<PAGE>
[Photo]
Gabelli
Gold
Fund,
Inc.
ANNUAL REPORT
DECEMBER 31, 1994
<PAGE>
Gabelli Gold Fund, Inc.
One Corporate Center
Rye, New York 10580-1434
Annual Report - 1994
To Our Shareholders:
We have completed nearly six months of operations in our first fiscal year
and we welcome our new shareholders. Since our inception on July 11, 1994 the
Fund's net asset value has risen by 10.7% which compares with a decline of 0.6%
in the Philadelphia Gold and Silver Index, a widely accepted, unmanaged index of
gold stocks and a 0.4% rise in the average gold fund followed by Lipper
Analytical Services. At the end of December our shareholder base was 1,743 and
the Fund's net assets were $17.6 million. During the fourth quarter the net
asset value of the Gabelli Gold Fund fell by 10.5% from $12.37 to $11.07 per
share. This compares favorably against a fall of 17.3% for the Philadelphia Gold
and Silver Index, and a decline of 14.4% for the average gold fund followed by
Lipper Analytical Services.
<TABLE>
<CAPTION>
INVESTMENT RESULTS (a)
-------------------------------------------------------------------------------------------------------------
Quarter
---------------------------------------
1st 2nd 3rd 4th Year
--- --- --- --- ----
<C> <S> <C> <C> <C> <C> <C>
1994: Net Asset Value .................... --- --- $12.37 $11.07 $11.07
Total Return ....................... --- --- 23.7%(b) (10.5)% 10.7%(b)
-------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Total return reflects change in share price and is net of expenses. Of
course, returns represent past performance and do not guarantee future results.
Investment returns and the principal value of an investment will fluctuate. When
shares are redeemed they may be worth more or less than their original cost.
(b) From commencement of operations on July 11, 1994.
--------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000
INVESTMENT IN THE GABELLI GOLD FUND, PHILADELPHIA
GOLD & SILVER INDEX AND THE
LIPPER GOLD INDEX
[THE FOLLOWING INFORMATION IS SHOWN BY A CHART IN THE PRINTED DOCUMENT]
Philadelphia Lipper
Gabelli Gold Fund Gold & Silver Index Index
----------------- ------------------- -----
7/11/94 $10,000 $10,000 $10,000
12/31/94 10,070* 9,940 10,040
* Past performance is not predictive of future performance.
Our Investment Objective
The Fund's objective is to obtain long-term capital appreciation by
investing in the equity securities of foreign and domestic issues principally
engaged in gold and gold related activities.
Our Approach
We look at a number of company specifics in order to determine which gold
stocks are relatively undervalued. Our primary focus is on capitalization per
ounce of production, and, more importantly, on capitalization per ounce of
<PAGE>
recoverable reserves. This determines how much gold actually backs every dollar
invested in a gold company. We appreciate that every mining company must replace
the gold that it mines and we place a heavy emphasis on the quality of
management and their ability to create shareholder wealth. We invest globally
with an emphasis on gold producing companies.
Commentary
Following a strong third quarter, gold equities performed poorly in the
fourth quarter as the gold price failed to move above $400 per ounce. This
failure led to considerable commodity fund selling and shorting of gold in
expectations of even lower prices. The gold market is now trading at the lower
end of its twelve month trading range with continued selling by speculators
being absorbed by strong physical demand, particularly from the the Far East.
Recently published figures from Gold Fields Mineral Services show very
favorable supply/demand characteristics for gold. Mine production and scrap
recovery rose last year by less than 1% compared with 1993. Adding Central Bank
sales, which declined dramatically to less than 50 tonnes from over 500 tonnes
in 1993 and forward sales by producers which also fell sharply, the total supply
of gold is estimated to have fallen by 16% in 1994. On the demand side, total
fabrication was down 2% with jewelry demand, by far the largest component,
falling by 1%. The residual figure which balances the equation, namely
investment demand, showed a large swing from 320 tonnes net investment in 1993
to net disinvestment of over 200 tonnes in 1994. This is a swing of about 550
tonnes or nearly 25% of total mine supply. Overall, these figures are supportive
of higher gold prices. Central banks have sharply curtailed their selling,
producers are hedging less, growth in mine production is muted, yet jewelry
demand recovered in the second half of the year and is set to expand further,
reflecting world-wide economic growth.
