/00 252,500 $ 267,117
----------------------------------------------------------------------------------------------------------------------------
Lynas Gold NL Wts., Exp. 6/99 1,200,000 81,967
-----------
Total Rights, Warrants and Certificates (Cost $253,473) 349,084
</TABLE>
<TABLE>
<CAPTION>
FACE
AMOUNT(1)
===================================================================================================================================
<S> <C> <C>
REPURCHASE AGREEMENT--6.9%
- -----------------------------------------------------------------------------------------------------------------------------------
Repurchase agreement with Goldman, Sachs & Co., 6.52%,
dated 12/31/96, to be repurchased at $11,204,057 on 1/2/97,
collateralized by U.S. Treasury Nts., 5.50%--7.50%, 7/15/99--8/15/05,
with a value of $11,456,793 (Cost $11,200,000) $11,200,000 11,200,000
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $127,560,242) 100.2% 161,566,457
- -----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (0.2) (336,268)
------------- -------------
NET ASSETS 100.0% $161,230,189
============= =============
</TABLE>
1. Face amount is reported in U.S. Dollars, except for those denoted in
the following currencies: GBP--British Pound Sterling
2. Non-income producing security.
3. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These
securities have been determined to be liquid under guidelines
established by the Board of Trustees. These securities amount to
$3,709,612 or 2.30% of the Fund's net assets, at December 31, 1996.
4. Affiliated company. Represents ownership of at least 5% of the voting
securities of the issuer and is or was an affiliate, as defined in the
Investment Company Act of 1940, at or during the period ended December
31, 1996. The aggregate fair value of all securities of affiliated
companies as of December 31, 1996 amounted to $1,258,523. Transactions
during the period in which the issuer was an affiliate are as follows:
<TABLE>
<CAPTION>
BALANCE BALANCE
JUNE 30, 1996 GROSS ADDITIONS GROSS REDUCTIONS DECEMBER 31, 1996
-------------------- -------------------- --------------------- --------------------
SHARES COST SHARES COST SHARES COST SHARES COST
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cambiex Exploration, Inc. 1,500,000 $756,573 -- $ -- -- $ -- 1,500,000 $756,573
</TABLE>
5. Identifies issues considered to be illiquid--See Note 5 of Notes to
Financial Statements.
See accompanying Notes to Financial Statements.
10 Oppenheimer Gold & Special Minerals Fund
<PAGE> 11
STATEMENT OF ASSETS AND LIABILITIES December 31, 1996 (Unaudited)
<TABLE>
================================================================================================================================
<S> <C>
ASSETS
Investments, at value--see accompanying statement:
Unaffiliated companies (cost $126,803,669) $160,307,934
Affiliated companies (cost $756,573) 1,258,523
-------------------------------------------------------------------------------------------------------------------------
Cash 318,953
-------------------------------------------------------------------------------------------------------------------------
Receivables:
Shares of beneficial interest sold 456,370
Interest and dividends 127,693
Investments sold 20,368
-------------------------------------------------------------------------------------------------------------------------
Other 21,065
------------
Total assets 162,510,906
================================================================================================================================
LIABILITIES
Payables and other liabilities:
Shares of beneficial interest redeemed 816,859
Investments purchased 117,120
Trustees' fees 100,935
Shareholder reports 97,208
Service plan fees 84,528
Transfer and shareholder servicing agent fees 13,403
Other 50,664
------------
Total liabilities 1,280,717
================================================================================================================================
NET ASSETS $161,230,189
============
================================================================================================================================
COMPOSITION OF
NET ASSETS
Paid-in capital $139,165,162
-------------------------------------------------------------------------------------------------------------------------
Overdistributed net investment income (83,806)
-------------------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (11,860,331)
-------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and
liabilities denominated in foreign currencies 34,009,164
------------
Net assets $161,230,189
============
================================================================================================================================
NET ASSET VALUE
PER SHARE
Class A Shares:
Net asset value and redemption price per share (based on net assets of $150,992,325 and
10,904,734 shares of beneficial interest outstanding) $13.85
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $14.69
-------------------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $7,568,626 and 549,427 shares of beneficial interest outstanding) $13.78
-------------------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $2,669,238 and 193,419 shares of beneficial interest outstanding) $13.80
</TABLE>
See accompanying Notes to Financial Statements.
