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 811-04010
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OCM MUTUAL FUND
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(Exact name of registrant as specified in charter)
1536 Holmes Street
Livermore, California 94550
(Address of principal executive offices) (Zip code)
Gregory M. Orrell
Orrell Capital Management, Inc
1536 Holmes Street
Livermore, California 94550
(Name and address of agent for service)
Registrant's telephone number, including area code: (925) 455-0802
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Date of fiscal year end: NOVEMBER 30
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Date of reporting period: NOVEMBER 30, 2007
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ITEM 1. REPORT TO STOCKHOLDERS.
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OCM GOLD FUND
====================
ANNUAL REPORT
NOVEMBER 30, 2007
Dear Fellow Shareholder:
The collapse of the structured debt markets in 2007 has led to serious solvency
issues for some of the world's largest financial institutions. Meanwhile, the
prospect of a contraction in the US economy is being fought with yet another
round of aggressive monetary and fiscal stimulus in an effort to keep financial
leverage from triggering a complete meltdown of the global economy. Inflationary
implications are of secondary concern. Consequently, dollar debasement continues
to threaten the dollar's role as the world's reserve currency. In periods where
trust and confidence in the financial system are being questioned, gold's
monetary characteristics become more widely appreciated as gold is not someone
else's liability.
Gold prices in dollar terms accelerated higher in 2007, closing the year above
$800 for the first time at $836.50 per ounce (London PM Fix), up 23.77% for the
year. For calendar year 2007, your Fund kept pace with the gold price advance,
rising 23.45% (17.88% after max sales load) versus an increase of 22.91% for the
Philadelphia Gold and Silver Share Index (XAU). For the fiscal period ending
November 30, 2007 covered in this report, your Fund gained 15.64% (10.46% after
max sales load) versus an increase of 15.88% for the XAU. A dividend of $1.42
was paid on December 27, 2007, classified as all long-term capital gain.
OVERVIEW
The current stress in the financial markets was precipitated by the over
issuance of credit to marginal borrowers, particularly in the housing market. As
the bubble burst in the housing market, the domino effect shed light on the
issuance of structured debt products and derivatives of questionable value.
Consequently, everything that could go wrong did in the later part of the year.
The asset backed commercial paper market came to a complete standstill. The
market for all types of collateralized debt obligations dried up. Municipal and
mortgage insurers became endangered while confidence in rating agencies was
battered. Special investment vehicles (SIVs) set up by banks to get mortgages
off their books could no longer get financing. The interbank lending rate
(LIBOR) skyrocketed as banks were unwilling to lend to each other as they had to
husband their resources and could no longer trust coun-terparties. In response,
central banks injected an unprecedented $400 billion into the banking system
over a 48 hour period. We believe the last domino in this crisis is by no means
close to falling as large financial institutions with household names find
themselves fighting for survival as write-offs engulf capital and lack of
balance sheet transparency threatens confidence.
With the contraction of credit due to the elimination of many of the new credit
instruments beginning to work its way through the economy, recession fears are
starting to take hold as unemployment rates tick higher and GDP growth slows.
Fear of systemic collapse has forced the Federal Reserve to cut interest rates
sharply over the past two months to the point where short-term interest rates
are below the rate of inflation causing real interest rates to be negative.
Historically, a negative real interest rate environment is extremely bullish for
higher gold prices. As we write this report, the Bush Administration is
hurriedly trying to enact a fiscal stimulus package, which will only serve to
balloon the budget deficit, in our opinion. With falling asset prices and lower
incomes, households will undoubtedly begin to rebuild savings that were run down
during the consumption binge of the last ten years, causing further downward
pressure on the economy, we believe.
On the surface, the present crisis may seem no different than the periodic
financial crises of the past 25 years highlighted by the S&L collapse in the
80's, the failure of Long-Term Capital Management (LTCM), or the economic shock
following 9/11. In each instance, the policy response was to socialize risk and
inject whatever amount of liquidity was necessary in order to prevent a
contraction of credit setting off a sequence of defaults. The actions
-1-
prevented malinvestment from being liquidated and encouraged greater risk taking
and asset bubbles to develop. The endless expansion of credit was made possible
because the rest of the world was willing to accept US dollars based on the
dollar's role as the world's reserve currency. With the world now drowning in
dollars due to years of running large current account deficits, monetary
authorities now find themselves trying to expand credit with a currency the rest
of the world is unwilling to accumulate and no longer views as a store of value,
in our opinion.
The policy dilemma is made more acute as the seeds of inflation sown back in
2004 when the Fed Funds rate stood at one percent is rearing its ugly head. It
appears the boom-bust cycles have caught up with the Fed and they now face
having to fight systemic collapse while only giving lip service to inflation.
The pendulum of confidence in Fed policy in our opinion is swinging decidedly
away from the point where Alan Greenspan received knighthood from the Queen of
England in 2002. The tightrope the Fed is now walking is how low can they take
the Federal Funds rate without triggering a flight out of US treasuries and the
dollar? If that point is reached, we believe the ability of the Fed to conduct
monetary policy to stimulate the economy comes to an end and gold prices will
reach levels well beyond the most optimistic of forecasts.
The current environment clearly favors higher gold prices, in our opinion, as
gold has historically been the reciprocal of confidence in financial assets.
With credit quality coming into question and monetary spigots wide open, gold's
role as the ultimate form of money is finding more friends. However, we remain
surprised and yet encouraged that gold and gold investments have yet to attract
a broader following as most investors remain skeptical about owning gold related
investments, which only confirms renowned investor Sir John Templeton's comment;
"Bull markets are born in pessimism, grow in skepticism, mature in optimism and
die in euphoria."
It is our belief, before the current bull market cycle in gold has run its
course; we will see foreign central banks once again become large acquirers of
gold either directly or through sovereign country funds which currently hold
over $2 trillion with the mandate to diversify US treasury holdings into
strategic assets. Additionally, we believe the Dow Jones/gold ratio will reach
low single digits, if not one to one. On three previous occasions after reaching
peaks, the Dow/gold ratio bottomed at one ounce of gold to buy one unit of the
Dow Jones (see chart).
