[PHOTO]
Gabelli
Gold
Fund,
Inc.
SEMI-ANNUAL REPORT
JUNE 30, 1995
<PAGE>
Gabelli Gold Fund, Inc.
One Corporate Center
Rye, New York 10580-1434
Semi-Annual Report - 1995
To Our Shareholders:
For the second quarter of 1995 the Fund's net asset value appreciated by
8.7%. This compares to a rise of 3.3% for the average of 42 gold funds monitored
by Lipper Analytical Services. For the six-month period ended June 30, 1995, the
Fund's total return was 8.0% versus the 1.7% increase in the average gold fund
tracked by Lipper. The Fund's total return from inception on July 11, 1994
through June 30, 1995 was 19.6%. On June 30, 1995 our shareholder base was 1,666
and net assets of the Fund were $18.1 million.
<TABLE>
<CAPTION>
INVESTMENT RESULTS (a)
- ---------------------------------------------------------------------------------------------------------------------------
Quarter
------------------------------------------
1st 2nd 3rd 4th Year
--- --- --- --- ----
<S> <C> <C> <C> <C> <C>
1995: Net Asset Value $11.00 $11.96 --- --- ---
Total Return (0.6)% 8.7% --- --- ---
- ---------------------------------------------------------------------------------------------------------------------------
1994: Net Asset Value --- --- $12.37 $11.07 $11.07
Total Return --- --- 23.7%(b) (10.5)% 10.7%(b)
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Total returns reflect changes in share price and are 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.
- --------------------------------------------------------------------------------
While the larger North American gold companies performed well during the
first quarter of 1995, smaller and overseas gold equities picked up in the
second quarter. The Philadelphia Gold and Silver Index, representing the senior
gold stocks, actually fell during the quarter by 1.5%. In contrast, the
Australian gold share index appreciated by 9.9%, unadjusted for movements in the
U.S. dollar.
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 mining 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
recoverable reserves. This determines how much gold actually backs every dollar
<PAGE>
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 the Mexican financial crisis and the weakness of the U.S. dollar
earlier in the year, relative calm returned to financial markets during the
second quarter of 1995. The dollar was stable relative to the yen and the
deutsche mark and previous fears that U.S. interest rates would rise proved to
be groundless. In fact, due to continuing evidence of an economic slowdown, U.S.
interest rates, particularly long-term rates, fell significantly during the
quarter. Overseas interest rates also declined with the Japanese ten year bond
yielding only 2.7% by the end of June. The gold price traded in a narrow band
between $383 per ounce and $394 per ounce and ended the quarter at $384.35.
The rally in the senior North American gold equities which occurred during
the first quarter spread in the second quarter to the medium-sized and smaller
gold companies and to selective overseas gold equities, particularly in
Australia. It is in these latter categories that your Fund is most heavily
invested. Although there are opportunities to make money in a flat gold price
environment, gold equities need a higher bullion price to perform very strongly.
Frankly, we have been disappointed that the gold price has not performed better
as we believe the fundamentals point to higher prices.
The primary or basic supply and demand situation remains very favorable.
Recently, Gold Fields Mineral Services presented its annual report on the world
gold market for 1994. Total fabrication demand including bar hoarding rose
slightly to 3,266 tonnes. This compares with mine supply and scrap recovery of
2,889 tonnes which implies a deficit of 377 tonnes or 16% of mine production. By
comparison, this basic deficit was 305 tonnes in 1993. Physical demand for gold
strengthened during the first quarter of 1995 according to the World Gold
Council. Demand was particularly strong in South East Asia and Korea and in the
developed markets of Japan and Germany. Increased demand in the latter two
countries reflects the strength of their currencies and, in the case of Japan,
bar hoarding which followed the Kobe earthquake. Looking forward, growth in mine
supply is expected to be slow at about 1% to 2% over the next few years, and,
indeed, newly mined gold in 1994 was less than gold mined in 1993. This is the
first time there has been a decline in production since 1975. Yet demand will
reflect increases in wealth, especially in the developing or emerging markets
and we expect that the basic deficit will widen further.
