As
filed with the Securities and Exchange Commission on July 27, 2023
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
N-CSR
CERTIFIED
SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT
COMPANIES
Investment
Company Act file number 811-21650
ASA
GOLD AND PRECIOUS METALS LIMITED
Three
Canal Plaza, Suite 600
Portland,
ME 04101
Karen
Shaw, Principal Financial Officer
Three
Canal Plaza, Suite 600
Portland,
Maine 04101
207-347-2000
Date
of fiscal year end: November 30
Date
of reporting period: December 1 – May 31
ITEM
1. REPORT TO STOCKHOLDERS.
Semi-Annual
Report and Financial Statements
May
31, 2023
(Unaudited)
A
Closed-End Fund
Specializing
in Gold and Other
Precious
Metals Investments
ASA
Gold and Precious Metals Limited
Semi-Annual Report and Financial Statements
May
31, 2023
Table
of Contents
Letter
to Shareholders (Unaudited)
Dear
Shareholder,
During
the six-month fiscal period that ended on May 31, 2023, the price of gold rose by 11.0%. However, the NYSE Arca Gold Miners Index
(the “GDMNTR” or the “Index”) slightly underperformed the commodity. In an ongoing effort to combat inflation,
the Federal Reserve (“Fed”) raised the federal funds target rate by 1.25% during this period. Interest rate increases
in this tightening cycle contributed to the collapse of Silicon Valley Bank in March 2023, causing significant uncertainty in
the regional banking sector. To bolster confidence in the U.S. financial system, the Federal Deposit Insurance Corporation (“FDIC”)
not only assumed control of the bank, but also announced all depositors would have access to the full amount of their deposits.
The Federal Reserve may have stopped raising interest rates partly because Silicon Valley Bank failed. This pause in rate hikes
helped push the price of gold to a high of $2,063 per ounce during the financial quarter. However, towards the end of the second
fiscal quarter, the Fed’s rhetoric returned to a hawkish stance. The “higher for longer” strategy put downward pressure
on the value of gold and gold equities.
ASA
Gold and Precious Metals Limited (“ASA” or the “Company”) reported a net asset value (“NAV”)
of $17.98 per share on May 31, 2023, for a six-month total return of +6.6% versus a total return of +8.6% for the Index.
The
closing share price of ASA on May 31, 2023, was $15.73, reflecting a total return of +10.4% for the six months ending on that
date. At the end of the first half of the fiscal year 2023, ASA shares were trading at a market price that was 12.5% less than
its Net Asset Value (NAV). This was a decrease from the start of the fiscal year when the shares were trading at a 15.5% discount
to the NAV. During this period, the average discount between the share price and the NAV was 14.5%, with the discount varying
between 12.5% and 17.3%.
By
the end of the first half of the fiscal year, ASA’s total net assets had increased to $347 million, a $21 million rise compared
to the end of fiscal year 2022.
In
the past six months, ASA distributed $0.01 per share to its shareholders.
Portfolio
Performance and Attribution
The
rise in the price of gold primarily benefited mining companies and development projects that already had funding. Following the
strong equity fundraising market witnessed in 2020-21, 2022 saw a significant downturn, a trend that has continued into 2023:
investors appeared hesitant to invest in companies that still needed funding to commence production. The challenging funding environment
has created pressure on companies seeking new capital to finance their operations and continue exploration activities.
The
weakness in the exploration companies was offset by strength in mining and development companies, presumably because they are
perceived to have funding for current operations, growth and new projects. The table below shows the attribution to ASA’s
NAV over the six-month period that ended on May 31, 2023 by company type.
Inflation
continues to be a major focus for the sector. During the COVID-19 pandemic from 2020 to 2022, the industry witnessed a significant
rise in costs. Despite the high gold price during this period, mining companies experienced only minimal margin expansion. Earlier
in the year, numerous companies revised their cost forecasts in response to escalating input price expectations. However, in our
analysis, many of these costs should start to stabilize for the remainder of 2023. If this scenario plays out, the sector could
see an expansion in margins, which would likely be positive for the sector.
The
substantial gap between the price of gold and the performance of junior gold mining companies has continued to expand,
contributing to a challenging funding environment for companies in need of capital. In our discussions with management of
mining companies, they are reluctant to secure funding at a low valuation or they may find that the necessary capital is
simply not available. The relatively stagnant gold price over the last 18 months, coupled with rising costs, has resulted in
a decrease in both margins for the producers and valuations across the sector. However, as mentioned earlier, with what we
assess to be stabilizing cost structures at the mines, we expect margins to remain steady or even increase over the next
12-24 months. In our analysis, the valuations of junior mining companies, as measured by the ratio of enterprise value
(“EV”) to ounces of reserves (oz), have significantly decreased during this period. We consider these levels
reminiscent of the time when the price of gold was closer to $1,300 per ounce in 2019 versus the current $1,900 per
ounce.
Our
ongoing belief is that producers need to replenish their production pipeline with reserves close to existing infrastructure and
new projects. The rate of mergers and acquisitions remains strong. These transactions are occurring across the sector, both among
large and small companies. We expect several of the larger transactions to result in divestures of non-core assets; smaller companies,
in turn, will seek to acquire these properties.
As
the Federal Reserve approaches the end of its interest rate hikes, following one of the most significant rate increases in history,
this rise in interest rates, coupled with elevated debt-to-GDP levels worldwide, may well increase fragility in financial markets.
The likelihood of economic turmoil, eventually necessitating a reversal in monetary policy by global central banks, appears high
to us. Furthermore, any financial upheaval would likely compel governments worldwide to provide fiscal support, further complicating
the path to lower inflation levels. We believe ASA is well-positioned and has the potential to perform well in such a market environment.
We are always willing to discuss the market and any questions shareholders may have.
| Peter
Maletis |
James
Holman |
Axel
Merk |
| Portfolio
Manager |
Portfolio
Manager |
Chief
Investment Officer |
Forward-Looking
Statements (Unaudited)
This
shareholder letter includes forward-looking statements, which involve known and unknown risks, uncertainties and other factors
that may cause the actual results, levels of activity, performance or achievements of the Company, or industry results, to be
materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking
statements. The Company’s actual performance or results may differ from its beliefs, expectations, estimates, goals and
projections, and consequently, investors should not rely on these forward-looking statements as predictions of future events.
Forward-looking statements are not historical in nature and generally can be identified by words such as “believe,”
“anticipate,” “estimate,” “expect,” “intend,” “should,” “may,”
“will,” “seek,” or similar expressions or their negative forms, or by references to strategy, plans, goals
or intentions. The absence of these words or references does not mean that the statements are not forward-looking. The Company’s
performance or results can fluctuate from month to month depending on a variety of factors, a number of which are beyond the Company’s
control and/or are difficult to predict, including without limitation: the Company’s investment decisions, the performance
of the securities in its investment portfolio, economic, political, market and financial factors, and the prices of gold, platinum
and other precious minerals that may fluctuate substantially over short periods of time. The Company may or may not revise, correct
or update the forward-looking statements as a result of new information, future events or otherwise.
The
Company concentrates its investments in the gold and precious minerals sector. This sector may be more volatile than other industries
and may be affected by movements in commodity prices triggered by international monetary and political developments. The Company
is a non-diversified fund and, as such, may invest in fewer investments than that of a diversified portfolio. The Company may
invest in smaller-sized companies that may be more volatile and less liquid than larger more established companies. Investments
in foreign securities, especially those in the emerging markets, may involve increased risk as well as exposure to currency fluctuations.
Shares of closed-end funds frequently trade at a discount to net asset value. All performance information reflects past performance
and is presented on a total return basis. Past performance is no guarantee of future results. Current performance may differ from
the performance shown.
This
shareholder letter does not constitute an offer to sell or solicitation of an offer to buy any securities.
Performance
Returns (Unaudited)
| Average
Annual Total Returns |
|
|
|
|
| For
the periods ended May 31, 2023 |
1
Year |
3
Year |
5
Year |
10
Year |
| ASA
Gold and Precious Metals - NAV |
-13.81% |
-1.51% |
8.38% |
1.75% |
| ASA
Gold and Precious Metals - Share Price |
-13.88% |
1.04% |
8.78% |
1.29% |
| NYSE
ARCA Gold Miners Index NTR(1) |
-1.77% |
-2.08% |
8.04% |
1.62% |
The
performance data quoted represent past performance and do not indicate future results. Current performance may be lower or higher
than the performance data quoted. For more current performance data, please visit http://www.asaltd.com/investor-information/factsheets.
The
results shown in the table reflect the reinvestment of income dividends and other distributions, if any. The results do
not reflect the effect of taxes a shareholder would pay on Company distributions or on the sale of the Company’s common
shares.
The
investment return and market price will fluctuate and the Company’s common shares may trade at prices above or below NAV.
The Company’s common shares, when sold, may be worth more or less than their original cost.
| (1) | The
NYSE Arca Gold Miners Index (NTR) (the “Index”) is a net total return modified
capitalization weighted index comprised of publicly traded companies primarily involved
in the mining of gold and silver in locations around the world. The Company does not
attempt to replicate the Index. The Index does not necessarily reflect investments in
other precious metals companies (e.g., silver, platinum, and diamonds) in which the Company
may invest. Data about the performance of the Index is prepared or obtained by Management
and include reinvestment of all income dividends and other distributions, if any. The
Company may invest in securities not included in the Index and does not invest in all
securities included in the Index. |
For
more complete information about the Company, please call us directly at 1-800-432-3378, or visit the Company’s website at
www.asaltd.com.
Certain
Investment Policies and Restrictions (Unaudited)
The
following is a summary of certain of the Company’s investment policies and restrictions and is subject to the more complete
statements contained in documents filed with the Securities and Exchange Commission.
The
concentration of investments in a particular industry or group of industries. It is a fundamental policy (i.e., a policy that
may be changed only by shareholder vote) of the Company that at least 80% of its total assets be (i) invested in common shares
or securities convertible into common shares of companies engaged, directly or indirectly, in the exploration, mining or processing
of gold, silver, platinum, diamonds or other precious minerals, (ii) held as bullion or other direct forms of gold, silver, platinum
or other precious minerals, (iii) invested in instruments representing interests in gold, silver, platinum or other precious minerals
such as certificates of deposit therefor, and/or (iv) invested in securities of investment companies, including exchange traded
funds, or other securities that seek to replicate the price movement of gold, silver or platinum bullion. Compliance with the
percentage limitation relating to the concentration of the Company’s investments will be measured at the time of investment.
If investment opportunities deemed by the Company to be attractive are not available in the types of securities referred to above,
the Company may deviate from the investment policy outlined in that paragraph and make temporary investments of unlimited amounts
in securities issued by the U.S. Government, its agencies or instrumentalities or other high quality money market instruments.
