[photo of mountains]
Semiannual Report December 31, 1999
Oppenheimer
Gold & Special Minerals Fund
[logo] OppenheimerFunds(R)
The Right Way to Invest
<PAGE>
- --------------------------------------------------------------------------------
REPORT HIGHLIGHTS
- --------------------------------------------------------------------------------
In the fall, gold markets rose sharply in response to an agreement among
European central banks to limit sales of gold reserves, then later slumped as
sales of reserves continued.
We concentrated on core holdings of well-capitalized senior gold producers,
many of which benefited from the market's initial rise and avoiding being caught
in subsequent declines.
We also benefited from investments in fast-growing special minerals producers,
most notably in palladium and platinum.
Contents
1 President's Letter
3 An Interview
with Your Fund's
Managers
9 Financial
Statements
26 Officers and Trustees
27 OppenheimerFunds
Family
- ---------------------------
Cumulative
Total Returns
For the 6-Month Period
Ended 12/31/99*
Class A
Without With
Sales Chg. Sales Chg.
- ---------------------------
8.37% 2.14%
Class B
Without With
Sales Chg. Sales Chg.
- ---------------------------
7.99% 2.99%
Class C
Without With
Sales Chg. Sales Chg.
- ---------------------------
8.05% 7.05%
- ----------------------
Not FDIC Insured.
No Bank Guarantee.
May Lose Value.
- ----------------------
* See page 7 for further details.
<PAGE>
- --------------------------------------------------------------------------------
PRESIDENT'S LETTER
- --------------------------------------------------------------------------------
[photo]
Bridget A. Macaskill
President
Oppenheimer
Gold & Special
Minerals Fund
Dear shareholder,
Whenever a new year begins--let alone a new decade or century--it makes
sense to pause a moment to assess where we've been and where we're going.
In retrospect, U.S. stocks and bonds in 1999 were subject to sudden and
substantial swings in investor sentiment because of economic uncertainty. When
the year began, investors were concerned that growth in the United States might
slow in response to economic weakness overseas. At mid-year, investors were
concerned that the economy was too strong, potentially rekindling inflationary
pressures. Yet, by year end, it became clearer that while the U.S. economy grew
robustly in 1999, inflation remained at low levels. Indeed, investors appeared
more comfortable with the economy after the Federal Reserve Board demonstrated
its inflation-fighting resolve by raising interest rates three times between
June and November.
As is normal in a rising-interest-rate environment, bond prices generally
declined in 1999, led lower by U.S. Treasury bonds. In the stock market, while
most major indices advanced, strong performance was mostly limited to a handful
of large-capitalization growth companies, principally in the technology arena.
Smaller and value-oriented stocks provided particularly lackluster returns, and
overall, foreign stocks outperformed U.S. stocks in 1999.
Looking forward, we expect the U.S. economy to remain on a
moderate-growth, low-inflation course. As recent revisions of 1999's economic
statistics demonstrated, the economy has defied many analysts' forecasts by
growing at a strong rate, which should be positive for the bond market.
Similarly, positive economic forces could help the stock market's performance
broaden to include value-oriented and smaller stocks.
We see particularly compelling opportunities outside of the U.S. market.
Many foreign stocks also ended 1999 more attractively valued than large-cap U.S.
stocks, and economic trends in overseas markets could lead to higher stock
prices. In Europe, corporate restructuring has just begun, giving
1 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
- --------------------------------------------------------------------------------
PRESIDENT'S LETTER
- --------------------------------------------------------------------------------
companies there the same potential for cost-cutting and productivity
improvements that U.S. companies enjoyed 10 years ago. In Japan and Asia,
economic recovery is expected to gain strength, which could allow stocks to
rally from relatively low levels.
Another 1999 trend that should remain in force in 2000 is the growth of
businesses related to the Internet. The rise of e-commerce has been good for
consumers and the economy because of greater price competition, which has helped
keep inflation under control. The Internet has also been good for investors, as
even companies with no earnings have seen their stock prices soar. Clearly,
while the Internet is here to stay, not all "dot-com" companies will survive,
and many of these high-flying Internet stocks will eventually--and perhaps very
suddenly--return to more reasonable levels. The long-term winners are most
likely to be companies that support the Internet's growth with content or
infrastructure.
What else is in store for investors in 2000? While we do not have an
infallible crystal ball, we believe that in almost any investment environment,
consistent success stems from an unwavering focus on fundamental investment
principles such as maintaining a long-term perspective, using diversification to
manage risk and availing oneself of the services of a knowledgeable financial
advisor. Indeed, these principles serve as the foundation for every investment
we offer, helping to make OppenheimerFunds The Right Way to Invest in 2000 and
beyond.
Sincerely,
/s/ Bridget A. Macaskill
Bridget A. Macaskill
January 24, 2000
These general market views represent opinions of OppenheimerFunds, Inc. and
are not intended to predict or depict performance of any particular fund.
Specific discussion, as it applies to your Fund, is contained in the pages that
follow.
2 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
- --------------------------------------------------------------------------------
AN INTERVIEW WITH YOUR FUND'S MANAGERS
- --------------------------------------------------------------------------------
[photo]
Portfolio Management
Team (l to r)
Frank Jennings
Shanquan Li
Q. How did Oppenheimer Gold & Special Minerals Fund perform during the last
six months?
A. Despite a volatile market in which gold prices rose sharply and then
fell again, gold prices ended the period only slightly higher than the point at
which they began the period. The investment environment proved more favorable
for the special mineral markets in which the Fund invests. As a result of our
exposure to these special minerals and our disciplined, conservative approach to
the gold market, the Fund succeeded in providing investors with a positive
return.
