---------------------------
Annual Report June 30, 1998
---------------------------
OPPENHEIMER
Gold & Special
Minerals Fund
[GRAPHIC OMITTED]
[LOGO]
OppenheimerFunds(R)
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
14 Statement of
Assets and
Liabilities
16 Statement of Operations
17 Statements of Changes in
Net Assets
18 Financial Highlights
20 Notes to Financial Statements
27 Independent
Auditors' Report
28 Federal Income
Tax Information
29 Officers and
Trustees
32 Information and Services
Report highlights
- --------------------------------------------------------------------------------
o We maintained a conservative investment approach in the face of weakness in
the gold industry, focusing on companies we believed were strong enough to
endure an extended period of market weakness.
o Guided by our proprietary stock selection model, we were able to identify good
companies with increasingly strong earnings.
o For investors seeking protection against a loss of value in other investments,
we believe the Fund continues to provide an attractive opportunity for
diversification.
- -------------------------------
Avg Annual Total Returns
- -------------------------------
For the 1-Year Period
Ended 6/30/98
Class A
Without With
Sales Chg.(1) Sales Chg.(2)
- -------------------------------
(30.23)% (34.24)%
- -------------------------------
Class B
Without With
Sales Chg.(1) Sales Chg.(2)
- -------------------------------
(30.73)% (34.20)%
- -------------------------------
Class C
Without With
Sales Chg.(1) Sales Chg.(2)
- -------------------------------
(30.74)% (31.43)%
- -------------------------------
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. 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. Class A returns include the current maximum initial sales charge of 5.75%.
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 for the one-year
result include the contingent deferred sales charge of 1%. 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.
2 Oppenheimer Gold & Special Minerals Fund
<PAGE>
Dear shareholder,
- --------------------------------------------------------------------------------
[PHOTO OMITTED]
Bridget A. Macaskill
President
Oppenheimer
Gold & Special
Minerals Fund
As we move further into 1998, we remain impressed by the strength of the U.S.
economy, despite the volatility in the world's financial markets. While we've
seen a decline in stock prices this summer, taking a wider perspective of the
markets reveals that, over the long term, U.S. and many world markets have
continued to serve investors well.
At OppenheimerFunds, we are pleased to help our shareholders seek the
rewards of rising markets, but we also recognize that increasing levels of
return cannot last forever. In fact, we've already begun to see signs of change.
Because no one can predict exactly how the markets will react tomorrow or the
next day, we feel it is prudent to continually identify, evaluate and manage the
risks that may affect our fund shareholders.
One of the leading risks facing investors today is rooted in the fact that
stock valuations remain at the high end of their historical range, while U.S.
corporate earnings growth is slowing. Given these circumstances, we believe,
regardless of daily fluctuations in the markets, it is unlikely that stocks will
sustain the unprecedented growth rate of the past three years. However, we also
believe that any market corrections we may see would be only temporary pauses on
the way to potential long-term gains.
We are also examining the potential economic effects of the "millennium
problem" that will render many computer systems unable to recognize the year
2000 when it arrives. Solving this problem may require some companies to divert
substantial human and financial resources from their core businesses, possibly
constraining global economic growth during 1999 and 2000.
For our part, we can report that OppenheimerFunds has made solid progress
toward ensuring that our shareholder accounting systems are fully "year 2000
compliant," and that all shareholder accounts will make a seamless transition
into the 21st century.
We encourage you to meet with your financial advisor to discuss how
today's uncertain markets or the millennium problem may affect your investments.
Together, you can prepare your investment portfolio for the challenges and
opportunities of the new century.
Sincerely,
/s/ Bridget A. Macaskill
Bridget A. Macaskill
July 22, 1998
3 Oppenheimer Gold & Special Minerals Fund
<PAGE>
Performance update
- --------------------------------------------------------------------------------
- --------------------------------
Avg Annual Total Returns
- --------------------------------
For the Periods Ended 6/30/98(1)
Class A
Since
1 year 5 year Inception
- --------------------------------
(34.24)% (7.22)% 2.28%
- --------------------------------
Class B
Since
1 year 5 year Inception
- --------------------------------
(34.20)% N/A (13.32)%
- --------------------------------
Class C
Since
1 year 5 year Inception
- --------------------------------
(31.43)% N/A (12.25)%
- --------------------------------
- --------------------------------
Cumulative Total Return
- --------------------------------
For the Period Ended 6/30/98(1)
Class A
5 year
- --------------------------------
(31.23)% $6,8774
- --------------------------------
Volatility and weakness in the overall gold market had a negative impact on the
Fund's portfolio. Nevertheless, the Fund's return compared favorably with those
of its competitors. Oppenheimer Gold & Special Minerals Fund's Class A shares
provided an average annual total return, without sales charges, of (30.23)% for
the one-year period ended June 30, 1998.(2) By comparison, the average total
return of gold-oriented funds for the same period was (35.02)% as measured by
Lipper Analytical Services.(3)
Growth of $10,000
Over five years(4)
(without sales charges)
[MOUNTAIN GRAPH OMITTED]
[The following table was originally a mountain graph in the printed materials.]