The
percentage of voting securities of any one issuer that the company may acquire. It is a non-fundamental policy (i.e., a policy
that may be changed by the Board of Directors) of the Company that the Company shall not purchase a security if, at the time of
purchase, more than 20% of the value of its total assets would be invested in securities of the issuer of such security.
Report
of Independent Registered Public Accounting Firm
To
the Board of Directors and Shareholders of ASA Gold and Precious Metals Limited
Results of Interim Financial Information
We
have reviewed the statement of assets and liabilities of ASA Gold and Precious Metals Limited (the “Company”), including
the schedule of investments, as of May 31, 2023, and the related statement of operations for the six month period ended May 31,
2023, the statement of changes in net assets for the six month period ended May 31, 2023, the financial highlights for the six
month period ended May 31, 2022, and the related notes (collectively referred to as the interim financial statements). Based on
our review, we are not aware of any material modifications that should be made to the accompanying interim financial statements
for them to be in conformity with accounting principles generally accepted in the United States of America.
We
have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB),
the statement of changes in net assets for the year ended November 30, 2022 and the financial highlights for each year in the
five year period ended November 30, 2022; and in our report dated January 25, 2023, we expressed an unqualified opinion on those
financial statements and financial highlights.
Basis
for Review Results
These
interim financial statements are the responsibility of the Company’s management. We conducted our review in accordance with
the standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and
making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit
conducted in accordance with standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion. We are a public accounting firm registered with the
Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company
in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.
TAIT,
WELLER & BAKER LLP
Philadelphia,
Pennsylvania
July
20, 2023
Schedule
of Investments (Unaudited)
May
31, 2023
| Name of Company | |
Principal
Amount | | |
Value | | |
% of Net
Assets | |
| Corporate Convertible Bond | |
| | |
| | |
| |
| Gold mining, exploration, development and royalty companies | |
| | | |
| | | |
| | |
| Canada | |
| | | |
| | | |
| | |
| i-80 Gold
Corp., 8.00%, 2/22/27 (1) | |
$ | 3,000,000 | | |
$ | 2,980,200 | | |
| 0.9 | % |
| Total corporate convertible bond (Cost $2,940,868) | |
| | | |
| 2,980,200 | | |
| 0.9 | |
| Name of Company | |
Shares
| | |
Value
| | |
% of Net
Assets
| |
| Common Shares | |
| | | |
| | | |
| | |
| Australia | |
| | | |
| | | |
| | |
| Alicanto Minerals, Ltd. (2) | |
| 45,300,000 | | |
| 1,060,754 | | |
| 0.3 | |
| Barton Gold Holdings, Ltd. (2) | |
| 8,600,000 | | |
| 1,454,406 | | |
| 0.4 | |
| Bellevue Gold, Ltd. (2) | |
| 8,966,667 | | |
| 7,494,594 | | |
| 2.2 | |
| Cygnus Metals, Ltd. (2) | |
| 16,850,000 | | |
| 2,246,817 | | |
| 0.6 | |
| Emerald Resources NL (2) | |
| 17,125,000 | | |
| 20,996,935 | | |
| 6.0 | |
| Los Cerros, Ltd. (2) | |
| 36,750,000 | | |
| 980,066 | | |
| 0.3 | |
| Pantoro, Ltd. (2) | |
| 16,000,000 | | |
| 718,097 | | |
| 0.2 | |
| Perseus Mining, Ltd. | |
| 5,500,000 | | |
| 6,528,893 | | |
| 1.9 | |
| Predictive Discovery, Ltd. (2) | |
| 81,850,000 | | |
| 8,252,097 | | |
| 2.4 | |
| Prodigy Gold NL (2) | |
| 116,250,000 | | |
| 529,304 | | |
| 0.2 | |
| | |
| | | |
| 50,261,963 | | |
| 14.5 | |
| Canada | |
| | | |
| | | |
| | |
| Agnico Eagle Mines, Ltd. | |
| 165,000 | | |
| 8,378,700 | | |
| 2.4 | |
| Alamos Gold, Inc. | |
| 1,000,000 | | |
| 12,340,000 | | |
| 3.6 | |
| American Pacific Mining Corp. 144A (2)(3) | |
| 3,000,000 | | |
| 773,481 | | |
| 0.2 | |
| Angel Wing Metals, Inc. (2) | |
| 9,300,000 | | |
| 856,354 | | |
| 0.2 | |
| Atex Resources, Inc. (2) | |
| 2,300,000 | | |
| 1,677,348 | | |
| 0.5 | |
| B2Gold Corp. | |
| 2,000,000 | | |
| 7,360,000 | | |
| 2.1 | |
| Barrick Gold Corp. | |
| 650,000 | | |
| 10,972,000 | | |
| 3.2 | |
| Calibre Mining Corp. (2) | |
| 11,083,000 | | |
| 12,654,623 | | |
| 3.6 | |
| Desert Gold Ventures, Inc. (2) | |
| 14,588,264 | | |
| 644,785 | | |
| 0.2 | |
| G Mining Ventures Corp. (2) | |
| 23,265,947 | | |
| 18,852,701 | | |
| 5.4 | |
| G2 Goldfields, Inc. (2) | |
| 3,000,000 | | |
| 1,701,657 | | |
| 0.5 | |
| GoGold Resources, Inc. (2) | |
| 2,857,140 | | |
| 3,662,191 | | |
| 1.1 | |
| HighGold Mining, Inc. (2) | |
| 3,000,000 | | |
| 1,436,464 | | |
| 0.4 | |
| Lahontan Gold Corp. (2) | |
| 8,400,000 | | |
| 1,020,994 | | |
| 0.3 | |
| Liberty Gold Corp. (2) | |
| 12,482,000 | | |
| 4,229,628 | | |
| 1.2 | |
| Lotus Gold Corp. (1)(2) | |
| 4,900,000 | | |
| 1,804,788 | | |
| 0.5 | |
| Marathon Gold Corp. (2) | |
| 6,389,200 | | |
| 3,859,406 | | |
| 1.1 | |
| Mawson Gold, Ltd. (2) | |
| 10,600,000 | | |
| 1,249,355 | | |
| 0.4 | |
| Monarch Mining Corp. (2) | |
| 7,300,000 | | |
| 268,877 | | |
| 0.1 | |
| Newcore Gold, Ltd. (2) | |
| 5,750,000 | | |
| 720,074 | | |
| 0.2 | |
| Nighthawk Gold Corp. (2) | |
| 6,148,000 | | |
| 2,717,348 | | |
| 0.8 | |
| O3 Mining, Inc. (2) | |
| 2,223,000 | | |
| 2,603,735 | | |
| 0.8 | |
| Orla Mining, Ltd. (2) | |
| 6,900,000 | | |
| 29,277,348 | | |
| 8.4 | |
| Osino Resources Corp. (2) | |
| 5,000,000 | | |
| 3,904,236 | | |
| 1.1 | |
| Prime Mining Corp. (2) | |
| 7,600,000 | | |
| 11,141,068 | | |
| 3.2 | |
| Probe Gold, Inc. (2) | |
| 7,087,500 | | |
| 8,405,801 | | |
| 2.4 | |
| Roscan Gold Corp. (2) | |
| 10,886,900 | | |
| 1,363,369 | | |
| 0.4 | |
| Skeena Resources, Ltd. (2) | |
| 700,000 | | |
| 3,738,000 | | |
| 1.1 | |
| Talisker Resources, Ltd. (2) | |
| 12,500,000 | | |
| 1,058,932 | | |
| 0.3 | |
| TDG Gold Corp. (2) | |
| 9,227,925 | | |
| 2,209,264 | | |
| 0.6 | |
| Thesis Gold, Inc. (2) | |
| 7,400,000 | | |
| 4,033,886 | | |
| 1.1 | |
| 6 | The
notes to financial statements form an integral part of these statements. |
Schedule
of Investments (Unaudited) (continued)
May
31, 2023
| Name of Company | |
Shares | | |
Value | | |
%
of Net Assets | |
| Common Shares (continued) | |
| | |
| | |
| |
| Gold mining, exploration, development and royalty companies (continued) | |
| | | |
| | | |
| | |
| Canada (continued) | |
| | | |
| | | |
| | |
| Westhaven Gold Corp. (2) | |
| 5,500,000 | | |
$ | 1,276,243 | | |
| 0.4 | % |
| | |
| | | |
| 166,192,656 | | |
| 47.8 | |
| | |
| | | |
| | | |
| | |
| Cayman Islands | |
| | | |
| | | |
| | |
| Endeavour Mining PLC | |
| 700,000 | | |
| 18,450,092 | | |
| 5.3 | |
| | |
| | | |
| | | |
| | |
| South Africa | |
| | | |
| | | |
| | |
| AngloGold Ashanti, Ltd. ADR | |
| 325,000 | | |
| 7,865,000 | | |
| 2.3 | |
| Gold Fields, Ltd. ADR | |
| 600,000 | | |
| 9,072,000 | | |
| 2.6 | |
| | |
| | | |
| 16,937,000 | | |
| 4.9 | |
| United States | |
| | | |
| | | |
| | |
| SSR Mining, Inc. | |
| 800,000 | | |
| 11,820,651 | | |
| 3.4 | |
| Total gold mining, exploration, development and royalty companies (Cost $177,578,709) | | |
| 263,662,362 | | |
| 75.9 | |
| |
| Diversified metals mining, exploration, development and royalty companies |
| Australia | |
| | | |
| | | |
| | |
| Auteco Minerals, Ltd. (2) | |
| 89,200,750 | | |
| 1,740,619 | | |
| 0.5 | |
| Bellavista Resources ltd (2) | |
| 1,625,000 | | |
| 184,972 | | |
| 0.1 | |
| Castile Resources, Ltd. (2) | |
| 15,143,255 | | |
| 866,794 | | |
| 0.2 | |
| Delta Lithium, Ltd. (2) | |
| 11,338,600 | | |
| 4,793,876 | | |
| 1.4 | |
| Genesis Minerals, Ltd. (2) | |
| 1,166,934 | | |
| 956,381 | | |
| 0.3 | |
| Geopacific Resources, Ltd. (2) | |
| 28,135,714 | | |
| 366,017 | | |
| 0.1 | |
| | |
| | | |
| 8,908,659 | | |
| 2.6 | |
| Canada | |
| | | |
| | | |
| | |
| Adventus Mining Corp. (2) | |
| 5,310,000 | | |
| 1,232,155 | | |
| 0.4 | |
| Americas Gold & Silver Corp. (2) | |
| 4,601,400 | | |
| 1,897,808 | | |
| 0.6 | |
| Arizona Metals Corp. (2) | |
| 2,500,000 | | |
| 6,095,764 | | |
| 1.8 | |
| Aya Gold & Silver, Inc. (2) | |
| 2,300,000 | | |
| 15,909,392 | | |
| 4.6 | |
| Benchmark Metals, Inc. (2) | |
| 15,384,615 | | |
| 3,966,567 | | |
| 1.1 | |
| Bunker Hill Mining Corp. (2) | |
| 19,214,957 | | |
| 3,397,119 | | |
| 1.0 | |
| Emerita Resources Corp. (2) | |
| 2,750,000 | | |
| 891,344 | | |
| 0.3 | |
| Huntsman Exploration, Inc. (2) | |
| 617,500 | | |
| 31,842 | | |
| 0.0 | |
| Integra Resources Corp. (2) | |
| 3,937,473 | | |
| 4,493,228 | | |
| 1.3 | |
| Max Resource Corp. (2) | |
| 8,200,000 | | |
| 724,862 | | |