What made this such a volatile period for gold?
Gold markets fell during the first half of 1999 due to concerns set off
when a number of central banks and the International Monetary Fund either sold
or announced plans to sell significant portions of their gold reserves. By the
beginning of July, gold prices had dipped to 20-year lows of just over $250 per
ounce. Prices remained at these levels until September, when the 15 European
central banks announced an agreement to limit gold sales. As a result, the price
of gold rose sharply, cresting at nearly $325 per ounce in early October.
However, under continued pressure from central bank sales, gold prices quickly
lost momentum, falling under $300 per ounce by late October and remaining there
for the rest of the period.
3 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
- --------------------------------------------------------------------------------
AN INTERVIEW WITH YOUR FUND'S MANAGERS
- --------------------------------------------------------------------------------
How did the Fund respond to these conditions?
Among gold stocks, we maintained our focus on large, mature companies with
strong balance sheets, relatively low operational costs and highly liquid
shares. Our holdings of companies such as Placer Dome, Inc. and Newmont Mining
Corp. performed relatively well since these companies are strongly positioned to
benefit from rising gold prices and are widely considered financially sound
enough to withstand the economic pressures associated with falling gold prices.
The Fund also benefited from investments in strongly positioned smaller
companies, several of which were acquired in the wave of business consolidation
that swept the industry during the period.
In the special minerals sector, where approximately 20% of the Fund's
portfolio was allocated, we concentrated on companies with high earnings growth,
such as Stillwater Mining Co. and Impala Platinum Holdings Ltd. Our focus on
earnings growth is one of the characteristics that differentiates the Fund from
most of its peers. In particular, we scored notable successes with stocks of
platinum and palladium producers. The performance of these companies was driven
by strong industrial demand for platinum and palladium in a variety of
electronics and in environmentally mandated catalytic converters, as well as by
consumer demand for platinum jewelry. The Fund also benefited from investments
in copper and nickel producers because of growing demand for these basic
industrial metals in the recovering markets of Europe and Asia.
[callout]
- ---------------------
"Over the long term,
we see strong
fundamentals
in the market
for gold and
special minerals."
- ---------------------
[end callout]
4 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
What is your outlook for the future?
We believe gold remains as attractive as ever as a hedge against declines in
other sectors of the economy. Historically, gold prices and gold stocks have
risen sharply when the prices of other assets have dropped. That's why ownership
of gold is viewed by many as insurance against loss of value in other
investments, such as stocks and bonds.
Over the long term, we see strong fundamentals in the market for gold and
special minerals. As the level of economic activity accelerates around the
world, demand for these essential commodities is likely to accelerate with it.
We believe the companies in which we invest are strongly positioned to benefit
from that growing demand. In particular, the long-term outlook for gold remains
positive because worldwide demand has, for many years, outpaced mining
production. Although central bank sales have filled the gap between supply and
demand thus far, their gold reserves are finite. Eventually, we believe it
likely that demand will drive prices higher, creating favorable conditions for
the types of companies in which we invest. We also see continuing investment
opportunities among platinum and palladium producers. Only a handful of major
companies worldwide supply the growing market for these metals, and few reserves
are held above ground.
- ---------------------------------
Average Annual
Total Returns
For the Periods Ended 12/31/99(1)
Class A
1-Year 5-Year 10-Year
- ---------------------------------
8.77% -5.25% -2.61%
Class B Since
1-Year 5-Year Inception
- ---------------------------------
9.63% N/A -4.40%
Class C Since
1-Year 5-Year Inception
- ---------------------------------
13.56% N/A -3.89%
- ---------------------------------
1. See page 7 for further details.
5 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
However the gold and special mineral markets perform in the future, we
believe our conservative, disciplined investment approach will help us identify
the firms best positioned to survive and thrive. That's why Oppenheimer Gold &
Special Minerals Fund remains part of The Right Way to Invest.
Top Ten Stock Holdings(3)
- ----------------------------------------------------------
Stillwater Mining Co. 7.3%
- ----------------------------------------------------------
Franco-Nevada Mining Corp. Ltd. 6.9
- ----------------------------------------------------------
Newmont Mining Corp. 5.7
- ----------------------------------------------------------
Impala Platinum Holdings Ltd. 5.3
- ----------------------------------------------------------
Anglogold Ltd. 4.9
- ----------------------------------------------------------
Barrick Gold Corp. 4.8
- ----------------------------------------------------------
Placer Dome, Inc. 4.2
- ----------------------------------------------------------
Homestake Mining Co. 3.9
- ----------------------------------------------------------
Gold Fields Ltd. 3.4
- ----------------------------------------------------------
Normandy Mining Ltd. 2.9
- ----------------------------------------------------------
- -------------------------
Portfolio Allocation(2)
* Gold & Precious
Minerals 78.1%
* Metals 19.3
* Cash Equivalents 0.8
* Other 1.8
- -------------------------
2. Portfolio is subject to change. Percentages are as of December 31, 1999, and
are based on total market value of investments.
3. Portfolio is subject to change. Percentages are as of December 31, 1999, and
are based on total market value of common stocks.
6 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
- --------------------------------------------------------------------------------
NOTES
- --------------------------------------------------------------------------------
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. Because of
ongoing market volatility, the Fund's performance may be subject to substantial
short-term changes. For updates on the Fund's performance, please contact your
financial advisor, call us at 1.800.525.7048 or visit our website,
www.oppenheimerfunds.com.
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized.
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 A returns include the current maximum
initial sales charge of 5.75%.