GRAPH OMITTED
Date Ratio Adj Close
10/1/1928 12.20 252.16 20.67
11/3/1930 8.75 180.91 20.67
12/1/1932 2.92 60.26 20.67
1/2/1935 2.91 101.69 35
2/1/1937 5.35 187.17 35
3/1/1939 3.77 131.84 35
4/1/1941 3.30 115.54 35
5/3/1943 4.03 141.18 35
6/1/1945 4.70 164.57 35
7/1/1947 5.23 183.18 35
8/1/1949 5.10 178.66 35
9/4/1951 7.75 271.16 35
10/1/1953 7.88 275.81 35
11/1/1955 13.81 483.26 35
12/2/1957 12.45 435.69 35
1/4/1960 17.79 622.62 35
2/1/1962 20.23 708.05 35
3/2/1964 23.24 813.29 35
4/1/1966 26.68 933.68 35
6/1/1970 18.95 683.53 36.07
7/3/1972 14.08 924.74 65.66
8/1/1974 4.39 678.58 154.49
9/1/1976 8.66 990.19 114.38
10/2/1978 3.48 792.45 227.63
11/3/1980 1.59 993.34 623.33
12/1/1982 2.35 1046.54 444.40
1/2/1985 4.26 1286.77 302.25
2/2/1987 5.55 2223.99 401.02
3/1/1989 5.88 2293.62 390.02
4/1/1991 8.06 2887.87 358.37
5/3/1993 9.59 3527.43 367.74
6/1/1995 11.76 4556.1 387.58
7/1/1997 25.39 8222.61 323.90
8/2/1999 42.19 10829.28 256.69
9/4/2001 31.22 8847.56 283.42
10/1/2003 25.87 9801.12 378.92
11/1/2005 22.67 10805.87 476.67
12/1/2007 17.05 13371 784.25
-2-
INVESTMENT STRATEGY
Your Fund continues to maintain its disciplined tiered approach to the gold
mining industry by holding positions in major (34.8%), intermediate (22.6%) and
junior gold producers (9.7%) along with exposure to exploration and development
companies (15.1%). It is our belief that investment flows into the gold sector
shift from one sub-sector to the next as a bull market trend in gold matures.
The largest position in the Fund is Goldcorp, Inc., which is the lowest cost
producer among major producers with the best production growth profile. We
believe that silver is "poor man's gold" and consequently your Fund has a 5.6%
position in predominant silver producers.
Despite higher gold prices, global gold production continues to decline as the
gold mining industry battles maturing ore bodies and escalating capital and
operating costs. According to consultancy group GFMS, annual gold production
from 2000 to 2007 has declined 6.7%. To reverse the trend, we believe gold
prices in excess of $1,000 are needed in order to allow for adequate returns on
capital that encourage investment in new mines and exploration and compensate
for heightened levels of political risk. Due to the global nature of the gold
mining business, country risk is an important consideration in the portfolio at
all times.
The desire for gold companies to grow and replace depleting reserves continues
to drive merger and acquisition activity in the gold sector. Over the past year,
Yamana Gold, Inc. successfully acquired fellow mid-tier producer Meridian Gold,
Inc., creating a new million ounce plus gold producer. In January 2008,
AngloGold Ashanti Ltd. announced plans to acquire Golden Cycle Gold Corp. at a
37% premium in order to consolidate ownership of the Cripple Creek and Victor
Gold joint venture in Colorado. We believe one of the themes of 2008 will be
major producers looking to simplify joint ventures structures by either buying
partners out or selling interests.
Although exploration and development companies tend to carry a higher level of
risk, we remain focused on the group as the sector offers the greatest potential
for creating shareholder value through discovery, reserve growth and takeover
premiums. Our strategy is to search out companies with talented management and
known deposits that we believe have the potential to expand further.
Additionally, your Fund's approach is to take minor positions in a relatively
large number of companies in order to spread out the risk and enhance overall
returns. While in general the exploration and development group has
underperformed the major and intermediate producers over the past year, one
notable exception in the portfolio has been Detour Gold Corp., which has
successfully developed a multi million ounce ore body and been rewarded in the
marketplace.
-3-
CONCLUSION
In our opinion, the most important period for investors to own gold and gold
related investments is at hand. Undoubtedly, few will heed this advice as
negative press over the past 25 years against owning gold and gold related
investments has successfully kept most investors away from hedging against
currency debasement in a period of heightened monetary risk. We believe fear
rather than greed will ultimately drive broader participation in the gold
market.
We appreciate your shareholding and confidence in the OCM Gold Fund and we look
forward to meeting the investment objective of preserving your purchasing power.
Should you have any questions regarding the Fund or gold, please contact your
financial adviser or you may contact us directly at 1-800-779-4681. For question
regarding your account, please contact Shareholder Service at 1-800-628-9403.
Sincerely,
/S/ GREGORY M. ORRELL /s/ TIMOTHY G. CHURCH
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Gregory M. Orrell Timothy G. Church
PORTFOLIO MANAGER ASSISTANT PORTFOLIO MANAGER
JANUARY 24, 2008
-4-
OCM GOLD FUND
SCHEDULE OF INVESTMENTS - NOVEMBER 30, 2007
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SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCKS 91.5%
MAJOR GOLD PRODUCERS 35.6%
20,000 AngloGold Ashanti Ltd. ADR ..................... $ 975,400
60,000 Barrick Gold Corp. ............................. 2,430,600
10,000 Freeport-McMoRan Copper & Gold, Inc. ........... 989,300
270,000 Gold Fields Ltd. ADR ........................... 4,441,500
686,250 Goldcorp, Inc. ................................. 22,241,362
225,000 Harmony Gold Mining Co., Ltd. ADR* ............. 2,349,000
430,680 Kinross Gold Corp.* ............................ 7,469,561
32,200 Lihir Gold Ltd. ADR. ........................... 1,079,988
107,333 Lihir Gold Ltd.* ............................... 371,161
124,994 Newmont Mining Corp. ........................... 6,210,952
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48,558,824
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INTERMEDIATE/MID-TIER GOLD PRODUCERS 22.2%
161,860 Agnico-Eagle Mines Ltd. ........................ 7,788,703
430,000 Eldorado Gold Corp.* ........................... 2,512,205
100,000 Gammon Gold, Inc.* ............................. 739,296
504,800 IAMGOLD Corp. .................................. 4,326,136
500,000 Oxiana Ltd. .................................... 1,737,862
140,000 Randgold Resources Ltd. ADR .................... 4,925,200
634,750 Yamana Gold, Inc. .............................. 8,162,885
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30,192,287
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JUNIOR GOLD PRODUCERS 10.0%
599,000 Alhambra Resources Ltd.* ....................... 641,187
250,000 Aurizon Mines Ltd.* ............................ 887,500
400,000 Capstone Mining Corp.* ......................... 1,084,433
1,000,000 Claude Resources, Inc.* ........................ 1,330,532
150,000 Glencairn Gold Corp.* .......................... 30,012
457,000 Golden Cycle Gold Corp.* ....................... 4,570,000
