Dear Shareholders:
- -------------------------------------------------------------------------------
Silver bullion, after a strong performance early in the year, experienced a
disappointing setback. Silver bullion prices, which ended 1995 at $5.15 an
ounce, hit a high of $5.88 an ounce on February 2, 1996, and finished the first
half of 1996 at $5.04.
CHART/BEGIN
Printed version of this shareholder report contains a
graphic chart indicating the spot price of silver per
ounce from 1/2/92 through 6/30/96.
CHART/END
The strong underlying silver bullion fundamentals, with physical demand far
outweighing production, was overwhelmed by selling from existing holdings. While
disappointing, this drawdown of existing holdings brings remaining inventories
down to levels which should provide strong support for higher silver prices in
the future.
The Lexington Strategic Silver Fund, had a total return of 7.20%* for the
first six months of 1996 compared with an average return of 14.82% for the gold
funds monitored by Lipper Analytical Services, Inc.Holding back the Fund's
performance was the significant weighting in silver bullion which was down for
the period. In addition, our large holding in Grupo Mexico had a difficult first
half after an exceptionally good share performance in 1995. We have maintained
our strong commitment to silver bullion but have pared back our holdings in
Grupo Mexico due to a less favorable outlook for copper prices, a significant
source of the company's profits.
Fabrication demand remains healthy, with the photographic and electronics
industries both showing good growth in consumption of silver. Meanwhile, mine
production of silver, secondary scrap recovery, government disposals, and
exports from developing economies should fall short of total fabrication demand
by a wide margin. Since the silver market has been in significant deficit since
1994, silver bullion stocks have come down substantially. It is now felt that
the ratio of silver bullion depository
1
<PAGE>
stocks to fabrication demand for silver has reached record low levels. This
should have a very favorable impact on the price of silver as smaller holdings
of silver bring about a greater reluctance to sell the remainder. Unlike the
gold market, Central Banks are not significant owners of silver bullion and so
they cannot be considered potential market depressants. We remain optimistic
regarding the price of silver and feel strongly that the Lexington Strategic
Silver Fund represents an excellent way in which to participate.
We appreciate your continued support and welcome the opportunity to discuss
any questions you may have about your investment.
Sincerely,
Robert W. Radsch Robert M. DeMichele
Portfolio Manager President
July, 1996 July, 1996
CHART/BEGIN
Printed version of this shareholder report contains a
graphic chart indicating the comparison of change in
value of a $10,000 investment in Lexington Strategic
Silver Fund, Inc., the S&P 500 and Silver Bullion
(London (U.S. Dollars))
CHART/END
*5.68% and 11.48% are the one year and since commencement (1/2/92) average
annual standard total returns, respectively, for the period ended June 30,
1996. Prior to January, 1992 the Fund was managed by a different investment
adviser. Investment return and principal value of an investment will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than
at their original cost. These calculations include the maximum 5.75% initial
sales charge and assume reinvestment of dividends and capital gains at net
asset value. Total return represents past performance.
2
<PAGE>
Lexington Strategic Silver Fund, Inc.
Statement of Net Assets
(Including the Portfolio of Investments)
June 30, 1996
Number of Value
Shares Security (Note 1)
- -------------------------------------------------------------------------------
SILVER BULLION: 21.8%
3,207,366 fine ounces2
(Cost $17,751,216) .......................... $16,133,052
-----------
COMMON STOCKS: 71.1%
AUSTRALIA: 8.3%
1,650,000 Aurora Gold, Ltd.2 ............................ 2,789,399
920,000 MIM Holdings, Ltd. ............................ 1,186,369
242,000 MIM Holdings, Ltd. (ADR) ...................... 624,360
1,100,000 Pasminco, Ltd. ................................ 1,548,225
-----------
6,148,353
-----------
GHANA: 1.0%
35,875 Ashanti Goldfields Company, Ltd. .............. 708,531
-----------
MEXICO: 14.9%
651,056 Corporacion Industrial San Luis S.A. .......... 3,999,896
734,016 Grupo Mexico S.A. de C.V.2 .................... 2,196,726
1,045,000 Industras Penoles S.A. ........................ 4,780,685
-----------
10,977,307
-----------
NORTH AMERICA: 44.9%
100,000 Adrian Resources, Ltd.2 ....................... 384,982
87,100 Agnico-Eagle Mines, Ltd. ...................... 1,421,115
200,000 Argosy Mining Corporation
(Special warrants)1,2 ....................... 395,982
67,800 ASARCO, Inc. .................................. 1,872,975
167,000 Atna Resources, Ltd. (Special warrants)1,2 .... 489,844
34,420 Barrick Gold Corporation ...................... 933,643
125,000 Battle Mountain Gold Company .................. 906,250
149,100 Cambior, Inc. ................................. 1,973,495
335,000 Campbell Resources, Inc.2 ..................... 380,765
180,000 Campbell Resources, Inc. (Units)1,2 ........... 204,590
140,000 Carson Gold Corporation1,2 .................... 172,472
73,100 Coeur D'Alene Mines Corporation ............... 1,343,213
278,000 Dayton Mining Corporation ..................... 1,671,629
150,000 Eldorado Corporation, Ltd.2 ................... 824,962
140,000 Eldorado Corporation, Ltd.
