[Photograph of
Mario Gabelli]
Gabelli
Gold
Fund,
Inc.
SEMI-ANNUAL REPORT
JUNE 30, 1996
<PAGE>
Gabelli Gold Fund, Inc.
Semi-Annual Report - June 30, 1996
[Photograph of
Caesar Bryan]
Caesar Bryan
To Our Shareholders:
Gold market participants began the quarter with optimism that the gold
price would again break the $400 per ounce level but ended the quarter
despondent as gold traded down to the lower end of its recent trading range just
above $380 per ounce. Gold equities continued their strong performance of the
first quarter in April and May but corrected sharply in June when the gold price
fell below $390 per ounce.
For the second quarter ended June 30, 1996, the net asset value of the
Gabelli Gold Fund declined by 4.3%. This compares with a decline of 14.0% for
the Philadelphia Index of gold and silver stocks and a decline of 6.5% for the
average gold mutual fund monitored by Lipper Analytical Services. For the first
half of the year the Fund increased 17.4%, which compares favorably with returns
of 2.8% for the Philadelphia Index and 14.1% for the average gold fund tracked
by Lipper.
For the twelve month period ended June 30, 1996, the Fund appreciated 12.0%
versus the 15.1% increase in the average gold fund according to Lipper. The
Fund's total return from inception on July 11, 1994 through June 30, 1996 was
34.0%, which equates to an average annual return of 16.0%. On June 30th our
shareholder base was 2,084 and total net assets of the Fund were $19.4 million.
INVESTMENT RESULTS (a)
- --------------------------------------------------------------------------------
Quarter
-----------------------------------------
1st 2nd 3rd 4th Year
--- --- --- --- ----
1996: Net Asset Value..... $14.00 $13.40 -- -- --
Total Return........ 22.7% (4.3)% -- -- --
- -------------------------------------------------------------------------------
1995: Net Asset Value..... $11.00 $11.96 $12.27 $11.41 $11.41
Total Return........ (0.6)% 8.7% 2.6% (7.0)% 3.1%
- -------------------------------------------------------------------------------
1994: Net Asset Value..... -- -- $12.37 $11.07 $11.07
Total Return........ -- -- 23.7%(b) (10.5)% 10.7%(b)
- -------------------------------------------------------------------------------
- --------------------------------------------
Average Annual Returns - June 30, 1996 (a)
- ------------------------------------------
1 Year ...................... 12.0%
Life of Fund(b) ............. 16.0%
- --------------------------------------------
(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. Note: Investing in foreign
securities involves risks not ordinarily associated with investments in domestic
issues, including currency fluctuation, economic and political risks. Investing
in gold is considered speculative and is affected by a variety of world-wide
economic, financial and political factors.
- --------------------------------------------------------------------------------
<PAGE>
Our Investment Objective
The Fund's objective is to obtain long-term capital appreciation by
investing in the equity securities of foreign and domestic issuers 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
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 its ability to create shareholder wealth. We invest globally with
an emphasis on gold-producing companies.
THE PORTFOLIO
Global Allocation
The chart at the right presents the Fund's holdings by geographic region as
of June 30, 1996. 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 table was represented as a pie graph in the printed material]
HOLDINGS BY GEOGRAPHIC REGION - 6/30/96
North America 53.8%
South Africa 28.0%
Australia 12.5%
Other 5.7%
Commentary
Until recently, gold equities have benefited from the buying by gold mutual
funds which were experiencing heavy inflows of new money. The prime
beneficiaries of these inflows were the gold exploration stocks which are fairly
small and generally do not have any gold production. Investors in these stocks
have been encouraged by the remarkable success of two Canadian companies which
have both discovered world class orebodies. Exploration stocks ran up to levels
which were unsustainable and, during June, many corrected sharply. When the gold
price fell below $390 per ounce, gold mutual funds experienced heavy redemptions
and, in the rush to raise cash, many of the larger, more liquid gold stocks were
sold aggressively.
What is the current outlook for the price of gold and for gold equities?
First, the gold price. Longer term, the fundamentals remain sound. Demand
continues to outstrip basic supply by an increasing amount. The shortfall
continues to be filled by the mobilization of central bank stocks either through
outright sales or lending. Although two of the largest gold mining companies,
Barrick Resources and Placer Dome Mines, recently curtailed their forward
selling program, the rest of the industry, especially in South Africa, continues
to hedge. At some point this will exhaust itself either because central banks
will
2
<PAGE>
have lent as much as they are able or demand from borrowers will wane. It
has been estimated that about 30% of the total potential amount of gold held by
central banks willing to take part in this activity has already been lent.