Oppenheimer Lipper
Gold & Special Gold
Minerals Fund Fund
Class A Shares Index
6/93 10000 10000
9/93 9066.55 8978
12/93 11624.1 11392.2
3/94 11477.3 10437.5
6/94 10825.2 10207.9
9/94 12341.4 12344.4
12/94 10930.3 10712.5
3/95 10545.2 10098.6
6/95 11045 10204.7
9/95 11340 10808.8
12/95 10765.5 10294.3
3/96 12255.2 12568.3
6/96 11646.2 11712.4
9/96 11539.2 11479.3
12/96 11422.8 10782.5
3/97 11026.9 9858.48
6/97 10457.8 8686.3
9/97 10639.2 8780.99
12/97 7776.47 6046.59
3/98 8612.93 6561.76
6/98 7296.15 5351.77
1. 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 for the one-year result include the contingent
deferred sales charge of 1%. Class C shares have an inception date of 11/1/95.
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.
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 or other mineral-related
companies.
Sector Allocation(5)
[PIE CHART OMITTED]
Gold & Platinum 82.5%
Metals 13.1
Chemicals 4.4
What We Look For
o Companies increasing their growth in gold or metal production.
o Companies gaining growth in earnings and dividends.
o Companies with a long-term gold supply.
o Companies with low production costs.
o Special opportunities in companies producing aluminum, copper, nickel and
steel.
o Diversification in a number of holdings to help lower the volatility
associated with single market sectors and foreign currencies.
Top 10 Stock Holdings(5)
- --------------------------------------------------------------------------------
Newmont Mining Corp. 8.3% Franco-Nevada Mining Corp. Ltd. 4.5%
- --------------------------------------------------------------------------------
Placer Dome Inc. 7.0 Normandy Mining Ltd. 3.8
- --------------------------------------------------------------------------------
Euro-Nevada Mining Corp. 6.8 Homestake Mining Co. 3.3
- --------------------------------------------------------------------------------
Stillwater Mining Co. 6.8 Cia Vale do Rio Doce, Preference 2.9
- --------------------------------------------------------------------------------
Barrick Gold Corp. 6.3 Anglogold Ltd. 2.8
- --------------------------------------------------------------------------------
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.
3. Source: Lipper Analytical Services, Inc., 6/30/98. 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 7 of 39 (1-year), 4 of 25
(5-year) and 4 of 19 (10-year) among gold-oriented funds for the period ended
6/30/98.
4. Results of a hypothetical $10,000 investment in Class A shares on June 30,
1993. 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.
5. Portfolio is subject to change. Percentages are as of June 30, 1998, and are
based on total market value of common stock holdings.
5 Oppenheimer Gold & Special Minerals Fund
<PAGE>
An interview with your Fund's managers
- --------------------------------------------------------------------------------
"We have developed a proprietary stock selection model that we believe offers us
a unique advantage..."
How did the Fund perform during the past year?
The Fund's performance should be viewed in light of volatility and weakness in
the overall gold market. Despite occasional rallies, gold indices were down
across the board during the last 12 months, marking a period of exceptional
difficulty for gold investors. For the one-year period ended June 30, 1998,
Oppenheimer Gold & Special Minerals Fund's Class A shares provided an average
annual total return, without sales charges, of (30.23)%.(1) The Fund's return
compares favorably with its competitors, as indicated by the Lipper Gold Fund
Index, which produced an average annual total return of (35.02)% for the same
one-year period.(2)
What factors had the greatest impact on the gold market during the period?
The gold market suffered as a result of both market-specific events and
macro-economic factors.
However, the single most significant factor in the gold market's weakness
was market specific: namely, the fear of a massive sale of gold holdings by
central banks. The rising threat that several countries around the world would
sell sizable gold reserves led to the shorting by speculators in the futures
market. Consequently, these commodities futures sales caused the global supply
of gold to outstrip demand, putting strong downward pressure on gold prices.
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., 6/30/98. 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 7 of 39 (1-year), 4 of 25
(5-year) and 4 of 19 (10-year) among gold-oriented funds for the period ended
6/30/98.
6 Oppenheimer Gold & Special Minerals Fund
<PAGE>
[PHOTO OMITTED]
Portfolio Management
Team (l to r)
Frank Jennings
Shanquan Li
On the broad economic front, continuing low inflation made investments other
than gold, such as corporate bonds and U.S. Treasury securities, appear more
attractive to some investors. At the same time, the strong U.S. dollar raised
the price of gold imports, creating additionally challenging conditions for U.S.
producers.