Class B shares of the Fund were first publicly offered on 11/1/95. Class B
returns include the applicable contingent deferred sales charge of 5% (1-year)
and 2% (since inception). Class B shares are subject to an annual 0.75%
asset-based sales charge.
Class C shares of the Fund were first publicly offered on 11/1/95. Class C
returns include the contingent deferred sales charge of 1% for the 1-year
period. Class C shares are subject to an annual 0.75% asset-based sales charge.
An explanation of the different performance calculations is in the
Fund's prospectus.
7 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
Financials
8 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS December 31, 1999 / Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
======================================================================================================
<S> <C> <C>
Common Stocks--97.8%
- ------------------------------------------------------------------------------------------------------
Basic Materials--96.0%
- ------------------------------------------------------------------------------------------------------
Gold & Precious Minerals--76.8%
- ------------------------------------------------------------------------------------------------------
Gold--8.4%
Barrick Gold Corp. 71,860 $ 1,278,515
- ------------------------------------------------------------------------------------------------------
Chugai Mining Co. Ltd.(1) 520,000 503,570
- ------------------------------------------------------------------------------------------------------
Franco-Nevada Mining Corp. Ltd. 482,940 7,391,088
-----------
9,173,173
- ------------------------------------------------------------------------------------------------------
Gold Mining: Australia--7.1%
Delta Gold NL 1,000,000 1,527,525
- ------------------------------------------------------------------------------------------------------
Lihir Gold Ltd.(1) 2,500,000 1,823,175
- ------------------------------------------------------------------------------------------------------
Newcrest Mining Ltd.(1) 700,000 2,391,480
- ------------------------------------------------------------------------------------------------------
Ranger Minerals NL 300,000 433,620
- ------------------------------------------------------------------------------------------------------
Sons of Gwalia Ltd. 453,019 1,517,931
- ------------------------------------------------------------------------------------------------------
Zimbabwe Platinum Mines Ltd.(1) 200,000 91,980
------------
7,785,711
- ------------------------------------------------------------------------------------------------------
Gold Mining: Canada--15.4%
Agnico-Eagle Mines Ltd. 280,000 2,050,715
- ------------------------------------------------------------------------------------------------------
Barrick Gold Corp. 292,000 5,164,750
- ------------------------------------------------------------------------------------------------------
Cambior, Inc. 550,000 691,633
- ------------------------------------------------------------------------------------------------------
Francisco Gold Corp.(1) 74,000 299,109
- ------------------------------------------------------------------------------------------------------
Goldcorp, Inc., Cl. A(1) 323,900 1,891,076
- ------------------------------------------------------------------------------------------------------
Placer Dome, Inc. 420,000 4,515,000
- ------------------------------------------------------------------------------------------------------
Teck Corp., Cl. B 239,800 2,253,355
-----------
16,865,638
- ------------------------------------------------------------------------------------------------------
Gold Related Investment--2.8%
Normandy Mining Ltd. 4,321,389 3,066,285
</TABLE>
9 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Gold Mining: South Africa--16.6%
Anglogold Ltd. 101,050 $ 5,204,137
- ------------------------------------------------------------------------------------------------------
Anglogold Ltd., Sponsored ADR 48,000 1,233,000
- ------------------------------------------------------------------------------------------------------
Ashanti Goldfields Co. Ltd., Sponsored GDR 346,120 908,565
- ------------------------------------------------------------------------------------------------------
Avgold Ltd.(1) 1,500,000 1,037,007
- ------------------------------------------------------------------------------------------------------
Durban Roodepoort Deep Ltd.(1) 180,000 303,050
- ------------------------------------------------------------------------------------------------------
Gold Fields Ltd. 742,147 3,591,521
- ------------------------------------------------------------------------------------------------------
Harmony Gold Mining Co. 300,000 1,927,613
- ------------------------------------------------------------------------------------------------------
IAMGOLD, International African Mining Gold Corp.(1) 180,000 404,201
- ------------------------------------------------------------------------------------------------------
Meridian Gold, Inc.(1) 340,400 2,304,926
- ------------------------------------------------------------------------------------------------------
Randfontein Estates Ltd. 190,000 265,799
- ------------------------------------------------------------------------------------------------------
Western Areas Ltd.(1) 265,000 969,906
-----------
18,149,725
- ------------------------------------------------------------------------------------------------------
Gold Mining: United States--9.8%
Battle Mountain Gold Co.(1) 217,200 447,975
- ------------------------------------------------------------------------------------------------------
Homestake Mining Co. 530,000 4,140,625
- ------------------------------------------------------------------------------------------------------
Newmont Mining Corp. 247,871 6,072,839
-----------
10,661,439
- ------------------------------------------------------------------------------------------------------
Platinum Mining--16.7%
Anglo American Platinum Corp. Ltd. 73,600 2,238,829
- ------------------------------------------------------------------------------------------------------
Anglo American Platinum Corp. Ltd., ADR 83,718 2,542,457
- ------------------------------------------------------------------------------------------------------
Impala Platinum Holdings Ltd. 140,000 5,670,598
- ------------------------------------------------------------------------------------------------------
Stillwater Mining Co.(1) 243,000 7,745,625
-----------
18,197,509
-----------
83,899,480
- ------------------------------------------------------------------------------------------------------
Metals--19.2%
- ------------------------------------------------------------------------------------------------------
Aluminum--3.5%
Billiton plc 220,600 1,301,676
- ------------------------------------------------------------------------------------------------------
Kaiser Aluminum Corp.(1) 130,000 999,375
- ------------------------------------------------------------------------------------------------------
Outokumpu OY 111,800 1,580,843
-----------
3,881,894
</TABLE>
10 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Copper--3.5%
Freeport-McMoRan Copper & Gold, Inc., Cl. A(1) 125,000 $ 2,320,312