50,000 Jaguar Mining, Inc.* ........................... 467,687
300,000 Red Back Mining, Inc.* ......................... 1,908,764
365,500 San Gold Corp.* ................................ 493,622
300,000 San Gold Corp., Private Placement*+ ............ 364,646
250,000 Sino Gold Mining Ltd.* ......................... 1,547,714
200,000 Yukon-Nevada Gold Corp.* ....................... 318,127
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13,644,224
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SHARES VALUE
- --------------------------------------------------------------------------------
EXPLORATION AND DEVELOPMENT COMPANIES 12.9%
200,000 Amarillo Gold Corp.* ........................... $ 185,074
375,000 Amazon Mining Holding PLC* ..................... 335,759
187,500 Anatolia Minerals Development Ltd.* ............ 834,709
500,000 Andean American Mining Corp.* .................. 390,156
58,200 Aquiline Resources, Inc.* ...................... 570,588
250,000 Australian Solomons Gold Ltd.* ................. 190,076
500,000 Birim Goldfields, Inc.* ........................ 177,571
700,000 Brazauro Resources Corp.* ...................... 315,126
125,000 Detour Gold Corp.* ............................. 1,324,280
126,706 DOT Resources Ltd.* ............................ 27,886
500,000 Evolving Gold Corp.* ........................... 495,198
300,000 Fury Explorations Ltd.* ........................ 225,090
215,600 Geologix Explorations, Inc.* ................... 485,294
300,000 Grayd Resource Corp.* .......................... 126,050
100,000 Guyana Goldfields, Inc.* ....................... 820,328
500,000 Hana Mining Ltd.* .............................. 210,084
450,000 MAG Silver Corp.* .............................. 6,928,271
287,500 Majestic Gold Corp.* ........................... 110,732
125,000 Mansfield Minerals, Inc.* ...................... 437,675
250,000 Maximus Ventures Ltd.* ......................... 110,044
500,000 Mediterranean Resources Ltd.* .................. 150,060
106,500 Metallica Resources, Inc.* ..................... 536,975
120,000 Pediment Exploration Ltd.*+ .................... 329,532
200,000 Radius Gold, Inc.* ............................. 94,038
300,000 Sabina Silver Corp.* ........................... 606,242
300,000 Selkirk Metals Corp.* ......................... 180,072
273,500 Sinchao Metals Corp.* .......................... 259,929
207,700 Sunridge Gold Corp.* ........................... 322,064
500,000 TNR Gold Corp.* ................................ 172,569
200,000 Western Goldfields, Inc.* ...................... 642,000
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17,593,472
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OTHER 5.8%
206,812 Altius Minerals Corp.* ......................... 5,170,300
229,200 International Royalty Corp. .................... 1,226,711
50,000 Royal Gold, Inc. ............................... 1,436,000
------------
7,833,011
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See notes to financial statements.
-5-
OCM GOLD FUND
SCHEDULE OF INVESTMENTS - NOVEMBER 30, 2007 (CONTINUED)
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SHARES VALUE
- --------------------------------------------------------------------------------
PRIMARY SILVER PRODUCERS 5.0%
40,000 Apex Silver Mines Ltd.* ........................ $ 682,000
150,000 Fortuna Silver Mines, Inc.* .................... 502,701
100,000 Hecla Mining Co.* .............................. 1,173,000
48,075 Pan American Silver Corp.* ..................... 1,522,664
100,000 Silver Wheaton Corp.* .......................... 1,501,601
359,997 Silverstone Resources Corp.* ................... 896,751
700,000 US Silver Corp.* ............................... 560,224
------------
6,838,941
------------
TOTAL COMMON STOCKS
(Cost $41,947,210) ............................. 124,660,759
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EXCHANGE TRADED FUNDS 4.6%
9,000 iShares Silver Trust* .......................... 1,251,000
65,000 Streettracks Gold Trust* ....................... 5,025,800
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TOTAL EXCHANGE TRADED FUNDS
(Cost $3,931,360) .............................. 6,276,800
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WARRANTS 1.2%
187,500 Amazon Mining Holding PLC*+# ................... --
Exercise Price 1.55 CAD, Exp. 11/16/2009
125,000 Australian Solomons Gold Ltd.* ................. 23,134
Exercise Price 1.71 CAD, Exp. 8/28/2008
89,000 Endeavour Mining Capital Corp.* ................ 377,066
Exercise Price 5.50 CAD, Exp. 11/10/2008
75,000 Fortuna Silver Mines, Inc.*+# .................. 112,545
Exercise Price 1.85 CAD, Exp. 3/23/2008
150,000 Fury Explorations Ltd.*+# ...................... --
Exercise Price 1.25 CAD, Exp. 9/20/2008
75,000 Glencairn Gold Corp.* .......................... 1,501
Exercise Price 1.25 CAD, Exp. 11/26/2008
1,500 Goldcorp, Inc.* ................................ 15,375
Exercise Price $40.55, Exp. 6/9/2011
143,750 Majestic Gold Corp.*+# ......................... --
Exercise Price 0.60 CAD, Exp. 5/3/2009
35,000 Nevsun Resources*+# ............................ --
Exercise Price 10.00 CAD, Exp. 12/18/2008
24,038 Pan American Silver Corp.* ..................... 468,928
Exercise Price 12.00 CAD, Exp. 2/20/2008
60,000 Pediment Exploration Ltd.*+# ................... --
Exercise Price 3.75 CAD, Exp. 11/16/2009
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SHARES VALUE
- --------------------------------------------------------------------------------
WARRANTS (CONTINUED)
150,000 San Gold Corp.*+# .............................. $ --
Exercise Price 2.00 CAD, Exp. 5/28/09
250,000 Silver Wheaton Corp.* .......................... 560,224
Exercise Price 4.00 CAD, Exp. 8/5/2009
100,000 Yukon-Nevada Gold Corp.* ....................... 62,525
Exercise Price 3.00 CAD, Exp. 5/25/2012 ------------
TOTAL WARRANTS
(Cost $85,797) ................................. 1,621,298
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SHORT-TERM INVESTMENT 3.0%
4,064,118 UMB Money Market Fiduciary, 3.06% ............... 4,064,118
------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $4,064,118) ......................................... 4,064,118
------------
TOTAL INVESTMENTS
(Cost $50,028,485) .......................... 100.3% 136,622,975
LIABILITIES LESS OTHER ASSETS ..................... (0.3)% (381,885)
------------
NET ASSETS ........................................ 100.0% $136,241,090
============
ADR - American Depository Receipts.
CAD - Canadian Dollars.
* Non-income producing security.
+ Illiquid security. Security is valued at fair value in accordance with
procedures established by the Fund's Board of Trustees.
# Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended, or otherwise restricted. These securities may be resold
in transactions exempt from registration, normally to qualified
institutional buyers. The securities are valued at fair value in
accordance with proce- dures established by the Fund's Board of Trustees.