How did you manage the Fund in light of these challenging market conditions?
We maintained a conservative approach to Fund management, focusing on companies
we believed were strong enough to endure an extended period of market weakness.
For example, Newmont Mining, which remained one of our largest holdings
throughout the period, is a dominant, low-cost gold producer with substantial
assets in Nevada. Companies like this are likely to benefit from current
conditions because they have the resources to accumulate other mining properties
at bargain prices. By concentrating our investments in the stocks of
well-capitalized, low-cost producers that own proven reserves and multiple
mining properties, we positioned the Fund to survive this difficult environment
and, most importantly, to benefit from future market upturns.
7 Oppenheimer Gold & Special Minerals Fund
<PAGE>
An interview with your Fund's managers
- --------------------------------------------------------------------------------
What factors led to the Fund's positive results relative
to its peers?
We have developed a proprietary stock selection model we believe offers us an
advantage in selecting companies that, relative to the market, are favorably
positioned to perform well. The model incorporates not only information on a
company's fundamentals, but also forward-looking analyses of changes to a
company's prospects. In other words, if credible analysts predict rising
earnings, we then factor in the degree of those improved projections, as well as
the time frame in which they are likely to occur.
Our model has helped us identify good companies with increasingly strong
earnings, such as Stillwater Mining, a key producer of platinum and palladium in
North America. This company has received very positive ratings among fundamental
analysts. Furthermore, industry demand for platinum and palladium is high, and
unlike gold, these metallic elements are not held in central bank reserves.
What is your outlook for the future?
As long as the fear of central bank selling of gold reserves continues to
outstrip demand, gold is unlikely to stage a significant, lasting recovery.
However, we believe that the long-term outlook for gold remains positive. That's
because worldwide demand has, for many years, outpaced mining production. In
addition, we believe that the restructuring and consolidation currently underway
within the gold industry will ultimately lead to stronger, more competitive
companies. Our strategy has been to identify these firms and to concentrate the
Fund's investments in such companies.
8 Oppenheimer Gold & Special Minerals Fund
<PAGE>
"Gold continues to offer attractive opportunities for diversification."
Of course, there is no way to predict when or if the gold market will improve.
But historically, gold prices and gold stocks have risen sharply when the prices
of other assets have dropped. As in the past, ownership of gold is seen as
insurance against loss of value in investments, such as stocks and bonds. After
the relatively steep decline in gold stocks last year, the cost of that
insurance has become relatively inexpensive. As a result, gold continues to
offer attractive opportunities for diversification, which is why the Fund's
disciplined strategy and conservative approach continue to make Oppenheimer Gold
& Special Minerals Fund part of The Right Way to Invest.
9 Oppenheimer Gold & Special Minerals Fund
<PAGE>
Financials
- --------------------------------------------------------------------------------
10 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments June 30, 1998
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
================================================================================
Common Stocks--94.4%
- --------------------------------------------------------------------------------
Basic Materials--94.4%
- --------------------------------------------------------------------------------
Chemicals--4.2%
AMCOL International Corp. 60,000 $ 723,750
- --------------------------------------------------------------------------------
Carbide/Graphite Group, Inc. (The)(1) 10,000 278,125
- --------------------------------------------------------------------------------
IMC Global, Inc. 15,000 451,875
- --------------------------------------------------------------------------------
Johnson Matthey plc 202,500 1,820,035
- --------------------------------------------------------------------------------
Quimica Minera Chile SA, Sponsored ADR 20,000 670,000
-----------
3,943,785
- --------------------------------------------------------------------------------
Gold & Platinum--77.8%
- --------------------------------------------------------------------------------
Diamond Mining & Marketing--0.7%
SouthernEra Resources Ltd.(1) 150,000 647,720
- --------------------------------------------------------------------------------
Gold--0.6%
Greenstone Resources Ltd.(1) 150,000 566,118
- --------------------------------------------------------------------------------
Gold Mining: Australia--9.6%
Acacia Resources Ltd. 1,130,000 1,203,570
- --------------------------------------------------------------------------------
Aurora Gold Ltd.(1) 150,000 112,393
- --------------------------------------------------------------------------------
Centaur Mining & Exploration Ltd.(1) 2,094,000 726,154
- --------------------------------------------------------------------------------
Delta Gold NL 1,000,000 1,226,110
- --------------------------------------------------------------------------------
Goldfields Ltd. 200,000 222,929
- --------------------------------------------------------------------------------
Great Central Mines NL 400,000 381,457
- --------------------------------------------------------------------------------
Lihir Gold Ltd.(1) 1,000,000 1,232,303
