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 811-3694
Oppenheimer Gold & Special Minerals Fund
(Exact name of registrant as specified in charter)
6803 South Tucson Way, Centennial, Colorado 80112-3924
(Address of principal executive offices) (Zip code)
Robert G. Zack, Esq.
OppenheimerFunds, Inc.
Two World Financial Center, New York, New York 10281-1008
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(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
--------------
Date of fiscal year end: June 30
-------
Date of reporting period: July 1, 2003 - June 30, 2004
ITEM 1. REPORTS TO STOCKHOLDERS.
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF
THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR ENDED JUNE 30, 2004, FOLLOWED BY A
GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE BROAD-BASED
MARKET INDEX.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. Over the 12-month period ended June
30, 2004, the Fund delivered positive returns. The Fund's performance was driven
primarily by the price of gold, which rose throughout the first half of the
period, but gave up the majority of those gains during the second half. Over 90%
of the Fund's assets were allocated to gold-related stocks, with the remainder
invested in other metal mining concerns and cash.
Throughout the reporting period, we generally maintained the Fund's focus
on large, mature companies with strong balance sheets, relatively low
operational costs and highly liquid shares, such as Newmont Mining Corp. and
Placer Dome, Inc. As gold prices rose during the first half of the period, we
also added to the Fund's holdings among small-to-intermediate gold exploration
and production companies with experienced management, good reserves and solid
financial resources. Some of our holdings climbed sharply in value on the
strength of successful exploration activity in various parts of the world. We
generally trimmed holdings in such companies in late 2003 when stock valuations
began to level, retaining positions in only a small number of intermediate
producers, such as Glamis Gold Ltd., that we believed offered above-average
potential for continued growth.
As gold and other special mineral prices leveled in 2004, we began to
convert some of the Fund's assets into cash. By the end of the period, our cash
position stood at approximately 5% of assets, an unusually high level for the
Fund. This cash position reflects our recognition of the increasing risks that
accompany recent commodity price increases, and the uncertainties implicit in
today's political and economic environment. We believe that if industrial growth
continues, it will likely be accompanied by possible inflationary pressures and
geopolitical risks. While gold and other precious metals may offer a strong
hedge against the negative forces in this equation, industrial metals are likely
to benefit from demand generated by increasing economic growth. Accordingly, we
remain watchful for developments that might lead us to reallocate the Fund's
assets among our various areas of investment.
COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the
performance of a hypothetical $10,000 investment in each class of shares of the
Fund held until June 30, 2004. In the case of Class A shares, performance is
measured over a ten-year period. In the case of Class B and Class C shares,
performance is measured from inception of the classes on November 1, 1995. In
the case of Class N shares, performance is measured from inception of the class
on March 1, 2001. The Fund's performance
8 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
reflects the deduction of the maximum initial sales charge on Class A shares,
the applicable contingent deferred sales charge on Class B, Class C and Class N
shares, and reinvestments of all dividends and capital gains distributions. Past
performance cannot guarantee future results.
The Fund's performance is compared to the performance of the Morgan
Stanley Capital International (MSCI) World Index, an unmanaged index of issuers
listed on the stock exchange of 20 countries and the U.S. Index performance
reflects the reinvestment of income but does not consider the effect of
transaction costs, and none of the data in the graphs shows the effect of taxes.
The Fund's performance reflects the effects of the Fund's business and operating
expenses. While index comparisons may be useful to provide a benchmark for the
Fund's performance, it must be noted that the Fund's investments are not limited
to the investments in the index.
9 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
FUND PERFORMANCE DISCUSSION
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CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Gold & Special Minerals Fund (Class A)
Morgan Stanley Capital International (MSCI) World Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Morgan Stanley
Value of Capital International
Investment (MSCI)
Date In Fund World Index
- ------------------------------------------------------------------
06/30/1994 9,425 10,000
09/30/1994 10,745 10,227
12/31/1994 9,517 10,164
03/31/1995 9,181 10,653
06/30/1995 9,616 11,122
09/30/1995 9,873 11,757
12/31/1995 9,373 12,331
03/31/1996 10,670 12,848
06/30/1996 10,140 13,235
