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Golden Prospect Precious MetalsAnnouncement

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RNS Number : 0416Z  Golden Prospect Precious Metals Ltd  12 September 2025

12 September 2025

 

Golden Prospect Precious Metals Limited

(the "Company")

 

Interim Report and Financial Statements

 

 

The Company is pleased to announce its half year results for the period ended
30 June 2025.

For the full report, please click the link below:

 

Key highlights:

·    Share price rose from 35.5p to 58.2p, gaining 63.9%

·    NAV rose by 53.6% from 43.10p to 66.18p with a peak value of 75.7p in
early June

·    Strong outperformance of the gold price, which rose 25.7% in dollars
and 14.7% in sterling

·    Considerable outperformance versus equivalent ETF peers - GDX and
GDXJ

·    The next annual subscription right exercise opportunity will take
place at the end of November, at a subscription price of 48p

 

http://www.rns-pdf.londonstockexchange.com/rns/0416Z_1-2025-9-11.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/0416Z_1-2025-9-11.pdf)

 

Chairman's Statement

 

Recent market developments

We began our previous review by highlighting the decoupling of the US bond
market with precious metals which had not been witnessed since the 1970's.
Having broken out decisively last year, the gold price pushed even higher, to
finish 2024 at $2,610. By the end of June 2025, it had settled at $3,264 after
hitting record highs close to the $3,500 level.

 

In a landmark development, gold has overtaken the Euro to become central
banks' second most widely held asset. Some 20% of their reserves are now in
gold, versus 16% in Euros. Ten years ago, the proportion was 10%. It appears
to be re-emerging as a core global holding and has been a beneficial hedge
against currency weakness, given that the Dollar Index fell by 10.7% in the
last six months. On that note, the share of US Dollars held by central banks
has fallen below 50% for the first time since the mid-1990's. Doubtless the
combined effect of tariffs and sanctions is driving the trend toward
de-dollarisation.

 

Central bank activity contrasts sharply with the action in Exchange Traded
Funds (ETFs). One would expect that after a big rally, the best-known gold
mining ETF would see greater uptake. Instead, the shares outstanding in the
VanEck Gold Miners ETF (or GDX index) have dwindled for the best part of 18
months. Meanwhile gold miners have become cash flow machines with many trading
at cheap valuations yet remain overlooked by mainstream investors.

 

This appears to be a classic stealth bull market where an upward trend in an
unloved sector gains little attention. While so-called smart money has made an
early move, professional investors are barely participating, as can be seen by
the lack of ETF demand. This is good news for Golden Prospect Precious Metals
Limited (the "Company") as it implies that there is some way to go in terms of
potential upside.

 

We are far from the typical exuberance and speculative frenzy that is the
hallmark of a bubble, where the proverbial taxi driver tips the latest gold
stock story. Perhaps the best sign that this bull market still has momentum,
and is widening, is that the next tier of precious metals, such as silver and
platinum, have only recently broken out of their trading range. For now,
commentators remain mesmerised by the Magnificent 7 US technology names
despite their two-month slump and subsequent recovery. Unlike the miners, they
are priced for perfection.

 

Performance

I am pleased to report on a very positive first half of the year for the
Company. Over the course of the period the NAV rose by 53.6% from 43.10p to
66.18p with a peak value of 75.7p in early June. The share price rose from
35.5p to 58.2p, gaining 63.9%, with highs in mid-June at 64.4p. The
performance was even more satisfying as we are at last seeing mining shares
outstrip the gains in precious metals.

 

Compared with equivalent ETFs, performance was well ahead of the VanEck Gold
Miners ETF (GDX) which rose 40.2% in Sterling terms. It also outperformed the
VanEck Junior Gold Miners ETF (GDXJ) which was up by 44.3% in Sterling. The
returns ranked very well against open-ended funds in the precious metals
sector. Although the share price retrenched a little towards the end of the
second quarter, it was well supported.

 

Over the six months under review gold has risen by 25.7% in Dollars and 14.7%
in Sterling terms. The drop in the Dollar is traditionally positive for
precious metals and commodities alike due to their inverse correlation. As for
UK-based investors, the asset gains have more than offset the currency loss.
This is characteristic of how precious metals and related mining stocks
performed in the past.