| 0.2 | |
| Pan Global Resources, Inc. (2) | |
| 6,667,000 | | |
| 1,596,151 | | |
| 0.5 | |
| Red Pine Exploration, Inc. (2) | |
| 16,700,000 | | |
| 1,783,794 | | |
| 0.5 | |
| Sable Resources, Ltd. (2) | |
| 26,160,000 | | |
| 1,059,890 | | |
| 0.3 | |
| San
Cristobal Mining, Inc. (1)(2) | |
| 2,583,332 | | |
| 6,200,002 | | |
| 1.8 | |
| | |
| | | |
| 49,279,918 | | |
| 14.4 | |
| United States | |
| | | |
| | | |
| | |
| Bendito
Resources, Inc. 144A (1)(2)(3) | |
| 4,288,000 | | |
| 1,072,000 | | |
| 0.3 | |
| Total diversified metals mining, exploration, development and royalty companies (Cost $89,524,280) | | |
| 59,260,577 | | |
| 17.3 | |
| | |
| | | |
| | | |
| | |
| Silver mining, exploration, development and royalty companies | |
| | | |
| | | |
| | |
| Canada | |
| | | |
| | | |
| | |
| Andean Precious Metals Corp. (2) | |
| 2,000,000 | | |
| 1,149,171 | | |
| 0.3 | |
| Discovery Silver Corp. (2) | |
| 7,154,545 | | |
| 5,217,679 | | |
| 1.5 | |
| Silver Mountain Resources, Inc. (2) | |
| 10,000,000 | | |
| 1,068,140 | | |
| 0.3 | |
| Silver Tiger Metals, Inc. (2) | |
| 14,795,333 | | |
| 2,506,760 | | |
| 0.7 | |
| | |
| | | |
| 9,941,750 | | |
| 2.8 | |
| The notes to financial statements form an integral part of these statements. |
7 |
Schedule
of Investments (Unaudited) (continued)
May
31, 2023
| Name of Company | |
Shares | | |
Value | | |
% of Net
Assets | |
| Common Shares (continued) | |
| | |
| | |
| |
| Silver mining, exploration, development and royalty companies (continued) |
| South Africa | |
| | | |
| | | |
| | |
| Sibanye Stillwater, Ltd. ADR | |
| 273,043 | | |
$ | 1,949,527 | | |
| 0.5 | % |
| Total silver mining, exploration, development and royalty companies (Cost $13,652,663) | |
| | | |
| 11,891,277 | | |
| 3.3 | |
| Total common shares (Cost $280,755,652 ) | |
| | | |
| 334,814,216 | | |
| 96.5 | |
| | |
| | | |
| | | |
| | |
| Rights (1)(2) | |
| | | |
| | | |
| | |
| Silver mining, exploration, development and royalty companies | |
| | | |
| | | |
| | |
| Canada | |
| | | |
| | | |
| | |
| Pan American Silver Corp. (Exp. Date 2/22/29) | |
| 393,200 | | |
| 89,288 | | |
| 0.0 | |
| Total rights (Cost $136,720) | |
| | | |
| 89,288 | | |
| 0.0 | |
| | |
| | | |
| | | |
| | |
| Warrants (1)(2) | |
| | | |
| | | |
| | |
| Diversified metals mining, exploration, development and royalty companies |
| Australia | |
| | | |
| | | |
| | |
| Red Dirt Metals, Ltd. (Exercise Price $0.25, Exp. Date 11/18/24) | |
| 2,834,650 | | |
| 774,395 | | |
| 0.2 | |
| Canada | |
| | | |
| | | |
| | |
| Aya Gold & Silver, Inc. (Exercise Price $3.30, Exp. Date 9/8/23) | |
| 1,200,000 | | |
| 5,427,624 | | |
| 1.6 | |
| Benchmark Metals, Inc. (Exercise Price $0.65, Exp. Date 9/28/24) | |
| 1,500,000 | | |
| 11,050 | | |
| 0.0 | |
| Bunker Hill Mining Corp. (Exercise Price $0.50, Exp. Date 8/15/23) | |
| 12,964,957 | | |
| 0 | | |
| 0.0 | |
| Bunker Hill Mining Corp. (Exercise Price $0.37, Exp. Date 4/1/25) | |
| 5,000,000 | | |
| 73,665 | | |
| 0.0 | |
| Bunker Hill Mining Corp. (Exercise Price $0.60, Exp. Date 2/9/26) | |
| 1,250,000 | | |
| 9,208 | | |
| 0.0 | |
| Emerita Resources Corp. (Exercise Price $1.50, Exp. Date 7/15/23) | |
| 1,375,000 | | |
| 0 | | |
| 0.0 | |
| Euro Sun Mining, Inc. (Exercise Price $0.55, Exp. Date 6/5/23) | |
| 5,500,000 | | |
| 0 | | |
| 0.0 | |
| Huntsman Exploration, Inc. (Exercise Price $3.50, Exp. Date 10/19/23) | |
| 617,500 | | |
| 0 | | |
| 0.0 | |
| Integra Resources Corp. (Exercise Price $1.38, Exp. Date 6/16/24) | |
| 1,689,165 | | |
| 37,330 | | |
| 0.0 | |
| Red Pine Exploration, Inc. (Exercise Price $0.25, Exp. Date 5/5/24) | |
| 8,350,000 | | |
| 0 | | |
| 0.0 | |
| Sable Resources, Ltd. (Exercise Price $0.20, Exp. Date 9/10/23) | |
| 11,000,000 | | |
| 0 | | |
| 0.0 | |
| | |
| | | |
| 5,558,877 | | |
| 1.6 | |
| Total diversified metals mining, exploration, development and royalty companies (Cost $1,483,283) | | |
| 6,333,272 | | |
| 1.8 | |
| Gold mining, exploration, development and royalty companies | |
| | | |
| | | |
| | |
| Canada | |
| | | |
| | | |
| | |
| American Pacific Mining Corp. (Exercise Price $1.40, Exp. Date 12/10/23) | |
| 1,500,000 | | |
| 0 | | |
| 0.0 | |
| Angel Wing Metals, Inc. (Exercise Price $0.40, Exp. Date 6/17/23) | |
| 3,950,000 | | |
| 0 | | |
| 0.0 | |
| Angel Wing Metals, Inc. (Exercise Price $0.25, Exp. Date 5/4/25) | |
| 700,000 | | |
| 0 | | |
| 0.0 | |
| Atex Resources, Inc. (Exercise Price $1.00, Exp. Date 8/31/25) | |
| 675,000 | | |
| 84,530 | | |
| 0.0 | |
| Desert Gold Ventures, Inc. (Exercise Price $0.40, Exp. Date 8/28/23) | |
| 6,700,000 | | |
| 0 | | |
| 0.0 | |
| Desert Gold Ventures, Inc. (Exercise Price $0.25, Exp. Date 12/31/24) | |
| 594,132 | | |
| 0 | | |
| 0.0 | |
| G Mining Ventures Corp. (Exercise Price $1.90, Exp. Date 9/9/24) | |
| 3,500,000 | | |
| 232,044 | | |
| 0.1 | |
| Gold Mountain Mining Corp. (Exercise Price $1.75, Exp. Date 4/21/24) | |
| 2,200,000 | | |
| 0 | | |
| 0.0 | |
| Lahontan Gold Corp. (Exercise Price $0.65, Exp. Date 3/24/24) | |
| 2,250,000 | | |
| 0 | | |
| 0.0 | |
| Lahontan Gold Corp. (Exercise Price $0.11, Exp. Date 2/28/26) | |
| 1,950,000 | | |
| 114,917 | | |
| 0.1 | |
| Lotus Gold Corp. (Exercise Price $0.75, Exp. Date 8/16/23) | |
| 2,200,000 | | |
| 0 | | |
| 0.0 | |
| Marathon Gold Corp. (Exercise Price $1.35, Exp. Date 9/20/24) | |
| 1,675,000 | | |
| 49,356 | | |
| 0.0 | |
| Monarch Mining Corp. (Exercise Price $1.05, Exp. Date 6/29/23) | |
| 1,700,000 | | |
| 0 | | |
| 0.0 | |
| Monarch Mining Corp. (Exercise Price $0.95, Exp. Date 4/6/27) | |
| 2,500,000 | | |
| 0 | | |
| 0.0 | |
| Nighthawk Gold Corp. (Exercise Price $1.50, Exp. Date 7/7/23) | |
| 2,174,000 | | |
| 0 | | |
| 0.0 | |
| Nighthawk Gold Corp. (Exercise Price $1.05, Exp. Date 5/3/24) | |
| 900,000 | | |
| 0 | | |
| 0.0 | |
| Prime Mining Corp. (Exercise Price $5.00, Exp. Date 4/27/24) | |
| 400,000 | | |
| 0 | | |
| 0.0 | |
| Prime Mining Corp. (Exercise Price $1.10, Exp. Date 6/10/25) | |
| 920,000 | | |
| 684,494 | | |
| 0.2 | |
| TDG Gold Corp. (Exercise Price $0.75, Exp. Date 12/22/24) | |
| 225,000 | | |
| 0 | | |
| 0.0 | |
| | |
| | | |
| 1,165,341 | | |
| 0.4 | |
| Total gold mining, exploration, development and royalty companies (Cost $1,960,723) | |
| | | |
| 1,165,341 | | |
| 0.4 | |
| 8 | The
notes to financial statements form an integral part of these statements. |
Schedule
of Investments (Unaudited) (continued)
May
31, 2023
| Name of Company | |
Shares | | |
Value | | |
% of Net
Assets | |
| Warrants (1)(2) (continued) | |
| | |
| | |
| |
| Silver mining, exploration, development and royalty companies | |
| | | |
| | | |
| | |
| Canada | |
| | | |
| | | |
| | |
| Silver Mountain Resources, Inc. (Exercise Price $0.50, Exp. Date 2/2/24) | |
| 5,000,000 | | |
$ | 0 | | |
| 0.0 | % |
| Silver Tiger Metals, Inc. (Exercise Price $0.50, Exp. Date 7/27/23) | |
| 1,666,666 | | |
| 0 | | |
| 0.0 | |
| Total silver mining, exploration, development and royalty companies (Cost $260,869) | | |
| 0 | | |
| 0.0 | |
| Total warrants (Cost $3,704,875) | |
| | | |
| 7,498,613 | | |
| 2.2 | |
| | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | |
| Money Market Fund | |
| | | |
| | | |
| | |
| Federated US Treasury
Cash Reserve Fund - Institutional Shares (4) | |
| 102,715 | | |
| 102,715 | | |
| 0.0 | |
| Total money market fund (Cost $102,715) | |
| | | |
| 102,715 | | |
| 0.0 | |
| | |
| | | |
| | | |
| | |
Investments, at value (Cost $287,640,830)
| |
| | | |
| 345,485,032 | | |
| 99.6 | |
| Cash, receivables and other assets less other liabilities | |
| | | |
| 1,442,213 | | |
| 0.4 | |
| Net assets | |
| | | |
$ | 346,927,245 | | |
| 100.0 | % |
| ADR |
American
Depositary Receipt |
| PLC |
Public Limited Company |
| |
|
| (1) |
Security
fair valued in accordance with procedures adopted by the Board of Directors. At the period end, the value of these securities
amounted to $19,644,891 or 5.7% of net assets. |
| (2) |
Non-income producing
security. |
| (3) |
Security
exempt from registration under Rule 144A under the Securities Act of 1933. At the period end, the value of these securities amounted
to $1,845,481 or 0.5% of net assets. |
| (4) |
Dividend yield changes
daily to reflect current market conditions. Rate was the quoted yield as of May 31, 2023. |
Portfolio
Statistics (Unaudited)
May
31, 2023
| Geographic Breakdown* | |
| |
|
| Australia | |
| 17.3 | % |
|
| Canada | |
| 67.9 | |
|
| Cayman Islands | |
| 5.3 | |
|
| South Africa | |
| 5.4 | |
|
| United States | |
| 3.7 | |
|
| Cash | |
| 0.4 | |
|
| | |
| 100.0 | % |
|
*Geographic
breakdown, which is based on company domiciles, is expressed as a percentage of total net assets including cash.
