Golden Prospect Precious Metals Limited

Monthly Investor Report - August 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

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 Facts¹ 

Ordinary Share and NAV Performance² 

Commentary³ 

Gold gained over August, reaching a new all-time high of $2,531/oz and closing the month up 7% at $2,503/oz. Regional demand for physical gold has shifted from China to the West, led by physical gold ETF buying.

Official data indicated that the People's Bank of China abstained from buying for a fourth consecutive month while holdings of physically backed gold ETFs added for a third month. This was ahead of an anticipated central bank rate-cutting cycle, led by the Fed, as inflationary pressures ease and employment markets cool. Whilst ETF buying is a positive catalyst, we anticipate that some increased volatility may result as these ETF holdings are less sticky than central bank and retail purchases that previously drove demand.

Uncertainty around US elections and ongoing Middle East tensions, as Israel-Palestine truce talks broke down, together with Ukraine's incursion into the Kursk region of Russia, added to the supportive backdrop for safe-haven assets.

Silver remains more economically driven with over 50% of demand linked to industrial usage. This partially explains why it has lagged behind gold, with the price ending the month little changed. The longer-term trends behind demand from solar power, wind turbines and electric vehicles (EVs) remain, and the metal is in its fourth year of deficit. This is part of the reason behind the Fund's meaningful exposure to the metal.

Gold's move provided a solid backdrop for equities. Despite the strengthening of sterling by over 2% against the dollar, the Fund NAV gained c.6% over the month. This is compared to a 2.6% sterling decline registered by the VanEck Junior Gold Miners ETF (GDXJ) and a 1.8% gain by the larger-cap VanEck Gold Miners ETF (GDX) over August.

Encouragingly, the Q2 reporting season showed some positive signs for improved company earnings and further evidence that costs can be contained and margins expanded may support a further rerating of sector equities.

Australian Gold producer Ora Banda saw strong performance as it continued to expand production, with the share price rising nearly 32% over the month. The completion of Westgold's merger with Karora, alongside some positive operational updates, helped drive a 16% rise in the share price of the enlarged group, further aided by broader ASX index inclusion. The Fund added to ASX-listed Southern Cross with their exciting high-grade discovery in Australia. The agreed merger with Mawson Gold, which owned a 49% interest in Southern Cross, should simplify the corporate structure and management of the combined entity as it continues its exploration drilling, potentially expanding its high-grade resource considerably.

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

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.