DEAR SHAREHOLDERS:
- --------------------------------------------------------------------------------
Silver bullion, like gold, showed a disappointing price pattern after an
encouraging burst early in the year. Having ended 1995 at $5.15 an ounce, silver
promptly rose to a high for the year of $5.84 an ounce on February 2,1996. This
powerful beginning then proceeded to give way to an enervating dissipation of
these gains over the balance of the year with silver bullion ending the year at
$4.82 an ounce, a decline of 6.41% for the full year compared with a decline of
5.01% for gold bullion.
CHART/BEGIN
Printed version of this shareholder report contains a
graphic chart indicating the spot price of silver per
ounce from December 1995 to December 1996
CHART/END
Despite a further increase in fabrication demand during 1996, together with
another large deficit in production and secondary supply versus industrial
demand, relentless commodity and hedge fund short selling dampened the prices of
silver bullion. With available silver stocks continuing to decrease and with a
fundamental surplus of industrial demand over mine production and secondary
supply, silver prices would not be expected to hold at these low levels for
long.
Despite the decline in silver bullion for 1996, Lexington Strategic Silver
Fund managed to post a modest positive return of 2.38%* compared with a gain of
7.56% for the average gold fund monitored by Lipper Analytical Services, Inc.
While the Fund was hurt by its relatively high (21.8% as of June 30, 1996)
silver bullion holdings, its common stock holdings managed to overcome the
weakness in silver prices with companies heavily involved in exploration efforts
doing particularly well. The same positive fundamentals were in place in late
1994 and early 1995 when short-term negative market dynamics pushed silver from
$5.80 an ounce to $4.40 an ounce. Available silver stocks have continued to
dissipate since then and worldwide fabrication demand remains strong. Meanwhile
there are some signs of worldwide inflationary trends beginning to show signs of
accelerating. A tightening U.S. labor market, higher world commodity prices,
especially for petroleum, and high money supply growth in Europe all point to
higher prices. Also, efforts to meet requirements for membership in the European
Monetary Union are proving difficult to achieve. Given a continuation of the
fundamental supply
1
<PAGE>
versus demand deficit which has existed since 1990, there are good reasons to
view the current price weakness in silver as an excellent buying opportunity.
Sincerely,
Robert W. Radsch Robert M. DeMichele
/s/ ------------------ /s/ -------------------
Robert W. Radsch Robert M. DeMichele
Portfolio Manager President
February, 1997 February, 1997
*-3.62% and 9.25% are the one year and since commencement (1/2/92) average
annual standard total returns, respectively, for the period ended December 31,
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 and is not predictive of future
results.
2
<PAGE>
LEXINGTON STRATEGIC SILVER FUND, INC.
STATEMENT OF NET ASSETS
(INCLUDING THE PORTFOLIO OF INVESTMENTS)
December 31, 1996
<TABLE>
<CAPTION>
NUMBER OF VALUE
SHARES SECURITY (NOTE 1)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SILVER BULLION: 15.3%
1,551,327 fine ounces (cost $8,573,458)2 ........................................ $ 7,415,343
----------
COMMON STOCKS: 78.2%
AUSTRALIA: 10.2%
1,650,000 Aurora Gold, Ltd. 2 ............................................................. 3,145,246
920,000 MIM Holdings, Ltd. .............................................................. 1,286,056
300,000 Pasminco, Ltd. .................................................................. 471,787
----------
4,903,089
----------
GHANA: 0.3%
10,875 Ashanti Goldfields Company, Ltd. ................................................ 134,578
----------
MEXICO: 17.8%
461,056 Corporacion Industrial San Luis S.A. ............................................ 2,928,445
634,016 Grupo Mexico S.A. de C.V.2 ...................................................... 1,973,239
1,045,000 Industras Penoles S.A. .......................................................... 3,703,684
----------
8,605,368
----------
NORTH AMERICA: 47.4%
100,000 Adrian Resources, Ltd.2 ......................................................... 142,998
52,100 Agnico-Eagle Mines, Ltd. ........................................................ 731,713
200,000 Argosy Mining Corporation1 ...................................................... 290,373
100,000 Argosy Mining Corporation (Warrants)1,2 ......................................... 73
83,500 Atna Resources, Ltd. ............................................................ 61
167,000 Atna Resources, Ltd.2 ........................................................... 584,831
89,100 Cambior, Inc. ................................................................... 1,313,111
515,000 Campbell Resources, Inc.2 ....................................................... 477,181
90,000 Campbell Resources, Inc. (Warrants)2 ............................................ 66
73,100 Coeur D'alene Mines Corporation ................................................. 1,105,638
128,000 Dayton Mining Corporation ....................................................... 849,814
50,000 Eldorado Corporation, Ltd.2 ..................................................... 335,606
140,000 Eldorado Corporation, Ltd.1,2 ................................................... 939,698
50,000 Falconbridge, Ltd. .............................................................. 1,065,186
17,500 Franco Nevada Mining Corporation, Ltd. .......................................... 801,169
99,000 Freeport McMoran Copper & Gold (Preferred shares) ............................... 1,683,000
34,700 Golden Knight Resources, Inc.2 .................................................. 167,088
139,400 Hecla Mining Company2 ........................................................... 784,125
138,000 Kinross Gold Corporation ........................................................ 976,615
130,000 Metallica Resources, Inc. 1 ..................................................... 436,288
100,000 Northern Crown Mines, Ltd. ...................................................... 94,845
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
LEXINGTON STRATEGIC SILVER FUND, INC.
