Annual Report June 30, 1997
OPPENHEIMER
Gold & Special
Minerals Fund
[PHOTO]
[OPPENHEIMBER FUNDS LOGO]
OppenheimerFunds(SM)
THE RIGHT WAY TO INVEST
<PAGE>
Contents
3 President's Letter
4 Fund Performance
6 An Interview with the Fund's Managers
11 Statement of Investments
16 Statement of Assets & Liabilities
18 Statement of Operations
19 Statements of Changes in Net Assets
20 Financial Highlights
22 Notes to Financial Statements
28 Independent Auditors' Report
29 Federal Income Tax Information
30 Officers & Trustees
32 Information & Services
Report highlights
- --------------------------------------------------------------------------------
[bullet] Oppenheimer Gold & Special Minerals Fund led its peer group, as Class A
shares placed 1st among 46 gold-oriented funds ranked by Lipper Analytical
Services for the 12-month period ended June 30, 1997.(1)
[bullet] The demand for gold from consumers worldwide remained strong during
the second half of 1996 and the first half of 1997.
[bullet] Gold remains an excellent diversification tool and inflation hedge for
virtually any portfolio, despite the market's lackluster performance over the
past year.
[bullet] Because we expect gold prices to increase modestly, we are taking
advantage of the current weakness in the gold market to make purchases at
attractive prices.
Total Returns at NAV
For the Period Ended 6/30/97(2)
Class A
6 months 1 year
(8.45)% (10.20)%
Class B
6 months 1 year
(8.85)% (10.99)%
Class C
6 months 1 year
(8.77)% (10.90)%
Total returns include changes 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.
1. Source: Lipper Analytical Services, Inc., 6/30/97. Based on the comparisons
between changes in net asset value without considering sales charges, with
dividends and capital gains distributions of the Fund's Class A shares
reinvested. The Fund's Class A shares were ranked 1 of 46 (1-year), 8 of 33
(3-year), 14 of 27 (5-year) and 1 of 18 (10-year) among gold-oriented funds for
the period ended 6/30/97. Past performance does not guarantee future results.
2. Includes changes in net asset value per share without deducting any sales
charges. Such performance would have been lower if sales charges were taken into
account. Total returns for the six-month period are cumulative and are not
annualized.
2 Oppenheimer Gold & Special Minerals Fund
<PAGE>
Dear shareholder,
- --------------------------------------------------------------------------------
[PHOTO OF BRIDGET A. MACASKILL]
[PHOTO CAPTION]
Bridget A. Macaskill
President
Oppenheimer
Gold & Special
Minerals Fund
I'd like to welcome you to the premier issue of our newly redesigned shareholder
reports. As you can see, we've changed the format to allow easier access to the
information you need to monitor your investments. Some notable additions are
"at-a-glance" report highlights and charts that let you quickly assess how your
Fund has performed. On the following pages, your portfolio team discuss their
current investment thinking, your Fund's strategies, and performance. Before
these commentaries, I'd like to share a few global observations.
As we consider the world's financial markets over the past six months,
some global trends emerge. For example, inflation has hit its lowest level in
three decades worldwide, which has helped spur many bullish financial markets.
The United States has been a beneficiary of this low-inflation environment, as
well as of a strong dollar, robust corporate earnings and a healthy economy.
However, many financial analysts are now concerned that the United States has
reached a point in the business cycle where earnings could decline because
companies are unable to further reduce costs.
On the other hand, a wave of corporate restructuring throughout Europe has
resulted in some exciting changes and opportunities. Because a similar
restructuring took place in the United States ten years ago, European companies
have been able to enjoy the benefit of hindsight by following our footsteps.
Latin America, too, has begun to shift its economies more toward the U.S.
capitalist model and has reported positive earnings growth along the way.
With major changes occurring in today's economies around the globe, it's
more important than ever to maintain a diversified portfolio across different
countries and market sectors. Now is the time to speak to your financial adviser
to ensure that your assets are allocated properly, so you have the opportunity
to benefit from investments in both domestic and international funds. It's
important to remember that investing abroad can involve greater risk and
expenses--including political and economic uncertainties--and should be
undertaken with a long-term approach in mind.
To keep in touch with our views on the markets, visit our website,
www.oppenheimerfunds.com, where you can access your account information and fund
performance data, 24 hours a day. The site also features prospectuses, timely
market updates and insightful commentaries. Our new shareholder reports and
presence on the Internet are just two examples of our commitment to keeping you
well informed.
Thank you for your confidence in OppenheimerFunds, The Right Way to
Invest. We look forward to helping you reach your investment goals in the
future.
Sincerely,
/s/ Bridget A. Macaskill
Bridget A. Macaskill July 22, 1997
3 Oppenheimer Gold & Special Minerals Fund
<PAGE>
Performance update
- --------------------------------------------------------------------------------
Marked by continued low inflation and the sale of significant amounts of gold
by many central banks, the past year has been difficult for the gold market.