09/30/1996 10,047 13,427
12/31/1996 9,945 14,057
03/31/1997 9,601 14,112
06/30/1997 9,105 16,253
09/30/1997 9,263 16,734
12/31/1997 6,771 16,338
03/31/1998 7,499 18,695
06/30/1998 6,352 19,091
09/30/1998 6,763 16,819
12/31/1998 6,683 20,389
03/31/1999 6,596 21,134
06/30/1999 7,117 22,161
09/30/1999 8,439 21,850
12/31/1999 7,712 25,555
03/31/2000 6,592 25,836
06/30/2000 6,488 24,938
09/30/2000 6,186 23,703
12/31/2000 6,547 22,254
03/31/2001 6,350 19,411
06/30/2001 7,501 19,950
09/30/2001 7,417 17,096
12/31/2001 7,839 18,577
03/31/2002 10,134 18,693
06/30/2002 10,618 16,979
09/30/2002 10,150 13,872
12/31/2002 11,169 14,947
03/31/2003 9,594 14,208
06/30/2003 11,080 16,659
09/30/2003 13,973 17,482
12/31/2003 17,831 19,994
03/31/2004 16,961 20,537
06/30/2004 14,396 20,751
AVERAGE ANNUAL TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT
6/30/04
1-Year 5-Year 10-Year Inception Date
- ------ ------ ------- --------------
22.45% 13.78% 3.71% 7/19/83
10 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Gold & Special Minerals Fund (Class B)
Morgan Stanley Capital International (MSCI) World Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Morgan Stanley
Value of Capital International
Investment (MSCI)
Date In Fund World Index
- ------------------------------------------------------------------
11/01/1995 10,000 10,000
12/31/1995 10,615 10,654
03/31/1996 12,049 11,100
06/30/1996 11,425 11,434
09/30/1996 11,296 11,600
12/31/1996 11,158 12,145
03/31/1997 10,753 12,193
06/30/1997 10,170 14,042
09/30/1997 10,332 14,457
12/31/1997 7,547 14,115
03/31/1998 8,340 16,152
06/30/1998 7,045 16,495
09/30/1998 7,490 14,531
12/31/1998 7,377 17,615
03/31/1999 7,271 18,259
06/30/1999 7,830 19,146
09/30/1999 9,271 18,878
12/31/1999 8,455 22,079
03/31/2000 7,208 22,322
06/30/2000 7,085 21,546
09/30/2000 6,740 20,479
12/31/2000 7,127 19,227
03/31/2001 6,893 16,771
06/30/2001 8,130 17,236
09/30/2001 8,030 14,771
12/31/2001 8,474 16,050
03/31/2002 10,955 16,150
06/30/2002 11,479 14,670
09/30/2002 10,973 11,985
12/31/2002 12,074 12,914
03/31/2003 10,372 12,276
06/30/2003 11,979 14,393
09/30/2003 15,106 15,104
12/31/2003 19,277 17,274
03/31/2004 18,337 17,744
06/30/2004 15,563 17,929
AVERAGE ANNUAL TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT
6/30/04
1-Year 5-Year Since Inception Inception Date
- ------ ------ --------------- ---------------
23.91% 14.02% 5.24% 11/1/95
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C
AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD.
BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, THE
"SINCE INCEPTION" RETURN FOR CLASS B USES CLASS A PERFORMANCE FOR THE PERIOD
AFTER CONVERSION. SEE PAGE 14 FOR FURTHER INFORMATION.
11 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Gold & Special Minerals Fund (Class C)
Morgan Stanley Capital International (MSCI) World Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Morgan Stanley
Value of Capital International
Investment (MSCI)
Date In Fund World Index
- ------------------------------------------------------------------
11/01/1995 10,000 10,000
12/31/1995 10,615 10,654
03/31/1996 12,057 11,100
06/30/1996 11,441 11,434
09/30/1996 11,312 11,600
12/31/1996 11,174 12,145
03/31/1997 10,769 12,193
06/30/1997 10,194 14,042
09/30/1997 10,348 14,457
12/31/1997 7,555 14,115
03/31/1998 8,348 16,152
06/30/1998 7,061 16,495
09/30/1998 7,506 14,531
12/31/1998 7,401 17,615
03/31/1999 7,287 18,259
06/30/1999 7,846 19,146
09/30/1999 9,296 18,878
12/31/1999 8,478 22,079
03/31/2000 7,231 22,322
06/30/2000 7,107 21,546
09/30/2000 6,763 20,479
12/31/2000 7,140 19,227
03/31/2001 6,914 16,771
06/30/2001 8,153 17,236
09/30/2001 8,044 14,771
12/31/2001 8,482 16,050
03/31/2002 10,945 16,150
06/30/2002 11,452 14,670
09/30/2002 10,919 11,985
12/31/2002 12,000 12,914
03/31/2003 10,287 12,276
06/30/2003 11,868 14,393
09/30/2003 14,934 15,104
12/31/2003 19,023 17,274
03/31/2004 18,057 17,744
06/30/2004 15,298 17,929
AVERAGE ANNUAL TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT
6/30/04
1-Year 5-Year Since Inception Inception Date
- ------ ------ --------------- --------------
27.90% 14.29% 5.03% 11/1/95
12 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
CLASS N SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Gold & Special Minerals Fund (Class N)
Morgan Stanley Capital International (MSCI) World Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Morgan Stanley
Value of Capital International
Investment (MSCI)
Date In Fund World Index
- ------------------------------------------------------------------
03/01/2001 10,000 10,000
03/31/2001 9,199 9,345
06/30/2001 10,856 9,604
09/30/2001 10,724 8,231
12/31/2001 11,303 8,944
03/31/2002 14,626 8,999
06/30/2002 15,304 8,174
09/30/2002 14,626 6,678
12/31/2002 16,083 7,196
03/31/2003 13,810 6,840
06/30/2003 15,943 8,020
09/30/2003 20,080 8,416
12/31/2003 25,599 9,625
03/31/2004 24,339 9,887
06/30/2004 20,630 9,990
AVERAGE ANNUAL TOTAL RETURNS OF CLASS N SHARES WITH SALES CHARGE OF THE FUND AT
6/30/04
1-Year 5-Year Since Inception Inception Date
- ------ ------ --------------- --------------
28.40% N/A 24.29% 3/1/01
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C
AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. SEE
PAGE 14 FOR FURTHER INFORMATION.