In the short term, gold has suffered from two negative influences. First,
the disruption in the copper market resulting in a massive loss for Sumitomo
Corporation has had some spillover effect in the gold market. Indeed, conditions
in the gold market can be contrasted with copper. For a period, the copper
market spot price traded at a premium to the future price, yet the spot price of
copper appreciated in the face of increased supply and sluggish demand. In
contrast, the gold contango has merely encouraged increased levels of hedging,
while mine supply is flat and demand is robust.
Second, the International Monetary Fund is promoting a plan to sell a
portion of its gold reserves to fund a program to assist heavily indebted
developing countries. At this point, only Germany opposes the plan. However, the
amounts suggested should easily be absorbed by the market, but investors and the
Germans fear more sales will follow. As the gold price has slipped back,
sentiment has turned bearish. Indeed, one sentiment indicator has not been this
low since the winter of 1992/93 which preceded gold's rally from $330 per ounce
to over $400 per ounce. With longer-run positive fundamentals in place, and with
overly bearish short-term investor sentiment, conditions appear to be in place
for a rally in the gold price.
The powerful performance of gold equities for the first five months of the
year reflected the growth potential for many companies and the expectation that
the gold price would move higher. When the gold price fell back, gold equities
suffered a sharp correction. Before their move which began in November, gold
equities were cheap relative to their history. At their recent peak at the end
of May they were trading at their recent high in terms of valuation but at
considerably lower valuation levels than during 1993 and most of 1994.
Currently, gold stocks are trading at the lower end of their valuation range.
This suggests that although valuations could contract further, the downside risk
is limited.
The Fund remains concentrated in two segments, namely mid-capitalization
North American gold producers with exciting growth potential such as Miramar,
Euro-Nevada, Dayton Mining, Bema Gold and TVX Gold, and higher-cost South
African producers which we believe are undervalued. Although exploration
companies can provide enormous returns, they certainly carry high risks. The
Fund currently has about 10% of its assets invested in companies with no current
gold production. The South African gold industry is benefiting from the recent
devaluation of the rand which has raised margins. Also, managements of South
Africa gold companies are now taking action to improve industry profitability by
rationalizing operations and creating more efficient financial structures. We
believe that these stocks should perform well as the gold price recovers and
because they are not subject to the exploration risks associated with stocks
that have no gold production.
3
<PAGE>
Let's Talk Stocks
The following are stock specifics on selected holdings of our Fund's
investments. Favorable EBITDA (earnings before interest, taxes, depreciation and
amortization) prospects do not necessarily translate into higher stock prices,
but they do express a positive trend which we believe will develop over time.
Blyvooruitzicht Gold Mining Ltd. (BLYVY.O - $1.69 - NASDAQ) is one of the oldest
mines in South Africa and has produced over 35 million ounces of gold since it
opened in 1937. During recent years, the mine has been barely profitable due to
rising costs and poor grades. New management has introduced a number of measures
to improve profitability including restricting underground mining and reducing
the number of employees. In November 1995, the company took over a neighboring
mine, which increases the reserve base and allows for other significant
operating efficiencies. The combined mines have 4.6 million ounces of proven and
profitable reserves, sufficient for about ten years of mining. At this level the
investor is buying gold in the ground at under $15 per ounce.
Cia de Minas Buenaventura S.A. (BLE.LM - $8.994 - Lima Stock Exchange) is one of
Peru's leading mining companies. Its major asset is a 32.3% stake in Yanacocha
which is one of the most profitable gold operations in the world and South
America's largest gold mine. The operator of the mine is Newmont Mining and
Buenaventura is attempting to increase its ownership in Yanacocha to over 43% as
Yanacocha has good potential for further growth. The company has interests in a
number of other gold and silver mines in Peru as well as promising exploration
properties. Buenaventura's exploration joint venture partners include Barrick
Resources, Echo Bay and Cyprus Amex.