- --------------------------------------------------------------------------------
Lihir Gold Ltd., Sponsored ADR(1) 50,000 1,218,750
- --------------------------------------------------------------------------------
Newcrest Mining Ltd.(1) 700,000 858,277
- --------------------------------------------------------------------------------
Ranger Minerals NL(1) 100,000 222,310
- --------------------------------------------------------------------------------
Resolute Ltd.(1) 942,000 571,665
- --------------------------------------------------------------------------------
Sons of Gwalia Ltd. 453,019 1,122,124
-----------
9,098,042
- --------------------------------------------------------------------------------
Gold Mining: Canada--21.6%
Barrick Gold Corp. 292,000 5,602,750
- --------------------------------------------------------------------------------
Bema Gold Corp.(1) 500,000 809,225
- --------------------------------------------------------------------------------
Cambior, Inc. 285,000 1,676,423
- --------------------------------------------------------------------------------
Goldcorp, Inc., Cl. A(1) 225,000 1,055,733
- --------------------------------------------------------------------------------
Kinross Gold(1) 560,000 1,885,020
- --------------------------------------------------------------------------------
Placer Dome, Inc. 530,000 6,214,120
- --------------------------------------------------------------------------------
Prime Resource Group, Inc. 175,800 1,231,342
- --------------------------------------------------------------------------------
Rio Narcea Gold Mines Ltd.(1) 100,000 221,687
- --------------------------------------------------------------------------------
TVX Gold, Inc.(1) 400,000 1,225,000
- --------------------------------------------------------------------------------
Viceroy Resources Corp.(1) 300,000 469,215
-----------
20,390,515
11 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Continued)
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
Gold Mining: South Africa--8.1%
Anglogold Ltd. 61,500 $ 2,495,492
- --------------------------------------------------------------------------------
Anglogold Ltd., Sponsored ADR 48,000 973,848
- --------------------------------------------------------------------------------
Ashanti Goldfields Co. Ltd., Sponsored GDR 156,120 1,268,475
- --------------------------------------------------------------------------------
Gold Fields of South Africa Ltd. 100,000 1,154,495
- --------------------------------------------------------------------------------
Harmony Gold Mining Co.(1) 100,000 415,958
- --------------------------------------------------------------------------------
IAMGOLD, International African Mining Gold Corp.(1) 200,000 510,016
- --------------------------------------------------------------------------------
Western Areas Gold Mining Co. Ltd. 245,000 790,320
-----------
7,608,604
- --------------------------------------------------------------------------------
Gold Mining: United States--14.4%
Battle Mountain Gold Co. 150,000 890,625
- --------------------------------------------------------------------------------
Getchell Gold Corp.(1) 157,000 2,413,875
- --------------------------------------------------------------------------------
Homestake Mining Co. 280,000 2,905,000
- --------------------------------------------------------------------------------
Newmont Mining Corp. 310,871 7,344,327
-----------
13,553,827
- --------------------------------------------------------------------------------
Gold Related Investment--14.3%
Euro-Nevada Mining Corp. 442,000 6,026,417
- --------------------------------------------------------------------------------
Franco-Nevada Mining Corp. Ltd. 203,000 4,023,993
- --------------------------------------------------------------------------------
Normandy Mining Ltd. 4,186,946 3,422,438
-----------
13,472,848
- --------------------------------------------------------------------------------
Platinum Mining--8.5%
Anglo American Platinum Corp. Ltd. 73,600 805,973
- --------------------------------------------------------------------------------
Anglo American Platinum Corp. Ltd., ADR 113,718 1,245,292
- --------------------------------------------------------------------------------
Stillwater Mining Co.(1) 222,000 6,021,750
-----------
8,073,015
-----------
73,410,689
- --------------------------------------------------------------------------------
Metals--12.4%
- --------------------------------------------------------------------------------
Aluminum--0.5%
Kaiser Aluminum Corp.(1) 50,000 478,125
- --------------------------------------------------------------------------------
Copper--0.2%
Freeport-McMoRan Copper & Gold, Inc., Cl. A 10,000 142,500
- --------------------------------------------------------------------------------
Metals: Diversified--5.9%
Aluminum Co. of America 23,000 1,516,562
- --------------------------------------------------------------------------------
Brush Wellman, Inc. 15,000 308,437
- --------------------------------------------------------------------------------
Cia de Minas Buenaventura SA, Sponsored ADR, Series B 35,600 467,250
- --------------------------------------------------------------------------------
Cia Vale do Rio Doce, Preference 130,000 2,540,189
- --------------------------------------------------------------------------------
Dia Met Minerals Ltd., Cl. B(1) 50,000 765,024
-----------
5,597,462
12 Oppenheimer Gold & Special Minerals Fund
<PAGE>
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
Metals: Miscellaneous--5.8%
Caemi Mineracao e Metalurgia SA 100,000 $ 5,793
- --------------------------------------------------------------------------------
Cameco Corp. 20,000 557,618