- ------------------------------------------------------------------------------------------------------
Jiangxi Copper Company Ltd., H Shares(1) 1,200,000 134,302
- ------------------------------------------------------------------------------------------------------
Phelps Dodge Corp. 20,000 1,342,500
------------
3,797,114
- ------------------------------------------------------------------------------------------------------
Metals: Diversified--7.6%
Brush Wellman, Inc. 104,800 1,761,950
- ------------------------------------------------------------------------------------------------------
Cia de Minas Buenaventura SA, Sponsored ADR, B Shares 120,000 1,927,500
- ------------------------------------------------------------------------------------------------------
Cominco Ltd. 29,200 612,326
- ------------------------------------------------------------------------------------------------------
Dia Met Minerals Ltd., Cl. B(1) 50,000 794,583
- ------------------------------------------------------------------------------------------------------
Rio Tinto plc 56,000 1,352,497
- ------------------------------------------------------------------------------------------------------
Sumitomo Metal Mining Co. 240,000 535,264
- ------------------------------------------------------------------------------------------------------
WMC Ltd.(1) 229,100 1,264,357
------------
8,248,477
- ------------------------------------------------------------------------------------------------------
Metals: Miscellaneous--3.1%
Caemi Mineracao e Metalurgia SA, Preference(1) 11,179,000 803,786
- ------------------------------------------------------------------------------------------------------
Liuka Resources Ltd. 600,000 1,592,568
- ------------------------------------------------------------------------------------------------------
Union Miniere SA 25,000 971,176
------------
3,367,530
- ------------------------------------------------------------------------------------------------------
Nickel--1.5%
Inco Ltd.(1) 70,000 1,645,000
------------
20,940,016
- ------------------------------------------------------------------------------------------------------
Capital Goods--0.5%
- ------------------------------------------------------------------------------------------------------
Manufacturing--0.5%
Maverick Tube Corp.(1) 21,800 538,188
- ------------------------------------------------------------------------------------------------------
Consumer Staples--1.3%
- ------------------------------------------------------------------------------------------------------
Household Goods--1.3%
Antofagasta plc 200,000 1,389,331
------------
Total Common Stocks (Cost $95,396,923) 106,767,014
======================================================================================================
Preferred Stocks--0.9%
Ashanti Goldfields Co. Ltd., A Shares(2) 88,888 66,666
- ------------------------------------------------------------------------------------------------------
Battle Mountain Gold Co., $3.25 Cum. Cv., Non-Vtg. 33,900 870,806
------------
Total Preferred Stocks (Cost $1,866,040) 937,472
</TABLE>
11 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
======================================================================================================
<S> <C> <C>
Repurchase Agreements--0.8%
Repurchase agreement with Banc One Capital Markets, Inc., 2.75%,
dated 12/31/99, to be repurchased at $900,206 on 1/3/00, collateralized
by U.S. Treasury Bonds, 5.25%-12%, 2/15/01-11/15/28, with a value of
$353,241 and U.S. Treasury Nts., 5%-7.50%, 12/31/00-2/15/07, with
a value of $565,282 (Cost $900,000) $900,000 $ 900,000
- ------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $98,162,963) 99.5% 108,604,486
- ------------------------------------------------------------------------------------------------------
Other Assets Net of Liabilities 0.5 539,340
----------------------------
Net Assets 100.0% $109,143,826
============================
</TABLE>
FOOTNOTES TO STATEMENT OF INVESTMENTS
Distribution of investments representing geographic diversification, as a
percentage of total investments at value, is as follows:
<TABLE>
<CAPTION>
Geographic Diversification Market Value Percent
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Canada $ 31,296,277 28.8%
United States 27,140,196 25.0
South Africa 25,892,481 23.8
Australia 13,775,587 12.7
Great Britain 4,043,505 3.7
Peru 1,927,500 1.8
Finland 1,580,842 1.5
Japan 1,038,834 1.0
Belgium 971,176 0.9
Brazil 803,786 0.7
Hong Kong 134,302 0.1
--------------------------------
Total $108,604,486 100.0%
================================
</TABLE>
1. Non-income-producing security.
2. Identifies issues considered to be illiquid or restricted--See Note 6 of
Notes to Financial Statements.
See accompanying Notes to Financial Statements.
12 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
<TABLE>
December 31, 1999
==========================================================================================
<S> <C>
Assets
Investments, at value (cost $98,162,963)--see accompanying statement $ 108,604,486
- ------------------------------------------------------------------------------------------
Cash 1,095,393
- ------------------------------------------------------------------------------------------
Unrealized appreciation on foreign currency exchange contracts 337
- ------------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 1,295,054
Interest and dividends 17,607
Other 9,300
------------
Total assets 111,022,177
==========================================================================================
Liabilities
Payables and other liabilities:
Shares of beneficial interest redeemed 827,099
Investments purchased 711,396
Trustees' compensation 107,047
Shareholder reports 88,342
Distribution and service plan fees 62,782
Transfer and shareholder servicing agent fees 56,373
Other 25,312
------------
Total liabilities 1,878,351
==========================================================================================
Net Assets $109,143,826
============
==========================================================================================
Composition of Net Assets
Paid-in capital $123,763,475
- ------------------------------------------------------------------------------------------
Overdistributed net investment income (1,407,495)
- ------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign
currency transactions (23,653,770)
- ------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of
assets and liabilities denominated in foreign currencies 10,441,616
------------
Net assets $109,143,826
============
==========================================================================================
Net Asset Value Per Share
- ------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$82,335,714 and 7,873,557 shares of beneficial interest outstanding) $10.46
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $11.10
- ------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $19,303,118
and 1,874,921 shares of beneficial interest outstanding) $10.30
- ------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $7,504,994
and 726,731 shares of beneficial interest outstanding) $10.33
</TABLE>
See accompanying Notes to Financial Statements.