Subscription Rights

In November, under the Company's annual subscription rights programme,
shareholders will have the right to subscribe for 1 new share for every 5
shares held at a price of 48p (being the Net Asset Value of the Company on
November 2024 subscription date). While there are still some months to go, it
is encouraging to see the theoretical position well 'in the money'. Hopefully
the full 20% allotment will be taken up, which, in addition to the organic net
assets rise, will add further assets for the fund managers to grow.

Saba Standstill Agreement

Shareholders may be aware of Saba Capital, a high-profile US activist investor
which has targeted the UK closed-end fund sector in recent months. Although
the Board is not aware of Saba Capital ever being on its share register, as
announced on 1 July 2025, the Company had the opportunity to negotiate and
enter into a standstill agreement with Saba, which will be in effect until the
Company's AGM in 2028. Under the terms of the agreement, Saba has agreed not
to call any general meetings or vote against the recommendation of the Board
on specified ordinary course resolutions proposed at a general meeting of the
Company.

Discount and marketing

Up until the end of May the share price matched the upward move in the NAV,
the discount remaining stubbornly wide, averaging 22.7% over the period under
review. However, at the beginning of June, the share price came to life and
the discount narrowed significantly. It ended the period at 12.1% but at one
point came in below 10%. Since the period end the discount has narrowed
further, at its narrowest reaching 6.2%. This is a good indication that
interest in this specialist sector is reviving.

We have continued fresh marketing initiatives to reach an extended audience,
outside of traditional wealth managers, to generate further demand for the
Company's shares. Tavistock, a leading London-based press and investor
relations firm, are well known for their role in financial public relations
for the mining sector. Thus far in 2025 with the rising gold price, the
Company has managed to capture media attention in multiple publications, as
well as deserved recognition through various awards.

The Company was again featured in Joanne Hart's MIDAS column in The Sunday
Times. Read by well over a million people, the column reviewed performance
since her previous tip in September 2024. We were also recognised on the
Interactive Investor platform as the best performing fund in the gold and gold
mining sector, beating the likes of BlackRock and Ruffer. The Company also won
the award of Best Investment Trust for Growth at the Online Money Awards 2025,
in conjunction with The Armchair Trader. The award recognises investment
trusts that demonstrate outstanding performance. More than 9,000 people
participated in the voting process, providing significant endorsement from the
wider investment community.

Gearing

Given the strong portfolio return over the period, gearing has served its
purpose and contributed 3.09% to NAV returns in the first half of the year. At
the close of the period under review, the gearing level stood at 8.7% of NAV,
while the maximum permissible is 20%.

Ongoing Charges Ratio (OCR)

The Company uses the AIC's methodology for calculating the Ongoing Charges
Ratio (OCR). In 2024 this was 2.20% and in the first half of 2025 it was
significantly lower at 1.66% as a result of the strong rise in NAV. While the
annual subscription rights did not raise as much equity as hoped, we are
grateful for the extra funds which the managers have subsequently invested.

Board changes

Having been with the Company since the launch of the fund, Robert King stepped
down at the Annual General Meeting in May. His presence and experience have
been much appreciated over the years, and we wish him well in the future.
Graeme Ross likewise decided to step down from the board due to family
commitments, having joined in 2018. We would also like to thank him for his
diligence as Chair of the Audit Committee.

We had already strengthened the Board with the appointment of Monica Tepes in
2024, who has a wealth of expertise in closed-end funds built up over the past
20 years. She has worked tirelessly to improve technical aspects of the
board's reporting along with our marketing and investor relations. The board
also selected Guernsey-based Chartered Accountant Helen Green for the role of
Audit Chair in which she has extensive experience over the course of decades.
During a distinguished career at Saffery Trust Company, she has been a
Non-Executive Director and Chair of a variety of listed funds with an emphasis
on Resources.

We will continue to search for appropriate directors as part of the Company's
succession planning. I intend to continue as Chairman until the next AGM in
2026, after which a replacement will be selected from new or current
directors.

Outlook and closing remarks

Despite the best efforts of the investment managers, there have been times in
the last 10 years that were reminiscent of the motionless ship in Samuel
Taylor Coleridge's "Rime of the Ancient Mariner". It now feels like the curse
on miners has been lifted, with the NAV rallying back to levels last seen in
2020. Given the backdrop, we believe that this is not the end of the bull
market, but it may be the end of the beginning. The next phase we believe will
involve wealth manager participation, which is why we think it is so important
to build the fund to a critical mass.