Why did investors sell gold? Gold underperformed base metals and other
commodities so investors switched to better performing commodities. As the year
progressed, the technical picture deteriorated and this encouraged huge
speculative shorting of gold. Liquidations of some commodity funds resulted in
further sales of precious metals. The economic reasoning behind this selling is
respect for the Federal Reserve's ability to slow the economy to a growth rate
nearer 2.5% from its current torrid pace. Indeed, a consensus has developed
which suggests that, following the 75 basis point rise in interest rates in
November, the economy is already beginning to slow and that only one more rate
rise is now necessary to achieve steady non-inflationary growth. This may occur
but the momentum of the economy is likely to be maintained by strong employment
gains followed by wage growth.
It is clear that inflationary pressures have been building in the economy
primarily at the producer price level, but this has not yet been reflected in
the consumer price index. The recent rate rise has exacerbated some of the
strains in the financial system such as the leveraging of supposedly low risk
money market portfolios in order to enhance returns. In December, the Orange
County, CA debacle surfaced and the Federal Reserve will be anxious to avoid
further losses, which may limit their freedom of action.
<PAGE>
As emerging markets grow, the influence on commodity prices by U.S. demand
will progressively wane. Even if the U.S. economy slows significantly, Europe is
still in the early stages of economic recovery and Japan has only just come out
of recession. A pick up in non-U.S. global growth will spur demand for
commodities, including gold. In addition, there is the potential for a large
rally in the gold price based on short covering which can be sustained by rising
physical demand.
Gold equities have been hit hard by the recent sell off in the gold price
and now are more attractively valued. Approximately half of the portfolio is
invested in North American gold equities. Other areas of emphasis include South
America, West Africa and the Far East.
Twenty eight percent of the portfolio is invested in South Africa with an
emphasis on platinum producers and companies, which will benefit from the
corporate reorganization of Randgold and the mines under its control. We remain
excited by the prospects for the platinum group metals which includes palladium.
Japan consumes about half of the world's platinum supply and we expect demand to
rise as the Japanese economic recovery takes hold. Growth in supply has slowed.
There are doubts as to whether Russia, a large supplier of palladium, will be
able to maintain deliveries due to production difficulties in Norilsk. We also
own shares in the only two platinum producing companies outside South Africa.
About thirteen percent of the Fund is invested in Australian gold companies,
which have excellent growth potential from projects in Australia and overseas.
Global Allocation
The chart at the right presents the Fund's holdings by geographic region
as of December 31, 1994. The geographic allocation will change based on future
global market conditions.
Countries and/or regions or companies represented in the chart and below
may or may not be included in the Fund's portfolio in the future.
[THE FOLLOWING INFORMATION IS SHOWN BY A CHART IN THE PRINTED DOCUMENT]
HOLDINGS BY GEOGRAPHIC REGION - 12/31/94
----------------------------------------
North America 44.0%
Australia 13.1%
Cash and Equivalents 10.5%
Other 4.6%
South Africa 27.8%
Let's Talk Stocks
The following are stock specifics on selected holdings of our Fund's
investments. Favorable EBITDA prospects do not necessarily translate into higher
stock prices, but they do express a positive trend which we believe will develop
over time.
Ashanti Goldfields (ASHGq.L - $21.63 - London Stock Exchange) mines one of the
world's richest gold deposits located in Ghana, West Africa. Until last year,
the company was a joint venture between Lonrho, the London based conglomerate
and the Government of Ghana. In April 1994, the company was listed on the London
and Ghanian stock exchanges after a secondary offering whereby the Ghanian
government reduced its ownership to 30%. Ashanti is producing gold at an annual
<PAGE>
rate of one million ounces and has a published reserve life of over 19 million
ounces. On a capitalization per ounce of gold reserves, the valuation is very
cheap relative to North American based producers. We believe that Ashanti has
the potential to increase its reserves and production substantially over the
next few years from its current lease area and to participate in other
opportunities in Ghana and other West African countries. We also expect Ashanti
to seek a U.S. listing which will increase investor interest.