- --------------------------------------------------------------------------------
Impala Platinum Holdings Ltd. 180,000 1,543,288
- --------------------------------------------------------------------------------
Korea Zinc Co. 100,000 779,315
- --------------------------------------------------------------------------------
Lepanto Consolidated Mining Co., Cl. B 10,000,000 107,913
- --------------------------------------------------------------------------------
Major Drilling Group International, Inc.(1) 20,000 112,204
- --------------------------------------------------------------------------------
PT International Nickel Indonesia 80,000 42,162
- --------------------------------------------------------------------------------
RMI Titanium Co.(1) 70,000 1,592,500
- --------------------------------------------------------------------------------
Union Miniere SA 8,000 494,491
- --------------------------------------------------------------------------------
Westralian Sands Ltd. 100,000 207,448
-----------
11,660,819
-----------
Total Common Stocks (Cost $97,706,329) 89,015,293
================================================================================
Preferred Stocks--1.7%
- --------------------------------------------------------------------------------
Ashanti GSM Ltd. Redeemable Preferred, A Shares(2) 88,888 137,777
- --------------------------------------------------------------------------------
Battle Mountain Gold Co., $3.25 Cum. Cv. 34,500 1,580,531
-----------
Total Preferred Stocks (Cost $1,900,877) 1,718,308
Units
================================================================================
Rights, Warrants and Certificates--0.0%
- --------------------------------------------------------------------------------
Resolute Ltd. Rts., Exp. 7/98 (Cost $0) 137,571 1,533
Face
Amount(3)
================================================================================
Convertible Corporate Bonds and Notes--1.6%
- --------------------------------------------------------------------------------
Lonrho Finance plc, 6% Cv. Gtd. Bonds, 2/27/04(GBP)
(Cost $1,521,959) $ 1,000,000 1,536,185
================================================================================
Repurchase Agreements--1.4%
- --------------------------------------------------------------------------------
Repurchase agreement with Salomon Smith Barney
Holdings, Inc., 5.90%, dated 6/30/98, to be
repurchased at $1,300,213 on 7/1/98,
collateralized by U.S. Treasury Bonds,
8.75%-11.25%, 2/15/15-2/15/19, with a value
of $1,334,565 (Cost $1,300,000) 1,300,000 1,300,000
- --------------------------------------------------------------------------------
Total Investments, at Value (Cost $102,429,165) 99.1% 93,571,319
- --------------------------------------------------------------------------------
Other Assets Net of Liabilities 0.9 838,840
----------- -----------
Net Assets 100.0% $94,410,159
=========== ===========
1. Non-income producing security.
2. Identifies issues considered to be illiquid or restricted--See Note 5 of
Notes to Financial Statements.
3. Face amount is reported in U.S. Dollars, except for those denoted in the
following currency: GBP--British Pound Sterling
See accompanying Notes to Financial Statements.
13 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
=============================================================================================
Assets
Investments, at value (cost $102,429,165)--see accompanying statement $ 93,571,319
- ---------------------------------------------------------------------------------------------
Cash 103,393
- ---------------------------------------------------------------------------------------------
Receivables:
Shares of beneficial interest sold 1,123,696
Interest and dividends 83,500
- ---------------------------------------------------------------------------------------------
Other 8,593
-------------
Total assets 94,890,501
=============================================================================================
Liabilities
Payables and other liabilities:
Shares of beneficial interest redeemed 143,836
Trustees' fees--Note 1 103,759
Shareholder reports 75,185
Investments purchased 69,231
Distribution and service plan fees 55,897
Transfer and shareholder servicing agent fees 6,916
Custodian fees 3,935
Other 21,583
-------------
Total liabilities 480,342
=============================================================================================
Net Assets $ 94,410,159
=============
=============================================================================================
Composition of Net Assets
Paid-in capital $ 128,195,864
- ---------------------------------------------------------------------------------------------
Overdistributed net investment income (97,629)
- ---------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (24,830,325)
- ---------------------------------------------------------------------------------------------
Net unrealized depreciation on investments and translation of assets and
liabilities denominated in foreign currencies (8,857,751)
-------------
Net assets $ 94,410,159
=============
</TABLE>
14 Oppenheimer Gold & Special Minerals Fund
<PAGE>
================================================================================
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$78,458,152 and 8,905,765 shares of beneficial interest outstanding) $8.81
Maximum offering price per share (net asset value plus sales charge of
5.75% of offering price) $9.35
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net assets
of $10,680,957 and 1,227,753 shares of beneficial interest outstanding) $8.70
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net assets
of $5,271,050 and 604,682 shares of beneficial interest outstanding) $8.72
See accompanying Notes to Financial Statements.
