REG - Golden Prospect Prec Golden Prospect-GPSS - Monthly Investor Report - March 2024

Golden Prospect Precious MetalsAnnouncement

26/04/2024 15:15

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RNS Number : 2728M  Golden Prospect Precious Metals Ltd  26 April 2024

 

 

Golden Prospect Precious Metals Limited

 

Monthly Investor Report - March 2024

 

The full monthly factsheet is now available on the Company's website and a
summary can be found below.

 

NCIM - Golden Prospect Precious Metals Ltd - Fund Page
(https://ncim.co.uk/golden-prospect-precious-metals-ltd/)

 

Enquiries:

 

For the Investment Manager

CQS (UK) LLP

Craig Cleland

0207 201 5368

 

For the Company Secretary and Administrator

Apex Administration (Guernsey) Limited

James Taylor

0203 530 3600

 

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Fund Description

 

The objective of the Golden Prospect Precious Metals Fund is to provide
investors with capital growth from a group of companies in the precious metals
sector.

 

Portfolio Managers

 

Keith Watson and Robert Crayfourd.

 

 

Key Advantages for the Investor

·    Access to under-researched mid and smaller companies in the precious
metals sector

·    Potential inflation protection from precious metals assets

·    Low correlation to major asset classes

 

Key Fund Facts(1)

 

 Total Gross Assets:  £34.50m
 Reference Currency:  GBP
 Ordinary Shares:     85,503,021
 Net Asset Value:     36.08p
 Mid-Market Price:    31.00p
 Net gearing:         11.6%
 Discount:            (14.08%)

 

 

Ordinary Share and NAV Performance(2)

 

                One Month  Three Months  One Year  Three Years  Five Years
                (%)        (%)           (%)       (%)          (%)
 NAV            16.12      (1.50)        (4.65)    (30.93)      31.53
 Share Price    28.63      5.08          (6.06)    (31.03)      51.96

 

 

Commentary(3)

 

Having lagged the move in gold and silver prices thus far in 2024, sentiment
to miners showed a marked improvement with the Fund NAV rising over 16%. The
Fund performance compared to a 21% sterling return registered by the Gold Bugs
Index and the GDXJ equity ETF. However, we anticipate that the lag in
performance of the smaller equities held in the Fund will catch-up with larger
peers given their relatively attractive valuations.

 

Gold was one of the stronger commodities with the price rising over 9% during
March to new all-time highs. Silver is latterly starting to catch-up,
registering a 10% price increase over the month. Prices held despite a more
hawkish move in US FED rate expectations after FOMC minutes indicated broader
US labour markets were stubbornly resilient despite relatively tepid economic
growth. Increasingly there appears to be a focus on ever growing government
debt levels which have shown little sign of reversing, as evidence by the
latest US congression Budget Office projections.

 

Recent physical gold buying has been led by China, with a pick-up in retail
demand showing in import data. This has been potentially driven by broader
concerns on the economy, particularly the weak regional property sector.
Alongside this is the healthy net central bank demand: People's Bank of China
(PBoC) data showed China's gold reserves continued to rise with the addition
of 0.39 Moz in February taking official reserves to 72.6Moz (+10%
year-on-year). Physical gold ETF's showed a pick-up in buying but aggregate
holdings nevertheless ended 246k ounces lower over the month. We believe gold
hitting all-time highs despite steady ETF selling is a positive, as would also
be the case should ETF's turn steady buyers, further tightening the market.

 

West African Resources and Fortuna Gold and Silver were strong contributors to
performance. This was closely followed by Australian gold producer Karora
which received bid interest from ASX-listed Ramelius, as well as reports of a
further interested party also in discussion with the company. While we do not
focus our stock selection specifically on M&A targets, we believe quality
undervalued assets should result in a higher probability of them becoming
targets. The sector remains short of growth projects, and so we would
anticipate a pick-up in M&A activity going forward. This should help close
the discounts of junior miners to the larger. Calidus was the primary
detractor to performance with the group undertaking an equity funding, in
which the Fund participated, as part of a broader restructuring of its debt
and gold hedging.

 

                                            Gross Leverage(5)  Commitment Leverage(6)

                                            (%)                (%)
 Golden Prospect Precious Metals Limited    111                111

 

 

CQS (UK) LLP

4th Floor, One Strand, London WC2N 5HR, United Kingdom

T: +44 (0) 20 7201 6900 | F: +44 (0) 20 7201 1200

 

CQS (US), LLC

152 West 57th Street, 40th Floor, New York, NY 10019, US

T: +1 212 259 2900 | F: +1 212 259 2699

 

Tavistock Communications

18 St. Swithin's Lane, London EC4N 8AD

T: +44 20 7920 3150 | goldenprospect@tavistock.co.uk
(mailto:goldenprospect@tavistock.co.uk)

 

Sources: (1,2) CQS as at the last business day of the month indicated at the
top of this report. Performance is net of fees and expenses. New City
Investment Managers took over the investment management function on 15
September 2008. These include historic returns and past performance is not a
reliable indicator of future results. The value of investments can go down as
well as up. Please read the Important Information section at the end of this
document. (3) All market data is sourced from Bloomberg unless otherwise
stated. The Fund may since have exited some / all the positions detailed in
the commentary. (5) For methodology details see Article 4(3) of Directive
2011/61/EU (AIFMD) and Articles 6, 7, 9 and 10 of Delegated Regulation
231/2013. (6) For methodology details see Article 4(3) of Directive 2011/61/EU
(AIFMD) and Articles 6, 8, 9, 10 and 11 of Delegated Regulation 231/2013.

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