Emperor Mines Ltd. (EMP.AX - $2.361 - Australian Stock Exchange) owns and
operates a gold mine on Viti Leru which is the largest island in Fiji. Gold has
been mined at this location since the 1930s and, over its life, the mine has
produced approximately five million ounces. The company recently increased its
total gold resource by over 30% to 3.4 million ounces. This compares with
production of about 130,000 ounces per year. Last September, new management took
control of the company and we expect increased capital expenditures which will
raise production and lower costs. Emperor is cheap relative to its reserve base
and does not hedge its gold production.
Guyanor Resources SA (GRE.TO - $7.038 - Toronto Stock Exchange) is a 70% owned
subsidiary of Golden Star Resources and was launched as a public company in
March 1995. The company was formed to hold Golden Star's interests in mineral
deposits in French Guiana in South America. French Guiana offers an excellent
combination of prospective geology, skilled work force and political stability.
The company intends to be a leader in the development of the gold mining
industry in French Guiana. Guyanor currently produces gold from an alluvial mine
and owns a number of potentially significant exploration targets containing both
gold and diamonds.
4
<PAGE>
IAM Gold (IMG.O - $4.216 - Toronto Stock Exchange) International African Mining
Gold Corporation or IAM Gold is involved in the exploration and development of
gold properties, primarily in West Africa. The company sought out interesting
properties before West Africa became popular among junior exploration companies.
The company's main asset is its 38% ownership of the Sadiola gold deposits in
Mali. This project is expected to begin production in the near future at an
annual rate of 400,000 ounces per year with very low cash cost. IAM Gold's
partner in this project is Anglo American. Elsewhere the company has a joint
venture with Ashanti Goldfields to explore its gold in Ghana, Guinea, Nigera and
Senegal.
Newmont Mining Corporation (NEM - $49.375 - NYSE) 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 Yannacocha, of which
Newmont owns 38%, will produce about 400,000 ounces in 1996. Yannacocha is one
example of Newmont's recent overseas exploration success. During 1996, 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.
Randgold and Exploration Company Limited (RNGJn.J - $5.28 - Johannesburg Stock
Exchange) owns stocks in a number of mines in South Africa including Harmony
Gold Mines as well as exploration assets in the rest of Africa. New management
joined the company about two years ago and has undertaken a comprehensive review
of the company's activities and structure. This has resulted in a change in the
relationship between Randgold and its operating mines, reducing head office
staff and instituting productivity enhancing reforms including buying
neighboring mines. Randgold has a number of promising exploration properties
outside South Africa, the value of which we believe has not been recognized by
the market.
The Pioneer Group Inc. (PIOG - $ 26.75 - NASDAQ), based in Boston, engages in
two main businesses: asset management and gold mining. The company owns 90% of
the Teberebie gold mine, which is Ghana's second largest mine. In 1995, the mine
produced about 235,000 ounces and is expected to rise to over 400,000 ounces in
1998. Reserves at the mine total over 9 million ounces which would support
further mine expansions. Cash costs are low, making Teberebie one of the most
profitable gold mines in the world. Pioneer also operates a successful mutual
fund business in the United States with $15.4 billion under management at June
30, 1996. The company has also invested in other natural resource businesses and
financial services outside the United States which we expect to be successful.
Management continues to seek a separate stock market listing for the company's
gold assets.
5
<PAGE>
Stillwater Mining Ltd. (PGMS - $23.625 - NASDAQ) is the only U.S. producer of
platinum and palladium, 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 electric components for personal
computers and cellular telephones. Historically, the price of platinum has
traded at a premium to the gold price. The Stillwater mine has a proven and
probable reserve of 18.0 million ounces of platinum and palladium. This is
equivalent to more than 10 million ounces of gold. The mine life, at the current
rate of mining, 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.
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. Furthermore,
Gabelli Gold Fund and many of our other Funds are available through the
no-transaction fee programs at many major discount brokerage firms.
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. An investment in The Gabelli U.S. Treasury Money Market Fund is
neither insured nor guaranteed by the U.S. Government and there can be no
assurance that the Fund will maintain a stable $1 per share net asset value.
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.
Internet
You can now visit us on the Internet. Our home page at
http://www.gabelli.com contains information about Gabelli Funds, Inc., the
Gabelli Mutual Funds, quarterly reports, closing prices, IRAs, 401(k)s and other
current news. You can also send us e-mail at [email protected].
6
<PAGE>
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 1996.
Sincerely,
/s/ Caesar Bryan
Caesar Bryan
President and Portfolio Manager
August 1, 1996
- --------------------------------------------------------------------------------
Top Ten Holdings
June 30, 1996
-------------
Stillwater Mining Ltd. Guyanor Resources SA
Randgold and Exploration Company Ltd. Emperor Mines Ltd.