These fundamentals have been negated by continuing central bank and
producer sales. The most recent example of central bank selling has been
Belgium, which announced a sale of 175 tonnes with the assumed motivation being
to bring their gold holdings as a percentage of their foreign exchange reserves
in line with Germany at just over 30%. If this is European Community policy,
Italy and France can be expected to sell some of their gold holdings to bring
them in line with Germany. This would amount to about 1,600 tonnes although some
may already have been sold. But, on the other hand, other European countries
with low gold holdings relative to total reserves would have to buy.
Of greater interest to many observers is the intent of the Far Eastern
central banks. Foreign exchange reserves in this region have grown much more
rapidly than those of the rest of the world and the vast majority are held in
U.S. dollars. Asian countries have been hard hit by the rapid appreciation of
the yen against the U.S. dollar because they have yen dominated debt and trade
2
<PAGE>
cities with Japan. Many of them, including China, Indonesia, Taiwan and Hong
Kong, have indicated that they have lowered, or are considering whether to
lower, the dollar portion of their reserves. For these countries, gold
represents a tiny portion of their reserves. Similarly, Japan, which had foreign
exchange reserves of $142 billion at the end of March, owns only 752 tonnes of
gold, which is worth $9.3 billion and is less than 7% of total reserves. Huge
losses, due to the depreciation of the dollar, have led to a debate in Japan as
to whether the Bank of Japan should increase its holdings of gold and deutsche
marks. Indeed, earlier this year, a small amount of gold was transferred to the
Bank of Japan from the Ministry of Finance.
Looking forward, the surprise may be that central banks will become net
buyers of gold and not sellers. This will follow a period when there has been a
huge transfer of gold from public institutions to the private sector. Again, the
figures are huge. Far Eastern central bank reserves total about $500 billion. A
5% allocation to gold represents over 2,000 tonnes, which is more than one
year's total mine production.
We have maintained our policy of owning growth companies in North America
and Australia which we believe can prosper with flat gold prices. Generally
these fall into two categories: medium-sized producing companies which are
successfully adding reserves and companies that are about to begin mining and
who will be re-rated by the market once production starts. Examples of
medium-sized companies adding reserves include Kinross, Goldcorp, Mt. Edon and
Golden Shamrock. Companies being revalued as production draws near include
Dayton Mining and Bema Gold. The Fund's South African holdings are usually more
sensitive to changes in the price of gold as their production costs are
generally higher than North American companies.
Global Allocation
The chart at the right presents the Fund's holdings by geographic region
as of June 30, 1995. 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 DATA IS REPRESENTED AS A PIE CHART]
HOLDINGS BY GEOGRAPHIC REGION - 6/30/95
South Africa
25.9%
North America
57.4%
Australia
14.4%
Other
2.3%
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.
Cambior, Inc. (CBJ - $12.39 - ASE) is a medium-sized gold producer based in
Quebec, Canada which has excellent growth potential and is attractively valued.
In 1994 the company produced 522,000 ounces of gold and expects gold production
to rise by 5% in 1995. About half of their production comes from the Omai mine
in Guyana and the remainder from a number of smaller mines in Canada. The
3
<PAGE>
company has just opened a new copper/gold mine in Quebec and expects to develop
two further base metal mines by the second half of 1996. In addition, Cambior
has an exciting portfolio of advanced exploration projects in Latin America. In
Mexico, the company has the right to earn a 50% interest in the Metates Project,
which has the potential to be a very large gold mine. Other countries where
Cambior has advanced exploration projects include Peru, Suriname and French
Guiana.