| The notes to financial statements form an integral part of these statements. |
9 |
Statement
of Assets and Liabilities (Unaudited)
May
31, 2023
| Assets | |
| |
| Investments, at value (Cost $287,640,830) | |
$ | 345,485,032 | |
| Cash | |
| 78,042 | |
| Foreign currency (Cost $1,197,590) | |
| 1,195,199 | |
| Investment securities sold | |
| 599,899 | |
| Dividends and interest receivable, net of withholding taxes payable | |
| 210,098 | |
| Prepaid expenses | |
| 41,671 | |
| Total assets | |
$ | 347,609,941 | |
| | |
| | |
Liabilities | |
| | |
| Accrued investment adviser fees | |
| 204,021 | |
| Accrued fund service fees | |
| 35,205 | |
| Liability for retirement benefits due to retired directors | |
| 357,584 | |
| Other expenses | |
| 85,886 | |
| Total liabilities | |
| 682,696 | |
| Net assets | |
$ | 346,927,245 | |
| | |
| | |
Common shares $1 par value
Authorized: 40,000,000 shares
Issued and Outstanding: 19,289,905 shares | |
$ | 19,289,905 | |
| Share premium (capital surplus) | |
| 1,372,500 | |
| Distributable earnings | |
| 326,264,840 | |
| Net assets | |
$ | 346,927,245 | |
| Net asset value per share | |
$ | 17.98 | |
The
closing price of the Company’s shares on the New York Stock Exchange was $15.73 on May 31, 2023.
| 10 | The
notes to financial statements form an integral part of these statements. |
Statement
of Operations (Unaudited)
For
the six months ended May 31, 2023
| Investment income | |
| |
| Dividend income (net of withholding taxes of $227,193) | |
$ | 1,058,619 | |
| Interest income | |
| 13,944 | |
| Total investment income | |
| 1,072,563 | |
| | |
| | |
Expenses
| |
| | |
| Investment adviser fees | |
| 1,229,863 | |
| Fund services fees | |
| 94,751 | |
| Compliance services fees | |
| 40,000 | |
| Transfer agent fees | |
| 35,807 | |
| Custodian fees | |
| 62,822 | |
| Directors’ fees and expenses | |
| 120,243 | |
| Retired directors’ fees | |
| 37,496 | |
| Insurance fees | |
| 62,506 | |
| Legal fees | |
| 60,942 | |
| Audit fees | |
| 17,500 | |
| Shareholder reports and proxy expenses | |
| 22,353 | |
| Dues and listing fees | |
| 12,466 | |
| Other expenses | |
| 41,998 | |
| Total expenses | |
| 1,838,747 | |
| Change in retirement benefits due to retired directors | |
| (21,658 | ) |
| Investment adviser fees waived | |
| (25,053 | ) |
| Net expenses | |
| 1,792,036 | |
| Net investment loss | |
| (719,473 | ) |
| |
Net realized and unrealized gain (loss) from investments and foreign currency transactions
|
| Proceeds from sales | |
| 15,297,317 | |
| Cost of securities sold | |
| (11,672,409 | ) |
| Net realized gain from investments | |
| 3,624,908 | |
| Net realized gain (loss) from foreign currency transactions | |
| | |
| Investments | |
| 7,860 | |
| Foreign currency | |
| 86,029 | |
| Net realized gain from foreign currency transactions | |
| 93,889 | |
| Net increase in unrealized appreciation (depreciation) on investments | |
| | |
| Balance, beginning of period | |
| 39,254,852 | |
| Balance, end of period | |
| 57,844,202 | |
| Net increase in unrealized appreciation (depreciation) on investments | |
| 18,589,350 | |
| Net unrealized loss on translation of assets and liabilities in foreign currency | |
| (41,159 | ) |
| Net realized and unrealized gain from investments and foreign currency transactions | |
| 22,266,988 | |
| Net increase in net assets resulting from operations | |
$ | 21,547,515 | |
| The notes to financial statements form an integral part of these statements. |
11 |
Statements
of Changes in Net Assets
| | |
Six Months
Ended
May 31, 2023
(Unaudited) | | |
Year Ended
November 30,
2022 | |
| Net investment loss | |
$ | (719,473 | ) | |
$ | (1,404,855 | ) |
| Net realized gain | |
| 3,624,908 | | |
| 26,955,986 | |
| Net realized gain (loss) from foreign currency transactions | |
| 93,889 | | |
| (187,107 | ) |
Net increase (decrease) in unrealized appreciation (depreciation) on investments
| |
| 18,589,350 | | |
| (181,343,210 | ) |
| Net unrealized gain (loss) on translation of assets and liabilities in foreign currency | |
| (41,159 | ) | |
| 39,158 | |
| Net increase (decrease) in net assets resulting from operations | |
| 21,547,515 | | |
| (155,940,028 | ) |
| Dividends paid/payable | |
| (192,899 | ) | |
| (385,798 | ) |
| Net increase (decrease) in net assets | |
| 21,354,616 | | |
| (156,325,826 | ) |
| Net assets, beginning of period | |
| 325,572,629 | | |
| 481,898,455 | |
| Net assets, end of period | |
$ | 346,927,245 | | |
$ | 325,572,629 | |
| 12 | The
notes to financial statements form an integral part of these statements. |
Notes
to Financial Statements (Unaudited)
Six
months ended May 31, 2023
1.
Organization
ASA
Gold and Precious Metals Limited (the “Company”) is a non-diversified, closed-end investment company registered under
the Investment Company Act of 1940, as amended (the “1940 Act”).
The
Company was initially organized as a public limited liability company in the Republic of South Africa in June 1958. On November
11, 2004, the Company’s shareholders approved a proposal to move the Company’s place of incorporation from the Republic
of South Africa to the Commonwealth of Bermuda by reorganizing itself into an exempted limited liability company formed in Bermuda.
The Company is registered with the Securities and Exchange Commission (the “SEC”) pursuant to an order under Section
7(d) of the 1940 Act.
The
Company seeks long-term capital appreciation primarily through investing in companies engaged in the exploration for, development
of projects or mining of precious metals and minerals. The Company is managed by Merk Investments LLC (the “Adviser”).
2.
Summary of significant accounting policies
The
following is a summary of the significant accounting policies:
A.
Security valuation
The
net asset value of the Company generally is determined as of the close of regular trading on the New York Stock Exchange (the
“NYSE”) on the date for which the valuation is being made (the “Valuation Time”). Portfolio securities
listed on U.S. and foreign stock exchanges generally are valued at the last reported sale price as of the Valuation Time on the
exchange on which the securities are primarily traded, or the last reported bid price if a sale price is not available.
Pursuant
to Rule 2a-5 under the Investment Company Act, the Company’s Board of Directors (the “Board”) has designated the
Adviser, as defined in Note 4, as the Company’s valuation designee to perform any fair value determinations for securities
and other assets held by the Company. The Adviser is subject to the oversight of the Board and certain reporting and other requirements
intended to provide the Board the information needed to oversee the Adviser’s fair value determinations. The Adviser is responsible
for determining the fair value of investments in accordance with policies and procedures that have been approved by the Board.
Under these procedures, the Adviser convenes on a regular and ad hoc basis to review such investments and considers a number of
factors, including valuation methodologies and unobservable inputs, when arriving at fair value. The Board has approved the Adviser’s
fair valuation procedures as a part of the Company’s compliance program and will review any changes made to the procedures.
Securities
traded over the counter are valued at the last reported sale price or the last reported bid price if a sale price is not available.
Securities listed on foreign stock exchanges may be fair valued at a value other than the last reported sale price or last reported
bid price based on significant events that have occurred subsequent to the close of the foreign markets. Shares of non-exchange
traded open-end mutual funds are valued at net asset value (“NAV”). To value its warrants, the Company’s valuation
designee typically utilizes the Black-Scholes model using the listed price for the underlying common shares. The valuation is
a combination of value of the stock price less the exercise price, plus some value related to the volatility of the stock over
the remaining time period prior to expiration.
Securities
for which current market quotations are not readily available are valued at their fair value as determined in accordance with
procedures approved by the Board. If a security is valued at a “fair value,” that value may be different from the
last quoted price for the security. Various factors may be reviewed in order to make a good faith determination of a security’s
fair value. These factors include, but are not limited to, the nature of the security; relevant financial or business developments
of the issuer; actively traded similar or related securities; conversion rights on the security; and changes in overall market
conditions.
