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[PHOTO]
Annual Report June 30, 2000
Oppenheimer
Gold & Special Minerals Fund
[LOGO OF OPPENHEIMER FUNDS]
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REPORT HIGHLIGHTS
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CONTENTS
1 President's Letter
3 An Interview
with Your Fund's
Managers
7 Fund Performance
12 Financial
Statements
28 Independent
Auditors' Report
29 Federal Income
Tax Information
30 Officers and
Trustees
Gold markets declined in response to the strength of the U.S. dollar and sales
of gold reserves by central banks. The Fund benefited from investments in
special-minerals producers, most notably in palladium and platinum, although
pricing pressures constrained profits.
We concentrated on core holdings of well-capitalized senior gold producers, many
of which held their value relatively well.
Average Annual
Total Returns*
For the 1-Year Period
Ended 6/30/00
Class A
Without With
Sales Chg. Sales Chg.
----------------------------
-8.83% -14.07%
Class B
Without With
Sales Chg. Sales Chg.
----------------------------
-9.52% -13.98%
Class C
Without With
Sales Chg. Sales Chg.
----------------------------
-9.42% -10.31%
*See Notes on page 10 for further details.
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PRESIDENT'S LETTER
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[PHOTO]
Bridget A. Macaskill
President
Oppenheimer
Gold & Special
Minerals Fund
Dear Shareholder,
The 1990s, although not free of volatility, were distinguished by an overall
bull market. In contrast, the year 2000 has been characterized so far as a
relatively difficult investment environment with high levels of volatility.
As we entered the year, a vital concern weighing on investors' minds was
growing evidence of a trend toward higher inflation. While productivity
improvements and various economic forces helped keep inflation low over the last
decade, the year 2000 has seen upward pressure on wages and some prices. That's
primarily because the U.S. economy has been growing at a vigorous pace, creating
a labor shortage for businesses and high spending levels among consumers. In
response, since the summer of 1999, the Federal Reserve Board raised short-term
interest rates six times through June 30, 2000, in an attempt to forestall
inflationary pressures.
During that period, higher interest rates adversely affected many stocks and
bonds. In a dramatic decline, previously high-flying technology stocks generally
fell to more reasonable valuations. At the same time, long-neglected value
stocks began to attract investor interest. The result: narrowing of the
valuation gap between growth stocks and value stocks. Finally, in the bond
market, higher interest rates caused prices of most fixed income securities to
fall.
At OppenheimerFunds, we were not surprised by these developments, many of
which we anticipated in our recent letters to investors. What did concern us was
that, prior to the April 2000 correction, we began to see disturbing signs that
short-term trading was taking place not just in technology stocks, but also in
mutual funds. Prudent investors will understand our concern: most stock and bond
funds are carefully designed as long-term investments to help individuals and
families progress toward significant financial goals. In general, short-term
trading is risky and may compromise a well planned financial strategy. It may
also result in unforeseen adverse consequences, such as unnecessarily high tax
bills.
1 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
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PRESIDENT'S LETTER
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We continue to believe that maintaining a long-term perspective and
practicing diversification are the fundamental drivers of consistent performance
over time. These strategies have helped individual investors, as well as
professional investors, weather declining markets and participate in rising
ones. On the following pages, your portfolio manager discusses the long-term
strategies and particular investment decisions that affected your fund during
the reporting period.
You can remain confident that our portfolio managers will continue to
monitor areas of opportunity in the arenas in which your fund invests, as the
effects of today's changing investment environment take hold. Knowing what's
going on in the world's economies, markets and companies--and making investment
decisions designed to try to take advantage of them over the long term--is
central to what makes OppenheimerFunds The Right Way to Invest.
Sincerely,
/s/ Bridget A. Macaskill
Bridget A. Macaskill
July 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.
Stocks and bonds have different types of investment risks; stocks are subject to
market volatility and bonds are subject to credit and interest rate risks.
2 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
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AN INTERVIEW WITH YOUR FUND'S MANAGER
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[PHOTO]
Portfolio Management Team
(l to r)
Frank Jennings
Shanquan Li1
(Portfolio Manager)
How would you characterize the Fund's performance during the one-year period
ended June 30, 2000?
A. Gold prices came under pressure during the reporting period, ending the one-
year period near the point at which they had begun. The Fund's performance
suffered as a result. While we are disappointed with these results, we believe
it is important to note that the environment for gold-oriented funds was
extremely challenging during the reporting period.
What made this such a challenging time for gold?
Gold markets fell throughout the period, due to a variety of unfavorable
economic conditions. One was the strength of the U.S. dollar, which was
supported by continued expansion of the U.S. economy, low rates of inflation and
high levels of consumer confidence. Since gold is often viewed as a refuge from
economic uncertainty and weakening currency, gold prices tend to fall when the
U.S. economy shows strength and the value of the dollar rises.