13 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
NOTES
- --------------------------------------------------------------------------------
TOTAL RETURNS AND THE ENDING ACCOUNT VALUES IN THE GRAPHS INCLUDE CHANGES IN
SHARE PRICE AND REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS IN A
HYPOTHETICAL INVESTMENT FOR THE PERIODS SHOWN. CUMULATIVE TOTAL RETURNS ARE NOT
ANNUALIZED. THE FUND'S TOTAL RETURNS SHOWN DO NOT REFLECT THE DEDUCTION OF
INCOME TAXES ON AN INDIVIDUAL'S INVESTMENT. TAXES MAY REDUCE YOUR ACTUAL
INVESTMENT RETURNS ON INCOME OR GAINS PAID BY THE FUND OR ANY GAINS YOU MAY
REALIZE IF YOU SELL YOUR SHARES.
INVESTORS SHOULD CONSIDER THE FUND'S INVESTMENT OBJECTIVES, RISKS, AND OTHER
CHARGES AND EXPENSES CAREFULLY BEFORE INVESTING. THE FUND'S PROSPECTUS CONTAINS
THIS AND OTHER INFORMATION ABOUT THE FUND, AND MAY BE OBTAINED BY ASKING YOUR
FINANCIAL ADVISOR, CALLING US AT 1.800.525.7048 OR VISITING OUR WEBSITE AT
www.oppenheimerfunds.com. READ THE PROSPECTUS CAREFULLY BEFORE INVESTING.
THE FUND'S INVESTMENT STRATEGY AND FOCUS CAN CHANGE OVER TIME. THE MENTION OF
SPECIFIC FUND HOLDINGS DOES NOT CONSTITUTE A RECOMMENDATION BY OPPENHEIMERFUNDS,
INC.
CLASS A shares of the Fund were first publicly offered on 7/19/83. The Fund's
maximum sales charge for Class A shares was higher prior to 4/1/91, so actual
performance may have been lower. Unless otherwise noted, Class A returns include
the current maximum initial sales charge of 5.75%.
CLASS B shares of the Fund were first publicly offered on 11/1/95. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charge of 5% (1-year) and 2% (5-year). Because Class B shares convert to
Class A shares 72 months after purchase, the "since inception" return for Class
B uses Class A performance for the period after conversion. The ending account
value shown in the graph is net of the applicable 1% contingent deferred sales
charge. Class B shares are subject to an annual 0.75% asset-based sales charge.
CLASS C shares of the Fund were first publicly offered on 11/1/95. Unless
otherwise noted, Class C returns include the contingent deferred sales charge of
1% for the 1-year period. Class C shares are subject to an annual 0.75%
asset-based sales charge.
CLASS N shares of the Fund were first publicly offered on 3/1/01. Class N shares
are offered only through retirement plans. Unless otherwise noted, Class N
returns include the contingent deferred sales charge of 1% for the 1-year
period. Class N shares are subject to an annual 0.25% asset-based sales charge.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
14 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
STATEMENT OF INVESTMENTS June 30, 2004
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--95.7%
- --------------------------------------------------------------------------------
FINANCIALS--0.5%
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--0.5%
Gold Bullion Securities
Ltd. 1 40,000 $ 1,579,600
- --------------------------------------------------------------------------------
INDUSTRIALS--0.3%
- --------------------------------------------------------------------------------
MACHINERY--0.3%
Trans Hex Group Ltd. 320,100 984,170
- --------------------------------------------------------------------------------
MATERIALS--94.9%
- --------------------------------------------------------------------------------
CHEMICALS--1.0%
Shin-Etsu Chemical Co. 90,000 3,216,790
- --------------------------------------------------------------------------------
METALS & MINING--93.9%
Aber Diamond Corp. 1 85,300 2,522,577
- --------------------------------------------------------------------------------
Agnico-Eagle Mines Ltd. 2 360,900 4,767,489
- --------------------------------------------------------------------------------
Alcan, Inc. 2 118,400 4,901,760
- --------------------------------------------------------------------------------
Alcoa, Inc. 2 133,700 4,416,111
- --------------------------------------------------------------------------------
Aluminum Corp. of
China Ltd. 6,000,000 3,211,621
- --------------------------------------------------------------------------------
Anglo American
Platinum Corp. Ltd. 1 28,673 526,174
- --------------------------------------------------------------------------------
Anglo American
Platinum Corp. Ltd. 155,626 5,887,096
- --------------------------------------------------------------------------------
AngloGold Ashanti
Ltd., Sponsored ADR 2 451,293 14,513,583
- --------------------------------------------------------------------------------
Antofagasta plc 308,800 5,266,882
- --------------------------------------------------------------------------------
Barrick Gold Corp. 2 771,900 15,245,025
- --------------------------------------------------------------------------------
Bema Gold Corp. 1 1,000,000 2,720,000