TVX Gold, Inc. Cia De Minas Buenaventura SA
GoldCorp Inc. IAM Gold
Newmont Mining Corporation Blyvooruitzicht Gold Mining Ltd.
- --------------------------------------------------------------------------------
NOTE: The views expressed in this report reflect those of the portfolio manager
only through the end of the period of this report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
7
<PAGE>
Gabelli Gold Fund, Inc.
Portfolio of Investments -- June 30, 1996 (Unaudited)
================================================================================
Market
Shares Cost Value
------ ---- -----
COMMON STOCKS -- 92.51%
METALS AND MINING -- 92.51%
AUSTRALIA -- 9.60%
230,000 Climax Mining Ltd.+............ $ 199,678 $ 253,414
274,000 Emperor Mines Ltd.+............ 354,025 646,914
147,000 Mount Edon Gold Mines Ltd...... 344,154 264,928
80,000 Ranger Minerals N.L.+.......... 235,400 264,432
140,000 Resolute Samantha Ltd.......... 279,858 325,031
15,000 Sons of Gwalia Ltd............. 113,302 106,245
---------- ----------
1,526,417 1,860,964
---------- ----------
EUROPE -- 2.49%
9,800 Ashanti Goldfields Co.
Ltd. GDR..................... 199,675 193,550
270,100 Glencar Explorations plc+...... 173,765 288,823
---------- ----------
373,440 482,373
---------- ----------
NORTH AMERICA -- 50.65%
17,000 Casmyn Corp.................... 273,190 276,250
20,000 Colossal Resources
Company+..................... 66,755 120,968
67,000 Dayton Mining Corporation+..... 210,487 402,786
100,000 East Rand Proprietary Mines
- Unsponsored ADR+........... 70,000 63,000
8,800 Euro-Nevada Mining
Corporation.................. 219,367 377,419
4,750 Franco-Nevada Mining
Corporation.................. 262,948 301,228
10,000 Getchell Gold Corp............. 270,625 330,000
44,800 GoldCorp Inc. Cl. A+........... 232,748 742,288
30,000 Golden Star Resources Ltd...... 203,512 431,085
25,000 Greenstone Resources Ltd....... 97,792 293,255
94,200 Guyanor Resources SA+.......... 142,317 662,991
135,000 IAM Gold....................... 564,587 569,098
70,000 Miramar Mining
Corporation+................. 346,359 377,199
15,000 Newmont Mining
Corporation.................. 711,375 740,625
51,000 North American
Palladium Ltd.+............... 298,995 254,203
80,000 Pan African Resources, Ltd..... 58,975 76,246
30,000 Pegasus Gold Inc.+............. 375,237 368,402
19,200 Pioneer Group, Inc............. 418,779 513,600
21,300 Placer Dome Inc................ 492,015 508,538
75,000 Royal Oak Mines Inc............ 322,099 274,927
44,250 Stillwater Mining Ltd. (a)(b)+. 306,500 1,045,406
5,000 Stillwater Mining Ltd.+........ 65,000 118,125
104,000 TVX Gold, Inc.+................ 771,760 762,463
400,000 Venoro Gold Corp. - A+......... 197,059 140,762
60,000 William Resources Inc.......... 53,605 70,821
---------- ----------
7,032,086 9,821,685
---------- ----------
SOUTH AFRICA -- 26.51%
167,900 Blyvooruitzicht Gold
Mining Ltd. ................. 342,016 283,720
135,000 Blyvooruitzicht Gold Mining
Ltd. Unsponsored ADR......... 277,750 227,813
100,000 Deelkraal Gold+ ............... 110,000 94,907
180,000 Deelkraal Gold ADR+............ 332,548 170,424
27,500 Durban Roodepoort
Deep, Ltd.+.................. 298,500 248,264
90,000 Grootvlei Proprietary
Mines Ltd.................... 258,252 228,618
49,000 Harmony Gold Mining
Ltd. ADR..................... 477,175 468,460
25,000 Impala Platinum
Holdings Ltd................. 562,500 362,500
10,000 Kloof Gold Mining
Company Ltd.................. 122,500 96,875
305,000 Lebowa Platinum Mines
Limited+..................... 354,700 197,685
40,000 Loraine Gold Mines Ltd. ADR+... 191,888 145,020
367,750 Northam Platinum Limited+...... 452,320 404,355
50,000 Randfontein Estates Gold
Mining Company Ltd. ADR...... 377,198 305,975
203,547 Randgold and Exploration
Company Ltd.+................ 585,330 1,074,276
15,000 Randgold Resources, Ltd........ 150,000 150,000
20,645 Rustenburg Platinum
Holdings Ltd................. 496,191 321,790
56,700 Saint Helena Gold Mines Ltd.... 516,131 308,306
25,000 West Rand Consolidated
Mines Ltd.................... 53,500 52,083
---------- ----------
5,958,499 5,141,071
---------- ----------
SOUTH AMERICA -- 3.26%
55,301 Cia De Minas
Buenaventura SA - Class C.... 172,946 497,392
13,825 Cia De Minas
Buenaventura SA - Class B.... 112,389 135,650
---------- ----------
285,335 633,042
---------- ----------
TOTAL
COMMON STOCKS ............... 15,175,777 17,939,135
---------- ----------
PREFERRED STOCKS -- 0.52%.......