13 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
<TABLE>
For the Six Months Ended December 31, 1999
==========================================================================================
<S> <C>
Investment Income
Dividends (net of foreign withholding taxes of $59,437) $ 933,479
- ------------------------------------------------------------------------------------------
Interest 60,449
----------
Total income 993,928
==========================================================================================
Expenses
Management fees 387,691
- ------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 86,945
Class B 84,913
Class C 34,154
- ------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees 134,397
- ------------------------------------------------------------------------------------------
Shareholder reports 70,810
- ------------------------------------------------------------------------------------------
Trustees' compensation 18,250
- ------------------------------------------------------------------------------------------
Custodian fees and expenses 1,770
- ------------------------------------------------------------------------------------------
Other 18,854
----------
Total expenses 837,784
Less expenses paid indirectly (1,199)
----------
Net expenses 836,585
==========================================================================================
Net Investment Income 157,343
==========================================================================================
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investments 3,945,001
Foreign currency transactions (659,284)
----------
Net realized gain 3,285,717
- ------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 5,297,329
Translation of assets and liabilities denominated in foreign currencies 781,944
----------
Net change 6,079,273
----------
Net realized and unrealized gain 9,364,990
==========================================================================================
Net Increase in Net Assets Resulting from Operations $9,522,333
==========
</TABLE>
See accompanying Notes to Financial Statements.
14 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
Dec. 31, 1999 June 30,
(Unaudited) 1999
<S> <C> <C>
======================================================================================================
Operations
Net investment income $ 157,343 $ 446,320
- ------------------------------------------------------------------------------------------------------
Net realized gain (loss) 3,285,717 (1,538,761)
- ------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 6,079,273 13,220,094
--------------------------------
Net increase in net assets resulting from operations 9,522,333 12,127,653
======================================================================================================
Dividends and/or Distributions to Shareholders
Dividends from net investment income:
Class A (1,482,387) (152,625)
Class B (229,633) --
Class C (90,802) --
======================================================================================================
Beneficial Interest Transactions
Net increase (decrease) in net assets resulting from beneficial
interest transactions:
Class A (2,278,392) (9,546,621)
Class B 3,625,834 2,373,711
Class C 1,134,334 (269,738)
======================================================================================================
Net Assets
Total increase 10,201,287 4,532,380
- ------------------------------------------------------------------------------------------------------
Beginning of period 98,942,539 94,410,159
--------------------------------
End of period [including undistributed (overdistributed)
net investment income of $(1,407,495) and $237,984, respectively] $109,143,826 $98,942,539
================================
</TABLE>
See accompanying Notes to Financial Statements.
15 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
Dec. 31, 1999 June 30,
Class A (Unaudited) 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
====================================================================================================================
Per Share Operating Data
Net asset value, beginning of period $ 9.85 $ 8.81 $12.68 $14.15 $13.48 $13.28
- --------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .04 .06 .04 .04 .04 .06
Net realized and unrealized gain (loss) .77 1.00 (3.87) (1.48) .69 .21
-----------------------------------------------------------------
Total income (loss) from investment
operations .81 1.06 (3.83) (1.44) .73 .27
- --------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.20) (.02) (.04) (.03) (.06) (.07)
-----------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.20) (.02) (.04) (.03) (.06) (.07)
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.46 $ 9.85 $ 8.81 $12.68 $14.15 $13.48
=================================================================
====================================================================================================================
Total Return, at Net Asset Value(1) 8.37% 12.03% (30.23)% (10.20)% 5.44% 2.03%
====================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $82,336 $78,514 $ 78,458 $126,086 $161,769 $171,721
- --------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $78,947 $78,932 $102,501 $149,564 $171,427 $178,579
- --------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income 0.50% 0.62% 0.32% 0.28% 0.25% 0.45%
Expenses 1.44% 1.62% 1.43%(3) 1.34%(3) 1.38%(3) 1.36%(3)
- --------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 9% 45% 65% 21% 38% 36%
</TABLE>
1. Assumes a $1,000 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.
2. Annualized for periods of less than one full year.
3. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
4. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended December 31, 1999, were $24,153,742 and $24,248,035, respectively.
See accompanying Notes to Financial Statements.
16 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
Dec. 31, 1999 June 30,
Class B (Unaudited) 1999 1998 1997 1996(5)
<S> <C> <C> <C> <C> <C>
========================================================================================================
Per Share Operating Data
Net asset value, beginning of period $ 9.67 $ 8.70 $12.56 $14.11 $12.33
- --------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .01 -- (.01) (.04) (.01)
Net realized and unrealized gain (loss) .75 .97 (3.85) (1.51) 1.79
-----------------------------------------------------
Total income (loss) from investment
operations .76 .97 (3.86) (1.55) 1.78
- --------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.13) -- -- -- --
-----------------------------------------------------
Total dividends and/or distributions
to shareholders (.13) -- -- -- --
- --------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.30 $ 9.67 $ 8.70 $12.56 $14.11
=====================================================
========================================================================================================
Total Return, at Net Asset Value(1) 7.99% 11.15% (30.73)% (10.99)% 14.25%
========================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $19,303 $14,528 $10,681 $8,716 $4,882
- --------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $16,871 $12,369 $10,150 $7,361 $2,588
- --------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income (loss) (0.35)% (0.22)% (0.41)% (0.48)% (0.25)%
Expenses 2.21% 2.41% 2.21%(3) 2.16%(3) 2.22%(3)
- --------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 9% 45% 65% 21% 38%
</TABLE>
1. Assumes a $1,000 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.
2. Annualized for periods of less than one full year.
3. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
4. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term securities)
for the period ended December 31, 1999, were $24,153,742 and $24,248,035,
respectively.