(Special warrants)1,2 ....................... 769,964
28,500 Euro Nevada Mining Corporation, Ltd. .......... 1,222,593
50,000 Falconbridge, Ltd. ............................ 1,088,949
17,500 Franco Nevada Mining Corporation, Ltd. ........ 1,110,031
34,700 Golden Knight Resources, Inc.2 ................ 215,014
3
<PAGE>
Lexington Strategic Silver Fund, Inc.
Statement of Net Assets
(Including the Portfolio of Investments)
June 30, 1996 (continued)
Number of Value
Shares Security (Note 1)
- -------------------------------------------------------------------------------
NORTH AMERICA: 44.9% (continued)
30,000 Golden StarResources, Ltd. (Warrants)1,2 ...... $ 300
84,400 Hecla Mining Company2 ......................... 590,800
76,700 Indochina Goldfields, Ltd.1,2 ................. 660,867
188,000 Kinross Gold Corporation2 ..................... 1,419,960
130,000 Metallica Resources, Inc.
(Special warrants)1,2 ........................ 471,878
14,281 Newmont Mining Corporation .................... 705,125
100,000 Northern Crown Mines, Ltd. .................... 74,797
60,000 Pan American Silver Corporation2 .............. 439,979
190,000 Pan American Silver Corporation1 .............. 1,393,268
95,000 Pan American Silver Corporation (Warrants)1,2 . 70
70,000 Pegasus Gold, Inc.2 ........................... 857,500
45,000 Placer Dome, Inc. ............................. 1,074,375
310,000 Prime Resource Group, Inc.2 ................... 2,295,960
109,600 Romarco Minerals, Inc.2 ....................... 365,682
350,000 Santa Elina Gold Corporation1,2 ............... 532,558
150,000 Silver Standard Resources, Inc.1,2 ............ 676,468
150,000 Silver Standard Resources, Inc. (Warrants)1,2 . 1,468
50,000 Teck Corporation "B" .......................... 1,026,619
350,000 Tiomin Resources (Special warrants)1,2 ........ 667,302
200,000 TVX Gold, Inc.2 ............................... 1,450,000
10,000 Valerie Gold Resources, Ltd.
(Special warrants)1,2 ........................ 124,662
840,000 William Resources, Inc.2 ...................... 991,714
-----------
33,203,820
-----------
PERU: 2.0%
167,009 Cia De Minas Buenaventura "C" ................. 1,503,354
-----------
TOTAL COMMON STOCKS
(Cost $44,948,331) .......................... 52,541,365
-----------
PREFERRED STOCK: 2.9%
99,000 Freeport McMoran Copper & Gold
(Cost $2,081,958) ........................... 2,165,625
-----------
TOTAL INVESTMENTS: 95.8%
(Cost $64,781,505\'86) (Note 1) ............. 70,840,042
Other assets in excess of liabilities: 4.2% ... 3,104,780
-----------
TOTAL NET ASSETS: 100.0%
(Equivalent to $4.46 per share on
16,579,742 shares outstanding) .............. $73,944,822
===========
ADR-American Depository Receipt.
1Restricted security (Note 6).
2Non-Income producing securities.