15 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations For the Year Ended June 30, 1998
- --------------------------------------------------------------------------------
================================================================================
Investment Income
Dividends (net of foreign withholding taxes of $87,663) $ 1,544,078
- --------------------------------------------------------------------------------
Interest 508,826
------------
Total income 2,052,904
================================================================================
Expenses
Management fees--Note 4 877,463
- --------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 212,635
Class B 101,446
Class C 42,138
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 350,260
- --------------------------------------------------------------------------------
Shareholder reports 75,477
- --------------------------------------------------------------------------------
Custodian fees and expenses 46,311
- --------------------------------------------------------------------------------
Trustees' fees and expenses--Note 1 46,202
- --------------------------------------------------------------------------------
Legal, auditing and other professional fees 24,229
- --------------------------------------------------------------------------------
Insurance expenses 7,386
- --------------------------------------------------------------------------------
Other 2,586
------------
Total expenses 1,786,133
================================================================================
Net Investment Income 266,771
================================================================================
Realized and Unrealized Loss
Net realized loss on:
Investments (12,350,200)
Foreign currency transactions (3,183,046)
------------
Net realized loss (15,533,246)
- --------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments (24,543,053)
Translation of assets and liabilities denominated in
foreign currencies (2,547,543)
------------
Net change (27,090,596)
------------
Net realized and unrealized loss (42,623,842)
================================================================================
Net Decrease in Net Assets Resulting from Operations $(42,357,071)
============
See accompanying Notes to Financial Statements.
16 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended June 30,
1998 1997
=============================================================================================
<S> <C> <C>
Operations
Net investment income $ 266,771 $ 377,451
- ---------------------------------------------------------------------------------------------
Net realized gain (loss) (15,533,246) 1,028,198
- ---------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation (27,090,596) (18,420,129)
------------- -------------
Net decrease in net assets resulting from operations (42,357,071) (17,014,480)
=============================================================================================
Dividends and Distributions to Shareholders
Dividends from net investment income:
Class A (360,008) (302,998)
=============================================================================================
Beneficial Interest Transactions
Net increase (decrease) in net assets
resulting from beneficial interest
transactions--Note 2:
Class A (10,099,835) (19,702,023)
Class B 5,712,711 4,828,099
Class C 2,776,982 2,887,566
=============================================================================================
Net Assets
Total decrease (44,327,221) (29,303,836)
- ---------------------------------------------------------------------------------------------
Beginning of period 138,737,380 168,041,216
------------- -------------
End of period [including undistributed (overdistributed)
net investment income of $(97,629) and $263,701, respectively] $ 94,410,159 $ 138,737,380
============= =============
</TABLE>
See accompanying Notes to Financial Statements.
17 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A
-------------------------------------------------------------
Year Ended June 30,
1998 1997 1996 1995 1994
===========================================================================================================
<S> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning
of period $12.68 $14.15 $13.48 $13.28 $12.32
- -----------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .04 .04 .04 .06 .06
Net realized and unrealized
gain (loss) (3.87) (1.48) .69 .21 .96
--------- --------- --------- --------- ---------
Total income (loss) from
investment operations (3.83) (1.44) .73 .27 1.02
- -----------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment
income (.04) (.03) (.06) (.07) (.06)
--------- --------- --------- --------- ---------
Total dividends and distributions
to shareholders (.04) (.03) (.06) (.07) (.06)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.81 $12.68 $14.15 $13.48 $13.28
========= ========= ========= ========= =========
===========================================================================================================
Total Return, at Net Asset Value(2) (30.23)% (10.20)% 5.44% 2.03% 8.25%
===========================================================================================================
Ratios/Supplemental Data
Net assets, end of period
(in thousands) $78,458 $126,086 $161,769 $171,721 $179,015
- -----------------------------------------------------------------------------------------------------------
Average net assets
(in thousands) $102,501 $149,564 $171,427 $178,579 $175,093
- -----------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) 0.32% 0.28% 0.25% 0.45% 0.50%
Expenses 1.43% 1.34% 1.38% 1.36% 1.31%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 64.9% 20.5% 37.6% 35.8% 29.5%
</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.