Kinross Gold Corporation (KGC - $5.17 - New York Stock Exchange) is an
aggressive Canadian based gold producer which has grown rapidly through
acquisition. Gold assets were acquired from Kennecott in mid-1993 and, by the
end of 1993, Kinross had purchased all of Falconbridge Gold. Since then, the
company has had considerable success in increasing reserves at the Candelaira
Mine and, more spectacularly, at the Hoyle Pond Mine which, at the end of
September had an estimated geologic resource of 1.5 million ounces. The company
also owns two producing mines in Zimbabwe and recently began construction at the
QR Project in British Columbia which will begin production in the spring.
Management is aggressive and, with $92 million in cash on the balance sheet,
future acquisitions and deals can be expected.
Miramar (MAE.TO - $4.28 - Toronto Stock Exchange) is a medium sized gold
producer based in Vancouver, Canada with excellent growth potential. The company
currently has two producing mines. The largest is the Con Mine in Canada, which
the company acquired very cheaply at the end of 1993. Miramar has been
successful in reducing costs and adding to reserves. In the third quarter, cash
costs were reduced to $260 dollars per ounce compared with $334 dollars a year
ago. The company owns a majority interest in a small mine in Nevada and has
recently purchased a development property nearby, which contains about 1.5
million ounces of gold. The company has exciting development opportunities in
Cuba and Argentina. The balance sheet is strong with cash totalling over $65
million, or about $1.50 per share.
International Gold Resources (IGC.TO - $3.14 - Toronto Stock Exchange) is an
attractively priced exploration company with excellent growth potential. The
company has acquired a portfolio of interesting properties in West Africa,
primarily in Ghana. Ghana has a long history of gold mining and the industry is
enjoying a strong revival following reforms. Currently, the company's most
valuable property is the Bibiani mine, which was closed in the mid-1960s, but
still appears to host a considerable amount of gold. International Gold
Resources' other properties have attracted the interest of Echo Bay Mines, a
major gold mining company, which has developed into a joint venture agreement.
Minimum Initial Investment - $1,000
The Fund's minimum initial investment for both regular and retirement
accounts is $1,000. There are no subsequent minimums. No initial minimum is
required for those establishing an Automatic Investment Plan.
<PAGE>
Gabelli U.S. Treasury Money Market Fund
Shareholders of any of the Gabelli Funds may invest in The Gabelli U.S.
Treasury Money Market Fund with an initial investment of $3,000 or more. The
Fund provides checkwriting and exchange privileges. The Fund's expenses are
capped at .30% of average net assets, making it one of the most attractive U.S.
Treasury-only money market funds. With dividends that are exempt from state and
local income taxes in all states, the Fund is an excellent vehicle in which to
store idle cash. Call us at 1-800-GABELLI (1-800-422-3554) for a prospectus
which gives a more complete description of the Fund, including management fees
and expenses. Read it carefully before you invest or send money.
In Conclusion
The Fund's daily net asset value is available in the financial press and
each evening after 6:00 PM (Eastern Time) by calling 1-800-GABELLI
(1-800-422-3554). The Fund's NASDAQ symbol is GOLDX. Please call us during the
day for further information.
We thank you for your confidence in our investing abilities and wish you a
productive and financially rewarding 1995.
Sincerely,
/s/ Caesar Bryan
Caesar Bryan
President and Portfolio Manager
February 1, 1995
--------------------------------------------------------------------------------
Top Ten Holdings
December 31, 1994
-----------------
Stillwater Mining Ltd. Kloof Gold Mining Company Ltd.
Newmont Mining Corporation Pegasus Gold, Inc.
Placer Dome, Inc. American Barrick Resources Corp.
TVX Gold, Inc. Pioneer Group, Inc.
Randgold and Exploration Company Cambior, Inc.
--------------------------------------------------------------------------------
<PAGE>
Gabelli Gold Fund, Inc.