+Aggregate cost for Federal income tax purposes is $65,271,688.
The Notes to Financial Statements are an integral part of this statement.
4
<PAGE>
Lexington Strategic Silver Fund, Inc.
Statement of Assets and Liabilities
June 30, 1996
Assets
Investments, at value (cost $64,781,505) (Note 1) .............. $70,840,042
Cash ........................................................... 1,558,264
Receivable for investment securities sold ...................... 2,193,144
Receivable for shares sold ..................................... 63,021
Dividends and interest receivable .............................. 533
Deferred reorganization expenses, net (Note 1) ................. 6,523
-----------
Total Assets ............................................. 74,661,527
-----------
Liabilities
Due to Lexington Management Corporation (Note 2) ............... 54,772
Payable for investment securities purchased .................... 101,836
Payable for shares redeemed .................................... 480,458
Accrued expenses ............................................... 79,639
-----------
Total Liabilities ........................................ 716,705
-----------
Net Assets (equivalent to $4.46 per share on 16,579,742
shares outstanding) (Note 3) ................................. $73,944,822
===========
Net Assets consist of:
Capital stock-authorized 1,000,000,000 shares,
$.001 par value per share ................................... $ 16,580
Additional paid in capital (Note 1) ............................ 77,636,803
Distributions in excess of net investment income (Note 1) ...... (117,653)
Accumulated net realized loss on investments and foreign
currency holdings (Notes 1 and 7) ............................ (9,649,306)
Unrealized appreciation of investments and foreign
currency holdings ............................................ 6,058,398
-----------
Total Net Assets ......................................... $73,944,822
===========
Net Asset Value, redemption price per share .................... $4.46
=====
Offering price per share (100/94.25 of $4.46
adjusted to nearest cent) .................................... $4.73
=====
The Notes to Financial Statements are an integral part of this statement.
5
<PAGE>
LEFT COLUMN)
Lexington Strategic Silver Fund, Inc.
Statement of Operations
Year ended June 30, 1996
Investment Income
Income:
Dividends $ 554,170
Interest 215,490
----------
769,660
Less: foreign tax expense 17,630
----------
Total investment income $ 752,030
Expenses:
Investment advisory fees
(Note 2) 630,181
Transfer agent and shareholder
services expenses (Note2) 210,638
Custodian fees 156,467
Accounting expenses (Note2) 79,468
Printing and mailing expenses 69,512
Registration fees 29,144
Professional fees 22,877
Amortization of
reorganization costs (Note 1) 13,103
Directors' fees 12,772
Other expenses 56,877
----------
Total expenses 1,281,039
----------
Net investment loss (529,009)
Net Realized and Unrealized Gain (Loss)
on Investments (Note 4)
Net realized gain (loss) on:
Investments 4,714,633
Foreign currency
transactions (6,745)
----------
Net realized gain 4,707,888
Net change in unrealized
appreciation on:
Investments 1,524,500
Foreign currency
translations of other
assets and liabilities (139)
----------
Net change in
unrealized appreciation 1,524,361
----------
Net realized and
unrealized gain 6,232,249
----------
Increase in Net Assets Resulting
from Operations $5,703,240
==========
(RIGHT COLUMN)
Lexington Strategic Silver Fund, Inc.
Statements of Changes in Net Assets
Years ended June 30, 1996 and 1995
1996 1995
---------- ----------
Net investment loss (529,009) (448,539)
Net realized gain (loss) from
investments and foreign
currency transactions 4,707,888 (1,327,359)
Change in unrealized
net appreciation of
investments and foreign
currency translations 1,524,361 2,439,414
----------- -----------
Increase in net assets
resulting from operations 5,703,240 663,516
Distributions to shareholders
in excess of net investment
income (Note 1) (437,823) -
Increase in net assets
from capital share
transactions (Note 3) 3,162,294 15,354,704
----------- -----------
Increase in
net assets 8,427,711 16,018,220
Net Assets:
Beginning of period 65,517,111 49,498,891
----------- -----------
End of period $73,944,822 $65,517,111
=========== ===========
The Notes to Financial Statements are an integral part of these statements.
6
<PAGE>
Lexington Strategic Silver Fund, Inc.