Another factor depressing the price of gold was an increase in the worldwide
gold supply. A number of central banks have been selling their gold reserves. By
the beginning of July 1999, high sales volumes caused gold prices to dip to 20-
year lows of just over $250 per ounce. Prices remained at these levels until
September 1999, 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 1999. However, under continued pressure
from central bank sales, gold prices quickly lost momentum, falling to
nearly $270 per ounce. When gold prices rose to over $310 per ounce in February
2000, sales volume increased as well, causing the price to decline once again.
1. Effective August 10, 2000, Shanquan Li is the sole portfolio manager of the
Fund.
3 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
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AN INTERVIEW WITH YOUR FUND'S MANAGER
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"We believe gold remains as attractive as ever as a hedge against declines in
other sectors of the economy."
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, such as Newmont Mining Corp. and Barrick Gold Corp. Some of our holdings
were hurt by the negative environment for gold, especially during the second
half of the period, while others held their value relatively well during the
period. Regardless of the short-term performance of our various holdings, we
continued to maintain our positions in leading gold mining, exploration and
development companies. We pursue this strategy because we believe these
companies are strongly positioned to benefit from rising gold prices, and are
financially sound enough to withstand the economic pressures associated with
volatile gold prices.
In the special-minerals sector, where approximately 20% of the Fund's portfolio
is 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 differentiate 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 consumer
electronics and in environmentally mandated catalytic converters, as well as by
consumer demand for platinum jewelry.
4 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
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Average Annual
Total Returns
For the Periods Ended 6/30/002
Class A
1-Year 5-Year 10-Year
----------------------------
-14.07% -8.66% -2.55%
Class B Since
1-Year 5-Year Inception
----------------------------
-13.98% N/A -7.52%
Class C Since
1-Year 5-Year Inception
----------------------------
-10.31% N/A -7.06%
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.
We remain wary of the prospect for other special minerals over the coming
months. While demand for many special minerals remains strong, prices have so
far proved resistant to increases. Furthermore, rising U.S. interest rates have
increased the likelihood that the economy may slow, thereby reducing industrial
demand. Accordingly, we remain watchful of global supply-and-demand trends,
awaiting convincing evidence that market conditions are improving before we
consider increasing the Fund's exposure to the sector.
Over the long term, we see strong fundamentals in the market for gold and
special minerals. As the level of economic activity grows around the world,
demand for these essential commodities is likely to accelerate correspondingly.
We believe the companies in which we invest are strongly positioned to benefit
from that increasing 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.
2. See Notes on page 10 for further details.
5 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
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AN INTERVIEW WITH YOUR FUND'S MANAGER
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Portfolio Allocation3
[GRAPH]
. Gold & Precious
Minerals 84.2%
. Metals 11.2
. Cash
Equivalents 3.7
. Other 0.9
Regardless of the performance of the gold and special-mineral markets 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 Common Stock Issuers4
--------------------------------------------------------
Barrick Gold Corp. 8.3%
--------------------------------------------------------
Franco-Nevada Mining Corp. Ltd. 7.0
--------------------------------------------------------
Stillwater Mining Co. 6.8
--------------------------------------------------------
Newmont Mining Co. 6.7
--------------------------------------------------------
Anglo American Platinum Corp. Ltd. 5.7
--------------------------------------------------------
Impala Platinum Holdings Ltd. 5.6
--------------------------------------------------------
Placer Dome, Inc. 5.1
--------------------------------------------------------
Homestake Mining Co. 4.6
--------------------------------------------------------
AngloGold Ltd. 4.4
--------------------------------------------------------
Gold Fields Ltd. 3.7
3. Portfolio is subject to change. Percentages are as of June 30, 2000, and are
based on total market value of investments.
4. Portfolio is subject to change. Percentages are as of June 30, 2000, and are
based on total market value of common stock holdings.
6 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
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FUND PERFORMANCE
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How has the Fund performed? Below is a discussion, by the Manager, of the Fund's
performance during its fiscal year ended June 30, 2000, followed by a graphical
comparison of the Fund's performance to an appropriate broad-based market index.
Management's discussion of performance. During the one-year period that ended
June 30, 2000, the performance of Oppenheimer Gold & Special Minerals Fund
benefited from a two-tiered strategy in the gold and the special minerals
sectors. Gold stock experienced sharp volatility, driven by the shifting stances
of central banks regarding the sales of gold reserves. In this sector, we
focused on large companies with strong balance sheets that were well positioned
to share in the market's rise and protected against market declines. In the
special-minerals sector, where strong demand fueled earnings growth, we focused
on fast-growing companies, especially producers of platinum and palladium. The
Fund's portfolio and our management strategies are subject to change.