- --------------------------------------------------------------------------------
Celtic Resources
Holdings plc 1 400,000 2,901,600
- --------------------------------------------------------------------------------
Coeur d'Alene
Mines Corp. 1 395,500 1,613,640
- --------------------------------------------------------------------------------
Companhia de Minas
Buenaventura SA,
Sponsored ADR,
B Shares 680,000 15,028,000
- --------------------------------------------------------------------------------
Companhia Vale
do Rio Doce,
Sponsored ADR 216,000 8,445,600
- --------------------------------------------------------------------------------
Dowa Mining Co. Ltd. 600,000 3,557,714
- --------------------------------------------------------------------------------
Durban Roodeport
Deep Ltd.,
Sponsored ADR 1 1,200,000 3,048,000
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
METALS & MINING CONTINUED
Eldorado Gold
Corp. Ltd. 1 1,880,600 $4,867,188
- --------------------------------------------------------------------------------
First Quantum
Minerals Ltd. 1 913,800 9,644,057
- --------------------------------------------------------------------------------
Freeport-McMoRan
Copper & Gold, Inc.,
Cl. B 2 420,000 13,923,000
- --------------------------------------------------------------------------------
Fujian Zijin Mining
Industry Co. Ltd. 11,600,000 3,941,127
- --------------------------------------------------------------------------------
Glamis Gold Ltd. 1,2 1,014,200 17,778,926
- --------------------------------------------------------------------------------
Gold Fields Ltd.,
Sponsored ADR 650,000 6,831,500
- --------------------------------------------------------------------------------
Goldcorp, Inc. 10,000 116,700
- --------------------------------------------------------------------------------
Golden Star
Resources Ltd. 1,2 1,852,800 8,596,992
- --------------------------------------------------------------------------------
Guinor Gold Corp. 1 1,990,899 1,574,009
- --------------------------------------------------------------------------------
Harmony Gold
Mining Co. Ltd. 270,000 2,835,929
- --------------------------------------------------------------------------------
Harmony Gold
Mining Co. Ltd.,
Sponsored ADR 2 262,000 2,774,580
- --------------------------------------------------------------------------------
Hecla Mining Co. 1 100,000 570,000
- --------------------------------------------------------------------------------
Impala Platinum
Holdings Ltd. 103,800 7,869,902
- --------------------------------------------------------------------------------
Ivanhoe Mines Ltd. 1 1,442,200 7,744,800
- --------------------------------------------------------------------------------
Kinross Gold Corp. 1 645,290 3,587,812
- --------------------------------------------------------------------------------
Kinross Gold Corp. 1 500,000 2,767,108
- --------------------------------------------------------------------------------
LionOre Mining
International Ltd. 1 1,447,000 6,518,650
- --------------------------------------------------------------------------------
Meridian Gold, Inc. 1 333,900 4,298,426
- --------------------------------------------------------------------------------
Newcrest Mining Ltd. 1,708,997 16,404,916
- --------------------------------------------------------------------------------
Newmont Mining
Corp. (Holding Co.) 2 484,005 18,760,034
- --------------------------------------------------------------------------------
Northgate
Exploration Ltd. 1 3,800,000 5,895,208
- --------------------------------------------------------------------------------
Peabody Energy Corp. 2 65,100 3,644,949
- --------------------------------------------------------------------------------
Placer Dome, Inc. 2 1,157,300 19,257,472
- --------------------------------------------------------------------------------
Randgold Resources
Ltd., ADR 1,2 1,345,600 11,868,192
- --------------------------------------------------------------------------------
Rio Tinto plc 2 172,860 4,156,765
15 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
METALS & MINING Continued
Royal Gold, Inc. 2 630,000 $ 8,927,100
- --------------------------------------------------------------------------------
Southwestern
Resources Corp. 1 180,000 1,919,819
-------------
295,648,033
-------------
Total Common Stocks
(Cost $278,313,275) 301,428,593
UNITS
- --------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.2%
- --------------------------------------------------------------------------------
Eldorado Gold Corp.
Wts., Exp. 8/25/04 1 240,000 8,950
- --------------------------------------------------------------------------------
Goldcorp, Inc. Wts.,
Exp. 4/30/07 1,3 7,500 42,375
- --------------------------------------------------------------------------------
Nevsun Resources Ltd.