Notes to Financial Statements
June 30, 1996 and 1995
1. Significant Accounting Policies
Lexington Strategic Silver Fund, Inc. (the "Fund") is an open-end
non-diversified management investment company registered under the Investment
Company Act of 1940, as amended. The Fund's investment objective is to seek to
maximize total return from long-term growth of capital and income principally by
investing in a portfolio at least 80% of which will be invested in the
securities of established silver-related companies throughout the world. The
following is a summary of significant accounting policies followed by the Fund
in the preparation of its financial statements:
Investments Security transactions are accounted for on a trade date basis.
Realized gains and losses from investment transactions are reported on the
identified cost basis. Securities traded on a recognized stock exchange are
valued at the last sales price reported by the exchange on which the securities
are traded. If no sales price is recorded, the mean between the last bid and
asked prices is used. Securities traded on the over-the-counter market and
silver bullion are valued at the mean between the last current bid and asked
price. Short-term securities having a maturity of 60 days or less are stated at
amortized cost, which approximates market value. Securities for which market
quotations are not readily available and other assets are valued by Fund
management in good faith under the direction of the Fund's Board of Directors.
All investments quoted in foreign currencies are valued in U.S. dollars on the
basis of the foreign currency exchange rates prevailing at the close of
business. Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Interest income, adjusted for amortization of premiums and
accretion of discounts, is accrued as earned.
Foreign Currency Transactions Foreign currencies (and receivables and
payables denominated in foreign currencies) are translated into U.S. dollar
amounts at current exchange rates. Translation gains or losses resulting from
changes in exchange rates and realized gains and losses on the settlement of
foreign currency transactions are reported in the statement of operations. In
addition, the Fund may enter into forward foreign exchange contracts in order to
hedge against foreign currency risk in the purchase or sale of securities
denominated in foreign currency. The Fund may also enter into such contracts to
hedge against changes in foreign currency exchange rates on portfolio positions.
These contracts are marked to market daily, by recognizing the difference
between the contract exchange rate and the current market rate as unrealized
gains or losses. Realized gains or losses are recognized when contracts are
closed and are reported in the statement of operations. There were no foreign
currency exchange contracts outstanding at June 30, 1996.
Federal Income Taxes It is the Fund's policy to comply with the requirements
of the Internal Revenue Code applicable to "regulated investment companies" and
to distribute all of its taxable income to its shareholders. Therefore, no
provision for Federal income taxes is required.
Distributions The character of income and gains to be distributed are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. At June 30, 1996 reclassifications
were made to the Fund's capital accounts to reflect permanent book/tax
differences and income and gains available for distributions under income tax
regulations. Net investment income, net realized gains and net assets were not
affected by this change.
Deferred Reorganization Expenses Reorganization expenses aggregating $65,512
have been deferred and are being amortized on a straight line basis over five
years.
Use of Estimates 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 at
the date of the financial statements and the reported amounts of increases and
decreases in net assets from operations during the reporting period. Actual
results could differ from those estimates.
7
<PAGE>
Lexington Strategic Silver Fund, Inc.
Notes to Financial Statements
June 30, 1996 and 1995 (continued)
2. Investment Advisory Fee and Other Transactions with Affiliate
The Fund pays an investment advisory fee to Lexington Management
Corporation ("LMC") at an annual rate of 1.00% of the Fund's average daily net
assets up to $30 million and at an annual rate of 0.75% thereafter. The
investment advisory contract provides that the total annual expenses of the Fund
(including management fees, but excluding interest, taxes, brokerage commissions
and extraordinary expenses) will not exceed the level of expenses which the Fund
is permitted to bear under the most restrictive expense limitation imposed by
any state in which shares of the Fund are offered for sale. No reimbursement was
required for the year ended June 30, 1996.
The Fund also reimbursed LMC for certain expenses, including accounting and
shareholder servicing costs of $210,638, which are incurred by the Fund, but
paid by LMC.