Goldcorp Inc. (GDL.A - $11.57 - Toronto Stock Exchange) was created by way of
reorganization at the end of March 1994. The reorganization combined the assets
of GoldCorp, Dickenson, Goldquest and CSA Management. The company has three gold
producing properties and two industrial mineral operations. We believe that the
company has the potential to increase reserves and production at each of the
three gold mines and production should rise from 125,000 ounces of gold in 1994
to well over 200,000 in 1997. The company's major asset, the Red Lake Mine,
which is part of a major producing camp in Canada, should be able to increase
production by 50,000 ounces following a $20 million capital outlay. The company
has a strong balance sheet, with cash and short-term investments of $63.4
million and long-term debt of $12 million. Goldcorp is undervalued relative to
other mid-sized producers and we expect the new management team to add
significantly to shareholder value.
Golden Shamrock Mine Limited (GSM.AX - $0.7525 - Australian Stock Exchange) is
an Australian-based gold and copper producing company with an operating mine in
Australia and Ghana, West Africa. The Cobar mine in Australia produces copper
and has a long life. In Ghana, Golden Shamrock owns 70% of the Iduapriem gold
mine, which will be producing about 150,000 ounces a year by 1996. The company's
exploration efforts are proving to be successful and their property at Siguiri,
in Guinea, West Africa, will likely be a producing mine by the end of 1996. At
its current share price the company is attractively valued.
Kinross Gold Corporation (KGC - $7.50 - NYSE) 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 of 1996. Management is aggressive and,
with $92 million in cash on the balance sheet, future acquisitions and deals can
be expected.
Kloof Gold Mining Company, Ltd. (KLOFY - $10.875 - NASDAQ) is the fourth-largest
gold mine in South Africa, with annual production of about 1.6 million ounces at
a cash cost of $250 per ounce. The mine is managed by Goldfields of South
Africa, one of the largest mining finance companies in South Africa. The company
has enough reserves to last for forty years mining at the current rate. Assuming
the gold price remains unchanged, Kloof has a current yield of about 5%. Kloof
has some high-cost shafts and will benefit substantially from a higher gold
price.
Newmont Mining Corporation (NEM - $41.875 - NYSE), we believe, is entering an
extended period of high growth in gold production. Currently, Newmont has two
producing properties, namely, Carlin, in Nevada, and Yannacocha, in Peru. The
former produces about 1.6 million ounces of gold annually and the latter, of
4
<PAGE>
which Newmont owns 38%, will produce about 400,000 ounces in 1995. Yannacocha is
one example of Newmont's recent overseas exploration success. During 1995,
Newmont will produce gold from two more properties, located in Uzbekistan and
Indonesia. We expect gold production to rise by 25% during the next three years.
Continued good exploration and development news will likely result in Newmont
doubling its production by the end of the decade.
Placer Dome Inc. (PDG - $26.125 - NYSE) is the second-largest North
American-based gold producer with mining operations in the United States,
Canada, Chile, and through its Australian subsidiary, Placer Pacific, in
Australia and Papua, New Guinea. The company's two largest mines, Missima and
Campbell, had cash costs under $140.00 per ounce in 1994 and are strong cash
generators for the company. Management is experienced in developing new mines
overseas and during the next few years we expect a number of development
projects to be converted into operating mines. Indeed, the company recently
announced a mineral resource of 18.7 million ounces of gold at its exploration
properties, which is nearly equal to its proven and probable reserves of 19.8
million ounces.
Randgold and Exploration Company Ltd. (RNGJ.J - $2.887 - Johannesburg Stock
Exchange) is a South African finance company which has interests in gold mining
companies that are listed on the Johannesburg Stock Exchange. The company has
three divisions: the gold division (which provides services for a fee to five
managed mines), the finance division and the exploration and new business
division. In August 1994, Randgold acquired First Wesgold Mining and
shareholders voted in a new board of directors. We believe that new management
will be able to materially improve the profitability of the gold mining
operations and realize the value of the exploration properties which are located
in West Africa and South Africa. The Fund also has a holding in Harmony Gold
Mining Company, which is managed by Randgold.