Portfolio of Investments -- December 31, 1994
================================================================================
Market
Shares Cost Value
------ ---- -----
COMMON STOCKS -- 87.40%
METALS & MINING -- 87.40%
Australia -- 13.08%
230,000 Climax Mining Ltd.+ ................... $ 199,678 $ 178,250
75,000 Delta Gold+ ........................... 169,895 163,913
150,000 Eagle Mining Corporation+ ............. 165,656 174,375
210,000 Golden Shamrock Mines
Limited+ ........................... 201,669 159,495
30,000 Great Central Mines N.L.+ ............. 72,236 63,938
140,700 Homestake Gold of Australia
Limited+ ........................... 164,640 161,383
71,429 Hunter Resources Limited+ ............. 31,644 30,446
100,000 Mount Edon Gold Mines Ltd ............. 233,853 232,500
46,700 Newcrest Mining Limited ............... 232,084 208,107
55,000 Poseidon Gold Ltd ..................... 162,697 115,088
80,000 Ranger Minerals NL+ ................... 235,400 217,000
100,000 Rhodes Mining NL+ ..................... 15,897 14,725
213,500 Saint Barbara Mines Ltd.+ ............. 266,385 256,467
15,000 Western Mining Corporation
Holdings Limited ................... 88,850 86,955
150,000 Zapopan N.L.+ ......................... 199,351 244,125
---------- ----------
2,439,935 2,306,767
---------- ----------
Europe -- 3.23%
15,000 Ashanti Goldfields GDR+ ............... 325,250 324,375
352,100 Glencar Explorations plc+ ............. 221,040 245,431
---------- ----------
546,290 569,806
---------- ----------
North America -- 43.94%
7,000 Agnico-Eagle Mines, Ltd ............... 85,050 74,375
19,922 American Barrick Resources
Corporation ........................ 416,828 443,265
20,000 Bema Gold Corporation+ ................ 34,216 35,663
35,400 Cambior, Inc. ......................... 446,793 407,151
87,000 Dayton Mining Corporation+ ............ 273,319 251,319
12,800 Euro-Nevada Mining
Corporation ........................ 328,855 269,330
6,750 Franco-Nevada Mining
Corporation ........................ 371,603 331,602
59,800 Goldcorp Inc. Cl. A.+ ................. 319,932 335,895
20,000 Golden Star Resources, Ltd.+ .......... 193,918 171,184
15,900 Hycroft Resources &
Development Corporation+ ........... 38,494 27,218
76,000 International Gold Resources
Corporation+ ....................... 236,653 238,516
70,000 Kinross Gold Corporation+ ............. 394,291 361,983
80,000 Miramar Mining Corporation+ ........... 378,552 342,368
17,000 Newmont Mining Corporation ............ 674,388 612,000
51,000 North American Palladium Ltd.+ ........ 298,995 376,125
40,000 Pegasus Gold, Inc.+ ................... 523,140 460,057
19,200 Pioneer Group, Inc. ................... 418,779 422,400
25,300 Placer Dome, Inc. ..................... 526,982 550,275
25,000 Royal Oak Mines+ ...................... 107,068 82,026
70,000 Santa Elina Gold
Corporation(a),+ ................... 105,000 105,000
29,000 Santa Fe Pacific Gold
Corporation+ ....................... 408,825 373,375
41,250 Stillwater Mining Ltd.(a),(b)+ ........ 242,000 505,849
30,000 Stillwater Mining Ltd.+ ............... 390,000 408,750
79,000 TVX Gold, Inc.+ ....................... 533,348 535,307
30,000 Zamora Gold Corporation+ .............. 43,481 26,748
---------- ----------
7,790,510 7,747,781
---------- ----------
South Africa -- 25.85%
180,000 Deelkraal Gold ADR .................... 332,548 293,724
155,000 Doornfontein Gold Mining
Company Limited ADR+ ............... 187,250 167,354
90,000 Grootvlei Proprietary
Mines Ltd. ......................... 258,252 234,000
35,000 Harmony Gold Mining Ltd
ADR+ ............................... 245,175 343,553
15,000 Impala Platinum Holdings,
Ltd. ............................... 347,500 368,094
33,000 Kloof Gold Mining
Company Ltd. ....................... 473,882 490,875
305,000 Lebowa Platinum Mines
Limited+............................ 354,700 387,331
20,000 Leslie Gold Mines Ltd. ADR ............ 180,475 190,182
40,100 Loraine Gold Mines Ltd. ADR+ .......... 192,362 180,450
79,000 Northam Platinum Limited+ ............. 97,475 116,318
20,000 Randfontein Estates Gold
Mining Company Ltd. ADR ............ 215,000 227,500
188,000 Randgold and Exploration
Company Ltd. ....................... 537,200 535,166
1,100,000 Rand Leases Gold Mining+ .............. 298,500 259,140
14,000 Rustenburg Platinum Holdings,
Ltd. ............................... 367,215 384,780
40,000 Saint Helena Gold Mines Ltd. .......... 378,388 380,000
---------- ----------
4,465,922 4,558,467
South America -- 1.30%
45,000 Cia De Minas Buenaventura
SA ................. ............... 172,946 230,323
---------- ----------
TOTAL COMMON STOCKS ................... 15,415,603 15,413,144
---------- ----------
CONVERTIBLE PREFERRED STOCKS -- 0.55%
North America
2,000 Amax Gold, Inc. $3.75 Cv.