See notes to financial statements.
-6-
OCM GOLD FUND
SCHEDULE OF INVESTMENTS - NOVEMBER 30, 2007 (CONTINUED)
At November 30, 2007, restricted securities totaled $694,178 or 0.5% of net
assets and consisted of the following securities:
NOVEMBER 30, 2007
CARRYING VALUE ACQUISITION
ISSUER PER UNIT COST DATE
- --------------------------------------------------------------------------------
Pediment Exploration Ltd. 2.745 CAD 3.00 CAD 11/14/2007
Pediment Exploration Ltd. Warrants
Exercise Price 3.75 CAD,
Exp. 11/16/2009 -- -- 11/14/2007
San Gold Corp. 1.215 CAD 1.40 CAD 11/27/2007
San Gold Corp. Warrants
Exercise Price 2.00 CAD,
Exp. 5/28/09 -- -- 11/27/2007
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SUMMARY OF INVESTMENTS BY COUNTRY
PERCENT OF
COUNTRY MARKET VALUE INVESTMENT SECURITIES
- --------------------------------------------------------------------------------
Australia $ 3,869,947 2.8%
Canada 92,387,493 67.6
Cayman Islands 1,059,066 0.8
Jersey 4,925,200 3.6
New Guinea 1,079,988 0.8
South Africa 7,765,900 5.7
United States (1) 25,535,381 18.7
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TOTAL $136,622,975 100.0%
- --------------------------------------------------------------------------------
(1) Includes short-term securities.
See notes to financial statements.
-7-
OCM GOLD FUND
STATEMENT OF ASSETS AND LIABILITIES - NOVEMBER 30, 2007
ASSETS:
Investments in unaffiliated issuers,
at value (cost $50,028,485) ............................. $ 136,622,975
Interest and dividends receivable ......................... 26,544
Receivable for fund shares sold ........................... 36,301
Prepaid expenses and other assets ......................... 13,649
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Total assets ............................................ 136,699,469
-------------
LIABILITIES:
Payable for fund shares redeemed .......................... 76,768
Due to investment adviser ................................. 98,318
Accrued distribution fees ................................. 198,235
Accrued trustees' fees .................................... 1,996
Accrued Chief Compliance Officer fees ..................... 3,654
Accrued expenses and other liabilities .................... 79,408
-------------
Total liabilities ....................................... 458,379
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Net Assets .............................................. $ 136,241,090
-------------
NET ASSETS CONSIST OF:
Shares of beneficial interest, no par value;
unlimited shares authorized ............................. $ 44,151,266
Accumulated net investment loss ........................... (2,159,235)
Undistributed net realized gain on investments
and foreign currency transactions ....................... 7,654,469
Net unrealized appreciation on investments
and foreign currency translations ....................... 86,594,590
-------------
Net Assets ............................................ $ 136,241,090
-------------
CALCULATION OF MAXIMUM OFFERING PRICE:
Net asset value and redemption price per share(1) $ ....... 21.49
Maximum sales charge (4.50% of offering price) ............ 1.01
-------------
Offering price to public .................................. $ 22.50
-------------
Shares outstanding ........................................ 6,338,304
=============
(1) A 1.50% redemption fee is imposed on redemptions of shares held less than
three months.
See notes to financial statements.
-8-
OCM GOLD FUND
STATEMENT OF OPERATIONS - YEAR ENDED NOVEMBER 30, 2007
INVESTMENT INCOME:
Interest .................................................... $ 105,005
Dividends (net of foreign withholding taxes of $32,632) ..... 395,498
------------
Total investment income ................................... 500,503
------------
EXPENSES:
Investment advisory fees .................................... 1,032,496
Distribution fees ........................................... 897,494
Fund administration and accounting fees ..................... 144,239
Transfer agent fees and expenses ............................ 93,764
Professional fees ........................................... 59,962
Federal and state registration fees ......................... 23,547
Custody fees ................................................ 19,165
Reports to shareholders ..................................... 15,092
Chief Compliance Officer fees ............................... 10,629
Trustees' fees .............................................. 7,849
Other expenses .............................................. 10,198
------------
Total expenses ............................................ 2,314,435
------------
Net investment loss ....................................... (1,813,932)
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments and
foreign currency transactions ............................. 8,400,525
Net change in unrealized appreciation/
depreciation on investments and
foreign currency translations ............................. 11,847,045
------------
Net gain on investments ................................... 20,247,570
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .......... $ 18,433,638
============
See notes to financial statements.
-9-
OCM GOLD FUND
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
NOV. 30, NOV. 30,
2007 2006
------------- -------------
OPERATIONS:
Net investment loss ...................... $ (1,813,932) $ (1,702,906)
Net realized gain on investments and
foreign currency transactions .......... 8,400,525 11,517,598
Net change in unrealized appreciation/
depreciation on investments
and foreign currency translations ...... 11,847,045 35,751,792
------------- -------------
Net increase in net assets resulting
from operations ........................ 18,433,638 45,566,484
------------- -------------
DISTRIBUTIONS PAID TO SHAREHOLDERS:
Distributions paid from net
realized gains ......................... (10,048,572) --
------------- -------------
Total distributions ...................... (10,048,572) --
------------- -------------
FUND SHARE TRANSACTIONS:
Net proceeds from shares sold ............ 14,220,807 11,755,811
Distributions reinvested ................. 8,876,117 --
Payment for shares redeemed(1) ........... (14,997,190) (16,093,563)
------------- -------------
Net increase/(decrease) in net
assets from fund share transactions .... 8,099,734 (4,337,752)
------------- -------------
TOTAL INCREASE IN NET ASSETS ............... 16,484,800 41,228,732
NET ASSETS, BEGINNING OF YEAR .............. 119,756,290 78,527,558
------------- -------------
NET ASSETS, END OF YEAR .................... $ 136,241,090 $ 119,756,290
============= =============
ACCUMULATED NET INVESTMENT LOSS ............ $ (2,159,235) $ (962,605)
============= =============
TRANSACTIONS IN SHARES:
Shares sold .............................. 727,987 668,319
Shares issued on reinvestment of
distributions .......................... 510,122 --
Shares redeemed .......................... (758,285) (921,283)
------------- -------------
Net increase/(decrease) in
shares outstanding ..................... 479,824 (252,964)
============= =============
- ------------
(1) Net of redemption fees of $2,617 and $4,526 for the years ended November 30,
2007 and 2006, respectively.
See notes to financial statements.
-10-
OCM GOLD FUND
NOTES TO FINANCIAL STATEMENTS - NOVEMBER 30, 2007
NOTE 1. ORGANIZATION
OCM Mutual Fund (the "Trust") is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment company.