Stillwater Mining Ltd. (PGMS - $27.8125 - NASDAQ) is the only U.S. producer of
platinum and palladium, which are rare precious metals used in many industrial
applications and in the jewelry industry. The largest use for platinum is in
catalytic converters for the auto industry and about half of the supply of
palladium is consumed in the production of electronic components for personal
computers and cellular telephones. Historically, the platinum price has traded
at a premium to the gold price. The Stillwater mine has proven and probable
reserves of 18.0 million ounces of platinum and palladium. This is equivalent to
over 10 million ounces of gold. At the current rate of mining, the mine's life
is over 60 years and the company is currently undertaking an expansion program
which will double production within two years. This will lower costs and improve
profitability. Stillwater went public at the end of 1994 and raised the
necessary funds to finance the mine expansion.
TVX Gold, Inc. (TVX - $7.1975 - NYSE) is a mid-sized gold producer with six
operating mines. Its largest mine is located in Chile and is a joint venture
with Placer Dome called La Coipa. Their other mines are located in Brazil,
Canada and the United States. The company has been very active in pursuing a
growth strategy which includes acquisitions and exploration. In particular,
three new projects have the potential to add significantly to the company's
value. In Canada, TVX has a 32% interest in the exciting Mussellwhite project.
In Ecuador and the Czech Republic, the Pachiatya property and the Kasperske
deposit, respectively, both have tremendous potential. These projects and other
developmental work that the company is undertaking will probably result in a
doubling of reserves between the end of 1993 and December 1996.
5
<PAGE>
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.
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
July 17, 1995
- --------------------------------------------------------------------------------
Top Ten Holdings
June 30, 1995
-------------
Stillwater Mining Ltd. Placer Dome, Inc.
TVX Gold, Inc. Cambior, Inc.
Goldcorp Inc. Newmont Mining Corporation
Kloof Gold Mining Company, Ltd. Golden Shamrock Mine Limited
Randgold and Exploration Company Ltd. Kinross Gold Corporation
- --------------------------------------------------------------------------------
6
<PAGE>
<TABLE>
<CAPTION>
Gabelli Gold Fund, Inc.
Portfolio of Investments -- June 30, 1995 (Unaudited)
===============================================================================================
Market
Shares Cost Value
------ ---- ------
COMMON STOCKS -- 99.42%
METALS AND MINING -- 99.42%
Australia -- 12.33%
<C> <S> <C> <C>
230,000 Climax Mining Ltd.+...................... $ 199,675 $ 182,896
75,000 Delta Gold............................... 169,895 139,515
250,000 Emperor Mines Ltd.+...................... 298,691 301,750
210,000 Golden Shamrock Mine Limited+............ 201,669 158,046
190,700 Homestake Gold of Australia
Limited+............................... 215,577 197,680
100,000 Mount Edon Gold Mines Ltd................ 233,853 216,550
46,700 Newcrest Mining Limited+................. 224,692 197,947
160,000 Pancontinental Mining Ltd................ 227,951 215,840
80,000 Ranger Minerals NL+...................... 235,400 187,440
100,000 Rhodes Mining NL+........................ 15,897 12,070
213,500 Saint Barbara Mines Ltd.................. 266,385 142,490
140,000 Samantha Gold N.L........................ 279,858 277,326
---------- ----------
2,569,543 2,229,550
---------- ----------
Europe -- 3.37%
15,000 Ashanti Goldfields Co. Ltd. GDR+(a)...... 325,250 348,750
370,100 Glencar Explorations plc+................ 232,313 260,835
---------- ----------
557,563 609,585
---------- ----------
North America -- 56.23%