5. For the period from November 1, 1995 (inception of offering) to June 30,
1996.
See accompanying Notes to Financial Statements.
17 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
Dec. 31, 1999 June 30,
Class C (Unaudited) 1999 1998 1997 1996(5)
<S> <C> <C> <C> <C> <C>
========================================================================================================
Per Share Operating Data
Net asset value, beginning of period $ 9.69 $ 8.72 $12.59 $14.13 $12.33
- --------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) -- (.02) (.01) (.02) (.01)
Net realized and unrealized gain (loss) .77 .99 (3.86) (1.52) 1.81
-----------------------------------------------------
Total income (loss) from investment
operations .77 .97 (3.87) (1.54) 1.80
- --------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.13) -- -- -- --
- --------------------------------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.13) -- -- -- --
-----------------------------------------------------
Net asset value, end of period $10.33 $ 9.69 $ 8.72 $12.59 $14.13
=====================================================
========================================================================================================
Total Return, at Net Asset Value(1) 8.05% 11.12% (30.74)% (10.90)% 14.41%
========================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $7,505 $5,900 $5,271 $3,935 $1,390
- --------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $6,784 $5,276 $4,215 $2,672 $ 840
- --------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income (loss) (0.35)% (0.22)% (0.41)% (0.45)% (0.26)%
Expenses 2.22% 2.40% 2.20%(3) 2.18(3) 2.19%(3)
- --------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 9% 45% 65% 21% 38%
</TABLE>
1. Assumes a $1,000 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.
2. Annualized for periods of less than one full year.
3. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
4. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term securities)
for the period ended December 31, 1999, were $24,153,742 and $24,248,035,
respectively.
5. For the period from November 1, 1995 (inception of offering) to June 30,
1996.
See accompanying Notes to Financial Statements.
18 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
================================================================================
1. Significant Accounting Policies
Oppenheimer Gold & Special Minerals Fund (the Fund) is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Fund's investment objective is to seek
capital appreciation. 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 at their offering price, which is normally net asset value plus an initial
sales charge. Class B and Class C shares are sold without an initial sales
charge but may be subject to a contingent deferred sales charge (CDSC). All
classes of shares have identical rights to earnings, assets and voting
privileges, except that each class has its own expenses directly attributable
to that class and exclusive voting rights with respect to matters affecting
that class. Classes A, B and C shares have separate distribution and/or service
plans. 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.
- --------------------------------------------------------------------------------
Securities 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 exchange contracts are valued based on
the closing prices of the foreign currency contract rates in the London foreign
exchange markets on a daily basis as provided by a reliable bank or dealer.
Options are valued based upon the last sale price on the principal exchange on
which the option is traded or, in the absence of any transactions that day, the
value is based upon the last sale price on the prior trading date if it is
within the spread between the closing bid and asked prices. If the last sale
price is outside the spread, the closing bid is used.
19 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
================================================================================
1. Significant Accounting Policies Continued
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, 1999, the
Fund had available for federal income tax purposes an unused capital loss
carryover of approximately $25,900,000, which expires between 2000 and 2007.
- --------------------------------------------------------------------------------
Trustees' Compensation. The Fund has adopted an unfunded retirement plan for
the Fund's independent Board of Trustees. Benefits are based on years of
service and fees paid to each trustee during the years of service. During the
six months ended December 31, 1999, a provision of $4,748 was made for the
Fund's projected benefit obligations and payments of $21,106 were made to
retired trustees, resulting in an accumulated liability of $103,495 as of
December 31, 1999.
20 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
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 compensation 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 Board of Trustees in shares of one or more
Oppenheimer funds selected by the trustee. The amount paid to the Board of
Trustees 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 investment income per share.
- --------------------------------------------------------------------------------
Dividends and Distributions to Shareholders. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax
purposes primarily because of the recognition of certain foreign currency gains
(losses) as ordinary income (loss) for tax purposes. The character of
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.
- --------------------------------------------------------------------------------
Expense Offset Arrangements. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
- --------------------------------------------------------------------------------
Other. Investment transactions are accounted for as of trade date and dividend
income is recorded on the ex-dividend date. Certain dividends from foreign
securities will be recorded as soon as the Fund is informed of the dividend if
such information is obtained subsequent to the ex-dividend date. 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.