11 Oppenheimer Gold & Special Minerals Fund
<PAGE> 12
STATEMENT OF OPERATIONS For the Six Months Ended December 31, 1996
(Unaudited)
<TABLE>
================================================================================================================================
<S> <C>
INVESTMENT INCOME
Dividends (net of foreign withholding taxes of $45,006) $ 806,952
-------------------------------------------------------------------------------------------------------------------------
Interest 363,389
-------------
Total income 1,170,341
================================================================================================================================
EXPENSES
Management fees--Note 4 621,661
-------------------------------------------------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 163,026
Class B 31,393
Class C 9,379
-------------------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 175,528
-------------------------------------------------------------------------------------------------------------------------
Shareholder reports 80,873
-------------------------------------------------------------------------------------------------------------------------
Legal and auditing fees 20,199
-------------------------------------------------------------------------------------------------------------------------
Trustees' fees and expenses--Note 1 16,854
-------------------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 14,504
-------------------------------------------------------------------------------------------------------------------------
Insurance expenses 6,028
-------------------------------------------------------------------------------------------------------------------------
Registration and filing fees:
Class B 879
Class C 584
-------------------------------------------------------------------------------------------------------------------------
Other 6,222
-------------
Total expenses 1,147,130
================================================================================================================================
NET INVESTMENT INCOME 23,211
================================================================================================================================
REALIZED AND UNREALIZED
GAIN (LOSS)
Net realized gain (loss) on:
Investments (718,684)
Foreign currency transactions 85,225
-------------
Net realized loss (633,459)
-------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments (2,901,930)
Translation of assets and liabilities denominated in foreign currencies 258,120
-------------
Net change (2,643,810)
-------------
Net realized and unrealized loss (3,277,269)
================================================================================================================================
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(3,254,058)
=============
</TABLE>
See accompanying Notes to Financial Statements.
12 Oppenheimer Gold & Special Minerals Fund
<PAGE> 13
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 1996 JUNE 30,
(UNAUDITED) 1996
================================================================================================================================
<S> <C> <C>
OPERATIONS
Net investment income $ 23,211 $ 431,529
-------------------------------------------------------------------------------------------------------------------------
Net realized loss (633,459) (1,488,121)
-------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation (2,643,810) 10,541,186
------------- -------------
Net increase (decrease) in net assets resulting from operations (3,254,058) 9,484,594
================================================================================================================================
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net investment income:
Class A (303,087) (705,030)
- --------------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST
TRANSACTIONS
Net increase (decrease) in net assets resulting from
beneficial interest transactions--Note 2:
Class A (7,372,513) (18,971,659)
Class B 2,835,683 5,082,545
Class C 1,282,948 1,429,900
================================================================================================================================
NET ASSETS
Total decrease (6,811,027) (3,679,650)
-------------------------------------------------------------------------------------------------------------------------
Beginning of period 168,041,216 171,720,866
------------- -------------
End of period [including undistributed (overdistributed) net
investment income of $(83,806) and $196,070, respectively] $161,230,189 $168,041,216
============= =============
</TABLE>
See accompanying Notes to Financial Statements.