18,000 Barrick Gold Corporation................. 373,900 454,500
20,000 Bema Gold Corporation+................... 34,216 40,816
45,400 Cambior, Inc............................. 574,206 562,536
87,000 Dayton Mining Corporation+............... 273,319 298,032
12,800 Euro-Nevada Mining Corporation........... 328,855 391,837
6,750 Franco-Nevada Mining Corporation......... 371,603 351,767
59,800 Goldcorp Inc. Cl. A...................... 319,932 691,928
20,000 Golden Star Resources Ltd.+.............. 186,373 143,950
13,992 Granges Inc.+............................ 38,494 23,558
124,000 Guyanor Resources SA+.................... 187,338 280,175
76,000 International Gold Resources
Corporation+........................... 236,653 265,889
70,000 Kinross Gold Corporation+................ 394,291 522,959
60,000 Miramar Mining Corporation+.............. 275,170 311,589
13,000 Newmont Mining Corporation............... 504,525 544,375
51,000 North American Palladium Ltd.+........... 298,995 280,500
40,000 Pegasus Gold Inc.+....................... 523,140 400,875
19,200 Pioneer Group, Inc....................... 418,779 516,000
22,300 Placer Dome Inc.......................... 447,203 582,588
55,000 Prime Resources Group+................... 356,096 380,831
40,000 Santa Fe Pacific Gold Corporation........ 463,450 485,000
41,250 Stillwater Mining Ltd.+(b)(c)............ 242,000 1,032,539
30,000 Stillwater Mining Ltd.+.................. 390,000 834,375
104,000 TVX Gold, Inc.+.......................... 687,723 748,542
30,000 Zamora Gold Corporation+................. 43,481 19,133
---------- ----------
7,969,742 10,164,294
---------- ----------
South Africa -- 25.89%
180,000 Deelkraal Gold ADR....................... 332,548 150,966
90,000 Grootvlei Proprietary Mines Ltd.......... 258,252 186,858
35,000 Harmony Gold Mining Ltd. ADR+............ 245,175 276,721
20,000 Impala Platinum Holdings, Ltd............ 444,375 506,008
58,000 Kloof Gold Mining Company, Ltd........... 750,382 630,750
305,000 Lebowa Platinum Mines Limited+........... 354,700 333,345
20,000 Leslie Gold Mines Ltd. ADR............... 180,475 133,378
40,100 Loraine Gold Mines Ltd. ADR+............. 192,363 159,899
302,750 Northam Platinum Limited+................ 387,320 478,640
1,100,000 Rand Leases Gold Mining.................. 298,500 257,080
20,000 Randfontein Estates Gold Mining
Company Ltd. ADR....................... 215,000 133,376
202,200 Randgold and Exploration
Company Ltd.+.......................... 579,775 583,750
20,000 Rustenburg Platinum Holdings Ltd......... 496,215 412,506
50,000 Saint Helena Gold Mines Ltd.............. 455,888 437,500
---------- ----------
5,190,968 4,680,777
---------- ----------
Principal
Amount Market
or Shares Cost Value
--------- ---- -----
South America -- 1.60%
50,826 Cia De Minas Buenaventura SA............. $ 172,946 $ 288,939
---------- ----------
TOTAL COMMON STOCKS ..................... 16,460,762 17,973,145
---------- ----------
WARRANTS -- 0.02%
19,750 Northam Platinum Limited+................ 2,497 3,801
---------- ----------
CONVERTIBLE CORPORATE BONDS -- 3.26%
Australia -- 2.05%
$350,000 Golden Shamrock Mine Limited
Sub. Deb. Cv. 7.50%, 05/03/00.......... 350,000 371,000
---------- ----------
North America -- 1.21%
200,000 Bema Gold Corporation Sub.
Deb. Cv. 7.50%, 02/28/00(a).......... 200,000 218,000
---------- ----------
TOTAL CONVERTIBLE
CORPORATE BONDS ....................... 550,000 589,000
---------- ----------
TOTAL
INVESTMENTS -- 102.70% ................ $17,013,259 18,565,946
===========
Liabilities in excess
of Other Assets -- (2.70%) .......... (487,791)
-----------
NET ASSETS -- 100.00%
(1,511,100 shares outstanding) ........ $18,078,155
===========
Net Asset Value and Redemption
Price Per Share ..................... $11.96
======
</TABLE>
- --------------------------
+ Non-income producing security.