Wts., Exp. 12/19/08 1 70,000 76,300
- --------------------------------------------------------------------------------
Rio Narcea Gold Mines
Ltd. Wts., Exp 9/11/08 1 132,500 66,213
- --------------------------------------------------------------------------------
Wheaton River
Minerals Ltd. Wts.:
Exp. 5/30/07 1 125,000 194,854
Exp. 8/25/08 1 150,000 166,698
--------
Total Rights, Warrants
and Certificates
(Cost $213,334) 555,390
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--4.8%
- --------------------------------------------------------------------------------
Undivided interest of 2.29% in joint
repurchase agreement (Principal
Amount/Value $657,803,000, with
a maturity value of $657,828,399)
with UBS Warburg LLC, 1.39%, dated
6/30/04, to be repurchased at
$15,037,581 on 7/1/04, collateralized
by Federal National Mortgage Assn.,
4.50%--6%, 2/1/19--3/1/34, with
a value of $672,658,066
(Cost $15,037,000) $ 15,037,000 $ 15,037,000
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS,
AT VALUE
(COST $293,563,609) 100.7% 317,020,983
- --------------------------------------------------------------------------------
LIABILITIES
IN EXCESS OF
OTHER ASSETS (0.7) (2,232,473)
-----------------------------
NET ASSETS 100.0% $ 314,788,510
=============================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. A sufficient amount of liquid assets has been designated to cover outstanding
written options, as follows:
CONTRACTS EXPIRATION EXERCISE PREMIUM VALUE
SUBJECT TO CALL DATES PRICE RECEIVED SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------
Agnico-Eagle Mines Ltd. 500 11/22/04 $ 15.00 $ 34,498 $ 27,500
Alcan, Inc. 500 9/20/04 40.00 98,495 135,000
Alcoa, Inc. 500 1/24/05 35.00 78,496 90,000
AngloGold Ashanti Ltd., Sponsored ADR 500 1/24/05 40.00 49,278 47,500
AngloGold Ashanti Ltd., Sponsored ADR 400 7/19/04 35.00 58,797 8,000
Barrick Gold Corp. 1,000 10/18/04 22.50 60,257 50,000
Freeport-McMoRan Copper & Gold,
Inc., Cl. B 500 1/24/05 40.00 67,247 77,500
Freeport-McMoRan Copper & Gold,
Inc., Cl. B 500 11/22/04 35.00 130,995 112,500
Freeport-McMoRan Copper & Gold,
Inc., Cl. B 500 11/22/04 40.00 53,147 55,000
Glamis Gold Ltd. 1,200 11/22/04 20.00 79,074 108,000
16 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
CONTRACTS EXPIRATION EXERCISE PREMIUM VALUE
SUBJECT TO CALL DATES PRICE RECEIVED SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------
Golden Star Resources Ltd. 1,500 11/22/04 $ 5.00 $ 97,295 $ 82,500
Golden Star Resources Ltd. 500 7/19/04 5.00 17,249 5,000
Harmony Gold Mining Co. Ltd.,
Sponsored ADR 100 8/23/04 15.00 2,450 500
Harmony Gold Mining Co. Ltd.,
Sponsored ADR 1,200 8/23/04 12.50 72,545 18,000
Newmont Mining Corp. (Holding Co.) 500 1/24/05 45.00 83,556 80,000
Newmont Mining Corp. (Holding Co.) 1,000 12/20/04 45.00 129,744 130,000
Newmont Mining Corp. (Holding Co.) 500 9/20/04 45.00 46,998 25,000
Newmont Mining Corp. (Holding Co.) 500 9/20/04 42.50 60,997 47,500
Peabody Energy Corp. 500 7/19/04 50.00 100,995 290,000
Placer Dome, Inc. 2,000 12/20/04 20.00 88,051 120,000
Randgold Resources Ltd., ADR 1,500 12/20/04 11.25 65,322 45,000
Royal Gold, Inc. 1,500 1/24/05 17.50 80,781 105,000
-------------------------
1,556,267 1,659,500
-------------------------
CONTRACTS
SUBJECT TO PUT
- -----------------------------------------------------------------------------------------------------------
Agnico-Eagle Mines Ltd. 500 2/21/05 12.50 55,997 52,500
Alcoa, Inc. 500 1/24/05 27.50 52,247 40,000
AngloGold Ashanti Ltd., Sponsored
ADR 500 1/24/05 25.00 44,498 40,000
AngloGold Ashanti Ltd., Sponsored
ADR 500 10/18/04 25.00 34,498 17,500
Bema Gold Corp. 1,500 10/18/04 2.50 45,998 37,500
Coeur d'Alene Mines Corp. 500 7/19/04 5.00 53,497 50,000
Coeur d'Alene Mines Corp. 1,000 9/20/04 5.00 86,496 115,000
Companhia Vale do Rio Doce,
Sponsored ADR 500 9/20/04 40.00 83,496 30,000
Freeport-McMoRan Copper & Gold,
Inc., Cl. B 1,000 11/22/04 25.00 97,570 65,000
Glamis Gold Ltd. 500 11/22/04 12.50 26,999 10,000
Glamis Gold Ltd. 400 8/23/04 12.50 33,650 --
Gold Fields Ltd.,
Sponsored ADR 1,000 10/18/04 10.00 74,423 80,000
Gold Fields Ltd.,
Sponsored ADR 300 7/19/04 10.00 23,199 3,000
Goldcorp, Inc. 500 1/24/05 10.00 41,998 30,000
Goldcorp, Inc. 1,000 10/18/04 10.00 60,247 40,000
Iamgold Corp. 1,000 12/20/04 5.00 38,998 35,000
Ivanhoe Mines Ltd. 500 12/20/04 5.00 35,698 35,000
Meridian Gold, Inc. 1,000 10/18/04 10.00 33,998 10,000
Meridian Gold, Inc. 500 7/19/04 10.00 25,749 --
Peabody Energy Corp. 500 9/20/04 45.00 50,998 15,000
Phelps Dodge Corp. 400 7/19/04 60.00 46,798 --
Placer Dome, Inc. 500 1/24/05 10.00 8,250 --
Placer Dome, Inc. 500 1/24/05 12.50 15,749 17,500
Rio Tinto plc 400 10/18/04 85.00 84,795 54,000
Stillwater Mining Co. 500 10/18/04 12.50 48,698 37,500
-------------------------
1,204,544 814,500
-------------------------
$ 2,760,811 $ 2,474,000
=========================
3. Identifies issues considered to be illiquid. See Note 7 of Notes to Financial
Statements.