Reflecting this trend, Oppenheimber Gold & Special Minerals Fund Class A shares
generated a total rate of return of (10.20)%(1) for the 1-year period ended June
30, 1997, without sales charges. However, the average total return of
gold-oriented funds for the same period was (24.40)% as measured by Lipper
Analytical Services.(2)
Avg Annual Total Returns
For the Period Ended 6/30/97(4)
Class A
Since
1 year 5 year Inception
(15.37)% 2.92% 5.13%
Class B
Since
1 year 5 year Inception
(15.44)% N/A (1.39)%
Class C
Since
1 year 5 year Inception
(11.79)% N/A 1.16%
Growth of $10,000
Over ten years
(without sales charges)(3)
[PLOT POINTS TO MOUNTAIN GRAPH]
Oppenheimer
Gold & Special
Lipper Gold Minerals Fund
Fund Index Class A Shares
$10,000 $10,000
12,011 10,638
9,224 11,983
8,380 12,336
8,180 13,324
7,270 12,378
7,493 12,986
8,005 14,001
7,882 14,181
8,580 15,319
10,000 17,482
9,150 15,486
8,131 14,621
8,409 13,918
7,572 12,803
7,193 12,236
7,914 13,055
7,329 12,425
7,527 12,845
7,046 12,639
7,303 13,718
6,840 12,767
6,089 11,544
7,550 13,631
9,996 16,070
8,974 14,570
11,387 18,680
10,433 18,444
10,204 17,396
12,339 19,832
10,708 17,565
10,094 16,946
10,200 17,749
10,804 18,223
10,290 17,300
12,563 19,694
11,708 18,715
11,475 18,543
10,778 18,356
9,854 17,720
$ 8,684 $15,839
6/30/87 6/30/97
1. Includes changes in net asset value per share without deducting any sales
charges. Such performance would have been lower if sales charges were taken into
account.
2. Source: Lipper Analytical Services, Inc., 6/30/97. Based on the comparisons
between changes in net asset value without considering sales charges, with
dividends and capital gains distributions of the Fund's Class A shares
reinvested. The Fund's Class A shares were ranked 1 of 46 (1-year), 8 of 33
(3-year), 14 of 27 (5-year) and 1 of 18 (10-year) among gold-oriented funds for
the period ended 6/30/97. Past performance does not guarantee future results.
3. Results of a hypothetical $10,000 investment in Class A shares on June 30,
1987. The Lipper Gold Fund Index includes funds which focus on gold-oriented
investments such as gold mines, gold-oriented finance houses, or gold coins,
without considering sales charges. Past performance does not guarantee future
results.
4 Oppenheimer Gold & Special Minerals Fund
<PAGE>
Portfolio review
- --------------------------------------------------------------------------------
Oppenheimer Gold & Special Minerals Fund is for investors looking for potential
diversification benefits from an investment in gold-related companies.
What We Look For
[bullet] Companies increasing their growth in gold or metal production.
[bullet] Companies gaining growth in earnings and dividends.
[bullet] Companies with a long-term gold supply.
[bullet] Companies with low production costs.
[bullet] Special opportunities in companies producing aluminum, copper, nickel
and steel.
[bullet] Diversification in a number of holdings to help lower the volatility
associated with single market sectors and foreign currencies.
Top Ten Stock Holdings(5)
................................................................
Newmont Mining Corp. 10.6% Franco-Nevada Mining 3.5%
Corp. Ltd.
................................................................
Euro-Nevada Mining Corp. 5.4 Stillwater Mining Co. 3.4
................................................................
Barrick Gold Corp. 4.7 Homestake Mining Co. 2.9
................................................................
Freeport-McMoRan 4.6 Getchell Gold Corp. 2.9
Copper & Gold, Inc., Cl. A
................................................................
Placer Dome, Inc. 3.7 Cambior, Inc. 2.3
................................................................
4. Total returns include changes in share price and reinvestment of dividends
and capital gains distributions in a hypothetical investment for the periods
shown. Class A returns include the current maximum initial sales charge of
5.75%. Class A shares were first publicly offered on 7/19/83. The Fund's maximum
sales charge for Class A shares was higher prior to 4/1/91, so actual
performance may have been lower. Class B returns include the applicable
contingent deferred sales charge of 5% (1-year) and 3% (since inception on
11/1/95). Class C returns include the contingent deferred sales charge of 1% for
the 1-year result. An explanation of the different performance calculations is
in the Fund's prospectus. Class B and C shares are subject to an annual 0.75%
asset-based sales charge and 0.25% service fee and Class A shares are subject to
an annual service fee not to exceed 0.25%.
5. The Fund's portfolio is subject to change. Percentages are based on total
market value of stock holdings as of June 30, 1997.
5 Oppenheimer Gold & Special Minerals Fund
<PAGE>
An interview with your Fund's managers
- --------------------------------------------------------------------------------
How has the Fund performed during the 12-month period ended June 30, 1997?
Oppenheimer Gold & Special Minerals Fund Class A shares generated a total return
of (10.20)%, including changes in share price and income distributions
reinvested in additional shares without sales charges. The Fund's return, though
negative, compares favorably with those of its competitors.
Although the gold market provided lackluster performance over the past
year, we take a long-term view of investing. Gold's traditional role as a
diversification tool and inflation hedge makes it an appropriate part of
virtually any portfolio, and we remain confident that its value will become more
apparent when we move into a different phase of the business cycle.
What factors influenced the gold market during the period?
The market for gold was constrained by a number of economic factors, including
continued low levels of U.S. inflation, a strong U.S. dollar relative to other
currencies, and sales of significant amounts of gold by central banks in Western
Europe and Australia. When inflation is low, gold shares must compete with the
high real rates of return (a security's yield less the rate of inflation)
provided by such investments as U.S. Treasury securities. As a result, when the
U.S. dollar is strong, gold imports become more expensive for U.S. companies and
consumers. When central banks sell large portions of their gold reserves, this
significantly increases the supply of gold available for purchase.
- -----------------------------------------
"Gold's traditional role as a diversification tool and inflation hedge makes it
an appropriate part of virtually any portfolio."
6 Oppenheimer Gold & Special Minerals Fund
<PAGE>
[photo of Bill Wilby and Diane Sobin] However, demand for gold from
Portfolio Management consumers worldwide remained strong during
Team (l to r) the second half of 1996 and the first half
Bill Wilby of 1997. Consumer demand in certain
Diane Sobin (Fund Manager)(1) countries was particularly robust, as
members of a growing middle class in the
emerging markets of Asia, Latin America and Eastern Europe increasingly bought
gold jewelry. Jewelry accounts for 85% of gold demand.