21 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
================================================================================
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of
beneficial interest. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
Six Months Ended December 31, 1999 Year Ended June 30, 1998
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Class A
Sold 5,588,980 $ 56,175,373 11,245,976 $ 104,670,021
Dividends and/or distributions
reinvested 132,623 1,282,470 15,567 140,416
Redeemed (5,821,904) (59,736,235) (12,193,450) (114,357,058)
------------------------------------------------------------
Net decrease (100,301) $ (2,278,392) (931,907) $ (9,546,621)
============================================================
- ----------------------------------------------------------------------------------------------
Class B
Sold 2,262,608 $ 22,829,880 2,242,622 $ 20,604,492
Dividends and/or distributions
reinvested 20,475 194,923 -- --
Redeemed (1,911,116) (19,398,969) (1,967,421) (18,230,781)
------------------------------------------------------------
Net increase 371,967 $ 3,625,834 275,201 $ 2,373,711
=============================================================
- ----------------------------------------------------------------------------------------------
Class C
Sold 1,151,502 $ 11,746,201 2,502,629 $ 22,956,234
Dividends and/or distributions
reinvested 8,422 80,427 -- --
Redeemed (1,041,879) (10,692,294) (2,498,625) (23,225,972)
------------------------------------------------------------
Net increase (decrease) 118,045 $ 1,134,334 4,004 $ (269,738)
============================================================
</TABLE>
================================================================================
3. Unrealized Gains and Losses on Securities
As of December 31, 1999, net unrealized appreciation on securities of
$10,441,523 was composed of gross appreciation of $28,433,500, and gross
depreciation of $17,991,977.
================================================================================
4. Management Fees and Other Transactions with Affiliates
Management Fees. 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 average net assets in excess of $800 million. The Fund's management
fee for the six months ended December 31, 1999, was 0.75% of the average annual
net assets for each class of shares, annualized for periods of less than one
full year.
22 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
- --------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the
Manager, is the transfer and shareholder servicing agent for the Fund and for
other Oppenheimer funds. OFS's total costs of providing such services are
allocated ratably to these funds.
- --------------------------------------------------------------------------------
Distribution and Service Plan Fees. Under its General Distributor's Agreement
with the Manager, the Distributor acts as the Fund's principal underwriter in
the continuous public offering of the different classes of shares of the Fund.
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the
period indicated.
<TABLE>
<CAPTION>
Aggregate Class A Commissions Commissions Commissions
Front-End Front-End on Class A on Class B on Class C
Sales Charges Sales Charges Shares Shares Shares
on Class A Retained by Advanced by Advanced by Advanced by
Six Months Ended Shares Distributor Distributor(1) Distributor(1) Distributor(1)
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
December 31, 1999 $100,724 $27,933 $-- $242,008 $18,234
</TABLE>
1. The Distributor advances commission payments to dealers for certain sales of
Class A shares and for sales of Class B and Class C shares from its own
resources at the time of sale.
<TABLE>
<CAPTION>
Class A Class B Class C
Contingent Deferred Contingent Deferred Contingent Deferred
Sales Charges Sales Charges Sales Charges
Six Months Ended Retained by Distributor Retained by Distributor Retained by Distributor
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
December 31, 1999 $-- $45,483 $3,352
</TABLE>
The Fund has adopted a Service Plan for Class A shares and Distribution
and Service Plans for Class B and Class C shares under Rule 12b-1 of the
Investment Company Act. Under those plans the Fund pays the Distributor for all
or a portion of its costs incurred in connection with the distribution and/or
servicing of the shares of the particular class.
- --------------------------------------------------------------------------------
Class A Service Plan Fees. Under the Class A service plan, the Distributor
currently uses the fees it receives from the Fund to pay brokers, dealers and
other financial institutions. The Class A service plan permits reimbursements
to the Distributor at a rate of up to 0.25% of average annual net assets of
Class A shares purchased. The Distributor makes payments to plan recipients
quarterly at an annual rate not to exceed 0.25% of the average annual net
assets consisting of Class A shares of the Fund. For the six months ended
December 31, 1999, payments under the Class A Plan totaled $86,945, all of
which was paid by the Distributor to recipients. That included $2,582 paid to
an affiliate of the Manager. Any unreimbursed expenses the Distributor incurs
with respect to Class A shares in any fiscal year cannot be recovered in
subsequent years.
23 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
================================================================================
4. Management Fees and Other Transactions with Affiliates Continued
Class B and Class C Distribution and Service Plan Fees. Under each plan,
service fees and distribution fees are computed on the average of the net asset
value of shares in the respective class, determined as of the close of each
regular business day during the period. The Class B and Class C plan provides
for the Distributor to be compensated at a flat rate, whether the Distributor's
distribution expenses are more or less than the amounts paid by the Fund under
the plan during the period for which the fee is paid.
The Distributor retains the asset-based sales charge on Class B shares.
The Distributor retains the asset-based sales charge on Class C shares during
the first year the shares are outstanding. The asset-based sales charges on
Class B and Class C shares allow investors to buy shares without a front-end
sales charge while allowing the Distributor to compensate dealers that sell
those shares.
The Distributor's actual expenses in selling Class B and Class C shares
may be more than the payments it receives from the contingent deferred sales
charges collected on redeemed shares and asset-based sales charges from the
Fund under the plans. If any plan is terminated by the Fund, the Board of
Trustees may allow the Fund to continue payments of the asset-based sales
charge to the Distributor for distributing shares before the plan was
terminated. The plans allow for the carry-forward of distribution expenses, to
be recovered from asset-based sales charges in subsequent fiscal periods.
Distribution fees paid to the Distributor for the six months ended December 31,
1999, were as follows:
<TABLE>
<CAPTION>
Distributor's Distributor's
Aggregate Unreimbursed
Unreimbursed Expenses as %
Total Payments Amount Retained Expenses of Net Assets
Under Plan by Distributor Under Plan of Class
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
Class B Plan $84,913 $73,355 $863,293 4.47%
Class C Plan 34,154 19,265 102,429 1.36
</TABLE>
================================================================================
5. Foreign Currency Contracts
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into
foreign currency contracts for operational purposes and to seek to protect
against adverse exchange rate fluctuations. Risks to the Fund include the
potential inability of the counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using foreign currency exchange rates as provided
by a reliable bank, dealer or pricing service. Unrealized appreciation and
depreciation on foreign currency contracts are reported in the Statement of
Assets and Liabilities.