17 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
DISTRIBUTION OF INVESTMENTS REPRESENTING GEOGRAPHIC HOLDINGS, AS A PERCENTAGE OF
TOTAL INVESTMENTS AT VALUE, IS AS FOLLOWS:
GEOGRAPHIC HOLDINGS VALUE PERCENT
- ---------------------------------------------
Canada $ 125,279,408 39.5%
United States 78,760,026 24.8
South Africa 45,270,934 14.3
Australia 16,404,916 5.2
Peru 15,028,000 4.7
United Kingdom 11,003,247 3.5
Brazil 8,445,600 2.7
Hong Kong 7,152,748 2.3
Japan 6,774,504 2.1
Ireland 2,901,600 0.9
-----------------------
Total $ 317,020,983 100.0%
=======================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
18 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
STATEMENT OF ASSETS AND LIABILITIES June 30, 2004
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
ASSETS
- -----------------------------------------------------------------------------------------------------
Investments, at value (cost $293,563,609)--see accompanying statement of investments $ 317,020,983
- -----------------------------------------------------------------------------------------------------
Cash--foreign currencies (cost $103,070) 103,545
- -----------------------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 836,283
Investments sold 341,366
Interest and dividends 73,069
Other 7,995
--------------
Total assets 318,383,241
- -----------------------------------------------------------------------------------------------------
LIABILITIES
- -----------------------------------------------------------------------------------------------------
Bank overdraft 238,715
- -----------------------------------------------------------------------------------------------------
Options written, at value (premiums received $2,760,811)
- --see accompanying statement of investments 2,474,000
- -----------------------------------------------------------------------------------------------------
Payables and other liabilities:
Shares of beneficial interest redeemed 505,342
Distribution and service plan fees 187,268
Transfer and shareholder servicing agent fees 60,022
Shareholder communications 55,424
Trustees' compensation 25,880
Other 48,080
--------------
Total liabilities 3,594,731
- -----------------------------------------------------------------------------------------------------
NET ASSETS $ 314,788,510
==============
- -----------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- -----------------------------------------------------------------------------------------------------
Paid-in capital $ 273,363,276
- -----------------------------------------------------------------------------------------------------
Accumulated net investment loss (134,806)
- -----------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions 17,814,272
- -----------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies 23,745,768
--------------
NET ASSETS $ 314,788,510
==============
19 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
STATEMENT OF ASSETS AND LIABILITIES Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- --------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of $206,696,266 and
12,236,418 shares of beneficial interest outstanding) $ 16.89
Maximum offering price per share (net asset value plus sales charge of 5.75% of
offering price) $ 17.92
- --------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $56,501,562 and 3,428,299 shares of
beneficial interest outstanding) $ 16.48
- --------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $47,810,170 and 2,902,406 shares of
beneficial interest outstanding) $ 16.47
- --------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price per share (based on net
assets of $3,780,512 and 226,469 shares of beneficial interest outstanding) $ 16.69
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
20 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
STATEMENT OF OPERATIONS For the Year Ended June 30, 2004
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $147,780) $ 2,572,499
- --------------------------------------------------------------------------------
Interest 77,625
------------
Total investment income 2,650,124
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Management fees 2,224,239
- --------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 458,734
Class B 576,308
Class C 441,177
Class N 14,256
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 446,628
Class B 136,497
Class C 85,390
Class N 8,055
- --------------------------------------------------------------------------------
Shareholder communications:
Class A 68,409
Class B 23,803
Class C 10,618
Class N 1,616
- --------------------------------------------------------------------------------
Custodian fees and expenses 25,325
- --------------------------------------------------------------------------------
Trustees' compensation 12,261
- --------------------------------------------------------------------------------
Other 97,238
-------------
Total expenses 4,630,554
Less reduction to custodian expenses (668)
Less payments and waivers of expenses (6,369)
-------------
Net expenses 4,623,517
- --------------------------------------------------------------------------------
NET INVESTMENT LOSS (1,973,393)
21 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
STATEMENT OF OPERATIONS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- --------------------------------------------------------------------------------
Net realized gain on:
Investments (including premiums on options exercised) $ 41,713,289
Closing and expiration of option contracts written 271,594
Foreign currency transactions 6,619,638
-------------
Net realized gain 48,604,521
- --------------------------------------------------------------------------------
Net change in unrealized appreciation on:
Investments 7,512,348
Translation of assets and liabilities denominated in foreign
currencies (2,726,770)
Option contracts 214,212
-------------
Net change in unrealized appreciation 4,999,790
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 51,630,918