Comparing the Fund's performance to the market. The graphs that follow show the
performance of a hypothetical $10,000 investment in Class A, Class B and Class C
shares of the Fund held until June 30, 2000. In the case of Class A shares,
performance is measured over a 10-year period. In the case of Class B and Class
C shares, performance is measured from inception of the classes on November 1,
1995. The Fund's performance reflects the deduction of the maximum initial sales
charge on Class A shares and the applicable contingent deferred sales charge for
Class B and Class C shares. The graphs assume that all dividends and capital
gains distributions were reinvested in additional shares.
The Fund's performance is compared to the performance of the Morgan Stanley
Capital International (MSCI) World Index, an unmanaged index of issuers listed
on the stock exchanges of 20 foreign countries and the United States. The Index
is widely recognized as a measure of global stock market performance. Index
performance reflects the reinvestment of dividends but does not consider the
effect of capital gains or transaction costs, and none of the data in the graphs
that follow shows the effect of taxes. The Fund's performance reflects the
effects of Fund business and operating expenses. While index comparisons may be
useful to provide a benchmark for the Fund's performance, it must be noted that
the Fund's investments are not limited to the investments in the index. The
Fund's investments are concentrated in one group of industries, while the Morgan
Stanley World Index includes companies from different industries with different
degrees of volatility and returns.
7 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
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FUND PERFORMANCE
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Class A Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
-- Oppenheimer Gold & Special Minerals Fund (Class A)
-- Morgan Stanley Capital International (MSCI) World Index
[GRAPH]
Oppenheimer Gold & Morgan Stanley
Special Minerals Capital International
Fund (Class A) (MSCI) World Index
6/30/90 9,425 10,000
6/30/91 8,415 9,569
6/30/92 8,843 10,031
6/30/93 10,359 11,778
6/30/94 11,214 13,047
6/30/95 11,441 14,510
6/30/96 12,065 17,267
6/30/97 10,833 21,205
6/30/98 7,558 24,908
6/30/99 8,468 28,913
6/30/2000 7,220 32,537
Average Annual Total Return of Class A Shares of the Fund at 6/30/00/1/
1-Year-14.07% 5-Year-8.66% 10-Year-2.55%
Class B Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
-- Oppenheimer Gold & Special Minerals Fund (Class B)
-- Morgan Stanley Capital International (MSCI) World Index
[GRAPH]
Oppenheimer Gold & Morgan Stanley
Special Minerals Capital International
Fund (Class B) (MSCI) World Index
11/1/95 10,000 10,000
8/30/96 11,425 11,257
8/30/97 10,170 13,824
8/30/98 7,045 16,238
8/30/99 7,830 18,849
6/30/2000 7,085 21,211
Average Annual Total Return of Class B Shares of the Fund at 6/30/00/1/
1-Year-13.98% Life-7.52%
8 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
Class C Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
-- Oppenheimer Gold & Special Minerals Fund (Class C)
-- Morgan Stanley Capital International (MSCI) World Index
[GRAPH]
Oppenheimer Gold & Morgan Stanley
Special Minerals Capital International
Fund (Class C) (MSCI) World Index
11/1/95 10,000 10,000
8/30/96 11,441 11,257
8/30/97 10,194 13,824
8/30/98 7,061 16,238
8/30/99 7,846 18,849
6/30/2000 7,107 21,211
Average Annual Total Return of Class C Shares of the Fund at 6/30/00/1/
1-Year -10.31% Life -7.06%
The performance information for the Morgan Stanley Capital International (MSCI)
World Index begins on 6/30/90 for Class A and 10/31/95 for both Class B and
Class C.
1. See page 10 for further details.
Past performance is not predictive of future performance. Graphs are not drawn
to same scale.
9 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
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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 quarterly updates on the Fund's performance, please contact
your financial advisor, call us at 1.800.525.7048 or visit our website at
www.oppenheimerfunds.com.
Total returns and the ending account values in the graphs include changes in
share price and reinvestment of dividends and capital gains distributions in a
hypothetical investment for the periods shown. The Fund's total returns shown do
not show the effects of income taxes on an individual's investment. Taxes may
reduce your actual investment returns on income or gains paid by the Fund or any
gains you may realize if you sell your shares.
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). The ending account value shown in the graph is net of
the applicable 2% contingent deferred sales charge. 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 calculation of performance is in the Fund's Statement of
Additional Information.