What factors led to the Fund's positive results relative to its peers?
First and foremost, the Fund avoided Bre-X, an exploration company that saw its
stock price plummet. The Fund did not hold this stock and has kept its exposure
to exploration companies to less than 5% of the portfolio. Instead, we favored
high-quality, well-established gold producers with a demonstrated ability to
increase their reserves without regard to changes in the metal's price. This
focus led us to invest more than half of the Fund's assets in
large-capitalization producers of precious metals.
In addition, we allocated between 10% and 20% of the portfolio to
companies engaged in the production of certain nonprecious metals, including
copper, aluminum and zinc. Our positions in these companies helped us take
advantage of positive pricing trends for these metals.
1. Effective July 18, 1997, the Fund's portfolio managers are Frank Jennings
and Shanquan Li.
7 Oppenheimer Gold & Special Minerals Fund
<PAGE>
An interview with your Fund's managers
- --------------------------------------------------------------------------------
In what parts of the world has the Fund found investment opportunities?
As of June 1997, the Fund's assets were allocated approximately 35% to the
United States, 40% to Canada, 10% to Australia and 8% to South Africa, with the
remaining assets in a variety of other places. The Fund's mix of geographic
regions changed little during the year, except for modestly increased exposure
to Canadian companies.
What investments made positive contributions to the Fund?
As might be expected, our top performers are generally senior gold producers
that we believe are the most efficient and experienced in the industry. For
example, the recent merger of Newmont Mining and Santa Fe Pacific Gold created a
dominant, low-cost gold producer with substantial assets in Nevada.
Freeport-McMoRan Copper and Gold operates the largest mine in the world and
ranks as one of the world's lowest cost producers of both copper and gold.
Stillwater Mining is the world's largest holder of platinum and palladium (a
metal used in electrical contacts, jewelry and surgical instruments). These
high-quality companies, and others like them, form the foundation for the entire
portfolio.(2)
- -----------------------------------------
"We favored high-quality, well-established gold producers with a demonstrated
ability to grow their reserves."
2. The Fund's portfolio is subject to change.
8 Oppenheimer Gold & Special Minerals Fund
<PAGE>
What is your outlook for gold and precious metals stocks
over the foreseeable future?
We are optimistic about the future of the gold market after a lackluster year.
We expect merger and acquisition activity to increase as larger companies buy
smaller businesses which have encountered difficulties raising capital in the
financial markets. We also expect gold prices to increase modestly from their
levels at June 1997, although prices should remain within their current trading
range. In fact, the current period of weakness may represent an opportunity for
the Fund to buy the stocks of sound companies at attractive prices, and we
intend to take advantage of compelling values as we find them.
- -----------------------------------------
"The current period of weakness may represent an opportunity for the Fund to buy
the stocks of sound companies at attractive prices."
9 Oppenheimer Gold & Special Minerals Fund
<PAGE>
Financials
- --------------------------------------------------------------------------------
10 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- -------------------------------------------------------------------------------
Statement of Investments June 30, 1997
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
==============================================================================
<S> <C> <C>
Convertible Corporate Bonds and Notes -- 2.4%
- ------------------------------------------------------------------------------
Lonrho Finance plc, 6% Gtd. Cv. Bonds, 2/27/04(GBP) 1,000,000 $1,560,282
- ------------------------------------------------------------------------------
TVX Gold, Inc., 5% Cv. Sub. Nts., 3/28/02 1,971,000 1,783,755
----------
Total Convertible Corporate Bonds and Notes
(Cost $3,423,151) 3,344,037
Shares
==============================================================================
Common Stocks -- 90.8%
- ------------------------------------------------------------------------------
Basic Materials -- 88.3%
- ------------------------------------------------------------------------------
Chemicals -- 3.4%
Engelhard Corp. 130,000 2,721,875
- ------------------------------------------------------------------------------
Johnson Matthey plc 202,500 1,951,351
----------
4,673,226
- ------------------------------------------------------------------------------
Gold and Platinum -- 66.7%
- ------------------------------------------------------------------------------
Gold -- 0.4%
Greenstone Resources Ltd.(2) 45,000 394,692
- ------------------------------------------------------------------------------
Manila Mining Corp., Cl. B 355,800,000 175,364
----------
570,056
- ------------------------------------------------------------------------------
Gold Mining: Australia -- 5.8%
Acacia Resources Ltd.(2) 250,000 327,946
- ------------------------------------------------------------------------------
Ashanti Goldfields Co. Ltd. 88,888 1,021,943
- ------------------------------------------------------------------------------
Aurora Gold Ltd.(2) 200,000 284,974
- ------------------------------------------------------------------------------
Delta Gold NL 800,000 1,332,895
- ------------------------------------------------------------------------------
Great Central Mines NL 267,000 507,657
- ------------------------------------------------------------------------------
Newcrest Mining Ltd. 400,000 1,103,408
- ------------------------------------------------------------------------------
Plutonic Resources Ltd. 300,000 936,344
- ------------------------------------------------------------------------------
RGC Ltd. 334,000 1,221,242
- ------------------------------------------------------------------------------
Resolute Ltd. 225,000 400,321
- ------------------------------------------------------------------------------
Sons of Gwalia Ltd. 230,000 854,847
----------
7,991,577
- ------------------------------------------------------------------------------
Gold Mining: Canada -- 23.2%
Barrick Gold Corp. 270,000 5,940,000