24 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
The Fund may realize a gain or loss upon the closing or settlement of the
foreign currency transactions. Realized gains and losses are reported with all
other foreign currency gains and losses in the Statement of Operations.
Securities denominated in foreign currency to cover net exposure on
outstanding foreign currency contracts are noted in the Statement of
Investments where applicable.
As of December 31, 1999, the Fund had outstanding foreign currency contracts as
follows:
<TABLE>
<CAPTION>
Expiration Contract Valuation as of Unrealized
Contract Description Date Amount (000s) Dec. 31, 1999 Appreciation
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
Contracts to Purchase
Canadian Dollar (CAD) 1/3/00 CAD171 $118,438 $337
</TABLE>
================================================================================
6. Illiquid or Restricted Securities
As of December 31, 1999, 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 or restricted securities. Certain
restricted securities, eligible for resale to qualified institutional
investors, are not subject to that limitation. The aggregate value of illiquid
or restricted securities subject to this limitation as of December 31, 1999,
was $66,666, which represents 0.06% of the Fund's net assets.
================================================================================
7. 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 that
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 0.45%. 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
0.08% per annum.
The Fund had no borrowings outstanding during the six months ended
December 31, 1999.
25 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
- --------------------------------------------------------------------------------
OPPENHEIMER GOLD & SPECIAL MINERALS FUND
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
======================================================================================
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
Phillip A. Griffiths, 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
Andrew J. Donohue, Secretary
Brian W. Wixted, Treasurer
Robert G. Zack, Assistant Secretary
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
======================================================================================
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 LLP
======================================================================================
Legal Counsel Mayer, Brown & Platt
</TABLE>
The financial statements included herein have been
taken from the records of the Fund without
examination of the independent auditors.
This is a copy of a report to shareholders of
Oppenheimer Gold & Special Minerals Fund. This
report must be preceded or accompanied by a
Prospectus of Oppenheimer Gold & Special Minerals
Fund. For material information concerning the
Fund, see the Prospectus.
Shares of Oppenheimer funds are not deposits or
obligations of any bank, are not guaranteed by any
bank, are not insured by the FDIC or any other
agency, and involve investment risks, including
the possible loss of the principal amount
invested.
26 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
- --------------------------------------------------------------------------------
OPPENHEIMERFUNDS FAMILY
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
========================================================================================================
Global Equity
Developing Markets Fund Global Fund
International Small Company Fund Quest Global Value Fund
Europe Fund Global Growth & Income Fund
International Growth Fund
========================================================================================================
Equity
Stock Stock & Bond
Enterprise Fund(1) Main Street(R) Growth & Income Fund
Discovery Fund Quest Opportunity Value Fund
Main Street(R) Small Cap Fund Total Return Fund
Quest Small Cap Value Fund Quest Balanced Value Fund
MidCap Fund Capital Income Fund(2)
Capital Appreciation Fund Multiple Strategies Fund
Growth Fund Disciplined Allocation Fund
Disciplined Value Fund Convertible Securities Fund
Quest Value Fund
Trinity Growth Fund Specialty
Trinity Core Fund Real Asset Fund
Trinity Value Fund Gold & Special Minerals Fund
========================================================================================================
Fixed Income
Taxable Municipal
International Bond Fund California Municipal Fund(3)
World Bond Fund Main Street(R) California Municipal Fund(3)
High Yield Fund Florida Municipal Fund(3)
Champion Income Fund New Jersey Municipal Fund(3)
Strategic Income Fund New York Municipal Fund(3)
Bond Fund Pennsylvania Municipal Fund(3)
Senior Floating Rate Fund Municipal Bond Fund
U.S. Government Trust Insured Municipal Fund
Limited-Term Government Fund Intermediate Municipal Fund
Rochester Division
Rochester Fund Municipals
Limited Term New York Municipal Fund
========================================================================================================
Money Market(4)
Money Market Fund Cash Reserves
</TABLE>
1. Effective July 1, 1999, this fund is closed to new investors.
2. On 4/1/99, the Fund's name was changed from "Oppenheimer Equity Income
Fund."
3. Available to investors only 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 2000 OppenheimerFunds, Inc. All rights reserved.
27 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
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INFORMATION AND SERVICES
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As an Oppenheimer fund shareholder, you can benefit from
special services designed to make investing simple. Whether
it's automatic investment plans, timely market updates or
immediate account access, you can count on us whenever you
need assistance. So call us today, or visit our website--
we're here to help.
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Internet
24-hr access to account information and transactions
www.oppenheimerfunds.com
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General Information
Mon-Fri 8:30am-9pm ET, Sat 10am-4pm ET
1.800.525.7048
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Telephone Transactions
Mon-Fri 8:30am-9pm ET, Sat 10am-4pm ET
1.800.852.8457
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PhoneLink
24-hr automated information and automated transactions
1.800.533.3310
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Telecommunications Device for the Deaf (TDD)
Mon-Fri 8:30am-7pm ET
1.800.843.4461
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OppenheimerFunds Information Hotline
24 hours a day, timely and insightful messages on the economy
and issues that may affect your investments
1.800.835.3104
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Transfer and Shareholder Servicing Agent
OppenheimerFunds Services
P.O. Box 5270, Denver, CO 80217-5270
[logo] OppenheimerFunds(R)
Distributors
RS0410.001.1299 February 29, 2000