10 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
Financials
11 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
STATEMENT OF INVESTMENTS June 30, 2000
Market Value
Shares See Note 1
================================================================================
Common Stocks--95.3%
--------------------------------------------------------------------------------
Basic Materials--94.4%
--------------------------------------------------------------------------------
Gold & Precious Minerals--83.1%
--------------------------------------------------------------------------------
Gold--6.6%
Franco-Nevada Mining Corp. Ltd. 482,940 $ 5,573,513
--------------------------------------------------------------------------------
Gold Mining: Australia--6.5%
Delta Gold Ltd. 1,000,000 745,096
--------------------------------------------------------------------------------
Lihir Gold Ltd.1 2,500,000 990,660
--------------------------------------------------------------------------------
Newcrest Mining Ltd.1 700,000 1,891,260
--------------------------------------------------------------------------------
Ranger Minerals NL1 300,000 360,240
--------------------------------------------------------------------------------
Sons of Gwalia Ltd. 453,019 1,427,961
--------------------------------------------------------------------------------
Zimbabwe Platinum Mines Ltd.1 200,000 24,376
------------
5,439,593
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Gold Mining: Canada--20.9%
Agnico-Eagle Mines Ltd. 280,000 1,757,441
--------------------------------------------------------------------------------
Barrick Gold Corp. 363,860 6,608,081
--------------------------------------------------------------------------------
Cambior, Inc.1 328,900 155,382
--------------------------------------------------------------------------------
Francisco Gold Corp.1 74,000 304,650
--------------------------------------------------------------------------------
Goldcorp, Inc., Cl. A1 323,900 2,317,163
--------------------------------------------------------------------------------
Kinross Gold Corp.1 408,700 364,098
--------------------------------------------------------------------------------
Placer Dome, Inc. 420,000 4,016,250
--------------------------------------------------------------------------------
Teck Corp., Cl. B 279,800 1,907,255
------------
17,430,320
--------------------------------------------------------------------------------
Gold Related Investment--2.9%
Normandy Mining Ltd. 4,435,109 2,396,556
--------------------------------------------------------------------------------
Gold Mining: South Africa--17.7%
AngloGold Ltd. 61,500 2,512,611
--------------------------------------------------------------------------------
AngloGold Ltd., CUFS 39,550 1,657,458
--------------------------------------------------------------------------------
AngloGold Ltd., Sponsored ADR 48,000 987,000
--------------------------------------------------------------------------------
Ashanti Goldfields Co. Ltd., Sponsored GDR1 346,120 605,710
--------------------------------------------------------------------------------
Avgold Ltd.1 1,500,000 796,460
--------------------------------------------------------------------------------
Durban Roodepoort Deep Ltd.1 180,000 185,841
--------------------------------------------------------------------------------
Gold Fields Ltd. 742,147 2,911,668
--------------------------------------------------------------------------------
Harmony Gold Mining Co. 364,600 2,016,593
--------------------------------------------------------------------------------
IAMGOLD Corp.1 210,000 432,274
--------------------------------------------------------------------------------
Meridian Gold, Inc.1 340,400 2,067,625
--------------------------------------------------------------------------------
Western Areas Ltd. 265,000 615,597
------------
14,788,837
12 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
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Market Value
Shares See Note 1
--------------------------------------------------------------------------------
Gold Mining: United States--10.8%
Homestake Mining Co. 530,000 $ 3,643,750
--------------------------------------------------------------------------------
Newmont Mining Corp. 247,871 5,360,210
------------
9,003,960
--------------------------------------------------------------------------------
Platinum Mining--17.7%
Anglo American Platinum Corp. Ltd. 73,600 2,121,156
--------------------------------------------------------------------------------
Anglo American Platinum Corp. Ltd., ADR 83,718 2,412,836
--------------------------------------------------------------------------------
Impala Platinum Holdings Ltd. 120,000 4,463,717
--------------------------------------------------------------------------------
Northam Platinum Ltd. 313,100 360,204
--------------------------------------------------------------------------------
Stillwater Mining Co.1 194,000 5,407,750
------------
14,765,663
------------
69,398,442
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Metals--11.3%
--------------------------------------------------------------------------------
Aluminum--3.3%
Century Aluminum Co. 67,000 728,625
--------------------------------------------------------------------------------
Outokumpu Oyj 111,800 1,071,715
--------------------------------------------------------------------------------
USX-U.S. Steel Group, Inc. 49,200 913,275
------------
2,713,615
--------------------------------------------------------------------------------
Copper--1.3%
Freeport-McMoRan Copper & Gold, Inc., Cl. B1 30,000 277,500
--------------------------------------------------------------------------------
Jiangxi Copper Co. Ltd., H Shares1 1,200,000 103,139
--------------------------------------------------------------------------------
Phelps Dodge Corp. 20,000 743,750
------------
1,124,389
--------------------------------------------------------------------------------
Metals: Diversified--5.5%
Alcoa, Inc. 28,000 812,000
--------------------------------------------------------------------------------
Dia Met Minerals Ltd., Cl. B1 80,000 1,079,841
--------------------------------------------------------------------------------
Rio Tinto plc 30,500 498,679
--------------------------------------------------------------------------------
Sumitomo Metal Mining Co. 240,000 1,134,162
--------------------------------------------------------------------------------
WMC Ltd. 229,100 1,027,923
------------
4,552,605
--------------------------------------------------------------------------------
Metals: Miscellaneous--1.2%
Grupo Mexico SA, Series B 186,900 518,349
--------------------------------------------------------------------------------
Tokyo Tungsten Co. 43,000 458,835
------------
977,184
------------
9,367,793
--------------------------------------------------------------------------------
Consumer Staples--0.9%
--------------------------------------------------------------------------------
Household Goods--0.9%
Antofagasta plc 141,200 763,133
------------
Total Common Stocks (Cost $86,248,878) 79,529,368
13 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
STATEMENT OF INVESTMENTS Continued
Market Value
Shares See Note 1
================================================================================
Preferred Stocks--1.3%
Ashanti Goldfields Co. Ltd., A Shares2 88,888 $ 79,999
--------------------------------------------------------------------------------
Battle Mountain Gold Co., $3.25 Cum. Cv., Non-Vtg 33,900 1,000,050
------------
Total Preferred Stocks (Cost $1,866,040) 1,080,049
Principal
Amount
================================================================================
Repurchase Agreements--3.7%
Repurchase agreement with Zion First National
Bank, 6.55%, dated 6/30/00, to be repurchased
at $3,136,711 on 7/3/00, collateralized by
U.S. Treasury Bonds, 7.25%--7.875%, 5/15/16--
2/15/21, with a value of $1,206,491 and U.S.