13 Oppenheimer Gold & Special Minerals Fund
<PAGE> 14
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------------------------
SIX MONTHS
ENDED
DEC. 31, 1996 YEAR ENDED JUNE 30,
(UNAUDITED) 1996 1995 1994 1993 1992
================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $14.15 $13.48 $13.28 $12.32 $10.68 $10.36
- --------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.01) .04 .06 .06 .06 .16
Net realized and unrealized gain (.26) .69 .21 .96 1.72 .35
-------- -------- -------- -------- -------- --------
Total income (loss) from
investment operations (.27) .73 .27 1.02 1.78 .51
- --------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment
income (.03) (.06) (.07) (.06) (.14) (.19)
-------- -------- -------- -------- -------- --------
Total dividends and distributions
to shareholders (.03) (.06) (.07) (.06) (.14) (.19)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.85 $14.15 $13.48 $13.28 $12.32 $10.68
======== ======== ======== ======== ======== ========
================================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(2) (1.92)% 5.44% 2.03% 8.25% 17.15% 5.08%
================================================================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $150,992 $161,769 $171,721 $179,015 $158,982 $133,345
- --------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $156,852 $171,427 $178,579 $175,093 $124,869 $137,906
- --------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 0.07%(3) 0.25% 0.45% 0.50% 0.61% 1.25%
Expenses 1.34%(3) 1.38% 1.36% 1.31% 1.38% 1.38%
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 8.2% 37.6% 35.8% 29.5% 23.9% 39.4%
Average brokerage
commission rate(5) $0.0299 $0.0211 $0.0204 -- -- --
</TABLE>
<TABLE>
<CAPTION>
CLASS B CLASS C
--------------------------- ---------------------------
SIX MONTHS PERIOD SIX MONTHS PERIOD
ENDED ENDED ENDED ENDED
DEC. 31, 1996 JUNE 30, DEC. 31, 1996 JUNE 30,
(UNAUDITED) 1996(1) (UNAUDITED) 1996(1)
=========================================================================================================
<S> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $14.11 $12.33 $14.13 $12.33
- ---------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.04) (.01) (.04) (.01)
Net realized and unrealized gain (.29) 1.79 (.29) 1.81
-------- -------- -------- --------
Total income (loss) from
investment operations (.33) 1.78 (.33) 1.80
- ---------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment
income -- -- -- --
-------- -------- -------- --------
Total dividends and distributions
to shareholders -- -- -- --
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.78 $14.11 $13.80 $14.13
======== ======== ======== ========
=========================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(2) (2.34)% 14.25% (2.34)% 14.41%
=========================================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $7,569 $4,882 $2,669 $1,390
- ---------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $6,219 $2,588 $1,861 $ 840
- ---------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (0.78)%(3) (0.25)%(3) (0.81)%(3) (0.26)%(3)
Expenses 2.17%(3) 2.22%(3) 2.21%(3) 2.19%(3)
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 8.2% 37.6% 8.2% 37.6%
Average brokerage
commission rate(5) $0.0299 $0.0211 $0.0299 $0.0211
</TABLE>
1. For the period from November 1, 1995 (inception of offering) to June
30, 1996.
2. Assumes a hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the
reinvestment date, and redemption at the net asset value calculated on
the last business day of the fiscal period. Sales charges are not
reflected in the total returns. Total returns are not annualized for
periods of less than one full year.
3. Annualized.
4. The lesser of purchases or sales of portfolio securities for a
period, divided by the monthly average of the market value of portfolio
securities owned during the period. Securities with a maturity or
expiration date at the time of acquisition of one year or less are
excluded from the calculation. Purchases and sales of investment
securities (excluding short-term securities) for the period ended
December 31, 1996 were $12,572,999 and $16,599,184, respectively.
5. Total brokerage commissions paid on applicable purchases and sales of
portfolio securities for the period, divided by the total number of
related shares purchased and sold.
See accompanying Notes to Financial Statements.
14 Oppenheimer Gold & Special Minerals Fund
<PAGE> 15
NOTES TO FINANCIAL STATEMENTS (Unaudited)
===============================================================================
1. SIGNIFICANT
ACCOUNTING POLICIES
Oppenheimer Gold & Special Minerals Fund (the Fund) is registered under
the Investment Company Act of 1940, as amended, as a diversified,
open-end management investment company. The Fund's investment objective
is to seek capital appreciation by primarily investing in securities of
companies engaged in mining, processing, fabricating or distributing
gold or other metals or minerals. The Fund's investment adviser is
OppenheimerFunds, Inc. (the Manager). The Fund offers Class A, Class B
and Class C shares. Class A shares are sold with a front-end sales
charge. Class B and Class C shares may be subject to a contingent
deferred sales charge. All classes of shares have identical rights to
earnings, assets and voting privileges, except that each class has its
own distribution and/or service plan, expenses directly attributable to
a particular class and exclusive voting rights with respect to matters
affecting a single class. Class B shares will automatically convert to
Class A shares six years after the date of purchase. The following is a
summary of significant accounting policies consistently followed by the
Fund.
------------------------------------------------------------------------
INVESTMENT VALUATION. Portfolio securities are valued at the close of
the New York Stock Exchange on each trading day. Listed and unlisted
securities for which such information is regularly reported are valued
at the last sale price of the day or, in the absence of sales, at values
based on the closing bid or the last sale price on the prior trading
day. Long-term and short-term "non-money market" debt securities are
valued by a portfolio pricing service approved by the Board of Trustees.