The
difference between cost and market value is reflected separately as net unrealized appreciation (depreciation) on investments.
The net realized gain or loss from the sale of securities is determined for accounting purposes on the identified cost basis.
B.
Fair value measurement
In
accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), fair
value is defined as the price that the Company would receive to sell an investment or pay to transfer a liability in a timely
transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous
market for the investment or liability. U.S. GAAP establishes a three-tier hierarchy to distinguish between (1) inputs that
reflect the assumptions market participants would use in pricing an asset or liability developed based on market
data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity’s
own assumptions about the assumptions market participants would use in pricing an asset or liability developed based on the best
information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for
disclosure purposes. Various inputs are used in determining the value of the Company’s investments. The inputs are summarized
in the three broad levels listed below.
Notes
to Financial Statements (Unaudited) (continued)
Six
months ended May 31, 2023
2.
Summary of significant accounting policies (continued)
B.
Fair value measurement (continued)
| Level
1 – | Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. |
| Level
2 – | Observable inputs other than quoted prices included in level 1 that are observable for the asset or liability either directly
or indirectly. These inputs may include quoted prices for identical instruments on an inactive market, prices for similar investments,
interest rates, prepayment speeds, credit risk, yield curves, default rates, and similar data. |
| Level
3 – | Unobservable inputs for the assets or liability to the extent that relevant observable inputs are not available, representing
the Company’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability,
and that would be based on the best information available. |
The
inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those
securities.
The
following is a summary of the inputs used as of May 31, 2023 in valuing the Company’s investments at fair value:
Investment
in Securities (1)
Measurements
at May 31, 2023
| | |
Level 1 | | |
Level 2 | | |
Level 3 | | |
Total | |
| Corporate Convertible Bond | |
| | |
| | |
| | |
| |
| Gold mining, exploration, development and royalty companies | |
$ | — | | |
$ | — | | |
$ | 2,980,200 | | |
$ | 2,980,200 | |
| Common Shares | |
| | | |
| | | |
| | | |
| | |
| Gold mining, exploration, development and royalty companies | |
| 261,857,574 | | |
| — | | |
| 1,804,788 | | |
| 263,662,362 | |
| Diversified metals mining, exploration, development and royalty companies | |
| 51,988,575 | | |
| — | | |
| 7,272,002 | | |
| 59,260,577 | |
| Silver mining, exploration, development and royalty companies | |
| 11,891,277 | | |
| — | | |
| — | | |
| 11,891,277 | |
| Rights | |
| | | |
| | | |
| | | |
| | |
| Silver mining, exploration, development and royalty companies | |
| — | | |
| — | | |
| 89,288 | | |
| 89,288 | |
| Warrants | |
| | | |
| | | |
| | | |
| | |
| Diversified metals mining, exploration, development and royalty companies | |
| — | | |
| — | | |
| 6,333,272 | | |
| 6,333,272 | |
| Gold mining, exploration, development and royalty companies | |
| — | | |
| — | | |
| 1,165,341 | | |
| 1,165,341 | |
| Silver mining, exploration, development and royalty companies | |
| — | | |
| — | | |
| — | | |
| — | |
| Money Market Fund | |
| 102,715 | | |
| — | | |
| — | | |
| 102,715 | |
| Total Investments | |
$ | 325,840,141 | | |
$ | — | | |
$ | 19,644,891 | | |
$ | 345,485,032 | |
| (1) | See
schedule of investments for country classifications. |
Notes
to Financial Statements (Unaudited) (continued)
Six
months ended May 31, 2023
2.
Summary of significant accounting policies (continued)
B. Fair value measurement (continued)
The
following is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value.
| | |
Corporate
Convertible
Bond | | |
Common
Stock | | |
Rights | | |
Warrants | |
| Balance November 30, 2022 | |
$ | — | | |
$ | 2,511,245 | | |
$ | 96,088 | | |
$ | 5,939,911 | |
| Purchases | |
| 2,940,000 | | |
| 5,309,217 | | |
| — | | |
| 116,057 | |
| Sales | |
| — | | |
| — | | |
| — | | |
| (71,866 | ) |
| Realized loss | |
| — | | |
| — | | |
| — | | |
| (254,655 | ) |
| Accretion of discount | |
| 868 | | |
| — | | |
| — | | |
| — | |
| Net change in unrealized
appreciation (depreciation) | |
| 39,332 | | |
| 1,256,328 | | |
| (6,800 | ) | |
$ | 1,769,166 | |
| Balance May 31, 2023 | |
$ | 2,980,200 | | |
$ | 9,076,790 | | |
$ | 89,288 | | |
$ | 7,498,613 | |
Net change in unrealized
appreciation (depreciation) from
investments held as of May 31, 2023* | |
$ | 39,332 | | |
$ | 1,256,328 | | |
$ | (6,800 | ) | |
$ | 1,769,166 | |
*
The change in unrealized appreciation/(depreciation) is included in net change in unrealized appreciation/(depreciation) of investments
in the accompanying Statement of Operations.
Significant
unobservable inputs developed by the valuation designee for Level 3 investments held at May 31, 2023 are as follows:
Asset
Categories | |
Fair Value | | |
Valuation Technique(s) | |
Unobservable
Input | | |
Range
(Weighted
Average) | |
| Corporate Convertible Bond1 | |
$ | 2,980,200 | | |
Implied Interest Rate | |
| Discount | | |
13% (13%) | |
| Common Shares2 | |
| 9,076,790 | | |
Transaction Cost/ Latest Round of Financing | |
| None | | |
None | |
| Rights3 | |
| 89,288 | | |
Market Transaction | |
| Discount | | |
70% (70%) | |
| Warrants4 | |
| 7,498,613 | | |
Black Scholes Method | |
| Volatility | | |
20% - 50% (38%) | |
1
Fair valued corporate convertible bonds are valued based on applying a fixed discount rate to the fixed income portion,
which represents the implied interest rate that would have valued the entire corporate convertible bond at the time of issuance.
2
Fair valued common stocks with no public market are valued based on transaction cost or latest round of financing.
3
Fair valued rights are valued based on the specifics of the rights at a discount to the market price of the underlying security.
4
Warrants are priced based on the Black Scholes Method; the key input to this method is modeled volatility of the investment; the
lower the modeled volatility, the lower the valuation of the warrant.
C.
Foreign Currency Translation
Portfolio
securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the rate
of exchange reported by independent data providers. Purchases and sales of investment securities and income and expense items
denominated in foreign currencies are translated into U.S. dollar amounts on the respective
dates of such transactions. The portion of the results arising from changes in the exchange rates and the portion due to fluctuations
arising from changes in the market prices of securities are not isolated. The resulting net foreign currency gain or loss is included
on the Statements of Operations. Realized foreign currency gains or losses arise from sales of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities transactions and the difference between the amounts of
dividends, interest, and foreign withholding taxes recorded on the Company’s books and the U.S. dollar equivalent of the
amounts actually received or paid.
Notes
to Financial Statements (Unaudited) (continued)
Six
months ended May 31, 2023
2.
Summary of significant accounting policies (continued)
D.
Securities Transactions and Investment Income
During
the six months ended May 31, 2023, sales and purchases of portfolio securities (other than temporary short-term investments) amounted
to $15,297,317 and $18,310,659, respectively.
As
of May 31, 2023, a significant portion of the Company’s assets consisted of securities of junior and intermediate mining
company issuers.
Dividend
income is recorded on the ex-dividend date, net of withholding taxes or ADR fees, if any. Interest income is recognized on the
accrual basis. Premium is amortized to the next call date above par and discount is accreted to maturity using the effective interest
method.
E.
Dividends to Shareholders
Dividends
to shareholders are recorded on the ex-dividend date. The reporting for financial statement purposes of dividends paid from net
investment income and/or net realized gains may differ from their ultimate reporting for U.S. federal income tax purposes, primarily
because of the separate line item reporting for financial statement purposes of foreign exchange gains or losses.
F.
Use of Estimates
The
preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that
affect amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
It is management’s opinion that all adjustments necessary for a fair statement of the results of the interim periods presented
have been made. All adjustments are of a normal recurring nature.
G.
Basis of Presentation
The
financial statements are presented in U.S. dollars. The Company is an investment company and accordingly follows the investment
company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard
Codification, Topic 946 “Financial Services - Investment Companies”.
H.
Income Taxes
In
accordance with U.S. GAAP requirements regarding accounting for uncertainties on income taxes, management has analyzed the Company’s
tax positions taken on federal and state income tax returns, as applicable, for all open tax years (2019-2022). As of May 31,
2023, the Company has not recorded any unrecognized tax benefits. The Company’s policy, if it had unrecognized benefits,
is to recognize accrued interest and penalties in operating expenses.
3.
Tax status of the Company
The
Company is a “passive foreign investment company” (“PFIC”) for U.S. federal income tax purposes and is
not subject to Bermuda tax as an exempted limited liability company organized under the laws of Bermuda. Nor is the Company generally
subject to U.S. federal income tax, since it is a non-U.S. corporation whose only business activity in the United States is trading
in stocks or securities for its own account; under the U.S. federal tax law that activity does not constitute engaging in the
conduct of a trade or business within the United States, even if its principal office is located therein. As a result, its gross
income is not subject to U.S. federal income tax, though certain types of income it earns from U.S. sources (such as dividends
of U.S. payors) are subject to U.S. federal withholding tax.
4.
Fees and Expenses and Other Transactions with Affiliates
Investment
Adviser – Merk Investments LLC (the “Adviser”) is the investment adviser to the Company. Pursuant to an investment
advisory agreement, the Adviser receives an advisory fee, payable monthly, from the Company at an annual rate of 0.70% of the
Company’s average daily net assets.
Notes
to Financial Statements (Unaudited) (continued)
Six
months ended May 31, 2023
4.
Fees and Expenses and Other Transactions with Affiliates (continued)
The
Adviser voluntarily agreed to waive a portion of its advisory fee, equal to an annual rate of 0.05% of the Company’s net
assets exceeding $300 million, and an additional 0.10% of the Company’s net assets exceeding $500 million. The Adviser may
waive additional fees at any time. The Adviser waived $25,053 for the six months ended May 31, 2023.
Other
Service Providers – Apex US Holdings LLC (d/b/a Apex Fund Services) (“Apex”) provides fund accounting, fund
administration and compliance services to the Company. The fees related to these services are included in fund services fees within
the Statement of Operations. Apex also provides certain shareholder report production and EDGAR conversion and filing services.
Pursuant to an Apex services agreement, the Company pays Apex customary fees for its services. Apex provides a Principal Financial
Officer, as well as certain additional compliance support functions.