Treasury Nts., 5.25%--6.625%, 6/30/01--2/15/06,
with a value of $1,997,224 (Cost $3,135,000) $3,135,000 3,135,000
--------------------------------------------------------------------------------
Total Investments, at Value (Cost $91,249,918) 100.3% 83,744,417
--------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (0.3) (259,949)
----------------------------
Net Assets 100.0% $83,484,468
============================
Footnotes to Statement of Investments
Distribution of investments representing geographic diversification, as a
percentage of total investments at value, is as follows:
Geographical Diversification Market Value Percent
--------------------------------------------------------------------------------
Canada $26,583,573 31.7%
United States 22,021,910 26.3
South Africa 19,989,393 23.9
Australia 10,601,530 12.7
Japan 1,592,997 1.9
Great Britain 1,261,811 1.5
Finland 1,071,715 1.3
Mexico 518,349 0.6
Hong Kong 103,139 0.1
-----------------------------
Total $83,744,417 100.0%
=============================
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.
14 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES June 30, 2000
================================================================================
Assets
Investments, at value (cost $91,249,918)--see accompanying
statement $83,744,417
--------------------------------------------------------------------------------
Cash 25,655
--------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 152,472
Interest and dividends 578
Other 12,845
------------
Total assets 83,935,967
================================================================================
Liabilities
Payables and other liabilities:
Shares of beneficial interest redeemed 124,529
Trustees' compensation 109,688
Shareholder reports 97,171
Distribution and service plan fees 48,216
Transfer and shareholder servicing agent fees 39,366
Legal, auditing and other professional fees 20,138
Other 12,391
------------
Total liabilities 451,499
================================================================================
Net Assets $83,484,468
============
================================================================================
Composition of Net Assets
Paid-in capital $112,562,082
--------------------------------------------------------------------------------
Overdistributed net investment income (1,184,693)
--------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign
currency transactions (20,387,420)
--------------------------------------------------------------------------------
Net unrealized depreciation on investments and translation of
assets and liabilities denominated in foreign currencies (7,505,501)
------------
Net Assets $83,484,468
============
================================================================================
Net Asset Value Per Share
Class A Shares:
Net asset value and redempton price per share (based on net
assets of $61,298,004 and 6,966,736 shares of beneficial
interest outstanding) $8.80
Maximum offering price per share (net asset value plus sales
charge of 5.75% of offering price) $9.34
--------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price per share
(based on net assets of $15,907,146 and 1,843,393 shares of
beneficial interest outstanding) $8.63
--------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $6,279,318 and 725,497 shares of beneficial interest
outstanding) $8.66
See accompanying Notes to Financial Statements.
15 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
STATEMENT OF OPERATIONS For the Year Ended June 30, 2000
================================================================================
Investment Income
Dividends (net of foreign withholding taxes of $147,892) $ 1,906,273
--------------------------------------------------------------------------------
Interest 60,561
------------
Total income 1,966,834
================================================================================
Expenses
Management fees 719,230
--------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 160,809
Class B 166,430
Class C 65,872
--------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees 208,095
--------------------------------------------------------------------------------
Shareholder reports 134,571
--------------------------------------------------------------------------------
Trustees' compensation 33,999
--------------------------------------------------------------------------------
Custodian fees and expenses 2,794
--------------------------------------------------------------------------------
Other 36,138
------------
Total expenses 1,527,938
Less expenses paid indirectly (2,270)
------------
Net expenses 1,525,668
================================================================================
Net Investment Income 441,166
================================================================================
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investments 5,613,011
Foreign currency transactions (901,423)
------------
Net realized gain 4,711,588
--------------------------------------------------------------------------------
Net change in unrealized depreciation on:
Investments (9,147,480)
Translation of assets and liabilities denominated in foreign
currencies (2,720,364)
------------
Net change (11,867,844)
------------
Net realized and unrealized loss (7,156,256)
================================================================================
Net Decrease in Net Assets Resulting from Operations $(6,715,090)
============
See accompanying Notes to Financial Statements.