STATEMENT OF NET ASSETS
(INCLUDING THE PORTFOLIO OF INVESTMENTS)
December 31, 1996
NUMBER OF VALUE
SHARES SECURITY (NOTE 1)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
NORTH AMERICA (continued)
60,000 Pan American Silver Corporation2 ................................................ $ 361,142
285,000 Pan American Silver Corporation1,2 .............................................. 1,715,423
310,000 Prime Resource Group, Inc.2 ..................................................... 2,193,845
109,600 Romarco Minerals, Inc.2 ......................................................... 435,792
300,000 Silver Standard Resources, Inc.2 ................................................ 1,335,130
50,000 Teck Corporation "B" ............................................................ 1,158,207
350,000 Tiomin Resources, Inc.1 ......................................................... 842,664
262,500 Tiomin Resources, Inc. (Warrants)1,2 ............................................ 201,090
50,000 TVX Gold, Inc.2 ................................................................. 387,500
10,000 Valerie Gold Resources, Ltd.1 ................................................... 57,272
100,000 Valerie Gold Resources, Ltd. .................................................... 572,720
5,000 Valerie Gold Resources, Ltd. (Warrants)1,2 ...................................... 4
840,000 Williams Resources, Inc.2 ....................................................... 864,114
-----------
22,904,382
-----------
PERU: 2.5%
167,009 Cia De Minas Buenaventura "C" ................................................... 1,221,846
-----------
TOTAL COMMON STOCKS:
(Cost $32,046,186) ............................................................ 37,769,263
-----------
SHORT-TERM INVESTMENTS: 6.4%
$3,100,000 Federal Home Loan Mortgage Corporation, 5.40%, due 01/02/97 (Cost $3,099,535) ... 3,099,535
-----------
TOTAL INVESTMENTS: 99.9%
(Cost $43,719,179+) ........................................................... 48,284,141
Other assets in excess of liabilities: 0.1% ..................................... 65,401
-----------
TOTAL NET ASSETS: 100.0%
(equivalent to $4.23 per share on 11,440,676 shares outstanding) .............. $48,349,542
===========
</TABLE>
1Restricted security (Note 6).
2Non-income producing securities.
ADR-American Depository Receipt.
+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
December 31, 1996 (unaudited)
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Investments, at value (cost $43,719,179) (Note 1) ................................................. $ 48,284,141
Cash .............................................................................................. 5,884
Receivable for investment securities sold ......................................................... 321,082
Receivable for shares sold ........................................................................ 7,098
Dividends and interest receivable ................................................................. 4,225
------------
Total Assets .................................................................................. 48,622,430
------------
LIABILITIES
Due to Lexington Management Corporation (Note 2) .................................................. 35,365
Payable for shares redeemed ....................................................................... 98,635
Distributions payable ............................................................................. 53,362
Accrued expenses .................................................................................. 85,526
------------
Total Liabilities ............................................................................. 272,888
------------
NET ASSETS (equivalent to $4.23 per share on 11,440,676 shares outstanding) (Note 3) .............. $ 48,349,542
============
NET ASSETS consist of:
Capital stock--authorized 1,000,000,000 shares, $.001 par value per share ......................... $ 11,441
Additional paid in capital (Note 1) ............................................................... 54,817,617
Distributions in excess of net investment income (Note 1) ......................................... (827,873
Accumulated net realized loss in investments and foreign currency transactions (Note 1) (10,216,587)
Unrealized appreciation on investments and foreign currency transactions .......................... 4,564,944
------------
TOTAL NET ASSETS .................................................................................. $ 48,349,542
============
NET ASSET VALUE, REDEMPTION PRICE PER SHARE ....................................................... $ 4.23
============
OFFERING PRICE PER SHARE (100/94.25 of $4.23 adjusted to nearest cent) ............................ $ 4.49
============
</TABLE>
The Notes to Financial Statements are an integral part of this statement.