SOUTH AFRICA -- 0.52%
11,000 Durban Roodepoort
Deep, Ltd. Pfd............... 73,519 101,852
---------- ----------
TOTAL PREFERRED STOCKS ........ 73,519 101,852
---------- ----------
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
Gabelli Gold Fund, Inc.
Portfolio of Investments (Continued) -- June 30, 1996 (Unaudited)
================================================================================
Principal
Amount Market
or Shares Cost Value
--------- ---- -----
OPTIONS -- 0.82%
SOUTH AFRICA -- 0.82%
36,000 Durban Roodepoort
Deep, Ltd.+ ................. $ 129,440 $ 158,333
---------- ----------
TOTAL OPTIONS ................. 129,440 158,333
---------- ----------
WARRANTS -- 1.22%
AUSTRALIA -- 0.62%
180,500 Lone Star Exploration+......... 47,626 120,745
---------- ----------
CANADA -- 0.46%
8,000 Valerie Gold Resources Ltd.
Special Warrants+............ 81,366 87,977
---------- ----------
SOUTH AFRICA -- 0.14%
21,900 Blyvooruitzicht Gold
Mining Ltd+. ................ 11,798 25,348
19,750 Northam Platinum Limited+...... 2,495 2,058
---------- ----------
14,293 27,406
---------- ----------
TOTAL WARRANTS................. 143,285 236,128
---------- ----------
CONVERTIBLE CORPORATE
BONDS -- 5.14%
AUSTRALIA -- 2.25%
$350,000 Golden Shamrock Mine
Limited Sub. Deb. Cv.
7.50%, 5/03/00................ 350,000 437,500
NORTH AMERICA -- 2.89%
200,000 Atlas Corporation Sub. Deb.
Cv. 7.00%, 10/25/00 (c)...... 200,000 200,000
200,000 Bema Gold Corporation Sub.
Deb. Cv. 7.50%, 2/28/00 ..... 200,000 360,000
---------- ----------
400,000 560,000
---------- ----------
TOTAL CONVERTIBLE
CORPORATE BONDS.............. $ 750,000 $ 997,500
---------- ----------
TOTAL
INVESTMENTS -- 100.21%....... $16,272,021* 19,432,948
========== ==========
Liabilities, in excess of
Other Assets -- (0.21)%...... (40,582)
----------
NET ASSETS -- 100.00%
(1,447,682 shares
outstanding)................. $19,392,366
==========
Net Asset Value and Redemption
Price Per Share ............. $13.40
=====
- ----------
(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 4.74% of net assets at June 30, 1996.
(c) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At June 30, 1996,
Rule 144A securities amounted to $200,000 or 1.3% of net assets.
ADR -- American Depositary Receipt
+ -- Non-income producing security
* For Federal income tax purposes:
Aggregate cost......................... $16,272,021
===========
Gross unrealized appreciation.......... $ 4,731,540
Gross unrealized depreciation.......... (1,570,613)
-----------
Net unrealized appreciation............ $ 3,160,927
===========
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
Gabelli Gold Fund, Inc.