Pfd. Ser B ......................... 100,000 97,000
---------- ----------
TOTAL CONVERTIBLE
PREFERRED STOCKS ..................... 100,000 97,000
---------- ----------
CONVERTIBLE CORPORATE BONDS -- 1.09%
North America
$200,000 Bema Gold Corporation Sub.
Deb. Cv. 7.50%, 9/15/99(a) ......... 200,000 192,000
---------- ----------
TOTAL CONVERTIBLE
CORPORATE BONDS ...................... 200,000 192,000
---------- ----------
U.S. GOVERNMENT OBLIGATIONS -- 13.20%
2,340,000 U.S. Treasury Bills, 4.55% to
5.46%, Due 2/2/95 to
2/23/95 ............................ 2,327,483 2,327,483
---------- ----------
TOTAL U.S. GOVERNMENT
OBLIGATIONS .......................... 2,327,483 2,327,483
---------- ----------
TOTAL
INVESTMENTS--102.24% ................. $18,043,086* 18,029,627
=========== ===========
(a) Security is fair valued pursuant to procedures established by the Board of
Directors.
(b) Security restricted as to resale. This investment was acquired on September
14, 1994 and represents 2.9% of net assets at December 31, 1994.
ADR--American Depository Receipt
GDR--Global Depository Receipt
+Non-income producing security.
*For Federal income tax purposes:
Aggregate cost ............................................. $18,043,086
===========
Gross unrealized appreciation .............................. $ 798,665
Gross unrealized depreciation .............................. (811,858)
-----------
Net unrealized depreciation $ (13,193)
===========
The accompanying notes are an integral part of the financial statements.
<PAGE>
Gabelli Gold Fund, Inc.
Statement of Assets and Liabilities
December 31, 1994
--------------------------------------------------------------------------------
Assets:
Investments in securities, at value
(Cost $18,043,086) ..................................... $ 18,029,627
Cash ........................................................ 249,445
Receivable for Fund shares sold ............................. 271,835
Receivable for investments sold ............................. 4,174
Dividends and interest receivable ........................... 26,791
Deferred organizational expenses ............................ 82,329
------------
Total assets 18,664,201
------------
Liabilities:
Payable to Advisor .......................................... 13,034
Payable for distribution fees ............................... 3,280
Payable for investments purchased ........................... 920,791
Payable for Fund shares redeemed ............................ 62,172
Organizational expenses payable ............................. 27,036
Other accrued expenses ...................................... 3,305
------------
Total Liabilities 1,029,618
------------
Net assets (applicable to 1,593,718
shares outstanding .................................... $ 17,634,583
============
Net asset value and redemption
price per share ...................................... $11.07
Net Assets Consist of:
Capital Stock, at par value ................................. $ 1,594
Additional paid-in-capital .................................. 17,652,756
Accumulated net realized loss on
investments and foreign currency
transactions............................................ (6,574)
Net unrealized depreciation on
investments and assets and
liabilities denominated in foreign
currencies.............................................. (13,193)
------------
Net assets ............................................. $ 17,634,583
============
Statement of Operations--For the Period
July 11, 1994 (Commencement of Operations)
through December 31, 1994
================================================================================
Investment Income:
Dividends (net of foreign taxes of $3,519) .................. $ 38,762
Interest.................. .................................. 28,739
--------
Total Income ........................................ 67,501
--------
Expenses:
Investment advisory fees..................................... 37,607
Distribution expenses........................................ 9,423
Amortization of organization expenses ....................... 8,671
Legal and audit fees......................................... 7,600
Custodian fees and expenses ................................. 4,631
Transfer and shareholder servicing agent .................... 3,079
Printing and mailing......................................... 2,843
Directors' fees and expenses ................................ 2,000
Registration fees............................................ 1,047