The Trust was organized as a Massachusetts business trust on January 6, 1984 and
consists of the OCM Gold Fund (the "Fund"). The investment objective for the
Fund is long-term growth of capital through investing primarily in equity
securities of domestic and foreign companies engaged in activities related to
gold and precious metals.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
by the Fund in the preparation of its financial statements.
SECURITY VALUATION - Portfolio securities that are listed on national
securities exchanges are valued at the last sale price as of the close of
business of such securities exchanges, or, in the absence of recorded sales, at
the average of readily available closing bid and ask prices on such exchanges.
NASDAQ National Market(R) and SmallCap(R) securities are valued at the NASDAQ
Official Closing Price ("NOCP"). If a NOCP is not issued for a given day, these
securities are valued at the average of readily available closing bid and asked
prices. Unlisted securities are valued at the average of the quoted bid and ask
prices in the over-the-counter market. Short-term investments which mature in
less than 60 days are valued at amortized cost (unless the Board of Trustees
determines that this method does not represent fair value). Short-term
investments which mature after 60 days are valued at market. Securities and
other assets for which market quotations are not readily available are valued at
fair value as determined in good faith by the investment adviser under
procedures established by and under the general supervision and responsibility
of the Trust's Board of Trustees. For each investment that is fair valued, the
investment adviser considers, to the extent applicable, various factors
including, but not limited to, the type of security, the financial condition of
the company, comparable companies in the public market, the nature and duration
of the cause for a quotation not being readily available and other relevant
factors.
FOREIGN CURRENCY - Investment securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at the date of valuation. 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 Fund
does not isolate that portion of the results of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such fluctuations are included
with the net unrealized and realized gain or loss from investments. Reported net
realized foreign exchange 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 Fund's books
and the U.S. dollar equivalent of the amounts actually received or paid. Net
unrealized foreign exchange gains and losses arise from changes in the fair
value of assets and liabilities, other than investments in securities at fiscal
year end, resulting from changes in exchange rates.
FEDERAL INCOME TAXES - The Fund intends to comply with the requirements
of the Internal Revenue Code necessary to qualify as a regulated investment
company and to make the requisite distributions of income to its shareholders
which will be sufficient to relieve it from all or substantially all federal
income taxes.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME - Securities transactions
are accounted for on a trade date basis. Realized gains and losses on sales of
securities are calculated on the identified cost basis. Dividend income is
recorded on the ex-dividend date and interest income is recorded on an accrual
basis.
DISTRIBUTIONS TO SHAREHOLDERS - Distributions to shareholders are
recorded on the ex-dividend date. The Fund declares and pays dividends of net
investment income, if any, annually and distributes net realized gains, if any,
annually. The character of distributions made during the year from net
investment income or net realized gains may differ from the characterization for
federal income tax purposes due to differences in the recognition of income,
expense or gain items for financial statement and tax purposes. To the extent
that these differences are attributable to permanent book and tax accounting
differences, the components of net assets have been adjusted.
On December 27, 2007 the Fund distributed $8,998,266 from long term
capital gains ($1.42 per share). The distribution was paid on December 27, 2007
to shareholders of record on December 26, 2007.
-11-
OCM GOLD FUND
NOTES TO FINANCIAL STATEMENTS - NOVEMBER 30, 2007 (CONTINUED)
REDEMPTION FEE - A 1.50% redemption fee is retained by the Fund to
offset transaction costs and other expenses associated with short-term
investing. The fee is imposed on redemptions or exchanges of shares held less
than three months from their purchase date. The Fund records the fee as a
reduction of shares redeemed and as a credit to paid-in-capital.
GUARANTEES AND INDEMNIFICATIONS - In the normal course of business, the
Fund enters into contracts with service providers that contain general
indemnification clauses. The Fund's maximum exposure under these arrangements is
unknown as this would involve future claims against the Fund that have not yet
occurred. Based on experience, the Fund expects the risk of loss to be remote.
USE OF ESTIMATES - The preparation of financial statements in
conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of increases and decreases in net assets from operations during the reporting
period. Actual results could differ from those estimates.
NEW ACCOUNTING PRONOUNCEMENTS - In June 2006, the Financial Accounting
Standards Board ("FASB") released FASB Interpretation No. 48 "Accounting for
Uncertainty in Income Taxes" ("FIN 48"). FIN 48 provides guidance for how
uncertain tax positions should be recognized, measured, presented and disclosed
in the financial statements. FIN 48 requires the evaluation of tax positions
taken or expected to be taken in the course of preparing the Fund's tax returns
to determine whether the tax positions are "more-likely-than-not" of being
sustained by the applicable tax authority. To the extent that a tax benefit of a
position is not deemed to meet the more-likely-than-not threshold, the Fund
would report an income tax expense in the statement of operations. Adoption of
FIN 48 is required as of the date of the last net asset value calculation in the
first required financial statement reporting period for fiscal years beginning
after December 15, 2006 and is to be applied to all open tax years as of the
effective date. At this time, management is evaluating the implications of FIN
48, and the impact of this standard on the Fund's financial statements has not
yet been determined.
In September 2006, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 157, "Fair Value Measurements."
The Statement defines fair value, establishes a framework for measuring fair
value in generally accepted accounting principles (GAAP), and expands
disclosures about fair value measurements. The Statement establishes a fair
value hierarchy that distinguishes between (1) market participant assumptions
developed based on market data obtained from sources independent of the
reporting entity (observable inputs) and (2) the reporting entity's own
assumptions about market participant assumptions developed based on the best
information available in the circumstances (unobservable inputs). The Statement
is effective for financial statements issued for fiscal years beginning after
November 15, 2007, and is to be applied prospectively as of the beginning of the
fiscal year in which this Statement is initially applied. Management has begun
to evaluate the application of the Statement to the Fund, but is not in a
position at this time to conclude on upon the significance of its impact, if
any, on the Fund's financial statements.