(a) Security exempt from registration under Rule 144A of the Securities Act of
1933. This security may be resold in transactions exempt from registration,
normally to qualified institutional buyers. At June 30, 1995, Rule 144A
security amounted to $348,750, or 1.9% of net assets.
(b) Security is fair valued pursuant to procedures established by the Board of
Directors.
(c) Security restricted as to resale. This investment was acquired on September
14, 1994 and represents 5.7% of net assets at June 30, 1995.
ADR--American Depositary Receipt
GDR--Global Depositary Receipt
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
Gabelli Gold Fund, Inc.
Statement of Assets and Liabilities
June 30, 1995 (Unaudited)
================================================================================
Assets:
Investments in securities, at value
(Cost $17,013,259)................................. $18,565,946
Cash ................................................... 11,446
Receivable for Fund shares sold........................... 5,669
Receivable for investments sold........................... 556,981
Dividends and interest receivable......................... 25,681
Deferred organizational expenses.......................... 73,309
-----------
Total Assets ...................................... 19,239,032
-----------
Liabilities:
Payable to Custodian...................................... 1,033,162
Payable to Advisor........................................ 16,081
Payable for distribution fees............................. 7,787
Payable for investments purchased......................... 11,363
Payable for Fund shares redeemed.......................... 54,011
Organizational expenses payable........................... 27,036
Other accrued expenses.................................... 11,437
-----------
Total Liabilities ................................. 1,160,877
-----------
Net Assets (applicable to 1,511,100
shares outstanding).............................. $18,078,155
===========
Net asset value and redemption
price per share .................................. $11.96
===========
Net Assets Consist of:
Capital Stock, at par value...............................$ 1,511
Additional paid-in-capital................................ 16,782,911
Accumulated net investment loss........................... (92,172)
Accumulated net realized loss on
investments and foreign currency
transactions....................................... (166,738)
Net unrealized appreciation on
investments and assets and
liabilities denominated in foreign
currencies......................................... 1,552,643
-----------
Net Assets ........................................ $18,078,155
===========
Statement of Operations (Unaudited)
For the Six Months Ended June 30, 1995
================================================================================
Investment Income:
Dividends (net of foreign taxes of $15,717)............... $ 79,204
Interest.................................................. 20,224
-----------
Total Income....................................... 99,428
-----------
Expenses:
Investment advisory fees.................................. 85,182
Legal and audit fees...................................... 22,527
Distribution expenses..................................... 21,254
Transfer and shareholder servicing agent.................. 19,579
Printing and mailing...................................... 12,741
Amortization of organization expenses..................... 9,020
Registration fees......................................... 7,948
Directors' fees and expenses.............................. 7,050
Custodian fees and expenses............................... 5,106
Miscellaneous............................................. 1,193
-----------
Total Expenses..................................... 191,600
-----------
Investment loss - net..................................... (92,172)
-----------
Net Realized and Unrealized Gain (Loss)
on Investments and Foreign Currency
Transactions:
Net realized loss on investments and
foreign currency transactions...................... (160,164)
Net change in unrealized appreciation on
investments and assets and liabilities
denominated in foreign currencies.................. 1,565,836
-----------
Net gain on investments............................ 1,405,672
-----------
Net increase in net assets resulting
from operations .................................. $1,313,500
==========
<TABLE>
<CAPTION>
Statement of Changes in Net Assets (Unaudited)
====================================================================================================================================
July 11, 1994
(Commencement
Six Months of Operations)
Ended through
June 30, 1995 December 31, 1994
------------- -----------------
<S> <C> <C>
Increase in Net Assets:
Investment loss - net............................................................ $ (92,172) $ (9,400)
Net realized loss on investments and foreign currency transactions............... (160,164) (6,574)
Net change in unrealized appreciation (depreciation) on investments and
assets and liabilities denominated in foreign currencies...................... 1,565,836 (13,193)
----------- -----------
Net increase (decrease) in net assets resulting from operations................ 1,313,500 (29,167)
----------- -----------
Share transactions - net......................................................... (869,928) 17,563,750
----------- -----------
Net increase in net assets..................................................... 443,572 17,534,583
Net Assets:
Beginning of period.............................................................. 17,634,583 100,000
----------- -----------
End of period.................................................................... $18,078,155 $17,634,583
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
Gabelli Gold Fund, Inc.