Foreside
Fund Services, LLC, a wholly owned subsidiary of ACA Group, provides a Chief Compliance Officer to the Company.
5.
Exemptive order
The
Company is a closed-end investment company and operates pursuant to an exemptive order issued by the Securities and Exchange Commission
(the “SEC”) pursuant to Section 7(d) of the 1940 Act (the “Order”). The Order is conditioned upon, among
other things, the Company complying with certain requirements relating to the custody of assets and settlement of securities transactions
outside of the United States different than those required of other registered investment companies. These conditions make it
more difficult for the Company to implement a flexible investment strategy and to fully achieve its desired portfolio diversification
than if it were not subject to such requirements.
6.
Retirement plans
The
Company has recorded a liability for retirement benefits due to retired directors. The liability for these benefits at May 31,
2023 was $357,584. A director whose first election to the Board of Directors was prior to January 1, 2008 qualifies to receive
retirement benefits if he has served the Company (and any of its predecessors) for at least twelve years prior to retirement.
Directors first elected on or after January 1, 2008 are not eligible to participate in the plan.
7.
Indemnifications
In
the ordinary course of business, the Company enters into contracts that contain a variety of indemnification pro-visions. The
Company’s maximum exposure under these arrangements is unknown.
8.
Share repurchase
The
Company may from time to time purchase its common shares at a discount to NAV on the open market in such amounts and at such prices
as the Company may deem advisable.
The
Company had 19,289,905 shares outstanding as of May 31, 2023. There were no repurchases during the six months ended May 31, 2023.
9.
Subsequent events
In
accordance with U.S. GAAP provisions, management has evaluated the possibility of subsequent events existing in the Company’s
financial statements through the date the financial statements were issued. The Company believes that there are no material events
that would require disclosure.
Financial
Highlights
| | |
(Unaudited)
Six Months
Ended May 31, | | |
For the Years Ended November 30, | |
| Per share operating
performance(1) | |
2023 | | |
2022 | | |
2021 | | |
2020 | | |
2019 | | |
2018 | |
| Net asset value, beginning of period | |
$ | 16.88 | | |
$ | 24.98 | | |
$ | 24.05 | | |
$ | 14.82 | | |
$ | 10.10 | | |
$ | 12.66 | |
| Net investment loss | |
| (0.04 | ) | |
| (0.07 | ) | |
| (0.09 | ) | |
| (0.13 | ) | |
| (0.06 | ) | |
| (0.07 | ) |
| Net realized gain (loss) from investments | |
| 0.19 | | |
| 1.40 | | |
| 1.37 | | |
| 1.83 | | |
| 0.09 | | |
| (0.47 | ) |
| Net realized gain (loss) from foreign currency transactions | |
| 0.00 | | |
| (0.01 | ) | |
| (0.01 | ) | |
| 0.05 | | |
| (0.06 | ) | |
| 0.01 | |
| Net increase (decrease) in unrealized appreciation on investments | |
| 0.96 | | |
| (9.40 | ) | |
| (0.32 | ) | |
| 7.50 | | |
| 4.77 | | |
| (2.00 | ) |
| Net unrealized gain on translation of assets and liabilities in foreign currency | |
| 0.00 | | |
| 0.00 | | |
| 0.00 | | |
| 0.00 | | |
| 0.00 | | |
| 0.00 | |
| Net increase (decrease) in net assets resulting from operations | |
| 1.11 | | |
| (8.08 | ) | |
| 0.95 | | |
| 9.25 | | |
| 4.74 | | |
| (2.53 | ) |
| Dividends From net investment income | |
| — | | |
| — | | |
| — | | |
| (0.02 | ) | |
| (0.02 | ) | |
| (0.03 | ) |
| From net realized gain on investments | |
| (0.01 | ) | |
| (0.02 | ) | |
| (0.02 | ) | |
| — | | |
| — | | |
| — | |
| Net asset value, end of period | |
$ | 17.98 | | |
$ | 16.88 | | |
$ | 24.98 | | |
$ | 24.05 | | |
$ | 14.82 | | |
$ | 10.10 | |
| Market value per share, end of period | |
$ | 15.73 | | |
$ | 14.26 | | |
$ | 20.70 | | |
$ | 19.91 | | |
$ | 12.20 | | |
$ | 8.66 | |
| Total investment return | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Based on market price (2) | |
| 10.38 | %(3) | |
| (31.02 | )% | |
| 4.06 | % | |
| 63.38 | % | |
| 41.14 | % | |
| (21.39 | )% |
| Based on net asset value (4) | |
| 6.58 | %(3) | |
| (32.34 | )% | |
| 3.96 | % | |
| 62.46 | % | |
| 47.01 | % | |
| (19.97 | )% |
| Ratio of average net assets | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Expenses | |
| 1.05 | %(5) | |
| 1.00 | % | |
| 0.94 | % | |
| 1.02 | % | |
| 1.38 | % | |
| 1.35 | % |
| Net expenses (6) | |
| 1.02 | %(5) | |
| 1.00 | % | |
| 0.91 | % | |
| 1.02 | % | |
| 1.38 | % | |
| 1.35 | % |
| Net investment loss | |
| (0.41 | )%(5) | |
| (0.36 | )% | |
| (0.35 | )% | |
| (0.67 | )% | |
| (0.44 | )% | |
| (0.63 | )% |
| Supplemental data | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Net assets, end of Period (000 omitted) | |
$ | 346,927 | | |
$ | 325,573 | | |
$ | 481,898 | | |
$ | 463,936 | | |
$ | 285,879 | | |
$ | 194,834 | |
| Portfolio turnover rate | |
| 4 | %(3) | |
| 13 | % | |
| 17 | % | |
| 31 | % | |
| 45 | % | |
| 3 | % |
| Shares outstanding (000 omitted) | |
| 19,290 | | |
| 19,290 | | |
| 19,290 | | |
| 19,290 | | |
| 19,290 | | |
| 19,290 | |
| (1) | Per
share amounts from operations have been calculated using the average shares method. |
| (2) | Total
investment return is calculated assuming a purchase of shares at the current market price
at close the day before and a sale at the current market price on the last day of each
period reported. Dividends are assumed, for purposes of this calculation, to be reinvested
at prices obtained under the Company’s dividend reinvestment plan. |
| (4) | Total
investment return is calculated assuming a purchase of shares at the current net asset
value at close the day before and a sale at the current net asset value on the last day
of each period reported. Dividends are assumed, for purposes of this calculation, to
be reinvested at prices obtained under the Company’s dividend reinvestment plan. |
| (6) | Reflects
the expense ratio excluding any waivers and the change in retirement benefits due to
retired directors. |
Certain
Tax Information for U.S. Shareholders (Unaudited)
The
Company is a “passive foreign investment company” (“PFIC”) for U.S. federal income tax purposes. In view
of this, U.S. investors holding common shares in taxable accounts are strongly urged to review the important tax information regarding
the consequences of an investment in the common shares of the Company, which may be found at www. asaltd.com under “Investor
Information | Taxpayer Information - PFIC”. Due to the complexity and potentially adverse effect of the applicable tax
rules, U.S. shareholders are strongly urged to consult their own tax advisors concerning the impact of these rules on their investment
in the Company and on their individual situations, and any additional informational filing requirements.
Dividend
Reinvestment and Stock Purchase Plan (Unaudited)
Computershare
Trust Company, N.A. (“Computershare”) has been authorized by the Company to offer and administer the Computershare
Investment Plan, a dividend reinvestment and stock purchase plan (“CIP”) to shareholders as well as new investors
or non-shareholders. Shareholders and new investors may elect to participate in the CIP by signing an enrollment form or by going
to www.computershare.com/investor and following the instructions. New investors or non-shareholders must include a minimum
initial investment of at least $500. Computershare as agent will apply to the purchase of common shares of the Company in the
open market (i) all cash dividends (after deduction of the service charge described below) that become payable to such participant
on the Company’s shares (including shares registered in his or her name and shares accumulated under the CIP) and (ii) any
optional cash purchases ($50 minimum, subject to an annual maximum of $250,000) received from such participant.
Computershare
may combine CIP participant purchase requests with other purchase requests received from other CIP participants and may submit
the combined purchase requests in bulk to Computershare’s broker as a single purchase order. Purchase requests may be combined,
at Computershare’s discretion, according to one or more factors such as purchase type (e.g., dividend reinvestment, one-time
ACH, check, etc.), request date, or request delivery method (e.g., online, regular mail, etc.). Computershare will submit bulk
purchase orders to its broker as and when required under the terms of the CIP. Computershare’s broker may execute each bulk
purchase order in one or more transactions over one or more days, depending on market conditions. Each participant whose purchase
request is included in each bulk purchase order will receive the weighted average market price of all shares purchased by Computershare’s
broker for such order. Any stock dividends or split shares distributed on shares held in the CIP will be credited to the participant’s
account.
A
one-time $10 enrollment fee to establish a new account for a new investor or non-shareholder will be deducted from the purchase
amount. For each participant, each dividend reinvestment will entail a transaction fee of 5% of the amount reinvested, up to a
maximum of $3 plus $0.03 per share purchased. Each optional cash purchase by check or one-time online bank debit will entail a
transaction fee of $5 plus $0.03 per share purchased. If a participant has funds automatically deducted monthly from his or her
savings or checking account, for each debit the transaction fee is $2.50 plus $0.03 per share purchased. Fees will be deducted
from the purchase amount. Each batch order sale will entail a transaction fee of $15 plus $0.12 per share sold. Each market order
sale will entail a transaction fee of $25 plus $0.12 per share sold. Fees are deducted from the proceeds derived from the sale.
All per share fees include any brokerage commissions Computershare is required to pay. Any fractional share will be rounded up
to a whole share for purposes of calculating the per share fee. Additional fees are charged by Computershare for specific shareholder
requests such as copies of account statements for prior years ($10 per year requested) and a returned check and ACH reject fee
of $25.
Participation
in the CIP may be terminated by a participant at any time by written, telephone or Internet instructions to Computershare. Upon
termination, a participant will receive a certificate for the whole number of shares credited to his or her account, unless he
or she requests the sale of all or part of such shares. Dividends reinvested by a shareholder under the CIP will generally be
treated for U.S. federal income tax purposes in the same manner as dividends paid to such shareholder in cash. See “Certain
Tax Information for U.S. Shareholders” for more information regarding tax consequences of an investment in shares of the
Company, including the effect of the Company’s status as a PFIC. The amount of the service charge is deductible for U.S.
federal income tax purposes, subject to limitations.
To
participate in the CIP, shareholders may not hold their shares in a “street name” brokerage account.
Additional
information regarding the CIP may be obtained from Computershare, P.O. Box 505000, Louisville, KY 40233-5000. Information may
also be obtained on the Internet at www.computershare.com/investor or by calling Computershare’s Telephone Response Center
at (800) 317-4445 between 9:00 a.m. and 5:00 p.m., Eastern time, Monday through Friday.