=============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR ENDED JUNE 30, 2004 2003
- --------------------------------------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) $ (1,973,393) $ 409,122
- --------------------------------------------------------------------------------------------------------------
Net realized gain 48,604,521 15,040,611
- --------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 4,999,790 (10,602,513)
-------------------------------
Net increase in net assets resulting from operations 51,630,918 4,847,220
- --------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (7,773,469) (1,502,583)
Class B (2,018,639) (183,324)
Class C (1,584,832) (107,362)
Class N (111,401) (7,661)
- --------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (4,608,810) --
Class B (1,416,397) --
Class C (1,068,266) --
Class N (67,330) --
- --------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- --------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from beneficial interest transactions:
Class A 54,822,865 11,194,743
Class B 7,547,612 4,444,731
Class C 17,117,407 7,990,546
Class N 2,392,497 1,215,483
- --------------------------------------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------------------------------------
Total increase 114,862,155 27,891,793
- --------------------------------------------------------------------------------------------------------------
Beginning of period 199,926,355 172,034,562
-------------------------------
End of period (including accumulated net investment loss
of $134,806 and $3,911,504, respectively) $ 314,788,510 $ 199,926,355
===============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
CLASS A YEAR ENDED JUNE 30, 2004 2003 2002 2001 2000
- ------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 13.79 $ 13.37 $ 9.91 $ 8.80 $ 9.85
- ------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income (loss) (.07) 1 .07 .19 .14 .06
Net realized and unrealized gain (loss) 4.37 1 .50 3.74 1.20 (.91)
-----------------------------------------------------------------------------
Total from investment operations 4.30 .57 3.93 1.34 (.85)
- ------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (.75) (.15) (.47) (.23) (.20)
Distributions from net realized gain (.45) -- -- -- --
-----------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (1.20) (.15) (.47) (.23) (.20)
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 16.89 $ 13.79 $ 13.37 $ 9.91 $ 8.80
=============================================================================
- ------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 29.93% 4.35% 3 41.56% 15.60% (8.83)%
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 206,696 $ 131,183 $ 117,794 $ 57,294 $ 61,298
- ------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 195,859 $ 128,266 $ 76,482 $ 54,347 $ 72,512
- ------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss) (0.40)% 0.46% 0.34% 1.82% 0.66%
Total expenses 1.27% 5,6 1.40% 5 1.45% 5,6 1.34% 5 1.41% 5
- ------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 108% 134% 60% 25% 36%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of
the fiscal period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Sales charges are not
reflected in the total returns. Total returns are not annualized for periods
less than one full year. Returns do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund shares.
3. For the year ended June 30, 2003, 0% of the Fund's total return consists of a
voluntary reimbursement by the Manager for a realized loss on investments not
meeting the Fund's investment restrictions, and another 0.07% consists of a gain
on investments not meeting the Fund's investment restrictions. Excluding these
items, the total return would have been 4.28%.
4. Annualized for periods of less than one full year.
5. Reduction to custodian expenses less than 0.01%.
6. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
CLASS B YEAR ENDED JUNE 30, 2004 2003 2002 2001 2000
- ------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 13.50 $ 13.10 $ 9.73 $ 8.63 $ 9.67
- ------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.21) 1 (.01) .16 .09 .01
Net realized and unrealized gain (loss) 4.28 1 .47 3.62 1.16 (.92)
----------------------------------------------------------------------------
Total from investment operations 4.07 .46 3.78 1.25 (.91)
- ------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (.64) (.06) (.41) (.15) (.13)
Distributions from net realized gain (.45) -- -- -- --
----------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (1.09) (.06) (.41) (.15) (.13)
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 16.48 $ 13.50 $ 13.10 $ 9.73 $ 8.63
============================================================================
- ------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 28.91% 3.57% 3 40.46% 14.76 (9.52)%
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 56,502 $ 41,426 $ 36,585 $ 16,990 $ 15,907
- ------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 57,639 $ 38,243 $ 23,133 $ 14,554 $ 16,624
- ------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss) (1.19)% (0.34)% (0.51)% 0.98% (0.17)%
Total expenses 2.06% 5,6 2.18% 5 2.22% 5,6 2.11% 5 2.19% 5
- ------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 108% 134% 60% 25% 36%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of
the fiscal period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Sales charges are not
reflected in the total returns. Total returns are not annualized for periods
less than one full year. Returns do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund shares.
3. For the year ended June 30, 2003, 0% of the Fund's total return consists of a
voluntary reimbursement by the Manager for a realized loss on investments not
meeting the Fund's investment restrictions, and another 0.07% consists of a gain
on investments not meeting the Fund's investment restrictions. Excluding these
items, the total return would have been 3.50%.