Such securities which cannot be valued by the approved portfolio pricing
service are valued using dealer-supplied valuations provided the Manager
is satisfied that the firm rendering the quotes is reliable and that the
quotes reflect current market value, or are valued under consistently
applied procedures established by the Board of Trustees to determine
fair value in good faith. Short-term "money market type" debt securities
having a remaining maturity of 60 days or less are valued at cost (or
last determined market value) adjusted for amortization to maturity of
any premium or discount.
------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The accounting records of the Fund are
maintained in U.S. dollars. Prices of securities denominated in foreign
currencies are translated into U.S. dollars at the closing rates of
exchange. Amounts related to the purchase and sale of securities and
investment income are translated at the rates of exchange prevailing on
the respective dates of such transactions.
The effect of changes in foreign currency exchange rates on
investments is separately identified from the fluctuations arising from
changes in market values of securities held and reported with all other
foreign currency gains and losses in the Fund's Statement of Operations.
------------------------------------------------------------------------
REPURCHASE AGREEMENTS. The Fund requires the custodian to take
possession, to have legally segregated in the Federal Reserve Book Entry
System or to have segregated within the custodian's vault, all
securities held as collateral for repurchase agreements. The market
value of the underlying securities is required to be at least 102% of
the resale price at the time of purchase. If the seller of the agreement
defaults and the value of the collateral declines, or if the seller
enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, AND GAINS AND LOSSES. Income, expenses
(other than those attributable to a specific class) and gains and losses
are allocated daily to each class of shares based upon the relative
proportion of net assets represented by such class. Operating expenses
directly attributable to a specific class are charged against the
operations of that class.
------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to continue to comply with provisions of
the Internal Revenue Code applicable to regulated investment companies
and to distribute all of its taxable income, including any net realized
gain on investments not offset by loss carryovers, to shareholders.
Therefore, no federal income or excise tax provision is required. At
December 31, 1996, the Fund had available for federal income tax
purposes an unused capital loss carryover of approximately $10,674,000,
which expires between 2000 and 2004.
------------------------------------------------------------------------
TRUSTEES' FEES AND EXPENSES. The Fund has adopted a nonfunded retirement
plan for the Fund's independent trustees. Benefits are based on years of
service and fees paid to each trustee during the years of service.
During the six months ended December 31, 1996, a provision of $3,486 was
made, resulting in an accumulated liability of $94,926 at December 31,
1996.
15 Oppenheimer Gold & Special Minerals Fund
<PAGE> 16
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
===============================================================================
1. SIGNIFICANT
ACCOUNTING POLICIES
(CONTINUED)
DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders are recorded on the ex-dividend date.
------------------------------------------------------------------------
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income
(loss) and net realized gain (loss) may differ for financial statement
and tax purposes primarily because of the recognition of certain foreign
currency gains (losses) as ordinary income (loss) for tax purposes. The
character of the distributions made during the year from net investment
income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to timing of
dividend distributions, the fiscal year in which amounts are distributed
may differ from the year that the income or realized gain (loss) was
recorded by the Fund.
------------------------------------------------------------------------
OTHER. Investment transactions are accounted for on the date the
investments are purchased or sold (trade date) and dividend income is
recorded on the ex-dividend date. Discount on securities purchased is
amortized over the life of the respective securities, in accordance with
federal income tax requirements. Realized gains and losses on
investments and unrealized appreciation and depreciation are determined
on an identified cost basis, which is the same basis used for federal
income tax purposes.
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 assets and liabilities at the
date of the financial statements and the reported amounts of income and
expenses during the reporting period. Actual results could differ from
those estimates.