Statement of Assets and Liabilities (Unaudited)
June 30, 1996
================================================================================
Assets:
Investments in securities, at value
(Cost $16,272,021) .................................... $ 19,432,948
------------
Cash .................................................... 87,645
Receivable for investments sold ......................... 236,186
Receivable for Fund shares sold ......................... 152,001
Dividends and interest receivable ....................... 10,722
Deferred organizational expenses ........................ 55,773
------------
Total assets .......................................... 19,975,275
------------
Liabilities:
Payable to advisor ...................................... 17,133
Payable to custodian .................................... 203,731
Payable for distribution fees ........................... 4,200
Payable for Fund shares redeemed ........................ 121,358
Payable for investments purchased ....................... 221,786
Other accrued expenses .................................. 14,701
------------
Total liabilities ..................................... 582,909
------------
Net assets (applicable to 1,447,682
shares outstanding) ................................. $ 19,392,366
============
Net asset value, offering price and
redemption price per share ............................ $ 13.40
============
Net Assets Consist of:
Capital Stock, at par value ............................. $ 1,448
Additional paid-in capital .............................. 16,283,282
Accumulated net realized gain on investments
and foreign currency transactions ..................... 88,201
Accumulated net investment loss ......................... (140,897)
Net unrealized appreciation on investments
and other assets and liabilities
denominated in foreign currencies ..................... 3,160,332
------------
Net assets ............................................ $ 19,392,366
============
Statement of Operations (Unaudited)
For the Six Months Ended June 30, 1996
================================================================================
Income:
Dividends (net of foreign taxes of $2,274) ............. $ 46,547
Interest ............................................... 34,281
-----------
Total income ......................................... 80,828
-----------
Expenses:
Investment advisory fees ............................... 106,384
Distribution expenses .................................. 26,539
Transfer and shareholder servicing agent ............... 24,216
Legal and audit fees ................................... 16,414
Printing and mailing ................................... 10,656
Amortization of organization expenses .................. 9,070
Registration fees ...................................... 8,849
Custodian fees and expenses ............................ 8,408
Directors' fees and expenses ........................... 5,836
Miscellaneous .......................................... 5,353
-----------
Total expenses ....................................... 221,725
-----------
Investment loss - net .................................. (140,897)
-----------
Net Realized and Unrealized Gain (Loss) on
Investments and Foreign Currency Transactions:
Net realized gain on investments and
foreign currency transactions ........................ 397,086
Net change in unrealized appreciation on
investments and other assets and liabilities
denominated in foreign currencies .................... 2,469,730
-----------
Net gain on investments .............................. 2,866,816
-----------
Net increase in net assets resulting from
operations ......................................... $ 2,725,919
===========
Statement of Changes in Net Assets
================================================================================
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1996 Year Ended
(Unaudited) December 31, 1995
<S> <C> <C>
Increase (decrease) in Net Assets:
Investment loss - net ......................................... $ (140,897) $ (195,523)
Net realized and unrealized gain (loss) on investments
and foreign currency transactions .............................. 397,086 (299,054)
Net change in unrealized appreciation on investments and assets
and liabilities denominated in foreign currencies .............. 2,469,730 703,796
------------ ------------
Net increase in net assets resulting from operations ........ 2,725,919 209,219
------------ ------------
Share transactions -- net ..................................... 2,156,252 (3,333,607)
------------ ------------
Net increase (decrease) in net assets ....................... 4,882,171 (3,124,388)
Net Assets:
Beginning of period ........................................... 14,510,195 17,634,583
------------ ------------
End of period ................................................. $ 19,392,366 $ 14,510,195
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<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 whose objective is long-term capital
appreciation. 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
preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates. 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, quoted by the National Association of Securities
Dealers Automated Quotations, Inc. ("NASDAQ") or traded on foreign exchanges 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 prices). All other
portfolio securities for which over-the-counter market quotations are readily
available are valued at the latest average of their bid and asked prices. When
market quotations are not readily available, portfolio securities are valued at
their fair value as determined in good faith under procedures established by and
under the general supervision of the Corporation's 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. Options are valued at the last sale price on the
exchange on which they are listed, unless no sales of such options have taken
place that day, in which case they will be valued at the mean between their
closing bid and asked prices.
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
recorded at the exchange rate on the valuation date.
(ii) purchases and sales of investment securities, income and expenses are
recorded 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, 1996, the Fund had no forward foreign currency contracts open.
11
<PAGE>
Gabelli Gold Fund, Inc.
Notes to Financial Statements (Unaudited) (Continued)
================================================================================
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 or 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.