- ------------------------------------------------------------------------------
Battle Mountain Canada, Inc. 270,000 1,546,147
- ------------------------------------------------------------------------------
Bema Gold Corp.(2) 95,000 575,003
- ------------------------------------------------------------------------------
Bema Gold Corp.(2) 10,000 60,000
- ------------------------------------------------------------------------------
Cambior, Inc. 257,000 2,924,777
- ------------------------------------------------------------------------------
Corriente Resources, Inc.(2) 30,000 71,762
- ------------------------------------------------------------------------------
Dayton Mining Corp.(2) 388,000 1,349,998
- ------------------------------------------------------------------------------
Dayton Mining Corp.(2)(3) 288,000 1,002,060
- ------------------------------------------------------------------------------
Eldorado Gold Corp. Ltd.(2) 117,000 457,973
11 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- ------------------------------------------------------------------------------
Statement of Investments (Continued)
- ------------------------------------------------------------------------------
Market Value
Shares See Note 1
- ------------------------------------------------------------------------------
Gold Mining: Canada (continued)
Glamis Gold Ltd. 100,000 $ 719,433
- ------------------------------------------------------------------------------
Goldcorp, Inc., Cl. A(2) 140,000 1,009,744
- ------------------------------------------------------------------------------
Kap Resources Ltd.(2) 515,000 1,166,587
- ------------------------------------------------------------------------------
Kinross Gold(2) 94,600 421,722
- ------------------------------------------------------------------------------
Meridian Gold, Inc., Installment Receipts(2)(3) 140,000 380,557
- ------------------------------------------------------------------------------
Metallica Resources, Inc.(2) 160,000 353,736
- ------------------------------------------------------------------------------
Pangea Goldfields, Inc.(2) 50,000 144,974
- ------------------------------------------------------------------------------
Placer Dome, Inc. 50,000 811,854
- ------------------------------------------------------------------------------
Placer Dome, Inc. 285,000 4,666,875
- ------------------------------------------------------------------------------
Prime Resource Group, Inc. 325,000 2,355,827
- ------------------------------------------------------------------------------
Rio Narcea Gold Mines Ltd.(2) 190,000 571,560
- ------------------------------------------------------------------------------
Teck Corp., Cl. B 140,000 2,836,416
- ------------------------------------------------------------------------------
TVX Gold, Inc.(2) 385,000 2,037,247
- ------------------------------------------------------------------------------
TVX Gold, Inc.(2) 35,000 185,938
- ------------------------------------------------------------------------------
Viceroy Resources Corp.(2) 205,000 668,692
-----------
32,258,882
- ------------------------------------------------------------------------------
Gold Mining: South Africa -- 6.1%
Anglo American Corp. of South Africa Ltd., ADR 37,000 2,233,875
- ------------------------------------------------------------------------------
Ashanti Goldfields Co. Ltd., Sponsored GDR 145,000 1,694,688
- ------------------------------------------------------------------------------
Driefontein Consolidated Ltd., Sponsored ADR 135,000 911,250
- ------------------------------------------------------------------------------
Free State Consolidated Gold Mines Ltd., ADR 57,000 285,000
- ------------------------------------------------------------------------------
IAMGOLD(2) 50,000 195,715
- ------------------------------------------------------------------------------
Randgold & Exploration Co. Ltd.(2) 75,000 330,721
- ------------------------------------------------------------------------------
Southvaal Holdings Ltd., ADR 50,000 1,003,185
- ------------------------------------------------------------------------------
Vaal Reefs Exploration & Mining Co. Ltd., ADR 170,000 818,125
- ------------------------------------------------------------------------------
Western Areas Gold Mining Co. Ltd., Unsponsored ADR 79,945 537,598
- ------------------------------------------------------------------------------
Western Deep Levels Ltd., Unsponsored ADR 20,000 477,500
-----------
8,487,657
- ------------------------------------------------------------------------------
Gold Mining: United States -- 16.4%
Battle Mountain Gold Co. 180,000 1,023,750
- ------------------------------------------------------------------------------
Crown Resources Corp.(2) 185,000 1,179,375
- ------------------------------------------------------------------------------
Getchell Gold Corp.(2) 102,000 3,595,500
- ------------------------------------------------------------------------------
Homestake Mining Co. 278,000 3,631,375
- ------------------------------------------------------------------------------
Newmont Mining Corp. 340,871 13,293,969
-----------
22,723,969
12 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Market Value
Shares See Note 1
- ------------------------------------------------------------------------------
Gold-Related Investment -- 9.8%
Cambiex Exploration, Inc.(2)(4) 1,500,000 $ 581,708
- ------------------------------------------------------------------------------
Canarc Resource Corp.(2) 282,500 192,489
- ------------------------------------------------------------------------------
Canarc Resource Corp.(2) 450,000 306,620
- ------------------------------------------------------------------------------
Euro-Nevada Mining Corp. 221,000 6,808,340
- ------------------------------------------------------------------------------
Franco-Nevada Mining Corp. Ltd. 89,000 4,467,554
- ------------------------------------------------------------------------------
Normandy Mining Ltd. 1,151,077 1,293,017
-----------
13,649,728
- ------------------------------------------------------------------------------
Platinum Mining -- 5.0%
Anglo American Platinum Ltd., Unsponsored ADR 138,114 1,141,927
- ------------------------------------------------------------------------------
Rustenburg Platinum Holdings Ltd., ADR 83,718 1,532,031
- ------------------------------------------------------------------------------
Stillwater Mining Co.(2) 192,000 4,272,000