--------
Total expenses ........................................... 76,901
--------
Investment loss - net ....................................... (9,400)
--------
Net Realized and Unrealized Loss
on Investments and Foreign Currency
Transactions:
Net realized loss on investments and
foreign currency transactions .......................... (6,574)
Net change in unrealized depreciation on
investments and assets and liabilities
denominated in foreign currencies ...................... (13,193)
--------
Net loss on investments ................................ (19,767)
---------
Net decrease in net assets resulting
from operations ........................................ $(29,167)
========
Statement of Changes in Net Assets
July 11, 1994 (Commencement of Operations) through December 31, 1994
================================================================================
Increase in Net Assets:
Investment loss - net ..................................... $ (9,400)
Net realized loss on investments and foreign
currency transactions ................................ (6,574)
Net change in unrealized depreciation on
investments and assets and liabilities
denominated in foreign currencies .................... (13,193)
-----------
Net decrease in net assets resulting from operations ...... (29,167)
-----------
Share transactions - net .................................. 17,563,750
-----------
Net increase in net assets ........................... 17,534,583
Net Assets:
Beginning of period ....................................... 100,000
-----------
End of period ............................................. $17,634,583
===========
The accompanying notes are an integral part of the financial statements.
<PAGE>
Gabelli Gold Fund, Inc.
Notes to Financial Statements
================================================================================
1. Significant Accounting Policies. The Gabelli Gold Fund, Inc. (the "Fund") was
incorporated in Maryland on May 13, 1994. The Fund is a no-load, open-end,
diversified management investment company. Prior to July 11, 1994 (commencement
of operations), the Fund had no operations other than the sale of 10,000 shares
of common stock at $10.00 per share, to Gabelli Funds, Inc., the Fund's advisor,
on June 14, 1994. The following is a summary of significant accounting policies
followed by the Fund:
Security Valuation. Portfolio securities listed or traded on the New York or
American Stock Exchanges or quoted by the National Association of Securities
Dealers Automated Quotations, Inc. are valued at the last sale price on that
exchange (if there were no sales that day, the security is valued at the average
of the bid and asked price). All other portfolio securities for which NASDAQ
market quotations are readily available are valued at the latest average of the
bid and asked price. Securities for which market quotations are not readily
available and restricted securities which are subject to limitations as to their
resale are valued at their fair value as determined in good faith under
procedures established by and under the general supervision of the Fund's Board
of Directors. Short-term debt securities with remaining maturities of 60 days or
less are valued at amortized cost, unless the Directors determine such does not
reflect the securities' fair value, in which case these securities will be
valued at their fair value as determined by the Directors.
Foreign Currency Transactions. The books and records of the Fund are maintained
in U.S. dollars as follows:
(i) market value of investment securities and other assets and liabilities are
translated at the exchange rate on the valuation date.
(ii) purchases and sales of investment securities, income and expenses are
translated at the exchange rate prevailing on the respective date of such
transactions.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuation
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Forward Foreign Currency Contracts. The Fund may hold currencies to meet
settlement requirements for foreign securities and may engage in currency
exchange transactions to hedge against changes in exchange rates. Forward
foreign currency contracts are valued at the forward rate and are
marked-to-market daily. The change in market value is recorded by the Fund as an
unrealized gain or loss. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the value of the contract
at the time it was opened and the value at the time it was closed.