===============================================================================
2. SHARES OF
BENEFICIAL INTEREST
The Fund has authorized an unlimited number of no par value shares of
beneficial interest. Transactions in shares of beneficial interest were
as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED DECEMBER 31, 1996 YEAR ENDED JUNE 30, 1996(1)
---------------------------------- ----------------------------------
SHARES AMOUNT SHARES AMOUNT
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 3,909,457 $ 54,887,513 11,015,184 $ 155,317,009
Dividends reinvested 19,645 265,994 48,035 625,897
Redeemed (4,455,832) (62,526,020) (12,375,016) (174,914,565)
------------- ------------- ------------- -------------
Net decrease (526,730) $ (7,372,513) (1,311,797) $ (18,971,659)
============= ============= ============= =============
---------------------------------------------------------------------------------------------------
Class B:
Sold 320,511 $ 4,472,246 434,241 $ 6,371,373
Dividends reinvested -- -- -- --
Redeemed (117,182) (1,636,563) (88,143) (1,288,828)
------------- ------------- ------------- -------------
Net increase 203,329 $ 2,835,683 346,098 $ 5,082,545
============= ============= ============= =============
---------------------------------------------------------------------------------------------------
Class C:
Sold 881,276 $ 12,262,195 665,116 $ 9,742,400
Dividends reinvested -- -- -- --
Redeemed (786,278) (10,979,247) (566,695) (8,312,500)
------------- ------------- ------------- -------------
Net increase 94,998 $ 1,282,948 98,421 $ 1,429,900
============= ============= ============= =============
</TABLE>
1. For the year ended June 30, 1996 for Class A shares, and for the
period from November 1, 1995 (inception of offering) to June 30, 1996
for Class B and Class C shares.
===============================================================================
3. UNREALIZED GAINS AND
LOSSES ON INVESTMENTS
At December 31, 1996, net unrealized appreciation on investments of
$34,006,215 was composed of gross appreciation of $42,365,203, and gross
depreciation of $8,358,988.
16 Oppenheimer Gold & Special Minerals Fund
<PAGE> 17
===============================================================================
4. MANAGEMENT FEES
AND OTHER TRANSACTIONS
WITH AFFILIATES
Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee of
0.75% on the first $200 million of average annual net assets, 0.72% on
the next $200 million, 0.69% on the next $200 million, 0.66% on the next
$200 million and 0.60% on net assets in excess of $800 million. The
Manager has agreed to reimburse the Fund if aggregate expenses (with
specified exceptions) exceed the most stringent applicable regulatory
limit on Fund expenses.
For the six months ended December 31, 1996, commissions
(sales charges paid by investors) on sales of Class A shares totaled
$186,101, of which $47,299 was retained by OppenheimerFunds Distributor,
Inc. (OFDI), a subsidiary of the Manager, as general distributor, and by
an affiliated broker/dealer. Sales charges advanced to broker/dealers by
OFDI on sales of the Fund's Class B and Class C shares totaled $116,988
and $13,608, of which $4,018 was paid to an affiliated broker/dealer for
Class B shares. During the six months ended December 31, 1996, OFDI
received contingent deferred sales charges of $17,116 and $2,266,
respectively, upon redemption of Class B and Class C shares as
reimbursement for sales commissions advanced by OFDI at the time of sale
of such shares.
OppenheimerFunds Services (OFS), a division of the Manager,
is the transfer and shareholder servicing agent for the Fund, and for
other registered investment companies. OFS's total costs of providing
such services are allocated ratably to these companies.
The Fund has adopted a Service Plan for Class A shares to
reimburse OFDI for a portion of its costs incurred in connection with
the personal service and maintenance of accounts that hold Class A
shares. Reimbursement is made quarterly at an annual rate that may not
exceed 0.25% of the average annual net assets of Class A shares of the
Fund. OFDI uses the service fee to reimburse brokers, dealers, banks and
other financial institutions quarterly for providing personal service
and maintenance of accounts of their customers that hold Class A shares.
During the six months ended December 31, 1996, OFDI paid $4,204 to an
affiliated broker/dealer as reimbursement for Class A personal service
and maintenance expenses.
The Fund has adopted compensation type Distribution and
Service Plans for Class B and Class C shares to compensate OFDI for its
services and costs in distributing Class B and Class C shares and
servicing accounts. Under the Plans, the Fund pays OFDI an annual
asset-based sales charge of 0.75% per year on Class B and Class C
shares, as compensation for sales commissions paid from its own
resources at the time of sale and associated financing costs. OFDI also
receives a service fee of 0.25% per year as compensation for costs
incurred in connection with the personal service and maintenance of
accounts that hold shares of the Fund, including amounts paid to
brokers, dealers, banks and other financial institutions. Both fees are
computed on the average annual net assets of Class B and Class C shares,
determined as of the close of each regular business day. During the six
months ended December 31, 1996, OFDI retained $29,887 and $7,941,
respectively, as compensation for Class B and Class C sales commissions
and service fee advances, as well as financing costs. If the Plans are
terminated by the Fund, the Board of Trustees may allow the Fund to
continue payments of the asset-based sales charge to OFDI for certain
expenses it incurred before the Plans were terminated. At December 31,
1996, OFDI had incurred unreimbursed expenses of $252,858 for Class B
and $43,869 for Class C.