-----------
6,945,958
-----------
92,627,827
- ------------------------------------------------------------------------------
Metals -- 18.2%
- ------------------------------------------------------------------------------
Copper -- 5.6%
Freeport-McMoRan Copper & Gold, Inc., Cl. A 199,455 5,834,059
- ------------------------------------------------------------------------------
Freeport-McMoRan Copper & Gold, Inc., Cl. B 15,000 466,875
- ------------------------------------------------------------------------------
Phelps Dodge Corp. 17,000 1,448,188
-----------
7,749,122
- ------------------------------------------------------------------------------
Metals: Diversified -- 9.2%
Aber Resources Ltd.(2) 74,000 1,035,259
- ------------------------------------------------------------------------------
Aluminum Co. of America 23,000 1,733,625
- ------------------------------------------------------------------------------
Ashton Mining Ltd. 600,000 823,259
- ------------------------------------------------------------------------------
Boliden Ltd., Installment Receipts(2) 200,000 1,065,559
- ------------------------------------------------------------------------------
Breakwater Resources Ltd.(2) 75,000 260,953
- ------------------------------------------------------------------------------
Brush Wellman, Inc. 50,000 1,046,875
- ------------------------------------------------------------------------------
Cominco Ltd. 30,000 799,169
- ------------------------------------------------------------------------------
Elkem ASA 120,000 2,352,204
- ------------------------------------------------------------------------------
Repadre Capital Corp.(2) 50,000 291,760
- ------------------------------------------------------------------------------
Rio Tinto plc 93,000 1,619,772
- ------------------------------------------------------------------------------
WMC Ltd. 199,988 1,258,937
- ------------------------------------------------------------------------------
Westmin Resources Ltd.(2) 100,000 478,414
-----------
12,765,786
13 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- ------------------------------------------------------------------------------
Statement of Investments (Continued)
- ------------------------------------------------------------------------------
Market Value
Shares See Note 1
- ------------------------------------------------------------------------------
Metals: Miscellaneous -- 2.2%
Cameco Corp. 20,000 $ 750,240
- ------------------------------------------------------------------------------
Pasminco Ltd. 1,150,000 2,332,189
------------
3,082,429
- ------------------------------------------------------------------------------
Nickel -- 1.2%
Falconbridge Ltd. 75,000 1,473,298
- ------------------------------------------------------------------------------
Sutton Resources Ltd.(2) 23,000 187,560
------------
1,660,858
------------
25,258,195
- ------------------------------------------------------------------------------
Industrial -- 2.5%
- ------------------------------------------------------------------------------
Industrial Services -- 0.6%
Calgon Carbon Corp. 60,000 832,500
- ------------------------------------------------------------------------------
Manufacturing -- 1.9%
Svedala Industri, AB Free 125,000 2,602,692
------------
Total Common Stocks (Cost $107,444,311) 125,994,440
==============================================================================
Preferred Stocks -- 1.3%
- ------------------------------------------------------------------------------
Ashanti GSM Ltd. Redeemable Preferred, A Shares(2)(5) 88,888 199,998
- ------------------------------------------------------------------------------
Battle Mountain Gold Co., $3.25 Cum. Cv. 34,500 1,649,531
------------
Total Preferred Stocks (Cost $1,900,876) 1,849,529
Units
==============================================================================
Rights, Warrants and Certificates -- 0.7%
- ------------------------------------------------------------------------------
Kap Resources Ltd. Special Wts. 200,000 453,044
- ------------------------------------------------------------------------------
Kap Resources Ltd. Wts., Cl. A, Exp. 8/00 252,500 196,757
- ------------------------------------------------------------------------------
Lynas Gold NL Wts., Exp. 6/99 1,200,000 41,615
- ------------------------------------------------------------------------------
Minefinders Corp. Special Wts., Exp. 4/98(5) 75,000 149,512
- ------------------------------------------------------------------------------
Rea Corp. Special Wts., Exp. 4/98 330,000 183,591
------------
Total Rights, Warrants and Certificates
(Cost $1,211,886) 1,024,519
14 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Face Market Value
Amount(1) See Note 1
===============================================================================
Repurchase Agreements -- 3.8%
- -------------------------------------------------------------------------------
Repurchase agreement with J.P. Morgan Securities, Inc., 5.95%,
dated 6/30/97, to be repurchased at $5,200,859 on 7/1/97,
collateralized by U.S. Treasury Bonds, 8.875%-12%,
8/15/13-2/15/19, with a value of $4,879,420 and
U.S. Treasury Nts., 7.875%, 11/15/04,
with a value of $444,938 (Cost $5,200,000) $ 5,200,000 $ 5,200,000
- -------------------------------------------------------------------------------
Total Investments, at Value (Cost $119,180,224) 99.0% 137,412,525
- -------------------------------------------------------------------------------
Other Assets Net of Liabilities 1.0 1,324,855
----------- ------------
Net Assets 100.0% $138,737,380
=========== ============
</TABLE>
1. Face amount is reported in U.S. dollars, except for those denoted in the
following currency:
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 $1,382,617, or 1.00% of the Fund's net
assets, at June 30, 1997.
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 June 30, 1997. The
aggregate fair value of all securities of affiliated companies as of June 30,
1997 amounted to $581,708. There were no transactions with affiliates during the
period ended June 30, 1997.
<TABLE>
<CAPTION>
Shares Gross Gross Shares
June 30, 1996 Additions Reductions June 30, 1997
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cambiex Exploration, Inc. 1,500,000 -- -- 1,500,000
</TABLE>
5. Identifies issues considered to be illiquid or restricted -- See Note 5 of
Notes to Financial Statements.
See accompanying Notes to Financial Statements.