Privacy
Notice (Unaudited)
The
Company is committed to protecting the financial privacy of its shareholders.
We
do not share any nonpublic, personal information that we may collect about shareholders with anyone, including our affiliates,
except to service and administer shareholders’ share accounts, to process transactions, to comply with shareholders’
requests of legal requirements or for other limited purposes permitted by law. For example, the Company may disclose a shareholder’s
name, address, social security number and the number of shares owned to its administrator, transfer agent or other service providers
in order to provide the shareholder with proxy statements, tax reporting forms, annual reports or other information about the
Company. This policy applies to all of the Company’s shareholders and former shareholders.
We
keep nonpublic personal information in a secure environment. We restrict access to nonpublic personal information to Company employees,
agents and service providers who have a need to know the information based on their role in servicing or administering shareholders’
accounts. The Company also maintains physical, electronic and procedural safeguards to protect the confidentiality of nonpublic
personal information.
Board
Consideration of Investment Advisory Agreement (Unaudited)
At
its March 27-28, 2023 meeting, the Board of Directors (the “Board”) of ASA Gold and Precious Metals Limited (“ASA”
or the “Company”), including those Directors who are not “interested persons” of the Company or of Merk
Investments LLC (“Merk” or the “Adviser”) (“Independent Directors”), considered and approved
the continuation of the Investment Advisory Agreement (“Advisory Agreement”) between the Company and Merk. In preparation
for its deliberations, the Board requested and reviewed extensive materials from the Adviser. The Independent Directors received
a memorandum reviewing the legal standards for their consideration of the proposed continuation of the Advisory Agreement from
counsel that is experienced in Investment Company Act of 1940 matters and that is independent of Merk (“Independent Counsel”)
and discussed these standards and the material submitted by the Adviser with Independent Counsel.
The
Board considered the broad range of information that is provided to the Board (including its Nominating, Audit and Ethics Committee)
at meetings throughout the year, including reports on investment performance based on net asset value and common stock market
prices, portfolio information and risks, information regarding share prices relative to net asset values (discounts and/or premiums),
as well as periodic reports on, among other matters, pricing and valuation, quality and cost of portfolio trade execution, and
compliance, all of which the Board deemed relevant to its evaluation of the Advisory Agreement and its continuation.
The
Board recognized the Company’s unique structure as a Bermuda corporation that operates as a closed-end investment company
pursuant to an exemptive order originally issued in 1958 (as subsequently amended from time to time) by the Securities and Exchange
Commission pursuant to Section 7(d) of the 1940 Act, which requires, among other things, that the Company comply with certain
requirements relating to the custody of assets and settlement of securities transactions outside of the United States that are
different than those required of other registered investment companies. The Board noted that the exemptive order imposes tasks
and obligations on the Company, the Board and its service providers beyond those required of registered investment companies organized
within the United States.
The
Independent Directors evaluated the following factors in connection with their consideration and approval of the Advisory Agreement:
(1) the nature, extent, and quality of the services to be provided by Merk; (2) the performance of ASA compared to a relevant
market index and a peer group of investment companies; (3) the costs of the services provided, including a comparison of advisory
fees to those of similar funds, and the profits realized by Merk; (4) the extent to which economies of scale might be realized
as ASA grows, including whether fee levels reflect any such potential economies of scale for the benefit of investors in ASA;
and (5) any indirect benefits to Merk attributable to its relationship with ASA. In their deliberations, the Independent Directors
did not identify any particular information or factor that was all-important or controlling, and each Independent Director may
have attributed different weights to the various factors.
Nature,
Extent, and Quality of the Services and Performance
Following
discussions with Merk regarding, among other things, Merk’s personnel, operations, and financial condition, the Independent
Directors determined the firm to be capable and qualified to continue to perform the services under the Advisory Agreement and
that the services provided by Merk were of high quality. In this regard, the Board considered information regarding the experience,
qualifications and professional background of the portfolio managers and other personnel at Merk providing services to the Company,
as well as the investment philosophy and decision-making process of Merk and the capability and integrity of Merk’s senior
management and staff.
The
Independent Directors considered the asset size of the Company relative to Merk’s other clients, and that Merk has a significant
incentive to work proactively and effectively with ASA. They also observed that the Adviser had consistently engaged
in informative reporting to the Independent Directors, and its continued efforts to support the Company’s website and to
provide information to shareholders.
The
Board considered that Merk assumes significant ongoing entrepreneurial and business risks as the investment adviser and sponsor
to the Company, for which it is entitled to reasonable compensation. The Board evaluated Merk’s activities under its contractual
obligation to oversee the Company’s various outside service providers and considered Merk’s ongoing development of
its own infrastructure and information technology to support the Company through, among other things, business continuity planning,
positive adaptation of its compliance program to support the Company and risk management. The Board particularly noted Merk’s
general responsiveness to the Board. The Board considered the general structure of portfolio manager compensation and whether
this structure provides appropriate incentives to act in the best interests of the Company. In addition, the Board noted that
Merk has been designated by the Board to perform fair valuation services with respect to the Company’s portfolio investments,
actively monitors the discounts from net asset value per share at which the Company’s common shares trade, and makes continuing
efforts to provide information about the Company and the investment environment to shareholders and potential investors that might
encourage interest in the Company.
The
Board considered information regarding the Company’s performance on a net asset value and market price basis, including
net asset value relative to the performance of peer investment companies and market benchmark indices, as well as relative alpha
and risk-adjusted performance based on the peer group and market benchmark indices presented by the Adviser. The Board reviewed
Company performance on a calendar year and cumulative basis from the time the Adviser began managing the Company as well as performance
data for the three-, five-, and ten-year cumulative periods through December 31, 2022. The Independent Directors considered that
there are no similar gold closed-end funds and that all of the peer funds are open-end mutual funds, but that the peer group information
was relevant to their discussion. They noted the above average performance of the Company relative to the peer group since the
Adviser assumed its role in the spring of 2019, and discussed the Adviser’s investment strategy that included investing
in junior and exploration small and mid-cap issuers, and that this strategy was instrumental in meeting the Company’s investment
objective of long-term capital appreciation.
Costs
of Providing Services and Profitability
The
Independent Directors noted that, unlike the funds in the peer group, the Company is a passive foreign investment company and
closed-end fund operating pursuant to exemptive relief. The Independent Directors determined that the peer group information was
nonetheless relevant to their considerations and useful in evaluating the Company from both an investment and expense perspective.
They observed that Merk had submitted information about the fees paid by its other clients and stated that its advisory services
to the Company involved distinct investment objectives, policies and strategies, concluding that the fees paid by other Merk clients
were not comparable to those paid by the Company or relevant, other than to provide information about the Adviser. They considered
that the Adviser had put in place a voluntary fee waiver effective December 1, 2020, which the Adviser had agreed to continue
until the next contract renewal in 2024. They noted that the advisory fee paid by the Company is below the peer group’s
average, while acknowledging that the peers have different fees and expenses and asset levels and flows.
The
Independent Directors reviewed profitability analyses and related information provided by the Adviser in connection with the provision
of services to the Company. They recognized (i) the challenges of allocating the Adviser’s costs, (ii) that there is no
single uniform methodology regarding the allocation of firm-wide expenses within the asset management industry for determining
profitability and (iii) that different reasonable methodologies can lead to different profit and loss results. The Board noted
that the Adviser was operating in a highly competitive business environment and is entitled to earn profits for its services,
concluding that the Adviser was not in a position to derive excessive profits from the Company and that the Adviser’s reported
level of profitability was not unreasonable.
Economies
of Scale
The
Board evaluated whether there were apparent or anticipated economies of scale in relation to the services Merk provides to the
Company and noted that there is little expectation that economies of scale could be achieved by Merk with regard to the Company,
given its closed-end structure, costs and size.
Other
Benefits
The
Independent Directors considered other ways that Merk could benefit from its relationship with the Company and noted that, other
than the advisory fee, there was no compensation or soft dollars received or receivable by Merk from the Company, concluding that
Merk derived no special or indirect benefits from the Company.
Conclusion
In
approving the continuation of the Advisory Agreement, the Board concluded that, in its business judgment, the terms of the Advisory
Agreement are fair and reasonable to the Company and that approval of the continuation of the Advisory Agreement is in the best
interests of the Company and its shareholders.
Results
of the proposals presented at the annual general meeting of shareholders (Unaudited)
The
following votes were cast at the Annual General Meeting of Shareholders held on March 28, 2023:
| Election of Directors |
|
|
|
| |
For |
Against |
Abstain |
| Anthony Artabane |
13,993,992 |
628,530 |
124,127 |
| William Donovan |
14,005,568 |
626,178 |
114,903 |
| Bruce Hansen |
13,965,758 |
657,240 |
123,651 |
| Mary Joan Hoene |
13,961,467 |
656,810 |
128,372 |
| Alexander Merk |
12,106,681 |
2,518,875 |
121,093 |
| |
|
|
| Appointment of Independent Registered
Public Accounting Firm |
|
|
| |
For |
Against |
Abstain |
| Tait, Weller & Baker LLP |
13,971,159 |
543,746 |
231,744 |
Form
N-PX/Proxy Voting (Unaudited)
The
company files a list of its proxy votes with the SEC for the period of July 1 - June 30 of each year on Form N-PX. The policies
and procedures used by the Company to determine how to vote proxies relating to portfolio securities and information regarding
how the Company voted proxies relating to portfolio securities during the most recent twelve month period are available on the
Company’s website at www.asaltd.com and on the SEC’s website at www.sec.gov. A written copy of the Company’s
policies and procedures is available without charge, upon request, by calling (800) 432-3378.
Form
N-PORT/Portfolio Holdings (Unaudited)
The
Company files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on
Form N-PORT. The Company’s Forms N-PORT are available on the SEC’s website at www.sec.gov. The Company’s
Forms N-PORT also may be reviewed and copied at the Reference Room in Washington, D.C.; information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330. The schedule of portfolio holdings on Form N-PORT also is included in
the Company’s financial statements for the first and third quarters of each fiscal year which are available on the Company’s
website at www.asaltd.com.
Share
Repurchase (Unaudited)
Notice
is hereby given in accordance with Section 23(c) of the 1940 Act that the Company is authorized to purchase its common shares
in the open market if the discount to net asset value exceeds a certain threshold as determined by the Board of Directors from
time to time. The Company may purchase its common shares in such amounts and at such prices as the Company may deem advisable.
There can be no assurance that such action will reduce the discount. There were no repurchases during the six months ended May
31, 2023. The Company had 19,289,905 shares outstanding on May 31, 2023.