16 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended June 30, 2000 1999
================================================================================
Operations
Net investment income $ 441,166 $ 446,320
--------------------------------------------------------------------------------
Net realized gain (loss) 4,711,588 (1,538,761)
--------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) (11,867,844) 13,220,094
------------------------------
Net increase (decrease) in net assets
resulting from operations (6,715,090) 12,127,653
================================================================================
Dividends and/or Distributions to Shareholders
Dividends from net investment income:
Class A (1,482,355) (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 (11,131,466) (9,546,621)
Class B 3,181,913 2,373,711
Class C 1,009,362 (269,738)
================================================================================
Net Assets
Total increase (decrease) (15,458,071) 4,532,380
--------------------------------------------------------------------------------
Beginning of period 98,942,539 94,410,159
-----------------------------
End of period [including undistributed
(overdistributed) net investment income of
$(1,184,693) and $237,984, respectively] $83,484,468 $98,942,539
=============================
See accompanying Notes to Financial Statements.
17 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Class A Year Ended June 30, 2000 1999 1998 1997 1996
================================================================================================
Per Share Operating Data
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $9.85 $8.81 $12.68 $14.15 $13.48
------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .06 .06 .04 .04 .04
Net realized and unrealized gain (loss) (.91) 1.00 (3.87) (1.48) .69
----------------------------------------------
Total income (loss) from
investment operations (.85) 1.06 (3.83) (1.44) .73
------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.20) (.02) (.04) (.03) (.06)
----------------------------------------------
Total dividends and/or distributions
to shareholders (.20) (.02) (.04) (.03) (.06)
------------------------------------------------------------------------------------------------
Net asset value, end of period $8.80 $9.85 $8.81 $12.68 $14.15
==============================================
================================================================================================
Total Return, at Net Asset Value1 (8.83)% 12.03% (30.23)% (10.20)% 5.44%
================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $61,298 $78,514 $ 78,458 $126,086 $161,769
------------------------------------------------------------------------------------------------
Average net assets (in thousands) $72,512 $78,932 $102,501 $149,564 $171,427
------------------------------------------------------------------------------------------------
Ratios to average net assets:2
Net investment income 0.66% 0.62% 0.32% 0.28% 0.25%
Expenses 1.45% 1.62% 1.43%3 1.34%3 1.38%3
------------------------------------------------------------------------------------------------
Portfolio turnover rate 36% 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.
See accompanying Notes to Financial Statements.
18 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
<TABLE>
<CAPTION>
Class B Year Ended June 30, 2000 1999 1998 1997 19961
================================================================================================
Per Share Operating Data
<S> <C> <C> <C> <C> <C>
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) (.92) .97 (3.85) (1.51) 1.79
----------------------------------------------
Total income (loss) from
investment operations (.91) .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 $8.63 $9.67 $8.70 $12.56 $14.11
==============================================
================================================================================================
Total Return, at Net Asset Value2 (9.52)% 11.15% (30.73)% (10.99)% 14.25%
================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $15,907 $14,528 $10,681 $8,716 $4,882
------------------------------------------------------------------------------------------------
Average net assets (in thousands) $16,624 $12,369 $10,150 $7,361 $2,588
------------------------------------------------------------------------------------------------
Ratios to average net assets:3
Net investment loss (0.17)% (0.22)% (0.41)% (0.48)% (0.25)%
Expenses 2.22% 2.41% 2.21%4 2.16%4 2.22%4
------------------------------------------------------------------------------------------------
Portfolio turnover rate 36% 45% 65% 21% 38%
</TABLE>
1. For the period from November 1, 1995 (inception of offering) to June 30,
1996.
2. 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.
3. Annualized for periods of less than one full year.
4. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
See accompanying Notes to Financial Statements.
19 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
FINANCIAL HIGHLIGHTS Continued
<TABLE>
<CAPTION>
Class C Year Ended June 30, 2000 1999 1998 1997 19961
================================================================================================
Per Share Operating Data
<S> <C> <C> <C> <C> <C>
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) .01 (.02) (.01) (.02) (.01)
Net realized and unrealized gain (loss) (.91) .99 (3.86) (1.52) 1.81
----------------------------------------------
Total income (loss) from
investment operations (.90) .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 $8.66 $9.69 $8.72 $12.59 $14.13
==============================================
================================================================================================
Total Return, at Net Asset Value2 (9.42)% 11.12% (30.74)% (10.90)% 14.41%
================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $6,279 $5,900 $5,271 $3,935 $1,390
------------------------------------------------------------------------------------------------
Average net assets (in thousands) $6,579 $5,276 $4,215 $2,672 $ 840
------------------------------------------------------------------------------------------------
Ratios to average net assets:3
Net investment loss (0.13)% (0.22)% (0.41)% (0.45)% (0.26)%
Expenses 2.22% 2.40% 2.20%4 2.18%4 2.19%4
------------------------------------------------------------------------------------------------
Portfolio turnover rate 36% 45% 65% 21% 38%
</TABLE>
1. For the period from November 1, 1995 (inception of offering) to June 30,
1996.