15 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- -------------------------------------------------------------------------------
Statement of Assets and Liabilities June 30, 1997
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
=================================================================================================
Assets
Investments, at value -- see accompanying statement:
Unaffiliated companies (cost $118,423,651) $136,830,817
Affiliated companies (cost $756,573) 581,708
- -------------------------------------------------------------------------------------------------
Cash 1,113,806
- -------------------------------------------------------------------------------------------------
Receivables:
Investments sold 2,307,138
Shares of beneficial interest sold 1,253,373
Interest and dividends 200,747
- -------------------------------------------------------------------------------------------------
Other 11,723
-------------
Total assets 142,299,312
=================================================================================================
Liabilities
Payables and other liabilities:
Shares of beneficial interest redeemed 3,130,242
Investments purchased 96,960
Trustees' fees -- Note 1 86,988
Shareholder reports 84,917
Distribution and service plan fees 77,245
Transfer and shareholder servicing agent fees 31,236
Other 54,344
-------------
Total liabilities 3,561,932
=================================================================================================
Net Assets $138,737,380
============
=================================================================================================
Composition of Net Assets
Paid-in capital $130,432,686
- -------------------------------------------------------------------------------------------------
Undistributed net investment income 263,701
- -------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (10,191,852)
- -------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and
liabilities denominated in foreign currencies 18,232,845
-------------
Net assets $138,737,380
=============
</TABLE>
16 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
=======================================================================================
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$126,086,276 and 9,945,213 shares of beneficial interest outstanding) $12.68
Maximum offering price per share (net asset value plus sales charge of
5.75% of offering price) $13.45
- ---------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (less applicable contingent deferred sales
charge) and offering price per share (based on net assets of $8,715,783 and
693,768 shares of beneficial interest outstanding) $12.56
- ---------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (less applicable contingent deferred sales
charge) and offering price per share (based on net assets of $3,935,321 and
312,660 shares of beneficial interest outstanding) $12.59
</TABLE>
See accompanying Notes to Financial Statements.
17 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- -------------------------------------------------------------------------------
Statement of Operations For the Year Ended June 30, 1997
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
========================================================================================
Investment Income
Dividends (net of foreign withholding taxes of $125,905) $ 1,895,631
- ----------------------------------------------------------------------------------------
Interest 704,308
------------
Total income 2,599,939
========================================================================================
Expenses
Management fees -- Note 4 1,195,285
- ----------------------------------------------------------------------------------------
Distribution and service plan fees -- Note 4:
Class A 308,600
Class B 73,620
Class C 26,693
- ----------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees -- Note 4 364,731
- ----------------------------------------------------------------------------------------
Shareholder reports 130,544
- ----------------------------------------------------------------------------------------
Custodian fees and expenses 42,254
- ----------------------------------------------------------------------------------------
Legal and auditing fees 35,463
- ----------------------------------------------------------------------------------------
Trustees' fees and expenses -- Note 1 20,149
- ----------------------------------------------------------------------------------------
Insurance expenses 9,980
- ----------------------------------------------------------------------------------------
Registration and filing fees:
Class B 1,465
Class C 875
- ----------------------------------------------------------------------------------------
Other 12,829
------------
Total expenses 2,222,488
========================================================================================
Net Investment Income 377,451
========================================================================================
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investments 1,612,811
Foreign currency transactions (584,613)
------------
Net realized gain 1,028,198
- ----------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments (17,688,639)
Translation of assets and liabilities denominated in foreign currencies (731,490)
------------
Net change (18,420,129)
------------
Net realized and unrealized loss (17,391,931)
========================================================================================
Net Decrease in Net Assets Resulting From Operations $(17,014,480)
============
</TABLE>
See accompanying Notes to Financial Statements.
18 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- -------------------------------------------------------------------------------
Statements of Changes in Net Assets
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended June 30,
1997 1996
==================================================================================================
<S> <C> <C>
Operations
Net investment income $ 377,451 $ 431,529
- --------------------------------------------------------------------------------------------------
Net realized gain (loss) 1,028,198 (1,488,121)
- --------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation (18,420,129) 10,541,186
------------ -------------
Net increase (decrease) in net assets resulting
from operations (17,014,480) 9,484,594
==================================================================================================
Dividends and Distributions To Shareholders
Dividends from net investment income:
Class A (302,998) (705,030)
===================================================================================================
Beneficial Interest Transactions
Net increase (decrease) in net assets resulting from beneficial
interest transactions -- Note 2:
Class A (19,702,023) (18,971,659)
Class B 4,828,099 5,082,545
Class C 2,887,566 1,429,900
==================================================================================================
Net Assets
Total decrease (29,303,836) (3,679,650)
- --------------------------------------------------------------------------------------------------
Beginning of period 168,041,216 171,720,866
------------ -------------
End of period (including undistributed net investment
income of $263,701 and $196,070, respectively) $138,737,380 $168,041,216
============ =============
</TABLE>
See accompanying Notes to Financial Statements.
19 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- -------------------------------------------------------------------------------
Financial Highlights
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A
------------------------------------
Year Ended June 30,
1997 1996 1995
============================================================================================
<S> <C> <C> <C>
Per Share Operating Data:
Net asset value, beginning of period $14.15 $13.48 $13.28
- ----------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .04 .04 .06
Net realized and unrealized gain (1.48) .69 .21
----------- ------- -------
Total income (loss) from investment operations (1.44) .73 .27
- ----------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.03) (.06) (.07)
----------- -------- --------
Total dividends and distributions to shareholders (.03) (.06) (.07)
- ----------------------------------------------------------------------------------------------
Net asset value, end of period $12.68 $14.15 $13.48
=========== ========= =========
==============================================================================================
Total Return, at Net Asset Value(2) (10.20)% 5.44% 2.03%
==============================================================================================
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) $126,086 $161,769 $171,721
- ----------------------------------------------------------------------------------------------
Average net assets (in thousands) $149,564 $171,427 $178,579
- ----------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) 0.28% 0.25% 0.45%
Expenses 1.34% 1.38% 1.36%
- ----------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 20.5% 37.6% 35.8%
Average brokerage commission rate(5) $0.0030 $0.0211 $0.0204
</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.