3. Capital Stock
Transactions in capital stock were as follows:
Year ended Year ended
June 30, 1996 June 30, 1995
------------------- ---------------------
Shares Amount Shares Amount
-------- ------ -------- ------
Shares sold ................ 15,352,920 $71,243,731 17,944,367 $70,752,502
Shares issued on
reinvestment of dividends . 59,629 294,570 - -
---------- ----------- ---------- -----------
15,412,549 71,538,301 17,944,367 70,752,502
Shares redeemed ............ (15,223,38) (68,376,007) (14,196,839) (55,397,798)
---------- ----------- ---------- -----------
Net increase ............... 189,169 $ 3,162,294 3,747,528 $15,354,704
========== =========== ========== ===========
4. Purchases and Sales of Investment Securities
The cost of purchases and proceeds from sales of securities for the year ended
June 30, 1996, excluding short-term securities, were $33,002,539 and
$30,860,899, respectively.
At June 30, 1996, the aggregate gross unrealized appreciation for all
securities in which there is an excess of value over tax cost amounted to
$11,323,596 and aggregate gross unrealized depreciation for all securities in
which there is an excess of tax cost over value amounted to $5,755,242.
5. Investment and Concentration Risks
The Fund makes significant investments in foreign securities and has an
investment objective of investing in securities of companies engaged in the
exploration, mining, processing, fabrication and distribution of silver. There
are certain risks involved in investing in foreign securities or concentrating
in specific industries that are in addition to the usual risks inherent in
domestic investments. These risks include those resulting from potentially
adverse political and economic developments as well as the possible imposition
of foreign exchange or other foreign governmental restrictions or laws, all of
which could affect the market and/or credit risk of the investments.
8
<PAGE>
Lexington Strategic Silver Fund, Inc.
Notes to Financial Statements
June 30, 1996 and 1995 (continued)
6. Restricted Securities
The following securities were purchased under Rule 144A of the Securities Act of
1933 or issued in private placements and, unless registered under the Act or
exempted from registration, may be sold only to qualified institutional
investors.
<TABLE>
<CAPTION>
Acquisition Average Cost Market of Net
Security Date Shares Per Share Value Assets
-------- ------------ ------ ------------ ------ ------
<S> <C> <C> <C> <C> <C>
Argosey Mining Corporation
(Special Warrants) ........................... 5/24/96 200,000 $12.50 $ 395,982 0.53%
Atna Resources Ltd. (Special Warrants) ......... 4/15/96 167,000 4.80 489,844 0.66%
Campbell Resources, Inc. (Units) ............... 10/25/95 180,000 1.25 204,590 0.28%
Carson Gold Corporation ........................ 12/13/93 140,000 3.20 172,472 0.23%
Eldorado Corporation, Ltd (Special Warrants) ... 2/22/96 140,000 5.37 769,964 1.04%
Golden Star Resources, Ltd. (Warrants) ......... 3/20/95 30,000 0.00 300 0.00%
Indochina Goldfields, Ltd. ..................... 6/13/96 76,700 10.97 660,867 0.89%
Metallica Resources, Inc. (Special Warrants) ... 3/20/96 130,000 3.68 471,878 0.64%
Pan American Corporation ....................... 3/21/96 190,000 5.17 1,393,268 1.88%
Pan American Corporation (Warrants) ............ 3/21/96 95,000 0.00 70 0.00%
Santa Elina Gold Corporation ................... 9/21/94 350,000 1.50 532,559 0.72%
Silver Standard Resources, Inc. ................ 9/06/95 150,000 2.99 676,468 0.91%
Silver Standard Resources, Inc. (Warrants) ..... 9/06/95 150,000 0.00 1,468 0.00%
Tiomin Resources, Inc. (Special Warrants) 9/28/95 350,000 1.44 667,302 0.90%
Valerie Gold Resources, Ltd.
(Special Warrants) ........................... 5/28/96 10,000 10.18 124,661 0.17%
---------- -----
$6,561,693 8.87%
---------- -----
</TABLE>
Pursuant to guidelines adopted by the Fund's Board of Directors, these
unregistered securities have been deemed to be illiquid. The Fund currently
limits investment in illiquid securities to 15% of the Fund's net assets, at
market value, at the time of purchase, but, pursuant to state regulations, the
Fund's investment in such securities is effectively limited to 10%.
7. Federal Income Taxes-Capital Loss Carryforwards
Capital loss carryforwards available for
federal income tax purposes as of June 30, 1996 are approximately:
$1,093,937 expiring in 1998;
1,254,382 expiring in 1999;
3,106,844 expiring in 2000;
954,860 expiring in 2001;
1,911,797 expiring in 2002; and,
1,327,486 expiring in 2003.