Notes to Financial Statements (Unaudited)
================================================================================
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 June 30, 1995 the Fund had the following forward foreign currency contract
open :
Foreign
Currency
Amount Cost Value
-------- -------- --------
152,478 Sold Australian Dollars........... $108,336 $108,260
========= ========
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.
9
<PAGE>
Gabelli Gold Fund, Inc.
Notes to Financial Statements (Unaudited) (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.
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:
<TABLE>
<CAPTION>
Six Months July 11, 1994
Ended (commencement of operations)
June 30, 1995 through December 31, 1994
----------------------------- ----------------------------
Shares Amount Shares Amount
---------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Shares sold................................. 1,303,456 $14,381,733 2,231,306 $25,119,891
Shares redeemed............................. (1,386,074) (15,251,661) (647,588) (7,556,141)
---------- ----------- --------- -----------
Shares transactions--net.................. (82,618) (869,928) 1,583,718 17,563,750
---------- ----------- --------- -----------
Reclassification of net investment loss..... -- -- -- (9,400)
---------- ----------- --------- -----------
Net increase (decrease)................... (82,618) $ (869,928) 1,583,718 $17,554,350
========== =========== ========= ===========
</TABLE>
3. Purchases and Sales of Securities. Purchases and sales of securities for the
six months ended June 30, 1995 other than U.S. government obligations and
short-term securities, aggregated $3,704,783 and $2,246,065, 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 the six months ended June 30, 1995.
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 six months ended June 30, 1995, the Fund has incurred
distribution costs of $21,254. The Board of Directors has approved that
Distribution costs incurred by Gabelli & Company, Inc., totalling $220,081 which
are in excess of the 0.25% limitation may be recovered from the Fund in future
periods, subject to such limitation.
10
<PAGE>
Financial Highlights (Unaudited)
================================================================================
Selected data for a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
Six Months July 11, 1994
Ended (Commencement of Operations)
June 30, 1995 through December 31, 1994
------------- -------------------------
<S> <C> <C>
Operating Performance:
Net Asset Value, Beginning of Period ......................................... $ 11.07 $ 10.00
---------- ----------
Increase from Investment Operations:
Net investment loss ........................................................ (0.06) (0.00)
Net realized and unrealized gain on securities ............................. 0.95 1.07(a)
---------- ----------
Total from Investment Operations ........................................... 0.89 1.07
---------- ----------
Net Asset Value, End of Period ............................................... $ 11.96 $ 11.07
========== ==========
Total Return ............................................................... 8.04% 10.70%
Ratios to average net assets/Supplemental Data:
Net Assets, End of Period (in thousands) ................................... $ 18,078 $ 17,634
Ratio of Expenses to Average Net Assets .................................... 2.25%(b) 2.04%(b)
Ratio of Net Investment Loss to Average Net Assets ......................... (1.08%)(b) (0.26%)(b)
Portfolio Turnover Rate .................................................... 13.56% 12.32%
</TABLE>
- ---------------
(a) Includes the effect of realized gains prior to significant increases in
shares outstanding.
(b) Annualized.
11
<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.
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
James E. McKee
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
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