20 Oppenheimer Gold & Special Minerals Fund
<PAGE>
<TABLE>
<CAPTION>
Class A Class B Class C
- --------------------- ---------------------- ----------------------
Year Ended June 30, Year Ended June 30, Year Ended June 30,
1994 1993 1997 1996(1) 1997 1996(1)
================================================================================
<S> <C> <C> <C> <C> <C>
$12.32 $10.68 $14.11 $12.33 $14.13 $12.33
- -------------------------------------------------------------------------------
.06 .06 (.04) (.01) (.02) (.01)
.96 1.72 (1.51) 1.79 (1.52) 1.81
------- ---- ------- ------ ------ ----
1.02 1.78 (1.55) 1.78 (1.54) 1.80
------- ----- ------ ------ ----- ----
(.06) (.14) -- -- -- --
------- ----- ------ ------ ----- ----
(.06) (.14) -- -- -- --
- -------------------------------------------------------------------------------
$13.28 $12.32 $12.56 $14.11 $12.59 $14.13
======== ====== ====== ====== ====== ======
===============================================================================
8.25% 17.15% (10.99)% 14.25% (10.90)% 14.41%
===============================================================================
$179,015 $158,982 $8,716 $4,882 $3,935 $1,390
- -------------------------------------------------------------------------------
$175,093 $124,869 $7,361 $2,588 $2,672 $ 840
- -------------------------------------------------------------------------------
0.50% 0.61% (0.48)% (0.25)%(3) (0.45)% (0.26)%(3)
1.31% 1.38% 2.16% 2.22%(3) 2.18% 2.19%(3)
- -------------------------------------------------------------------------------
29.5% 23.9% 20.5% 37.6% 20.5% 37.6%
-- -- $0.0030 $0.0211 $0.0030 $0.0211
</TABLE>
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 June 30, 1997 were $30,398,518 and $38,564,264, respectively.
5. Total brokerage commissions paid on applicable purchases and sales of
portfolio securities for the period, divided by the total of related shares
purchased and sold. Generally, non-U.S. commissions are lower than U.S.
commissions when expressed as cents per share but higher when expressed as a
percentage of transactions because of the lower per-share prices of many
non-U.S. securities.
See accompanying Notes to Financial Statements.
21 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
================================================================================
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 that
mine or produce gold or other metals and 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 that class and exclusive voting
rights with respect to matters affecting that 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 an
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 foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
22 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
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 June 30, 1997, the Fund
had available for federal income tax purposes an unused capital loss carryover
of approximately $10,035,000, 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 year ended
June 30, 1997, a credit of $9,193 and payments of $1,013 were made, resulting in
an accumulated liability of $81,234 at June 30, 1997.
- --------------------------------------------------------------------------------
Distributions to Shareholders. Dividends and distributions to shareholders are
recorded on the ex-dividend date.
23 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
================================================================================
1. Significant Accounting Policies (continued)
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 its 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 fiscal year in which the income or realized gain
was recorded by the Fund.
During the year ended June 30, 1997, the Fund changed the
classification of distributions to shareholders to better disclose the
differences between financial statement amounts and distributions determined in
accordance with income tax regulations. Accordingly, during the year ended June
30, 1997, amounts have been reclassified to reflect a decrease in undistributed
net investment income of $6,822. Accumulated net realized loss on investments
was decreased by the same amount.
- --------------------------------------------------------------------------------
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.
24 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
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>
Year Ended June 30, 1997 Year Ended June 30, 1996(1)
---------------------------- -----------------------------
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 9,092,060 $ 125,381,941 11,015,184 $ 155,317,009
Dividends reinvested 19,635 265,853 48,035 625,897
Redeemed (10,597,946) (145,349,817) (12,375,016) (174,914,565)
------------ ------------- ------------ -------------
Net decrease (1,486,251) $ (19,702,023) (1,311,797) $ (18,971,659)
============ ============= ============ =============
- -----------------------------------------------------------------------------------------
Class B:
Sold 650,210 $ 8,951,921 434,241 $ 6,371,373
Dividends reinvested -- -- -- --
Redeemed (302,540) (4,123,822) (88,143) (1,288,828)
------------ ------------- ------------ -------------
Net increase 347,670 $ 4,828,099 346,098 $ 5,082,545
============ ============= ============ =============
- -----------------------------------------------------------------------------------------
Class C:
Sold 1,715,098 $ 23,557,280 665,116 $ 9,742,400
Dividends reinvested -- -- -- --
Redeemed (1,500,859) (20,669,714) (566,695) (8,312,500)
------------ ------------- ------------ -------------
Net increase 214,239 $ 2,887,566 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 June 30, 1997, net unrealized appreciation on investments of $18,232,301 was
composed of gross appreciation of $32,416,626, and gross depreciation of
$14,184,325.
25 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
================================================================================
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% of the first
$200 million of aggregate net assets, 0.72% of the next $200 million, 0.69% of
the next $200 million, 0.66% of the next $200 million and 0.60% of net assets in
excess of $800 million.
For the year ended June 30, 1997, commissions (sales charges paid
by investors) on sales of Class A shares totaled $412,453, of which $96,752 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 $231,888 and $33,341, of which $5,367 was paid to an
affiliated broker/dealer for Class B shares. During the year ended June 30,
1997, OFDI received contingent deferred sales charges of $34,108 and $3,974,
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 shareholder 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 year ended June
30, 1997, OFDI paid $7,782 to an affiliated broker/dealer as reimbursement for
Class A personal service and maintenance expenses.
26 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
The Fund has adopted 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 year ended June 30, 1997, OFDI retained $68,461 and $21,390,
respectively, as compensation for Class B and Class C sales commissions and
service fee advances, as well as financing costs. If either Plan is terminated
by the Fund, the Board of Trustees may allow the Fund to continue payments of
the asset-based sales charge to OFDI for distributing shares before the Plan
was terminated. At June 30, 1997, OFDI had incurred unreimbursed expenses of
$339,068 for Class B and $64,753 for Class C.
================================================================================
5. Illiquid and Restricted Securities
At June 30, 1997, 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
periodically) 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 June 30, 1997 was $349,510, which represents 0.25%
of the Fund's net assets, of which $149,512 is considered restricted.