18 Oppenheimer Gold & Special Minerals Fund
<PAGE>
<TABLE>
<CAPTION>
Class B Class C
--------------------------------- -----------------------------------
Year Ended June 30, Year Ended June 30,
1998 1997 1996(1) 1998 1997 1996(1)
=========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning
of period $12.56 $14.11 $12.33 $12.59 $14.13 $12.33
- -------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.01) (.04) (.01) (.01) (.02) (.01)
Net realized and unrealized
gain (loss) (3.85) (1.51) 1.79 (3.86) (1.52) 1.81
------- --------- --------- --------- --------- ---------
Total income (loss) from
investment operations (3.86) (1.55) 1.78 (3.87) (1.54) 1.80
- -------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment
income -- -- -- -- -- --
------- --------- --------- --------- --------- ---------
Total dividends and distributions
to shareholders -- -- -- -- -- --
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.70 $12.56 $14.11 $8.72 $12.59 $14.13
======= ========= ========= ========= ========= =========
=========================================================================================================================
Total Return, at Net Asset Value(2) (30.73)% (10.99)% 14.25% (30.74)% (10.90)% 14.41%
=========================================================================================================================
Ratios/Supplemental Data
Net assets, end of period
(in thousands) $10,681 $8,716 $4,882 $5,271 $3,935 $1,390
- -------------------------------------------------------------------------------------------------------------------------
Average net assets
(in thousands) $10,150 $7,361 $2,588 $4,215 $2,672 $840
- -------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) (0.41)% (0.48)% (0.25)%(3) (0.41)% (0.45)% (0.26)%(3)
Expenses 2.21% 2.16% 2.22%(3) 2.20% 2.18% 2.19%(3)
- -------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 64.9% 20.5% 37.6% 64.9% 20.5% 37.6%
</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, 1998 were $73,641,552 and $72,306,033, respectively.
See accompanying Notes to Financial Statements.
19 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 engaged
in mining, processing, fabricating or distributing gold or other metals or
minerals in the United States and in foreign countries. The Fund's investment
advisor 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. Forward foreign currency exchange contracts are valued
based on the closing prices of the forward currency contract rates in the London
foreign exchange markets on a daily basis as provided by a reliable bank or
dealer.
20 Oppenheimer Gold & Special Minerals Fund
<PAGE>
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.
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, Gains and Losses. Income, expenses (other than
those attributable to a specific class), 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. As of June 30, 1998, the
Fund had available for federal income tax purposes an unused capital loss
carryover of approximately $16,300,000 which expires between 2000 and 2006.
21 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. Significant Accounting Policies (continued)
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, 1998, a provision of $20,921 was made for the Fund's projected benefit
obligations and payments of $4,526 were made to retired trustees, resulting in
an accumulated liability of $97,629 at June 30, 1998.
The Board of Trustees has adopted a Deferred Compensation plan for
independent Trustees that enables Trustees to elect to defer receipt of all or a
portion of annual fees they are entitled to receive from the Fund. Under the
plan, the compensation deferred is periodically adjusted as though an equivalent
amount had been invested for the Trustee in shares of one or more Oppenheimer
funds selected by the Trustee. The amount paid to the Trustee under the plan
will be determined based upon the performance of the selected funds. Deferral of
Trustees' fees under the plan will not affect the net assets of the Fund, and
will not materially affect the Fund's assets, liabilities or net income per
share.
- --------------------------------------------------------------------------------
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 disallowed losses and 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, 1998, 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, 1998, amounts have been reclassified to reflect a decrease in undistributed
net investment income of $268,093, a decrease in accumulated net realized loss
of $894,773, and a decrease in paid-in capital of $626,680.
22 Oppenheimer Gold & Special Minerals Fund
<PAGE>
================================================================================
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>
Year Ended June 30, 1998 Year Ended June 30, 1997
----------------------------- -----------------------------
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 12,853,959 $ 135,829,366 9,092,060 $ 125,381,941
Dividends reinvested 36,061 325,275 19,635 265,853
Redeemed (13,929,468) (146,254,476) (10,597,946) (145,349,817)
------------- ------------- ------------- -------------
Net decrease (1,039,448) $ (10,099,835) (1,486,251) $ (19,702,023)
============= ============= ============= =============
- -----------------------------------------------------------------------------------
Class B:
Sold 1,457,504 $ 15,191,579 650,210 $ 8,951,921
Redeemed (923,519) (9,478,868) (302,540) (4,123,822)
------------- ------------- ------------- -------------
Net increase 533,985 $ 5,712,711 347,670 $ 4,828,099
============= ============= ============= =============
- -----------------------------------------------------------------------------------
Class C:
Sold 2,406,210 $ 24,524,520 1,715,098 $ 23,557,280
Redeemed (2,114,188) (21,747,538) (1,500,859) (20,669,714)
------------- ------------- ------------- -------------
Net increase 292,022 $ 2,776,982 214,239 $ 2,887,566
============= ============= ============= =============
</TABLE>
23 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
3. Unrealized Gains and Losses on Investments
At June 30, 1998, net unrealized depreciation on investments of $8,857,846 was
composed of gross appreciation of $12,361,408, and gross depreciation of
$21,219,254.
- --------------------------------------------------------------------------------
4. Management Fees and Other Transactions
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 average annual 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, 1998, commissions (sales charges paid by
investors) on sales of Class A shares totaled $326,078, of which $77,457 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 $276,714 and $27,913, respectively, of which $8,163, was
paid to an affiliated broker/dealer for Class B shares. During the year ended
June 30, 1998, OFDI received contingent deferred sales charges of $58,219 and
$5,010, 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, 1998, OFDI paid $4,903 to an
affiliated broker/dealer as reimbursement for Class A personal service and
maintenance expenses.