5
<PAGE>
LEXINGTON STRATEGIC SILVER FUND, INC.
STATEMENT OF OPERATIONS
Six months ended December 31, 1996 (unaudited)
INVESTMENT INCOME
Dividends ..................... $ 128,341
Interest ...................... 43,339
----------
171,680
Less: foreign tax expense ..... 9,398
----------
Total investment income ... $ 162,282
EXPENSES
Investment advisory fee
(Note 2) .................. 243,151
Transfer agent and shareholder
servicing expense (Note 2) 91,403
Custodian expense ........... 70,753
Printing and mailing expenses 37,550
Accounting expenses (Note 2) 28,929
Registration fees ........... 15,195
Professional fees ........... 13,702
Directors' fees and expenses. 8,343
Computer processing fees .... 7,149
Amortization of reorganization
costs ..................... 6,523
Other expenses .............. 14,507
----------
Total expenses ............ 537,205
----------
Net investment loss ..... (374,923)
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTE 4)
Net realized gain (loss) on:
Investments ............... (567,562)
Foreign currency
transactions ............ 281
----------
Net realized loss ..... (567,281)
Net change in unrealized
appreciation on:
Investments ............... (1,493,436)
Foreign currency translations
of other assets and
liabilities ............. (18)
----------
Net change in unrealized
appreciation ............ (1,493,454)
----------
Net realized and
unrealized loss ....... (2,060,735)
----------
DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS ............. $(2,435,658)
==========
LEXINGTON STRATEGIC SILVER FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED YEAR
DECEMBER 31, ENDED
1996 JUNE 30,
(UNAUDITED) 1996
---------- ----------
Net investment loss ............. $ (374,923) $ (529,009)
Net realized gain (loss) from
investment and foreign
currency transactions ......... (567,281) 4,707,888
Net change in unrealized
appreciation of investments
and foreign currency
translations .................. (1,493,454) 1,524,361
----------- ------------
Increase (decrease) in net
assets resulting
from operations ........... (2,435,658) 5,703,240
Distributions to shareholders
from net investment income .... (335,296) --
Distributions to shareholders
in excess of net investment
income (Note 1) ............... -- (437,823)
Increase (decrease) in net assets
from capital share transactions
(Note 3) ...................... (22,824,326) 3,162,294
------------ ------------
Net increase (decrease) in
net assets ................ (25,595,280) 8,427,711
NET ASSETS:
Beginning of period ........... 73,944,822 65,517,111
------------ ------------
End of period (including
distributions in excess of
net investment income of
$827,873 and 117,653,
respectively) ............... $ 48,349,542 $ 73,944,822
============ ============
The Notes to Financial Statements are an integral part of this statement.
6
<PAGE>
LEXINGTON STRATEGIC SILVER FUND, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1996 (unaudited) and June 30, 1996
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 forward
foreign currency exchange contracts outstanding at December 31,1996.
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 Dividends from net investment income and net realized capital
gains are normally declared and paid annually, but the Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code. 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 fully amortized as of December 31, 1996.
7
<PAGE>
LEXINGTON STRATEGIC SILVER FUND, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1996 (unaudited) and June 30, 1996 (continued)
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.
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 six months ended December 31, 1996.
The Fund also reimbursed LMC for certain expenses, including accounting and
shareholder servicing costs of $53,436, which are incurred by the Fund, but paid
by LMC.
3. CAPITAL STOCK
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
DECEMBER 31, 1996 YEAR ENDED
(UNAUDITED) JUNE 30, 1996
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Shares sold ........................................... 2,143,856 $ 9,479,628 15,352,920 $71,243,731
Shares issued on reinvestment of dividends ............ 67,131 281,952 59,629 294,570
---------- ---------- ---------- ----------
2,210,987 9,761,580 15,412,549 71,538,301
Shares redeemed ....................................... (7,350,053) (32,585,906) (15,223,380) (68,376,007)
---------- ------------ ----------- ------------
Net increase (decrease) ........................... (5,139,066) $(22,824,326) 189,169 $ 3,162,294
========== ============ =========== ============
</TABLE>
4. PURCHASES AND SALES OF INVESTMENT SECURITIES
The cost of purchases and proceeds from sales of securities for the six months
ended December 31, 1996, excluding short-term securities, were $3,529,368 and
$27,021,830, respectively.