There will doubtless be setbacks and exogenous geopolitical shocks along the
way. However, the economic situation appears ideal for continued gains in
precious metals and the companies that mine them. In closing, we thank
shareholders for their continued support and invite them to study the
Investment Manager's report for their economic assessment and coverage of the
portfolio holdings.

Toby Birch

Chairman

11 September 2025

Investment Manager's Report

Performance

The Company's NAV surged 53.6% over the first six months of 2025. This was
even more remarkable given the currency headwind - AUD, CAD and USD, the
predominant portfolio currencies, depreciated 3.4%, 3.8% and 9.4% respectively
versus sterling over the period.

Golden Prospect NAV (black), Gold (orange) GPM NAV, NYSE Gold Bugs Index
(yellow) all GBP, normalized to 100.

Performance contributors were broad, but notable contributions came from the
Australian producers such as Greatland Gold (+159%) and latterly the silver
producers (eg MAG +59%. Americas Silver +100%). The early-stage holdings in
the fund were mixed, with some like TDG Gold up 350%, but others we think are
just as promising seeing limited gains. We continue to focus on value with
catalysts and are optimistic that catalyst driven news flow can be supportive
for many of our holdings.

Portfolio activity

Following some profit taking in Ora Banda earlier in the year, Equinox (prior
to the official takeover of Calibre), Gold Standard Ventures, Robex, MagSilver
(following performance after the approach by PanAmerican Silver) and some
smaller investments such as Serabi and Newcore saw profit taking. The Fund has
latterly reinvested proceeds back into Ora Banda, a placing by Polymetals (a
promising high silver content mine restart located in Australia) and explorer
Tolu (which is pushing on with exploration of a very high grade deposit next
to K92 in PNG).

Elsewhere, we note a possible relisting of Leo Lithium next year, having
delisted in September 2023 following the forced sale of their working interest
in the Gou lamina lithium mine in Mali, by the government to Chinese lithium
producer and JV partner Gangfeng. This may include a possible cash
distribution, whilst a new asset purchase is being considered using proceeds
from Ganfeng, which would also feed into the look-through value of our
Firefinch holding which is based on its holding in Leo Lithium.

Period review

The period was most impacted by Donald Trump's 'Liberation Day', on the 2nd of
April, in which he stated the US would look to apply tariffs to the majority
of its global trading partners. This upended global markets as the scale of
tariff threats shocked versus expectations. After the initial weakness in
global markets, they bottomed on the 8th of April before rebounding strongly
and ending higher by the end of June than they were before the announcement.

Market perceptions shifted to the belief that the US economy would be able to
continue and Trump would dial back ultimate tariff levels. One journalist
labelled it the TACO (Trump Always Chickens Out) trade, whilst high levels of
front loading of imports have so far dampened the impact of tariffs on the
real economy. Ultimately these tariffs are a consumer tax and will in the
majority be passed directly through to the US consumer.

On the back of this uncertainty precious metals were the standout performer
over the six-month period, with gold and silver up 26% and 25% respectively,
benefiting the Company's large exposure to precious metals.

Toward the end of the period, at the start of June, we saw other precious
metals, silver and PGM's platinum and palladium outperform. Despite multiple
year deficits in silver and platinum, the move higher felt more speculatively
driven than fundamental given the way all three moved in unison. This
coincided with an increase of retail chat board commentary, especially in the
US, thus we have taken a cautious approach. The fund retains a meaningful
exposure to silver miners, with an allocation of 9.2%, but has taken more of a
focused bottom-up approach on valuation as we don't believe the material
premium at which silver miners can trade is necessarily justified, despite our
positive view on the metal longer term. The PGM rally followed the World
Platinum Investment Council forecast continuing deficit for the platinum
market of 966koz in 2025, similar to the last few years. WPIC estimates that
above ground stocks will reach a low of only three months of demand by the end
of this year, which helped lift platinum prices. Nevertheless, we remain wary
of the PGM rally, given chrome credits remain supportive with little prospect
of meaningful curtailment of PGM supply.

Macro

Geopolitical uncertainty remains elevated as US led tariff pauses come to an
end. With Trump's 'Big Beautiful Bill' having now passed through the House,
his focus appears to be returning to tariffs.

These policies are clearly disruptive to global trade, inward looking and
negative for growth, whilst ultimately inflationary. It is a consumer tax in a
way that was saleable to his voter base, with the intension of raising
additional tax revenues to try and offset the budget deficit. Whilst the
policies aimed at driving more domestic industry may see some benefit at the
margin, businesses are unlikely to make 5-10 year strategic decisions on
policy decisions that flip flop weekly.