NOTE 3. INVESTMENT ADVISORY AGREEMENT
The Fund has an investment advisory agreement with Orrell Capital
Management, Inc. ("OCM"). Under the agreement, the Fund pays OCM a fee computed
daily and payable monthly, at the following annual rates based upon average
daily net assets:
ASSETS FEE RATE
-------------------------------------------------------------------------
$0 to $50 million ........................................... 1.000%
$50 million to $75 million .................................. 0.875%
$75 million to $100 million ................................. 0.750%
$100 million to $150 million ................................ 0.625%
$150 million to $250 million ................................ 0.500%
Over $250 million ........................................... 0.375%
-12-
OCM GOLD FUND
NOTES TO FINANCIAL STATEMENTS - NOVEMBER 30, 2007 (CONTINUED)
NOTE 4. DISTRIBUTION AGREEMENT AND PLAN
The Trust has adopted a Distribution Plan (the "Plan") pursuant to Rule
12b-1 under the Investment Company Act of 1940, as amended. The Plan authorizes
the Fund to reimburse the distributor for marketing expenses incurred in
distributing shares of each Fund, including the cost of printing sales material
and making payments to dealers of the Fund's shares, in any fiscal year, subject
to a limit of 0.99% of average daily net assets. Fees incurred by the Fund under
the Plan during the period ended November 30, 2007 are reflected in the
Statement of Operations. At November 30, 2007, $198,235 of Distributions Fees
were available for eligible 12b-1 expenses.
NOTE 5. PURCHASES AND SALES OF SECURITIES
Purchases and sales of investment securities (excluding short-term
securities and U.S. government obligations) for the year ended November 30, 2007
were $13,439,551 and $19,425,189, respectively. There were no purchases or sales
of U.S. government obligations.
NOTE 6. FEDERAL INCOME TAX INFORMATION
At November 30, 2007, gross unrealized appreciation and depreciation of
investments owned by the Fund, based on cost for federal income tax purposes
were as follows:
Cost of investments ....................... $ 52,191,237
============
Unrealized appreciation ................... $ 86,247,141
Unrealized depreciation ................... (1,815,403)
------------
Net unrealized appreciation
on investments .......................... $ 84,431,738
============
The difference between cost amounts for financial statement and federal
income tax purposes is due primarily to investments in passive foreign
investment companies ("PFICs").
The tax character of distributions paid during the fiscal years ended
November 30, 2007 and 2006 was as follows:
2007 2006
----------- ---------
Ordinary income .......................... $ -- $ --
Net long-term capital gains .............. 10,048,572 --
----------- ---------
Total distributions ...................... $10,048,572 $ --
=========== ---------
As of November 30, 2007 the components of accumulated earnings on a tax
basis were as follows:
Undistributed ordinary income ...................... $ 219,986
Undistributed long-term gains ...................... 7,438,001
-----------
Tax accumulated earnings ........................... 7,657,987
Accumulated capital and other losses ............... --
Unrealized appreciation on investments ............. 84,431,738
Unrealized appreciation on foreign
currency ......................................... 99
-----------
Total accumulated earnings ......................... $92,089,824
===========
-13-
OCM GOLD FUND
NOTES TO FINANCIAL STATEMENTS - NOVEMBER 30, 2007 (CONTINUED)
NOTE 7. OFFERING PRICE PER SHARE
A maximum front-end sales charge of 4.50% is imposed on purchases of
the Fund's shares. For the year ended November 30, 2007, the Fund was advised
that the Distributor received $29,736 of sales charges from sales of the Fund's
shares.
NOTE 8. CONCENTRATION OF RISK
Investing in foreign securities involves certain risks not necessarily
found in U.S. markets. These include risks associated with adverse changes in
economic, political, regulatory and other conditions, changes in currency
exchange rates, exchange control regulations, expropriation of assets or
nationalization, imposition of withholding taxes on dividend or interest
payments or capital gains, and possible difficulty in obtaining and enforcing
judgments against foreign entities. Further, issuers of foreign securities are
subject to different, and often less comprehensive, accounting, reporting and
disclosure requirements than domestic issuers.
As the Fund concentrates its investments in the gold mining industry, a
development adversely affecting the industry (for example, changes in the mining
laws which increases production costs or a significant decrease in the market
price of gold) would have a greater adverse effect on the Fund than it would if
the Fund invested in a number of different industries.
-14-
OCM GOLD FUND
FINANCIAL HIGHLIGHTS
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30,
2007 2006 2005 2004 2003
----------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout each year)
Net asset value, beginning of year . $ 20.44 $ 12.85 $ 12.76 $ 14.46 $ 7.53
---------- --------- -------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ................ (0.27) (0.29) (0.18) (0.18) (0.12)
Net realized and unrealized gain
(loss) on investments and
foreign currency transactions .... 3.06 7.88 0.69 (1.30) 7.05
---------- --------- -------- --------- ---------
Total from investment operations ... 2.79 7.59 0.51 (1.48) 6.93
---------- --------- -------- --------- ---------
LESS DISTRIBUTIONS:
Dividends from net investment income -- -- (0.11) (0.01) --
Distribution from net realized gains (1.74) -- (0.31) (0.21) --
---------- --------- -------- --------- ---------
Total distributions ................ (1.74) -- (0.42) (0.22) --
---------- --------- -------- --------- ---------
Net asset value, end of year ....... $ 21.49 $ 20.44 $ 12.85 $ 12.76 $ 14.46
========== ========= ======== ========= =========
TOTAL RETURN* ...................... 15.64% 59.07% 4.34% (10.31)% 92.03%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's) . $ 136,241 $ 119,756 $ 78,528 $ 80,202 $ 84,230
Ratio of expenses to average
net assets:
Net of waivers and reimbursements 1.93% 2.07% 2.24% 2.15% 2.39%
Before waivers and reimbursements 1.93% 2.07% 2.24% 2.17% 2.39%
Ratio of net investment loss to
average net assets:
Net of waivers and reimbursements (1.51)% (1.64)% (1.51)% (1.58)% (1.42)%
Before waivers and reimbursements (1.51)% (1.64)% (1.51)% (1.60)% (1.42)%
Portfolio turnover rate ............ 11% 20% 5% 12% 17%
- ----------
* Assumes no sales charge.
See notes to financial statements.
-15-
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Trustees of OCM Gold Fund:
We have audited the accompanying statement of assets and liabilities of OCM Gold
Fund (the "Fund"), including the schedule of investments, as of November 30,
2007, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years then ended, and
the financial highlights for each of the three years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The Fund's
financial highlights for the periods ended prior to November 30, 2005 were
audited by other auditors whose report, dated January 25, 2005, expressed an
unqualified opinion on the financial statements.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Fund
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audit included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of November 30, 2007, by correspondence with the
custodian and brokers; where replies were not received from brokers, we
performed other auditing procedures. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Fund as of November 30, 2007, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended, and the financial highlights for each of the three years in the
period then ended, in conformity with accounting principles generally accepted
in the United States of America.
/s/ DELOITT & TOUCHE LLP
- ------------------------
January 24, 2008
Milwaukee, WI
-16-
OCM GOLD FUND
EXPENSE EXAMPLE - FOR THE YEAR ENDED NOVEMBER 30, 2007 (UNAUDITED)
As a shareholder of the OCM Gold Fund (the "Fund"), you incur two types
of costs: (1) transaction costs, including sales charges (loads) on purchase
payments and redemption fees on certain redemptions; and (2) ongoing costs,
including management fees; distribution (12b-1) fees; and other Fund expenses.