Federal Income Taxes. The Fund 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 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 up 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.
The Fund has a net capital loss carryforward for Federal income tax purposes of
$314,698 from prior years. This loss carryforward is available to reduce future
distributions of net capital gains to shareholders. $6,761 of the loss
carryforward is available through 2002; $307,937 is available through 2003.
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).
Transactions in shares of common stock were as follows:
<TABLE>
<CAPTION>
Six Months Ended June 30, 1996 Year Ended December 31, 1995
------------------------------ ----------------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares sold ................................ 2,414,040 $ 33,581,893 2,241,792 $ 25,680,073
Shares issued upon reinvestment of dividends -- -- -- --
Shares redeemed ............................ (2,238,519) (31,425,641) (2,563,349) (29,013,680)
---------- ------------ ---------- ------------
Net increase .............................. 175,521 $ 2,156,252 (321,557) $ (3,333,607)
========== ============ ========== ============
</TABLE>
3. Purchases and Sales of Securities. Purchases and sales of securities for the
six months ended June 30, 1996, other than U.S. government obligations and
short-term securities, aggregated $8,805,120 and $6,586,773, 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 its affiliates. 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 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, 1996.
12
<PAGE>
Gabelli Gold Fund, Inc.
Notes to Financial Statements (Unaudited) (Continued)
================================================================================
5. Organization Expenses. The organization 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
initial 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. For the six months ended June 30, 1996, the Fund has
incurred distribution costs of $26,539, or 0.25% of average net assets, the
annual limitation under the Plan. The Board of Directors has approved that
Distribution costs incurred by Gabelli & Co., Inc., of $292,222, which are in
excess of the 0.25% limitation may be recovered from the Fund in future periods,
subject to such limitation.
Financial Highlights
================================================================================
Selected data for a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
July 11, 1994
(Commencement
Period Ended Year Ended of Operations) through
June 30, 1996 December 31, 1995 December 31, 1994
------------- ----------------- -----------------
<S> <C> <C> <C>
Operating Performance:
Net Asset Value, Beginning of Period ............... $ 11.41 $ 11.07 $ 10.00
------------ ------------ ------------
Increase from Investment Operations:
Net investment loss .............................. (0.10) (0.15) 0.00
Net realized and unrealized gain on securities ... 2.09 0.49 1.07(b)
------------ ------------ ------------
Total from investment operations ................. 1.99 0.34 1.07
------------ ------------ ------------
Net Asset Value, End of Period ..................... $ 13.40 $ 11.41 $ 11.07
============ ============ ============
Total Return ..................................... 17.44% 3.07% 10.70%
Ratios to Average Net Assets/Supplemental Data:
Net Assets, End of Period (in thousands) ......... $ 19,392 $ 14,510 $ 17,634
Ratio of Operating Expenses to Average Net Assets 2.08%(a) 2.25% 2.04%(a)
Ratio of Net Investment Loss to Average Net Assets (1.32)%(a) (1.12) % (0.26)%(a)
Portfolio Turnover Rate .......................... 31.83% 37.94% 12%
Average Commision Rate ........................... $ 0.0290 -- --
</TABLE>
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(a) Annualized.
(b) Includes the effect of realized gains prior to significant increases in
shares outstanding.
13
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<PAGE>
Gabelli Family of Funds
Distributed by Gabelli & Company, Inc.
One Corporate Center, Rye, NY 10580-1435
Gabelli Asset Fund -------------------------------------------------------------
Invests in a diversified portfolio of companies selling below their private
market value. The Fund's primary objective is to seek growth of capital.
(No-load)
Portfolio Manager: Mario J. Gabelli, CFA
Gabelli Growth Fund ------------------------------------------------------------
Invests in a diversified portfolio of common stocks that have favorable, yet
undervalued, prospects for earnings growth. The Fund's primary objective is to
seek capital appreciation by employing an earnings-driven investment approach.
(No-load)
Portfolio Manager: Howard F. Ward, CFA
Gabelli Value Fund -------------------------------------------------------------
Invests in a concentrated portfolio of securities of companies which are selling
below their private market value. The Fund's primary objective is long-term
capital appreciation. $250 initial minimum for IRAs.