The use of forward foreign currency contracts does not eliminate fluctuations in
the underlying prices of the Fund's portfolio securities, but it does establish
a rate of exchange that can be achieved in the future. Although forward foreign
currency contracts limit the risk of loss due to a decline in the value of the
hedged currency, they also limit any potential gain that might result should the
value of the currency increase. In addition, the Fund could be exposed to risks
if the counterparties to the contracts are unable to meet the terms of their
contracts. At December 31, 1994 the Fund had long positions in the following
forward foreign currency contracts:
Foreign
Currency
Amount Cost Value
------ ---- -----
397,445 Canadian Dollar ............... $282,176 $283,484
16,398 Irish Punt .................... 25,220 25,401
-------- --------
$307,396 $308,885
======== ========
Security Transactions and Investment Income. Security transactions are accounted
for on the dates the securities are purchased or sold (the trade dates), with
realized gain and loss on investments determined by using specific
identification as the cost method. Interest income (including amortization of
premium and discount) is recorded as earned. Dividend income and dividend and
capital gain distributions to shareholders are recorded on the ex-dividend date.
<PAGE>
Gabelli Gold Fund, Inc.
Notes to Financial Statements (Continued)
================================================================================
Federal Income Taxes. The Fund has qualified and intends to continue to qualify
as a "regulated investment company" under Subchapter M of the Internal Revenue
Code of 1986 and distribute all of its taxable income and capital gains, if any,
to its shareholders. Therefore, no Federal income tax provision is required.
Dividends and interest from non-U.S. sources received by the Fund are generally
subject to non-U.S. withholding taxes at rates ranging to 30%. Such withholding
taxes may be reduced or eliminated under the terms of applicable U.S. income tax
treaties, and the Fund intends to undertake any procedural steps required to
claim the benefits of such treaties. If more than 50% in value of the Fund's
total assets at the close of any taxable year consists of stocks or securities
of non-U.S. corporations, the Fund is permitted and may elect to treat any
non-U.S. taxes paid by it as paid by its shareholders.
At December 31, 1994, the Fund had a net capital loss carryforward of $6,574 for
Federal income tax purposes, which is available through 2002 to reduce future
distributions of net capital gains to shareholders. The Fund's net investment
loss of $9,400 was charged against additional paid in capital as the loss cannot
be carried forward for Federal income tax purposes.
2. Capital Stock Transactions. The Articles of Incorporation, dated May 13,
1994, permit the Fund to issue 1,000,000,000 shares (par value $0.001) of common
stock. Transactions in shares of common stock were as follows:
July 11, 1994
(commencement of operations)
through December 31, 1994
------------------------------
Shares Amount
------ ------
Shares sold ............................ 2,231,306 $ 25,119,891
Shares redeemed ........................ (647,588) (7,556,141)
--------- ------------
Shares transactions--net ............. 1,583,718 $ 17,563,750
========= ============
3. Purchases and Sales of Securities. Purchases and sales of securities for the
period ended December 31, 1994 other than U.S. government obligations and
short-term securities, aggregated $16,559,891 and $837,526 respectively.
4. Investment Advisory Contract. The Fund employs Gabelli Funds, Inc. (the
"Advisor") to provide a continuous investment program for the Fund's portfolio,
provide all facilities and personnel, including officers, required for its
administrative management, and to pay the compensation of all officers and
Directors of the Fund who are affiliated with the Advisor. As compensation for
the services rendered and related expenses borne by the Advisor, the Fund pays
the Advisor a fee, computed and accrued daily and payable monthly, equal to
1.00% per annum of the Fund's average daily net assets. The Advisor is obligated
to reimburse the Fund in the event the Fund's expenses exceed the most
restrictive expense ratio limitation imposed by any state, currently believed to
be 2.5% of the first $30 million, 2% of the next $70 million and 1.5% of the
excess over $100 million of the Fund's average daily net assets (excluding
taxes, interest, distribution expenses and extraordinary items). No such
reimbursement was required during 1994.
5. Organization Expenses. The organization and start-up expenses of the Fund are
being amortized on a straight-line basis over a period of 60 months. The Advisor
has agreed that in the event that any of the initial 10,000 shares it owns are
redeemed during the period of amortization of the Fund's organization and
start-up expenses, the redemption proceeds will be reduced by any such
unamortized organization expenses in the same proportion as the number of shares
redeemed to the number of initial shares outstanding at the time of redemption.