This Example is intended to help you understand your ongoing costs (in dollars)
of investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the
beginning of the period and held for the entire period from June 1, 2007 to
November 30, 2007 (the "period").
ACTUAL EXPENSES
The first line of the table below provides information about actual
account values and actual expenses. You may use the information in this line,
together with the amount you invested, to estimate the expenses you paid over
the period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 equals 8.6), then multiply the result by the
number in the first line under the heading entitled "Expenses Paid During the
Period" to estimate the expenses you paid on your account during the period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about
hypothetical account values and hypothetical expenses based on the Fund's actual
expense ratio and an assumed rate of return of 5% per year before expenses,
which is not the Fund's actual return. The hypothetical account values and
expenses may not be used to estimate the actual ending account balance or
expenses you paid for the period. You may use this information to compare the
ongoing costs of investing in the Fund and other funds. To do so, compare this
5% hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight
your ongoing costs only and do not reflect any transactional costs, such as
sales charges (loads) and redemption fees. Therefore, the second line of the
table is useful in comparing the ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transactional costs were included, your costs could have been higher.
EXPENSES PAID DURING THE PERIOD
EXPENSES PAID
BEGINNING ENDING DURING THE
ACCOUNT VALUE ACCOUNT VALUE PERIOD ENDED
JUNE 1, 2007 NOVEMBER 30, 2007 NOVEMBER 30, 2007*
------------ ----------------- ------------------
Actual ............................ $ 1,000.00 $ 1,187.90 $ 10.54
Hypothetical (5% return
before expenses) ................ 1,000.00 1,015.37 9.71
- ---------
* Expenses are equal to the Fund's annualized expense ratio of 1.92% for the
period, multiplied by the average account value over the period, multiplied
by 183/365 (to reflect the one-half year period).
-17-
OCM GOLD FUND
INVESTMENTS BY SECTOR (UNAUDITED)
AS A PERCENTAGE OF NET ASSETS
PIE CHART OMITTED
Major Gold Producers 35.6%
Intermediate/Mid-Tier
Gold Producers 22.2%
Exploration and Development
Companies 12.9%
Junior Gold Producers 10.1%
Other 6.0%
Primary Silver Producers 5.9%
Exchange Traded Funds 4.6%
Cash and Other Assets 2.7%
A description of the Fund's proxy voting policies and procedures and a
record of the Fund's proxy votes for the year ended June 30, 2007 are available
without charge, upon request by calling toll free 1-800-779-4681 and on the
Securities and Exchange Commission's (SEC) website at http://www.sec.gov.
The Fund will file its complete schedule of investments with the SEC
for the first and third quarters of each fiscal year on Form N-Q. The Fund's
Forms N-Q will be available on the EDGAR database on the SEC's website at
http://www.sec.gov. These Forms may also be reviewed and copied at the SEC's
Public Reference Room in Washington, D.C. Information about the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330.
-18-
OCM GOLD FUND
PERFORMANCE RESULTS - YEAR ENDED NOVEMBER 30, 2007 (UNAUDITED)
(ALL PERFORMANCE MEASUREMENTS REFLECT THE MAXIMUM SALES LOAD CHARGES FOR EACH
Average Annual Total Returns Value on 11/30/07
---------------------------- -----------------
1 year 10.46% OCM Gold Fund $46,699
5 year 25.86% S&P 500(R) Index $18,188
10 year 16.66% Philadelphia Gold
& Silver Index $27,899
GRAPH OMITTED
Philadelphia
OCM Gold S&P 500 Gold & Silver
--------------------------------------------------
11/30/97 10,000 10,000 10,000
11/30/98 9,343 12,366 10,098
11/30/99 8,912 14,950 9,715
11/30/00 6,604 14,319 6,987
11/30/01 8,837 12,569 7,924
11/30/02 14,128 10,494 9,712
11/30/03 27,129 12,077 17,080
11/30/04 24,332 13,630 16,808
11/30/05 25,387 14,781 18,276
11/30/06 40,382 16,885 24,077
11/30/07 46,699 18,188 27,899
The returns shown include the reinvestment of all dividends and the
maximum sales load charge, but do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
Past performance is not indicative of future results.
The Philadelphia Gold and Silver Index (XAU) is an unmanaged
capitilization-weighted index composed of 16 companies listed on U.S. exchanges
involved in the gold and silver mining industry. The index is generally
considered as representative of the gold and silver share market.
The S&P 500(R) Index is a broad unmanaged index generally considered as
representative of the U.S. equity market.
-19-
OCM GOLD FUND
ANNUAL RENEWAL OF INVESTMENT ADVISORY AGREEMENT (UNAUDITED)
On October 15, 2007, the Board of Trustees of OCM Mutual Fund approved the
continuation of the Fund's investment advisory agreement with Orrell Capital
Management, Inc. (the "Adviser"). Prior to approving the continuation of the
agreement, the Board considered:
o the nature, extent and quality of the services provided by the Adviser
o the investment performance of the Fund
o the costs of the services to be provided and profits to be realized by
the Adviser from its relationship with the Fund
o the extent to which economies of scale would be realized as the Fund
grows and whether fee levels reflect those economies of scale
o the expense ratio of the Fund
In considering the nature, extent and quality of the services provided
by the Adviser, the Board considered an oral presentation by the Adviser
describing the portfolio management, shareholder communication, and regulatory
compliance services provided by the Adviser to the Fund. The Trustees concluded
that the Adviser was providing essential services to the Fund.
The Trustees compared the performance of the Fund to benchmark indices
over various periods of time and concluded that the performance of the Fund
warranted the continuation of the Investment Advisory Agreement. The Trustees
noted that the Fund adhered to its investment style.
In concluding that the advisory fees payable by the Fund were
reasonable, the Trustees reviewed the profits realized by the Adviser, from its
relationship with the Fund and concluded that such profits were reasonable and
not excessive. As part of its analysis the Board considered the value the
research the Adviser received from broker-dealers executing securities
transactions for the Fund. The Trustees also reviewed reports comparing the
expense ratio and advisory fees paid by the Fund to those paid by other
comparable mutual funds in the same category and concluded that the advisory
fees paid by the Fund and the expense ratio of the Fund were in the range of
comparable mutual funds.
The Trustees also considered whether the Investment Advisory Agreement
fee schedule should be adjusted for an increase in assets under management. They
concluded that the "breakpoints" embodied in the Investment Advisory Agreement
were appropriate.