Trumps 'Big Beautiful Bill' is likely to be stimulative but some measures
won't feed through till beyond 2025.

US debt sustainability remains a key focus of ours, but as ever the timing of
this remains uncertain. We believe a combination of a higher rate environment,
Trump's policies leading to less foreign buyers of US Treasuries and
ultimately demographics, with US boomers near peak savings, create a difficult
backdrop under which to continue to run a $2-3trn/year deficit. The timing of
when this is called into question is impossible to pinpoint, as is part
dependent on when the market shifts to pricing in this risk, but increasingly
we believe it should lead generalists to add to gold for protection. Trump's
focus on the US Fed reducing interest rates has shifted to open calls for Fed
Chair Powell to step down, which could add to volatility ahead of his official
exit next year.

With this backdrop, we still believe gold remains one of, if not the most
attractive asset to protect against this uncertainty. This seems well
understood by Central Banks, who have been the primary drivers of demand that
have seen it repeatedly make new all-time highs over the last 12 months.
Financial market investors have largely been relatively on the sidelines, only
adding 7Moz since February. The backdrop of US debt uncertainty should see
more financial market allocation to gold over the coming quarters, even if the
bond vigilantes don't see a US version of the Liz Truss moment. We also
believe Central Banks are likely to add more, not less gold from here, as the
US led trade war has added concern on the US influence over US Treasury
holdings that started after the Russian invasion of Ukraine.

Outlook

The outlook for gold continues to appear well supported with the One Big
Beautiful Bill in the US being the latest government program to add to the
already over-extended levels of government borrowing. Other economies are in
the same if not worse position and a consequence of this has been increased
investor scrutiny over the sustainability of such indebtedness. Gold remains a
beneficiary of this together with risks from geopolitical and trade friction.
In contrast, as a result of its weaponisation, the US dollar has fallen out of
favour as a safe haven, especially for non-US aligned nations.

These remain the most significant factors driving central bank demand for gold
as per the latest WGC survey in which a record number of respondents indicated
expectations that the trend for dollar holdings to be reduced in favour of
gold, would continue.  A survey by the Official Monetary and Financial
Institutions Forum published an industry survey of 75 central banks and 15
public pension and sovereign funds, which similarly flagged expectations for
strong gold purchasing expected in the coming months.

While the latest data to May showed central bank gold buying remained strong
in May, gold ETF holdings also increased through June and into July,
sustaining the recent recovery in financial sector demand since the mid-2024
low, suggesting continued financial players are seeking to diversify as well.

Physical gold ETF holdings

At 91.2Moz or $300bn, this is only 0.1% of global financial assets. As the
most common way generalists would own physical gold, we believe this
highlights the low relative weighting directly to gold versus to history,
leaving significant upside if we saw weightings return to more normalized
historic levels. The gold strength so far has been mostly driven by Central
Banks with minimal participation from financial markets.

Whilst we are constructive on the gold price, it is the valuations of the
miners that truly excite us. We believe the operational leverage that mining
companies are capable of delivering has yet to be fully appreciated, with the
precious metal mining sector showing a 1:1 relation with gold year to date,
rather than the normal ~2:1 seen historically due to operational leverage.
This sets up for a catch up from the miners to the move in the gold price.

Keith Watson and Robert Crayfourd

New City Investment Managers

Investment Manager

11 September 2025

 Enquiries

 Manulife | CQS Investment Management                 +44 (0) 20 7201 5368

 Craig Cleland

 Cavendish Capital Markets Limited                    +44 (0) 20 7908 6000

 Robert Peel (Corporate Finance)                      +44 (0) 20 7720 0500

 Daniel Balabanoff / Pauline Tribe (Sales)

 Apex Fund and Corporate Services (Guernsey) Limited  +44 (0) 203 5303 600

 James Taylor

 Tavistock                                            +44 (0) 20 7920 3150

 Jos Simson / Gareth Tredway / Ruairi Millar

 

                              About Golden Prospect Precious
Metals

                              Golden Prospect Precious Metals
Limited is a closed-ended investment company incorporated with

                              limited liability in Guernsey on
16 October 2006. The Company's investment objective is to provide Shareholders

                              with capital growth from a
portfolio of companies involved in the precious metals mining sector.

 

                              For the latest factsheet and
other information, click here
(https://ncim.co.uk/golden-prospect-precious-metals-ltd/) .

 

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