6. Distribution Plan. The Fund's Board of Directors has adopted a distribution
plan (the "Plan") under Section 12(b) of the Investment Company Act of 1940 and
Rule 12b-1 thereunder under which the Fund pays Gabelli & Company, Inc., the
distributor and an affiliate of the Advisor, an annual rate of up to 0.25% of
average net assets for the costs and expenses in connection with distributing
the Fund's shares. For the period ended December 31, 1994, the Fund has incurred
distribution costs of $9,423. The Board of Directors has approved that
Distribution costs incurred by Gabelli & Company, Inc., totalling $185,764 which
are in excess of the .25% limitation may be recovered from the Fund in future
periods, subject to such limitation.
<PAGE>
Financial Highlights
================================================================================
Selected data for a share of capital stock outstanding throughout the period
July 11, 1994 (Commencement of Operations) through December 31, 1994:
Operating Performance:
Net Asset Value, Beginning of Period ........................... $ 10.00
Increase from Investment Operations:
Net investment loss .......................................... 0.00
Net realized and unrealized gain on securities ............... 1.07(a)
-------
Total from Investment Operations ............................... 1.07
-------
Net Asset Value, End of Period ................................. $ 11.07
=======
Total Return ................................................. 10.70%
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) ..................... $17,634
Ratio of Expenses to Average Net Assets ...................... 2.04%(b)
Ratio of Net Investment Loss to Average Net Assets ........... (0.26%)(b)
Portfolio Turnover Rate ...................................... 12.32%
----------
(a) Includes the effect of realized gains prior to significant increases in
shares outstanding.
(b) Annualized.
================================================================================
Gabelli Gold Fund, Inc.
Report of Ernst & Young LLP, Independent Auditors
--------------------------------------------------------------------------------
Shareholders and Board of Directors
Gabelli Gold Fund, Inc.
We have audited the accompanying statement of assets and liabilities of The
Gabelli Gold Fund, Inc., including the portfolio of investments, as of December
31, 1994, and the related statements of operations and changes in net assets,
and financial highlights for the period from July 11, 1994 (commencement of
operations) to December 31, 1994. 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 audit.
We conducted our audit 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 December 31, 1994 by
correspondence with the custodian and brokers. 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 audit provides 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 The
Gabelli Gold Fund, Inc. at December 31, 1994, and the results of its operations,
the changes in its net assets and the financial highlights for the period from
July 11, 1994 to December 31, 1994, in conformity with generally accepted
accounting principles.
February 17, 1995 /s/ Ernest Young LLP
<PAGE>
Gabelli Gold Fund, Inc.
One Corporate Center
Rye, New York 10580-1434
1-800-GABELLI
[1-800-422-3554]
(Net Asset Value may be obtained daily by calling
1-800-GABELLI after 6:00 P.M.)
Board of Directors
Mario J. Gabelli, CFA
Chairman and Chief
Investment Officer
Gabelli Funds, Inc.
E. Val Cerutti
Chief Executive Officer
Cerutti Consultants, Inc.
Felix J. Christiana
Former Senior
Vice President
Dollar Dry Dock Savings Bank
Anthony J. Colavita
Attorney-at-Law
Anthony J. Colavita, P.C.
Karl Otto Pohl
Former President
Deutsche Bundesbank
Werner J. Roeder, MD
Director of Surgery
Lawrence Hospital
Anthonie C. van Ekris
Managing Director
BALMAC International, Inc.
Daniel E. Zucchi
Senior Vice President
Hearst Magazines
Officers
Caesar Bryan
President and
Portfolio Manager
J. Hamilton Crawford, Jr.
Secretary
Bruce N. Alpert
Vice President
and Treasurer
Distributor
Gabelli & Company, Inc.
Custodian, Transfer Agent and Dividend Agent
State Street Bank and Trust Company
Legal Counsel
Willkie, Farr & Gallagher
Independent Auditors
Ernst & Young LLP
--------------------------------------------------------------------------------
This report is submitted for the general information of the shareholders of
Gabelli Gold Fund, Inc. It is not authorized for distribution to prospective
investors unless preceded or accompanied by an effective prospectus.
--------------------------------------------------------------------------------
<PAGE>