LONG TERM CAPITAL GAINS DESIGNATION (UNAUDITED)
Pursuant to IRC 852(b)(3) of the Internal Revenue Code OCM Gold Fund
hereby designates $10,048,572, as long-term capital gains distributed during the
year ended November 30, 2007.
-20-
OCM GOLD FUND
TRUSTEE AND OFFICER INFORMATION (UNAUDITED)
INDEPENDENT TRUSTEES*
- --------------------------------------------------------------------------------------------------------------------------
OTHER
TERM OF OFFICE DIRECTORSHIPS
POSITION(S) AND LENGTH OF PRINCIPAL OCCUPATION(S) HELD BY
NAME, ADDRESS AND AGE HELD WITH FUND TIME SERVED DURING PAST 5 YEARS TRUSTEE
- --------------------------------------------------------------------------------------------------------------------------
JOHN L. CRARY Trustee Indefinite Since 1999 Mr. Crary has been the managing microHelix,
1536 Holmes Street, (Chairman of Since 2004 member of Crary Enterprises, LLC, a private Inc. and
Livermore, California 94550 the Board) investment company. Since 1988 Mr. Crary Scheid
Age 54 has been an independent corporate Vineyards,
financial advisor and private investor Inc.
in various biotechnology, software and other
early stage business ventures. Mr. Crary
began his business career as an investment
banker with E.F. Hutton & Company Inc.
DOUG WEBENBAUER Trustee Indefinite Chief Financial Officer of M.E. Fox & None
1536 Holmes Street, Since 2005 Company, Inc., a beer distributor, since 1999.
Livermore, California 94550
Age 47
INTERESTED TRUSTEES AND OFFICERS**
- --------------------------------------------------------------------------------------------------------------------------
OTHER
TERM OF OFFICE DIRECTORSHIPS
POSITION(S) AND LENGTH OF PRINCIPAL OCCUPATION(S) HELD BY
NAME, ADDRESS AND AGE HELD WITH FUND TIME SERVED DURING PAST 5 YEARS TRUSTEE
- --------------------------------------------------------------------------------------------------------------------------
GREGORY M. ORRELL Trustee, Indefinite President of Orrell Capital Management, Inc. None
1536 Holmes Street, President Since 2004 since 1991.
Livermore, California 94550
Age 46
JACKLYN A. ORRELL*** Secretary and One year term Secretary of Orrell Capital Management, Inc. N/A
1536 Holmes Street, Treasurer Since 2004 since 1999.
Livermore, California 94550
Age 73
ANDREW ROGERS Chief At discretion Manager, Fund Compliance Services, LLC since N/A
1536 Holmes Street, Compliance of the 2004; President, GemCom, LLC since 2004;
Livermore, California 94550 Officer Board President and formerly Senior Vice President
Age 38 Since 2004 and Director of Administration, Gemini Fund
Services, LLC since 2001.
- ---------------
* "Independent" trustees are trustees who a re not deemed to be "interested
persons" of the Fund as defined in the Inve stment Company Act of 1940.
** An "interested" trustee is a trustee who is deemed to be an "interested
person" of the Fund, as defined in the Investment Company Act of 1940.
Gregory M. Orrell is an interested person of the Fund because of his
ownership in the Fund's investment adviser.
*** Ms. Orrell is the mother of Gregory M. Orrell, the President and a trustee
of the Trust.
-21-
OCM Gold Fund
Distributed by:
Syndicated Capital, Inc.
1299 Ocean Avenue, Suite 210
Santa Monica, CA 90401
-22-
ITEM 2. CODE OF ETHICS.
The registrant, as of the end of the period covered by this report, has adopted
a code of ethics that applies to the Registrant's principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions, regardless of whether these individuals
are employed by the Registrant or a third party. A copy of this code of ethics
is attached hereto as Exhibit (a)
There have been no amendments to the Registrant's Code of Ethics during the
reporting period for this Form N-CSR. There have also been no waivers granted by
the Registrant to individuals covered by the Registrant's Code of Ethics during
the reporting period for this Form N-CSR.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Registrant's board of trustees has determined that Mr. Doug Webenbauer is an
audit committee financial expert serving on its audit committee and that Mr.
Webenbauer is independent.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The aggregate fees billed for each of the last two fiscal years for professional
services rendered by the principal accountant for the audit of the Registrant's
annual financial statements or services that are normally provided by the
accountant in connection with statutory and regulatory filings or engagements
are listed below.
Fiscal year ended Fiscal year ended
November 30, 2007 November 30, 2006
----------------- -----------------
Audit Fees $24,675 $23,500
Audit-Related Fees $0 $0
Tax Fees $3,860 $3,675
All Other Fees $0 $0
The Registrant's audit committee has adopted an Audit Committee Charter that
requires that the Audit Committee review the scope and plan of the registered
public accounting firm's annual and interim examinations, approve the services
(other than the annual audit) to be performed for the Registrant by the
independent public accountants and approve the fees and other compensation
payable to the independent accountants. During the fiscal years ended November
30, 2007 and 2006, all of the audit and non-audit services provided by the
Registrant's principal accountant were pre-approved by the audit committee.
(f) None.
(g) None.
(h) Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS
The schedules of investments in securities in unaffiliated issuers are included
as part of the reports to shareholders filed 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
Not applicable.
ITEM 10. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
As of the end of the period covered by this report, the registrant had not
adopted any procedures by which shareholders may recommend nominees to the
registrant's Board of Directors.
ITEM 11. CONTROLS AND PROCEDURES.
The registrant's certifying officers have concluded that the registrant's
disclosure controls and procedures (as defined in Rule 30a-2 under the
Investment Company Act of 1940 (the "Act")) are effective in design and
operation and are sufficient to form the basis of the certifications required by
Rule 30a-2 under the Act, based on their evaluation of these disclosure controls
and procedures within 90 days of the filing date of this report on Form N-CSR.
ITEM 12. EXHIBITS.
(a)(1) Code of Ethics - Filed as an attachment to this filing.
(a)(2) Certification for each principal executive and principal financial
officer of the registrant as required by Rule 30a-2 under the Act (17 CFR
270.30a-2(a)) - Filed as an attachment to this filing.
(b) Certifications required by Rule 30a-2(b) under the Act (17 CFR
270.30a-2(b)), Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR
240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of
the United States Code (18 U.S.C. 1350) - Filed as an attachment to this filing.
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.
OCM Mutual Fund
By: /S/ GREGORY M. ORRELL
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Gregory M. Orrell
President
Date: February 5, 2008
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/ GREGORY M. ORRELL
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Gregory M. Orrell
President
Date: February 5, 2008
By: /S/ JACKLYN ORRELL
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Jacklyn Orrell
Secretary and Treasurer
Date: February 5, 2008