24 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 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 for its
services rendered in distributing Class B and Class C shares. OFDI also receives
a service fee of 0.25% per year to compensate dealers for providing personal
services for accounts that hold Class B and Class C shares. Each fee is computed
on the average annual net assets of Class B or Class C shares, determined as of
the close of each regular business day. During the year ended June 30, 1998,
OFDI retained $89,760 and $28,516, 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, 1998, OFDI had
incurred excess distribution and servicing costs of $535,917 for Class B and
$85,393 for Class C.
================================================================================
5. Illiquid and Restricted Securities
At June 30, 1998, 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 securities subject to
this limitation at June 30, 1998 was $137,777, which represents 0.15% of the
Fund's net assets.
25 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
================================================================================
6. Bank Borrowings
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.35%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of
0.0575% per annum.
The Fund had no borrowings outstanding during the period ended June
30, 1998.
================================================================================
7. Forward Contracts
A forward foreign currency exchange contract (forward contract) is a commitment
to purchase or sell a foreign currency at a future date, at a negotiated rate.
The fund uses forward contracts to seek to manage foreign currency
risks. They may also be used to tactically shift portfolio currency risk. The
Fund generally enters into forward contracts as a hedge upon the purchase or
sale of a security denominated in a foreign currency. In addition, the Fund may
enter into such contracts as a hedge against charges in foreign currency
exchange rates on portfolio positions.
Forward contracts are valued based on the closing prices of the
forward currency contract rates in the London foreign exchange markets on a
daily basis as provided by a reliable bank or dealer. The Fund will realize a
gain or loss upon the closing or settlement of the forward transaction.
Securities held in segregated accounts to cover net exposure on
outstanding forward contracts are noted in the Statement of Investments where
applicable. Unrealized appreciation or depreciation on forward contracts is
reported in the Statement of Assets of Liabilities. Realized gains and loses are
reported with all foreign currency gains and losses in the Fund's Statement of
Operations.
Risks include the potential inability of the counterparty to meet
the terms of the contract and unanticipated movements in the value of a foreign
currency relative to the U.S. dollar.
26 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, 1998, 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, 1998, 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, 1998, 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, 1998
27 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
Federal Income Tax Information (Unaudited)
- --------------------------------------------------------------------------------
================================================================================
In early 1999, shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1998. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
None of the dividends paid by the Fund during the fiscal year ended
June 30, 1998 are eligible for the corporate dividend-received deduction.
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 advisor for specific
guidance.
28 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
Frank Jennings, Vice President
Shanquan Li, 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 Advisor 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.
29 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
OppenheimerFunds Family
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
============================================================================================
Real Asset Funds
- --------------------------------------------------------------------------------------------
Real Asset Fund Gold & Special Minerals Fund
============================================================================================
Global Stock Funds
- --------------------------------------------------------------------------------------------
Developing Markets Fund International Growth Fund Quest Global Value Fund
International Small Global Fund Global Growth & Income Fund
Company Fund
============================================================================================
Stock Funds
- --------------------------------------------------------------------------------------------
Enterprise Fund MidCap Fund Growth Fund
Discovery Fund Capital Appreciation Fund Disciplined Value Fund
Quest Small Cap Value Fund Quest Capital Value Fund Quest Value Fund
============================================================================================
Stock & Bond Funds
- --------------------------------------------------------------------------------------------
Main Street Income & Total Return Fund Disciplined Allocation Fund
Growth Fund Quest Balanced Multiple Strategies Fund
Quest Opportunity Value Fund(1) Convertible Securities Fund(2)
Value Fund Equity Income Fund
============================================================================================
Taxable Bond Funds
- --------------------------------------------------------------------------------------------
International Bond Fund Champion Income Fund U.S. Government Trust
World Bond Fund Strategic Income Fund Limited-Term Government Fund
High Yield 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
</TABLE>
1. On 5/18/98, the Fund's name was changed from "Quest Growth & Income Value
Fund."
2. On 4/28/98, the Fund's name was changed from "Bond Fund for Growth."
3. Available only to investors in certain states.
4. An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
these funds may seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in these funds. Oppenheimer
funds are distributed by OppenheimerFunds Distributor, Inc., Two World Trade
Center, New York, NY 10048-0203.
(C) Copyright 1998 OppenheimerFunds, Inc. All rights reserved.
30 Oppenheimer Gold & Special Minerals Fund
<PAGE>
Information and services
- --------------------------------------------------------------------------------
Internet
24-hr access to account
information. Online
trans actions now available
- --------------------------
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-8pm 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
- --------------------------
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 or by visiting our website. 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 or website 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.
[LOGO] OppenheimerFunds(R)
Distributor, Inc.
RA0410.001.0698 August 29, 1998