Information concerning restricted securities is as follows:
<TABLE>
<CAPTION>
Valuation Per Unit
Security Acquisition Date Cost Per Unit As of June 30, 1997
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Minefinders Corp. Ltd. Wts. 3/11/97 $3.66 $1.99
====================================================================================
</TABLE>
6. Subsequent Event
Effective July 18, 1997, the Fund's portfolio managers are Frank Jennings and
Shanquan Li. Messrs. Jennings and Li are the persons principally responsible
for the day-to-day management of the Fund's portfolio.
27 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
Independent Auditors' Report
- --------------------------------------------------------------------------------
================================================================================
The Board of Trustees and Shareholders of
Oppenheimer Gold & Special Minerals Fund:
We have audited the accompanying statements of investments and assets and
liabilities of Oppenheimer Gold & Special Minerals Fund as of June 30, 1997, and
the related statement of operations for the year then ended, the statements of
changes in net assets for each of the years in the two-year period then ended
and the financial highlights for each of the years in the five-year period then
ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of June 30, 1997, by correspondence with the
custodian and brokers; and where confirmations were not received from brokers,
we performed other auditing procedures. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Oppenheimer Gold & Special Minerals Fund as of June 30, 1997, the
results of its operations for the year then ended, the changes in its net assets
for each of the years in the two-year period then ended, and the financial
highlights for each of the years in the five-year period then ended, in
conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Denver, Colorado
July 22, 1997
28 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
Federal Income Tax Information (Unaudited)
- --------------------------------------------------------------------------------
================================================================================
In early 1998, shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1997. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
Dividends paid by the Fund during the fiscal year ended June 30, 1997
which are not designated as capital gain distributions should be multiplied by
100% to arrive at the net amount eligible for the corporate dividend-received
deduction.
The Fund has elected the application of Section 853 of the Internal
Revenue Code to permit shareholders to take a federal income tax credit or
deduction, at their option, on a per share basis for an aggregate amount of
$125,905 of foreign income taxes paid by the Fund during the fiscal year ended
June 30, 1997. A separate notice will be mailed to each shareholder in January
of 1998, which will reflect the proportionate share of such foreign taxes (as
well as the dividend expected to be paid by the Fund in December of 1997) which
must be treated by shareholders as gross income for federal income tax purposes.
The foregoing information is presented to assist shareholders in
reporting distributions received from the Fund to the Internal Revenue Service.
Because of the complexity of the federal regulations which may affect your
individual tax return and the many variations in state and local tax
regulations, we recommend that you consult your tax adviser for specific
guidance.
29 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
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 OppenheimerFunds Services
Servicing Agent
================================================================================
Custodian of The Bank of New York
Portfolio Securities
================================================================================
Independent Auditors KPMG Peat Marwick LLP
================================================================================
Legal Counsel Gordon Altman Butowsky Weitzen Shalov & Wein
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.
30 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
OppenheimerFunds Family
- --------------------------------------------------------------------------------
<TABLE>
=======================================================================================
<S> <C> <C>
Real Asset Funds
- ---------------------------------------------------------------------------------------
Real Asset Fund Gold & Special Minerals Fund
=======================================================================================
Stock Funds
- ---------------------------------------------------------------------------------------
Developing Markets Fund Quest Small Cap Value Fund Global Fund
Enterprise Fund Capital Appreciation Fund(1) Quest Global Value Fund
International Growth Fund Quest Capital Value Fund Disciplined Value Fund
Discovery Fund Growth Fund Quest Value Fund
=======================================================================================
Stock & Bond Funds
- ---------------------------------------------------------------------------------------
Main Street Income & Quest Growth & Income Disciplined Allocation Fund
Growth Fund Value Fund Multiple Strategies Fund(2)
Quest Opportunity Value Fund Global Growth & Income Fund Bond Fund for Growth
Total Return Fund Equity Income Fund
=======================================================================================
Bond Funds
- ---------------------------------------------------------------------------------------
International Bond Fund Champion Income Fund U.S. Government Trust
High Yield Fund Strategic Income Fund Limited-Term Government Fund
Bond Fund
=======================================================================================
Municipal Funds
- ---------------------------------------------------------------------------------------
California Municipal Fund(3) Pennsylvania Municipal Fund(3) Rochester Division:
Florida Municipal Fund(3) Municipal Bond Fund Rochester Fund Municipals
New Jersey Municipal Fund(3) Insured Municipal Fund Limited Term New York
New York Municipal Fund(3) Intermediate Municipal Fund Municipal Fund
=======================================================================================
Money Market Funds(4)
- ---------------------------------------------------------------------------------------
Money Market Fund Cash Reserves
=======================================================================================
LifeSpan
- ---------------------------------------------------------------------------------------
Growth Fund Balanced Fund Income Fund
</TABLE>
1. On 12/18/96, the Fund's name was changed from "Target Fund."
2. On 3/16/97, the Fund's name was changed from "Asset Allocation Fund."
3. Available only to investors in certain states.
4. 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.
31 Oppenheimer Gold & Special Minerals Fund
<PAGE>
Internet
24-hr access to account information
www.oppenheimerfunds.com
General Information
Mon-Fri 8:30am-9pm ET
Sat 10am-4pm ET
1-800-525-7048
Account Transactions
Mon-Fri 8:30am-9pm ET
Sat 10am-4pm ET
1-800-852-8457
PhoneLink
24-hr automated information
and automated transactions
1-800-533-3310
Telecommunication Device
for the Deaf (TDD)
Mon-Fri 8:30am-2pm 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
Information and services
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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 OppenheimerFunds 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, or visit us at our website at
www.oppenheimerfunds.com--we're here to help.
[Oppenheimer logo] OppenheimerFunds(SM)
Distributor, Inc.
RA0410.001.0697 August 30, 1997