To the extent any future capital gains are offset by these losses, such
gains would not be distributed to shareholders.
9
<PAGE>
Lexington Strategic Silver Fund, Inc.
Financial Highlights
Selected per share data for a share outstanding throughout the period:
Year ended June 30,
---------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
Net asset value,
beginning of period $4.00 $3.92 $3.52 $2.78 $3.64
----- ----- ----- ----- -----
Income (loss) from investment
operations:
Net investment loss (.03) (.03) (.02) (.04) (.09)
Net realized and unrealized gain
(loss) on investments and
foreign currency transactions .51 .11 .42 .78 (.77)
----- ----- ----- ----- -----
Total income (loss) from investment
operations .48 .08 .40 .74 (.86)
----- ----- ----- ----- -----
Less distributions:
Distributions in excess of net
investment income (.02) - - - -
----- ----- ----- ----- -----
Net asset value, end of period $4.46 $4.00 $3.92 $3.52 $2.78
===== ===== ===== ===== =====
Total return* 12.02% 2.04% 11.36% 26.62% (23.63%)
Ratios to average net assets:
Expenses, before reimbursement 1.73% 1.82% 1.84% 3.48% 2.70%
Expenses, net of reimbursement 1.73% 1.82% 1.84% 2.60% 2.50%
Net investment loss, before
reimbursement (0.72%) (0.83%) (0.82%) (2.48%) (2.15%)
Net investment loss, including
reimbursement (0.72%) (0.83%) (0.82%) (1.60%) (1.95%)
Portfolio turnover 44.30% 44.22% 5.28% 18.58% 45.20%
Average commissions paid on
equity security transactions** $0.02 - - - -
Net assets at end of period
(000's omitted) $73,945 $65,517 $49,499 $15,032 $10,687
*Sales load is not reflected in total return.
**In accordance with recent SEC disclosure guidelines, average commissions
are calculated for the current period and not for prior periods.
10
<PAGE>
Independent Auditors' Report
The Board of Directors and Shareholders
Lexington Strategic Silver Fund, Inc.:
We have audited the accompanying statements of net assets (including the
portfolio of investments) and assets and liabilities of Lexington Strategic
Silver Fund, Inc. as of June 30, 1996, the related statement of operations for
the year then ended, the statements of changes in net assets for each of the
years in the two-year period then ended, and the financial highlights for each
of the years in the five-year period then ended. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1996 by correspondence with the custodian. As to securities purchased and
sold but not received or delivered, we performed other appropriate auditing
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Lexington Strategic Silver Fund, Inc. as of June 30, 1996, the results of its
operations for the year then ended, the changes in its net assets for each of
the years in the two-year period then ended, and the financial highlights for
each of the years in the five-year period then ended, in conformity with
generally accepted accounting principles.
KPMG Peat Marwick LLP
New York, New York
August 1, 1996
11
<PAGE>
Lexington Strategic Silver Fund, Inc.
Investment Adviser
- -------------------------------------------------
LEXINGTON MANAGEMENT CORPORATION
P.O. Box 1515
Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
Distributor
- -------------------------------------------------
LEXINGTON FUNDS DISTRIBUTOR, INC.
P.O. Box 1515
Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
---------------------------------------------
All shareholder requests for services of
any kind should be sent to:
Transfer Agent
---------------------------------------------
STATE STREET BANK AND
TRUST COMPANY
c/o National Financial Data Services
1004 Baltimore
Kansas City, Missouri 64105
Or call toll free:
Service and Sales: 1-800-526-0056
24 Hour Account Information:
1-800-526-0052
---------------------------------------------
This report has been prepared for the information of the
shareholders of Lexington Strategic Silver Fund, Inc. and is
authorized for distribution to the public only if it is accom-
panied or preceded by a currently effective prospectus
which sets forth expenses and other material information.
LEXINGTON
LEXINGTON
STRATEGIC
SILVER
FUND, INC.
----------X----------
Seeks long-term
growth of capital
through investment
in established silver
related companies.
----------X----------
ANNUAL REPORT
JUNE 30, 1996