At December 31, 1996, the aggregate gross unrealized appreciation for all
securities in which there is an excess of value over tax cost amounted to
$8,570,669 and aggregate gross unrealized depreciation for all securities in
which there is an excess of tax cost over value amounted to $4,005,725.
8
<PAGE>
LEXINGTON STRATEGIC SILVER FUND, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1996 (unaudited) and June 30, 1996 (continued)
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.
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>
Argosy Mining Corporation 5/24/96 200,000 $ 1.82 $ 290,373 0.60%
Argosy Mining Corporation (Warrants) 5/24/96 100,000 0.00 73 0.00%
Eldorado Corporation, Ltd. 2/22/96 140,000 5.37 939,689 1.94%
Metallica Resources, Inc. 3/20/96 130,000 3.68 436,288 0.90%
Pan American Silver Corporation 3/21/96 285,000 5.44 1,715,423 3.55%
Tiomin Resources, Inc. 9/28/95 350,000 1.44 842,664 1.74%
Tiomin Resources, Inc. (Warrants) 9/28/95 262,500 0.00 201,090 0.42%
Valerie Gold Resources, Ltd. 9/28/95 10,000 10.18 57,272 0.12%
Valerie Gold Resources, Ltd. (Warrants) 5/28/96 5,000 0.00 4 0.00%
----------- ------
$4,482,876 9.27%
----------- ------
</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.
9
<PAGE>
LEXINGTON STRATEGIC SILVER FUND, INC.
FINANCIAL HIGHLIGHTS
Selected per share data for a share outstanding throughout the period:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
DECEMBER 31, YEAR ENDED JUNE 30,
1996 --------------------------------------
(UNAUDITED) 1996 1995 1994 1993
------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ................. $4.46 $4.00 $3.92 $3.52 $2.78
----- ----- ----- ----- -----
Income (loss) from investment operations:
Net investment loss ................................ (0.03) (0.03) (0.03) (0.02) (0.04)
Net realized and unrealized gain (loss) on
investments and foreign currency transactions .... (0.15) 0.51 0.11 0.42 0.78
----- ----- ----- ----- -----
Total income (loss) from investment operations ....... (0.18) 0.48 0.08 0.40 0.74
----- ----- ----- ----- -----
Less distributions:
Distributions from net investment income ............. (0.05) (0.02) -- -- --
----- ----- ----- ----- -----
Net asset value, end of period ....................... $4.23 $4.46 $4.00 $3.92 $3.52
----- ----- ----- ----- -----
Total return*** ...................................... (8.69%)* 12.02% 2.04% 11.36% 26.62%
Ratio to average net assets:
Expenses, before reimbursement or waivers .......... 1.96%* 1.73% 1.82% 1.84% 3.48%
Expenses, net of reimbursement or waivers .......... 1.96%* 1.73% 1.82% 1.84% 2.60%
Net investment loss, before reimbursement
or waivers ....................................... (1.37%)* (0.72%) (0.83%) (0.82%) (2.48%)
Net investment loss ................................ (1.37%)* (0.72%) (0.83%) (0.82%) (1.60%)
Portfolio turnover rate .............................. 13.20%* 44.30% 44.22% 5.28% 18.58%
Average commission paid on equity
security transactions** ............................ $0.03 $0.02 -- -- --
Net assets, end of period (000's omitted) ............ $48,350 $73,945 $65,517 $49,499 $15,032
</TABLE>
*Annualized.
**In accordance with recent SEC disclosure guidelines, the average commissions
are calculated for the year ended in 1996 and forward, but not for prior
periods.
***Sales load is not reflected in total return.
10
<PAGE>
LEXINGTON
[LOGO]
- --------------------------------------------------------------------------------
LEXINGTON
STRATEGICSILVER
FUND, INC.
----------------------
Seeks long-term
growth of capital
through investment
in established silver
related companies.
----------------------
SEMI-ANNUAL REPORT
DECEMBER31, 1996
- --------------------------------------------------------------------------------
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 accompanied or preceded by a currently effective prospectus
which sets forth expenses and other material information.