2. 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.
3. Annualized for periods of less than one full year.
4. Expense ratio has not been grossed up to reflect the effect of expenses
paid indirectly.
See accompanying Notes to Financial Statements.
20 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 an 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 a front-end
sales charge. Class B and Class C shares are sold without a front-end 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 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. Securities listed or traded on National Stock Exchanges or
other domestic or foreign exchanges are valued based on the last sale price of
the security traded on that exchange prior to the time when the Fund's assets
are valued. In the absence of a sale, the security is valued at the last sale
price on the prior trading day, if it is within the spread of the closing bid
and asked prices, and if not, at the closing bid price. Securities (including
restricted securities) for which quotations are not readily available are valued
primarily using dealer-supplied valuations, a portfolio pricing service
authorized by the Board of Trustees, or at their fair value. Fair value is
determined in good faith under consistently applied procedures under the
supervision of the Board of Trustees. Short-term "money market type" debt
securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
--------------------------------------------------------------------------------
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.
21 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Continued
================================================================================
1. Significant Accounting Policies Continued
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, 2000, the
Fund had available for federal income tax purposes an unused capital loss
carryover as follows:
Expiring
-----------------------------
2001 $3,252,830
2004 1,026,788
2006 6,314,932
2007 9,596,997
--------------------------------------------------------------------------------
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 year ended
June 30, 2000, a provision of $14,845 was made for the Fund's projected benefit
obligations and payments of $4,681 were made to retired trustees, resulting in
an accumulated liability of $108,911 as of June 30, 2000.
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.
22 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
--------------------------------------------------------------------------------
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 Dividends and 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 dividends and distributions made during the fiscal 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
dividends and 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.
The Fund adjusts the classification of distributions to shareholders to
reflect the differences between financial statement amounts and distributions
determined in accordance with income tax regulations. Accordingly, during the
year ended June 30, 2000, amounts have been reclassified to reflect a decrease
in paid-in capital of $1,779,426, an increase in overdistributed net investment
income of $61,053, and a decrease in accumulated net realized loss on
investments of $1,840,479. Net assets of the Fund were unaffected by the
reclassifications.
--------------------------------------------------------------------------------
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.
23 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS 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>
Year Ended June 30, 2000 Year Ended June 30, 1999
Shares Amount Shares Amount
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Sold 10,970,320 $ 106,996,661 11,245,976 $ 104,670,021
Dividends and/or
distributions reinvested 132,620 1,282,437 15,567 140,416
Redeemed (12,110,062) (119,410,564) (12,193,450) (114,357,058)
------------------------------------------------------------
Net decrease (1,007,122) $ (11,131,466) (931,907) $ (9,546,621)
============================================================
---------------------------------------------------------------------------------------
Class B
Sold 4,261,492 $ 41,145,408 2,242,622 $ 20,604,492
Dividends and/or
distributions reinvested 20,484 195,009 -- --
Redeemed (3,941,537) (38,158,504) (1,967,421) (18,230,781)
------------------------------------------------------------
Net increase 340,439 $ 3,181,913 275,201 $ 2,373,711
============================================================
---------------------------------------------------------------------------------------
Class C
Sold 2,518,435 $ 24,579,605 2,502,629 $ 22,956,234
Dividends and/or
distributions reinvested 8,421 80,427 -- --
Redeemed (2,410,045) (23,650,670) (2,498,625) $ (23,225,972)
------------------------------------------------------------
Net increase (decrease) 116,811 $ 1,009,362 4,004 (269,738)
============================================================
</TABLE>
================================================================================
3. Purchases and Sales of Securities
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the year ended June 30, 2000, were $34,219,775
and $44,749,095, respectively.
As of June 30, 2000, unrealized appreciation (depreciation) based on cost of
securities for federal income tax purposes of $94,066,822 was:
Gross unrealized appreciation $ 14,199,862
Gross unrealized depreciation (24,522,267)
------------
Net unrealized depreciation $(10,322,405)
============
================================================================================
4. 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 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 average annual net assets in excess of $800 million. The Fund's
management fee for the year ended June 30, 2000 was an annualized rate of 0.75%,
before any waiver by the Manager if applicable.