===============================================================================
5. ILLIQUID AND
RESTRICTED SECURITIES
At December 31, 1996, investments in securities included issues that are
illiquid or restricted. Restricted securities are often purchased in
private placement transactions, are not registered under the Securities
Act of 1933, may have contractual restrictions on resale, and are valued
under methods approved by the Board of Trustees as reflecting fair
value. A security may also be considered illiquid if it lacks a readily
available market or if its valuation has not changed for a certain
period of time. The Fund intends to invest no more than 10% of its net
assets (determined at the time of purchase and reviewed from time to
time) in illiquid and restricted securities. Certain restricted
securities, eligible for resale to qualified institutional investors,
are not subject to that limit. The aggregate value of illiquid or
restricted securities subject to this limitation at December 31, 1996
was $199,998, which represents 0.12% of the Fund's net assets.
17 Oppenheimer Gold & Special Minerals Fund
<PAGE> 18
OPPENHEIMER GOLD & SPECIAL MINERALS FUND
===============================================================================
OFFICERS AND TRUSTEES
Leon Levy, Chairman of the Board of Trustees
Donald W. Spiro, Vice Chairman of the Board of Trustees
Bridget A. Macaskill, Trustee and President
Robert G. Galli, Trustee
Benjamin Lipstein, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Pauline Trigere, Trustee
Clayton K. Yeutter, Trustee
Diane Sobin, Vice President
George C. Bowen, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
===============================================================================
INVESTMENT ADVISER
OppenheimerFunds, Inc.
===============================================================================
DISTRIBUTOR
OppenheimerFunds Distributor, Inc.
===============================================================================
TRANSFER AND SHAREHOLDER
SERVICING AGENT
OppenheimerFunds Services
===============================================================================
CUSTODIAN OF
PORTFOLIO SECURITIES
The Bank of New York
===============================================================================
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
===============================================================================
LEGAL COUNSEL
Gordon Altman Butowsky Weitzen Shalov & Wein
The financial statements included herein have been taken from the
records of the Fund without examination by the independent auditors.
This is a copy of a report to shareholders of Oppenheimer Gold & Special
Minerals Fund. This report must be preceded or accompanied by a
Prospectus of Oppenheimer Gold & Special Minerals Fund. For material
information concerning the Fund, see the Prospectus.
Shares of Oppenheimer funds are not deposits or obligations of any bank,
are not guaranteed by any bank, and are not insured by the FDIC or any
other agency, and involve investment risks, including possible loss of
the principal amount invested.
18 Oppenheimer Gold & Special Minerals Fund
<PAGE> 19
OPPENHEIMERFUNDS FAMILY
===============================================================================
OppenheimerFunds offers over 50 funds designed to fit virtually every
investment goal. Whether you're investing for retirement, your
children's education or tax-free income, we have the funds to help you
seek your objective.
When you invest with OppenheimerFunds, you can feel
comfortable knowing that you are investing with a respected financial
institution with over 35 years of experience in helping people just like
you reach their financial goals. And you're investing with a leader in
global, growth stock and flexible fixed-income investments--with over 3
million shareholder accounts and more than $60 billion under
OppenheimerFunds' management and that of our affiliates.
At OppenheimerFunds we don't charge a fee to exchange
shares. And you can exchange shares easily by mail or by telephone.(1)
For more information on Oppenheimer funds, please contact your financial
adviser or call us at 1-800-525-7048 for a prospectus. You may also
write us at the address shown on the back cover. As always, please read
the prospectus carefully before you invest.