Portfolio Manager: Mario J. Gabelli, CFA
Max. Sales charge: 5 1/2%
Gabelli Small Cap Growth Fund --------------------------------------------------
Invests primarily in equity securities of smaller companies (companies with a
total market capitalization of less than $500 million) which are believed likely
to have rapid growth in revenues and earnings. The Fund's primary objective is
to seek capital appreciation. (No-load)
Portfolio Manager: Mario J. Gabelli, CFA
Gabelli Equity Income Fund -----------------------------------------------------
Invests primarily in a portfolio of income producing equity securities. Pays
quarterly dividends. The Fund's primary objective is to seek a high level of
total return. (No-load)
Portfolio Manager: Mario J. Gabelli, CFA
Gabelli/Westwood Funds ---------------------------------------------------------
Three investment portfolios, designed to pursue a variety of investment
objectives: Equity Fund seeks capital appreciation, Balanced Fund seeks income
and growth, and Intermediate Bond Fund seeks current income. (No-load)
Portfolio Manager: Susan Byrne
Gabelli Global Series ----------------------------------------------------------
Gabelli Global Telecommunications Fund
Invests in telecommunications companies throughout the world. Targets
undervalued companies with strong earnings per share and cash flow dynamics.
The Fund's primary objective is to seek capital appreciation.(No-load)
Team Manager: Mario J. Gabelli, CFA
Gabelli Global Convertible Securities Fund
Invests principally in bonds and preferred stocks which are convertible into
common stock of foreign and domestic companies. The Fund's primary objective
is to seek a high level of total return through a combination of current
income and capital appreciation. (No-load)
Portfolio Manager: Hart Woodson
Gabelli Global Interactive Couch Potato(R) Fund
Invests in companies involved in communications, creativity and copyright
throughout the world. The Fund will also invest in companies participating in
emerging technological advances in interactive services and products. The
Fund's primary objective is to seek capital appreciation. (No-load)
Portfolio Manager: Mario J. Gabelli, CFA
Gabelli Gold Fund --------------------------------------------------------------
Invests in a global portfolio of equity securities of gold mining and related
companies. The Fund's primary objective is to seek capital appreciation.
Investment in gold stocks is considered speculative and is affected by a variety
of worldwide economic, financial and political factors. (No-load)
Portfolio Manager: Caesar Bryan
Gabelli International Growth Fund ----------------------------------------------
Invests in a diversified portfolio of equity securities of companies outside of
the U.S. Seeks to achieve international diversification and capital
appreciation, and to serve as a complement to a domestic investment portfolio.
(No-load)
Portfolio Manager: Caesar Bryan
The five funds above invest in foreign securities which involves risks not
ordinarily associated with investments in domestic issues, including currency
fluctuation, economic and political risks.
Gabelli U.S. Treasury Money Market Fund ----------------------------------------
Invests exclusively in short-term U.S. Treasury securities. The Fund's primary
objective is to provide high current income consistent with the preservation of
principal and liquidity. Features low expenses, free checkwriting, telephone
exchange and redemption privileges.
Portfolio Manager: Ronald Eaker
To request a prospectus, call 1-800-GABELLI (1-800-422-3554)
Or, visit our Internet homepage at: http://www.gabelli.com
The prospectus(es) contain more complete information, including fees and
expenses, and should be read carefully prior to investing.
<PAGE>
Gabelli Gold Fund, Inc.
One Corporate Center
Rye, New York 10580-1434
1-800-GABELLI
[1-800-422-3554]
fax: 1-914-921-5118
http://www.gabelli.com
e-mail: [email protected]
(Net Asset Value may be obtained daily by calling
1-800-GABELLI after 6:00 P.M.)
Board of Directors
Mario J. Gabelli, CFA Werner J. Roeder, MD
Chairman and Director of Surgery
Chief Investment Officer Lawrence Hospital
Gabelli Funds, Inc.
Anthonie C. van Ekris
E. Val Cerutti Managing Director
Chief Executive Officer BALMAC International, Inc.
Cerutti Consultants, Inc.
Daniel E. Zucchi
Anthony J. Colavita President
Attorney-at-Law Daniel E. Zucchi Associates
Anthony J. Colavita, P.C.
Karl Otto Pohl
Former President
Deutsche Bundesbank
Officers
Caesar Bryan Bruce N. Alpert
President and Vice President
Portfolio Manager and Treasurer
James E. McKee
Secretary
Distributor
Gabelli & Company, Inc.
Custodian, Transfer Agent and Dividend Agent
State Street Bank and Trust Company
Legal Counsel
Willkie Farr & Gallagher
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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.
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