Company
Investment Objective, Investment Strategy and Risks (Unaudited)
Investment
Objective
The
Company’s investment objective is long-term capital appreciation through investment primarily in companies engaged in the
exploration for, development of projects or mining of precious metals and minerals.
Investment
Strategy
It
is a fundamental policy of the Company that at least 80% of its total assets must be (i) invested in common shares or securities
convertible into common shares of companies engaged, directly or indirectly, in the exploration, mining or processing of gold,
silver, platinum, diamonds or other precious minerals, (ii) held as bullion or other direct forms of gold, silver, platinum or
other precious minerals, (iii) invested in instruments representing interests in gold, silver, platinum or other precious minerals
such as certificates of deposit therefor, and/or (iv) invested in securities of investment companies, including exchange traded
funds, or other securities that seek to replicate the price movement of gold, silver or platinum bullion.
The
Company employs bottom-up fundamental analysis and relies on detailed primary research including meetings with company executives,
site visits to key operating assets, and proprietary financial analysis in making its investment decisions.
Risks
The
following discussion summarizes certain (but not all) of the principal risks associated with investing in the Company. The Company
may be subject to other risks in addition to those identified below, such as the risks associated with its tax status as a PFIC
(see Note 3) and its reliance on an SEC exemptive order (see Note 5). The risk factors set forth in the following are described
in no particular order and the order of the risk factors is not necessarily indicative of significance. The relative importance
of, or potential exposure as a result of, each of these risks will vary based on market and other investment-specific considerations.
Concentration
Risk. The Company invests at least 80% of its total assets in securities of companies engaged, directly or indirectly, in
the exploration, mining or processing of gold or other precious minerals. The Company currently is invested in a limited number
of securities and thus holds large positions in certain securities. Because the Company’s investments are concentrated in
a limited number of securities of companies involved in the holding or mining of gold and other precious minerals and related
activities, the net asset value of the Company may be subject to greater volatility than that of a more broadly diversified investment
company.
Gold
and Precious Metals/Minerals Risk. The Company invests in securities that typically respond to changes in the price of gold
and other precious metals, which can be influenced by a variety of global economic, financial, and political factors; increased
environmental and labor costs in mining; and changes in laws relating to mining or gold production or sales; and the price may
fluctuate substantially over short periods of time.
Foreign
Securities Risk/Emerging Markets Risk. The Company’s returns and share prices may be affected to a large degree by several
factors, including fluctuations in currency exchange rates; political, social or economic instability; the rule of law with respect
to the recognition and protection of property rights; and less stringent accounting, disclosure and financial reporting requirements
in a particular country. These risks are generally intensified in emerging markets. The Company’s share prices will reflect
the movements of the different stock markets in which it is invested and the currencies in which its investments are denominated.
Geographic
Investment Risk. To the extent that the Company invests a significant portion of its assets in the securities of companies
of a single country or region, it is more likely to be impacted by events or conditions affecting that country or region. As of
May 31, 2023, a significant portion of the Company’s assets consisted of securities of Canadian issuers.
Canada
Risk. The Canadian economy is susceptible to adverse changes in certain commodities markets, including those related to the
natural resources and mining industries. It is also heavily dependent on trading with key partners. Any adverse events that affect
Canada’s major industries may have a negative impact on the overall Canadian economy and the Company’s investments
in Canadian issuers.
Junior
and Intermediate Mining Companies Risk. The securities of junior and intermediate exploration and development, gold and silver
mining companies, which are often more speculative in nature, tend to be less liquid and more volatile in price than securities
of larger companies.
Private
Placement Risk. Privately issued securities, including those which may be sold only in accordance with Rule 144A under the
Securities Act of 1933, as amended, are restricted securities that are not registered with the U.S. Securities and Exchange Commission.
The liquidity of the market for specific privately issued securities may vary. Accordingly, the Company may not be able to redeem
or resell its interests in a privately issued security at an advantageous time or at an advantageous price, which may result in
a loss to the Company.
Restricted
Security Risk. The Company may make direct equity investments in securities that are subject to contractual and regulatory
restrictions on transfer. These investments may involve a high degree of business and financial risk. The restrictions on transfer
may cause the Company to hold a security at a time when it may be beneficial to liquidate the security, and the security could
decline significantly in value before the Company could liquidate the security.
Depositary
Receipts Risk. Depositary receipts risks include, but are not limited to, fluctuations in foreign currencies and foreign investment
risks, such as political and financial instability, less liquidity and greater volatility, lack of uniform accounting auditing
and financial reporting standards and increased price volatility. In addition, depositary receipts may not track the price of
the underlying foreign securities, and their value may change materially at times when the U.S. markets are not open for trading.
Investments in unsponsored depositary receipts may be subject to additional risks.
Warrants
Risk. Warrants can provide a greater potential for profit or loss than an equivalent investment in the underlying security.
Prices of warrants do not necessarily move, however, in tandem with prices of the underlying securities, particularly for shorter
periods of time, and, therefore, may be considered speculative investments. If a warrant held by the Company were not exercised
by the date of its expiration, the Company would incur a loss in the amount of the cost of the warrant.
Market
Discount from Net Asset Value. Shares of closed-end investment companies such as the Company frequently trade at a discount
from their net asset value. The Company cannot predict whether its common shares will trade at, below or above net asset value.
This characteristic is a risk separate and distinct from the risk that the Company’s net asset value could decrease as a
result of investment activities.
Valuation
Risk. The Company may not be able to sell an investment at the price at which the Company has valued the investment. Such
differences could be significant, particularly for illiquid securities and securities that trade in relatively thin markets and/or
markets that experience extreme volatility. If market or other conditions make it difficult to value some investments, SEC rules
and applicable accounting protocols may require the Company to value these investments using more subjective methods, known as
fair value methodologies. Using fair value methodologies to price investments may result in a value that is different from an
investment’s most recent price and from the prices used by other funds to calculate their NAVs. The Company’s ability
to value its investments in an accurate and timely manner may be impacted by technological issues and/or errors by third party
service providers, such as pricing services or accounting agents.
Market
Events Risk. Geopolitical events, including pandemics (such as COVID-19), may destabilize various countries’ economies
and markets, which may experience increased volatility and reduced liquidity. Policy changes by the Federal Reserve and/or other
government actors could similarly cause increased volatility in financial markets. Trade barriers and other protectionist trade
policies (including those in the U.S.) may also result in market turbulence. Market volatility and reductions in market liquidity
may negatively affect issuers worldwide, including issuers in which the Company invests. Under such circumstances, the Company
may have difficulty liquidating portfolio holdings, particularly at favorable prices. Also, the Company may be required to transact
in contemporaneous markets, even if they are volatile and/or illiquid, which may negatively impact the Company’s net asset
value.
Gold
and Precious Metals Limited
Other
Information
Shareholder
Services
ASA
Gold and Precious Metals Limited
P.O.
Box 588
Portland,
ME, U.S.A. 04112
(800)
432-3378
Registered
Office
Canon’s
Court
22
Victoria Street
Hamilton
HM 12, Bermuda
Investment
Adviser
Merk
Investments LLC
Menlo
Park, CA, U.S.A.
Independent
Registered Public Accounting Firm
Tait,
Weller & Baker LLP, Philadelphia, PA, U.S.A.
Counsel
Appleby,
Hamilton, Bermuda
K&L
Gates LLP, Washington, DC, U.S.A.
Custodian
JPMorgan
Chase Bank, N.A.
New
York, NY, U.S.A.
Fund
Administrator
Apex
Fund Services
Portland,
ME, U.S.A.
Transfer
Agent
Computershare
Trust Company, N.A.
P.O.
Box 505000
Louisville,
KY, U.S.A. 40233-5000
(800)
317-4445
Website:
www.asaltd.com
The
Semi-annual and Annual Reports of the Company and the latest valuation of net assets per share may be viewed on the Company’s
website or may be requested from the Executive Office (800-432-3378). Shareholders are reminded to notify Computershare of any
change of address.
ITEM
2. CODE OF ETHICS.
Not
applicable.
ITEM
3. AUDIT COMMITTEE FINANCIAL EXPERT.
The
registrant’s board of directors determined that Bruce Hansen, Chairman of the registrant’s Audit and Ethics Committee,
is an “audit committee financial expert” as defined in the instructions to Item 3 of Form N-CSR. Mr. Hansen is
“independent” as defined in Item 3 of Form N-CSR.
ITEM
4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not
applicable.
ITEM
5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not
applicable.
ITEM
6. INVESTMENTS.
| (a) | Included
as part of the report to shareholders under Item 1. |
ITEM
7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not
applicable.
ITEM
8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not
applicable.
ITEM
9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
During
the period covered by this report, there were no purchases made by or on behalf of the registrant or any “affiliated purchaser,”
as defined in Rule 10b-18(a)(3) under Securities Exchange Act of 1934 (the “Exchange Act”), of any common shares of
the registrant.
ITEM
10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There
have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of
directors since the registrant provided disclosure in response to Item 22(b)(15) of Schedule 14A in its proxy statement dated
January 24, 2023.
ITEM
11. CONTROLS AND PROCEDURES
(a)
The Principal Executive Officer and the Principal Financial Officer, in their capacities as principal executive officer and principal
financial officer of the registrant, have concluded that the registrant’s disclosure controls and procedures (as defined
in Rule 30a-3(c) under the Investment Company Act of 1940 (the “1940 Act”)) are effective, based on their evaluation
of these controls and procedures as of a date within 90 days prior to the filing date of this report.
(b)
There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the
1940 Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially
affect, the registrant’s internal control over financial reporting.
ITEM
12. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES
The
Registrant did not participate in securities lending activities during the six months ended May 31, 2023.
ITEM
13. EXHIBITS.
(a)(1)
Not applicable.
(a)(2)
The certifications required by Rule 30a-2(a) under the 1940 Act are attached hereto.
(a)(3)
Not applicable.
(a)(4)
Not applicable.
(b)
The certifications required by Rule 30a-2(b) under the 1940 Act, Rule 13a-14(b) under the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code are attached hereto. These certifications are not deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. Such certifications will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the registrant specifically incorporates them by reference.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Registrant |
ASA Gold
and Precious Metals Limited |
|
| By |
/s/ Axel Merk |
|
| |
Axel Merk, Principal Executive Officer |
|
| |
|
|
| Date |
7/25/2023 |
|
Pursuant
to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed
below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
| By |
/s/ Axel Merk |
|
| |
Axel Merk, Principal Executive Officer |
|
| |
|
|
| Date |
7/25/2023 |
|
| |
|
|
| By |
/s/ Karen Shaw |
|
| |
Karen Shaw, Principal Financial Officer |
|
| |
|
|
| Date |
7/25/2023 |
|