<TABLE>
=================================================================================
<S> <C>
STOCK FUNDS
Developing Markets Fund Growth Fund
Global Emerging Growth Fund Global Fund
Enterprise Fund(2) Quest Global Value Fund
International Growth Fund Disciplined Value Fund
Discovery Fund Oppenheimer Fund
Quest Small Cap Value Fund Value Stock Fund
Gold & Special Minerals Fund Quest Value Fund
Capital Appreciation Fund3
=================================================================================
STOCK & BOND FUNDS
Main Street Income & Growth Fund Equity Income Fund
Quest Opportunity Value Fund Disciplined Allocation Fund
Total Return Fund Asset Allocation Fund
Quest Growth & Income Value Fund Strategic Income & Growth Fund
Global Growth & Income Fund Bond Fund for Growth
=================================================================================
BOND FUNDS
International Bond Fund Bond Fund
High Yield Fund U.S. Government Trust
Champion Income Fund Limited-Term Government Fund
Strategic Income Fund
=================================================================================
MUNICIPAL FUNDS
California Municipal Fund(4) Insured Municipal Fund
Florida Municipal Fund(4) Intermediate Municipal Fund
New Jersey Municipal Fund(4)
New York Municipal Fund(4) Rochester Division
Pennsylvania Municipal Fund(4) Rochester Fund Municipals
Municipal Bond Fund Limited Term New York Municipal Fund
=================================================================================
MONEY MARKET FUNDS(5)
Money Market Fund Cash Reserves
=================================================================================
LIFESPAN
Growth Fund Income Fund
Balanced Fund
</TABLE>
1. Exchange privileges are subject to change or termination. Shares may
be exchanged only for shares of the same class of eligible funds.
2. Effective 4/1/96, the Fund is closed to new investors.
3. On 12/18/96, the Fund's name was changed from "Target Fund."
4. Available only to investors in certain states.
5. An investment in money market funds is neither insured nor guaranteed
by the U.S. government and there can be no assurance that a money market
fund will be able to maintain a stable net asset value of $1.00 per
share. Oppenheimer funds are distributed by OppenheimerFunds
Distributor, Inc., Two World Trade Center, New York, NY 10048-0203.
(C) Copyright 1997 OppenheimerFunds, Inc. All rights reserved.
19 Oppenheimer Gold & Special Minerals Fund
<PAGE> 20
INFORMATION
GENERAL INFORMATION
Monday-Friday 8:30 a.m.-9 p.m. ET
Saturday 10 a.m.-2 p.m. ET
1-800-525-7048
TELEPHONE TRANSACTIONS
Monday-Friday 8:30 a.m.-8 p.m. ET
1-800-852-8457
PHONELINK
24 hours a day, automated
information and transactions
1-800-533-3310
TELECOMMUNICATIONS DEVICE
for the Deaf (TDD)
Monday-Friday 8:30 a.m.-8 p.m. ET
1-800-843-4461
OPPENHEIMERFUNDS
INFORMATION HOTLINE
24 hours a day, timely and insightful
messages on the economy and
issues that affect your investments
1-800-835-3104
RS0410.001.1296 February 28, 1997
[PHOTO]
Customer Service Representative
OppenheimerFunds Services
"HOW MAY I HELP YOU?"
As an Oppenheimer fund shareholder, you have some special privileges. Whether
it's automatic investment plans, informative newsletters and hotlines, or ready
account access, you can benefit from services designed to make investing
simple.
And when you need help, our Customer Service Representatives are only
a toll-free phone call away. They can provide information about your account
and handle administrative requests. You can reach them at our General
Information number.
When you want to make a transaction, you can do it easily by calling
our toll-free Telephone Transactions number. And, by enrolling in AccountLink,
a convenient service that "links" your Oppenheimer funds accounts and your bank
checking or savings account, you can use the Telephone Transactions number to
make investments.
For added convenience, you can get automated information with
OppenheimerFunds PhoneLink service, available 24 hours a day, 7 days a week.
PhoneLink gives you access to a variety of fund, account, and market
information. Of course, you can always speak with a Customer Service
Representative during the General Information hours shown at the left.
You can count on us whenever you need assistance. That's why the
International Customer Service Association, an independent, nonprofit
organization made up of over 3,200 customer service management professionals
from around the country, honored the Oppenheimer funds' transfer agent,
OppenheimerFunds Services, with their Award of Excellence in 1993.
So call us today--we're here to help.
- --------------------------------------------------------------------------------
[OPPENHEIMERFUNDS LOGO]
OppenheimerFunds Distributor, Inc.
P.O. Box 5270
Denver, CO 80217-5270
- -------------------------------------
Bulk Rate
U.S. Postage
PAID
Permit No. 469
Denver, CO
- -------------------------------------