24 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
--------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund on an
"at-cost" basis. OFS also acts as the transfer and shareholder servicing agent
for the other Oppenheimer 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
Year Ended Shares Distributor Distributor1 Distributor1 Distributor1
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
June 30, 2000 $169,188 $41,619 $6,927 $316,028 $32,162
</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
Year Ended Retained by Distributor Retained by Distributor Retained by Distributor
-------------------------------------------------------------------------------------------
<S> <C> <C> <C>
June 30, 2000 $-- $91,711 $8,040
</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 year ended June 30, 2000, payments under
the Class A plan totaled $160,809, all of which were paid by the Distributor to
recipients, and included $4,485 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.
--------------------------------------------------------------------------------
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 plans provide 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.
25 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Continued
--------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates Continued
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 year ended June 30, 2000, were
as follows:
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
--------------------------------------------------------------------------------
Class B Plan $166,430 $143,612 $857,827 5.39%
Class C Plan 65,872 30,913 142,209 2.26
================================================================================
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.
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.
26 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
================================================================================
6. Illiquid Securities
As of June 30, 2000, investments in securities included issues that are
illiquid. A security may 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 securities. The
aggregate value of illiquid securities subject to this limitation as of June 30,
2000, was $79,999, which represents 0.10% of the Fund's net assets. Certain
restricted securities, eligible for resale to qualified institutional investors,
are not subject to that limit.
================================================================================
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 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 0.45%. 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 year ended June 30, 2000.
27 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
INDEPENDENT AUDITOR S' REPORT
================================================================================
The Board of Trustees and Shareholders of
Oppenheimer Gold & Special Minerals Fund:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Oppenheimer Gold & Special Minerals Fund as of
June 30, 2000, 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 auditing standards generally
accepted in the United States of America. 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. Our procedures included confirmation of
securities owned as of June 30, 2000, by correspondence with the custodian. 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, 2000, 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
accounting principles generally accepted in the United States of America.
KPMG LLP
Denver, Colorado
July 24, 2000
28 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
FEDERAL INCOME TAX INFORMATION Unaudited
================================================================================
In early 2001 shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 2000. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
Dividends and distributions of $0.1983, $0.1317 and $0.1298 per share were
paid to Class A, Class B and Class C shareholders, respectively, on December 7,
1999, all of which was designated as ordinary income for federal income tax
purposes. Whether received in stock or in cash, the capital gain distribution
should be treated by shareholders as a gain from the sale of capital assets held
for more than one year (long-term capital gains).
Dividends paid by the Fund during the fiscal year ended June 30, 2000
which are not designated as capital gain distributions should be multiplied by
15.08% to arrive at the net amount 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.
29 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
OPPENHEIMER GOLD & SPECIAL MINERALS FUND
================================================================================
Officers and Trustees Leon Levy, Chairman of the Board of Trustees
Donald W. Spiro, Vice Chairman of the Board of
Trustees
Bridget A. Macaskill, Trustee and President
Robert G. Galli, Trustee
Phillip A. Griffiths, Trustee
Benjamin Lipstein,Trustee
Elizabeth B. Moynihan,Trustee
Kenneth A. Randall,Trustee
Edward V. Regan,Trustee
Russell S. Reynolds, Jr., Trustee
Clayton K. Yeutter, Trustee
Frank Jennings,Vice President
Shanquan Li,Vice President
Andrew J. Donohue, Secretary
Brian W. Wixted, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
================================================================================
Investment Advisor OppenheimerFunds, Inc.
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Distributor OppenheimerFunds Distributor, Inc.
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Transfer and Shareholder OppenheimerFunds Services
Servicing Agent
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Custodian of The Bank of New York
Portfolio Securities
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Independent Auditors KPMG LLP
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Legal Counsel Mayer, Brown & Platt
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 other
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 the
possible loss of the principal amount invested.
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.
30 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
OPPENHEIMERFUNDS FAMILY
<TABLE>
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<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
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Equity
Stock Stock & Bond
Enterprise Fund1 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 Fund2
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 Fund3
World Bond Fund Main Street(R)California Municipal Fund3
High Yield Fund Florida Municipal Fund3
Champion Income Fund New Jersey Municipal Fund3
Strategic Income Fund New York Municipal Fund 3
Bond Fund Pennsylvania Municipal Fund3
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 Market4
Money Market Fund Cash Reserves
</TABLE>
1. Effective July 1, 1999, this fund is closed to new investors. See prospectus
for details.
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.
31 OPPENHEIMER GOLD & SPECIAL MINERALS FUND
<PAGE>
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 transactions1
www.oppenheimerfunds.com
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General Information
Mon-Fri 8am-9pm ET, Sat 10am-4pm ET
1.800.525.7048
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Telephone Transactions
Mon-Fri 8am-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 9am-6:30pm ET
1.800.843.4461
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OppenheimerFunds Market 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
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Ticker Symbols Class A: OPGSX Class B: OGMBX Class C: OGMCX
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1. At times this website may be inaccessible or its transaction feature may be
unavailable.
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