4. Annualized for periods of less than one full year.
5. Reduction to custodian expenses less than 0.01%.
6. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
25 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS C YEAR ENDED JUNE 30, 2004 2003 2002 2001 2000
- -----------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 13.51 $ 13.11 $ 9.74 $ 8.66 $ 9.69
- -----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.20) 1 .09 .15 .13 .01
Net realized and unrealized gain (loss) 4.27 1 .38 3.63 1.12 (.91)
----------------------------------------------------------------------------
Total from investment operations 4.07 .47 3.78 1.25 (.90)
- -----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.66) (.07) (.41) (.17) (.13)
Distributions from net realized gain (.45) -- -- -- --
----------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (1.11) (.07) (.41) (.17) (.13)
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 16.47 $ 13.51 $ 13.11 $ 9.74 $ 8.66
============================================================================
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 28.90% 3.63% 3 40.46% 14.71% (9.42)%
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 47,810 $ 25,899 $ 17,526 $ 8,344 $ 6,279
- -----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 44,168 $ 21,672 $ 11,090 $ 6,714 $ 6,579
- -----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss) (1.11)% (0.26)% (0.38)% 1.01% (0.13)%
Total expenses 1.99% 5,6 2.13% 5 2.22% 5,6 2.11% 5 2.19% 5
- -----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 108% 134% 60% 25% 36%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of
the fiscal period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Sales charges are not
reflected in the total returns. Total returns are not annualized for periods
less than one full year. Returns do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund shares.
3. For the year ended June 30, 2003, 0% of the Fund's total return consists of a
voluntary reimbursement by the Manager for a realized loss on investments not
meeting the Fund's investment restrictions, and another 0.07% consists of a gain
on investments not meeting the Fund's investment restrictions. Excluding these
items, the total return would have been 3.56%.
4. Annualized for periods of less than one full year.
5. Reduction to custodian expenses less than 0.01%.
6. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
26 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
CLASS N YEAR ENDED JUNE 30, 2004 2003 2002 2001 1
- ---------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 13.68 $ 13.31 $ 9.89 $ 9.11
- ---------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.13) 2 .01 .47 (.06)
Net realized and unrealized gain 4.33 2 .53 3.40 .84
------------------------------------------------------------
Total from investment operations 4.20 .54 3.87 .78
- ---------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (.74) (.17) (.45) --
Distributions from net realized gain (.45) -- -- --
------------------------------------------------------------
Total dividends and/or distributions
to shareholders (1.19) (.17) (.45) --
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 16.69 $ 13.68 $ 13.31 $ 9.89
============================================================
- ---------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 29.40% 4.17% 4 40.97% 8.56%
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 3,781 $ 1,419 $ 130 $ 1
- ---------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 2,857 $ 775 $ 34 $ 1
- ---------------------------------------------------------------------------------------------------------
Ratios to average net assets: 5
Net investment income (loss) (0.71)% 0.13% 1.87% (2.09)%
Total expenses 1.62% 1.80% 1.69% 1.11%
Expenses after payments and waivers and
reduction to custodian expenses N/A 6,7 1.69% N/A 6,7 N/A 6
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 108% 134% 60% 25%
1. For the period from March 1, 2001 (inception of offering) to June 30, 2001.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
4. For the year ended June 30, 2003, 0% of the Fund's total return consists of
a voluntary reimbursement by the Manager for a realized loss on investments not
meeting the Fund's investment restrictions, and another 0.07% consists of a gain
on investments not meeting the Fund's investment restrictions. Excluding these
items, the total return would have been 4.10%.
5. Annualized for periods of less than one full year.
6. Reduction to custodian expenses less than 0.01%.
7. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
27 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Gold & Special Minerals Fund (the Fund) is registered under the
Investment Company Act of 1940, as amended, as a non-diversified, open-end
management investment company. The Fund's investment objective is to seek
capital appreciation. The Fund's investment advisor is OppenheimerFunds, Inc.
(the Manager).
The Fund offers Class A, Class B, Class C and Class N shares. Class A
shares are sold at their offering price, which is normally net asset value plus
a front-end sales charge. Class B, Class C and Class N shares are sold without a
front-end sales charge but may be subject to a contingent deferred sales charge
(CDSC). Class N shares are sold only through retirement plans. Retirement plans
that offer Class N shares may impose charges on those accounts. All classes of
shares have identical rights and voting privileges with respect to the Fund in
general and exclusive voting rights on matters that affect that class alone.
Earnings, net assets and net asset value per share may differ due to each class
having its own expenses, such as transfer and shareholder servicing agent fees
and shareholder communications, directly attributable to that class. Classes A,
B, C and N have separate distribution and/or service plans. Class B shares will
automatically convert to Class A shares six years after the date of purchase.
The Fund assesses a 2% fee on the proceeds of fund shares that are redeemed
(either by selling or exchanging to another Oppenheimer fund) within 30 days of
their purchase. The fee, which is retained by the Fund, is accounted for as an
addition to paid-in capital.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. The Fund calculates the net asset value of its shares as
of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for business. Securities listed
or traded on National Stock Exchanges or other domestic or foreign exchanges are
valued based on the last sale price of the security traded on that exchange
prior to the time when the Fund's assets are valued. Securities traded on
NASDAQ are valued based on the closing price provided by NASDAQ prior to the
time when the Fund's assets are valued. In the absence of a sale, the security
is valued at the last sale price on the prior trading day, if it is within the
spread of the closing bid and asked prices, and if not, at the closing bid
price. Securities may be valued primarily using dealer-supplied valuations or a
portfolio pricing service authorized by the Board of Trustees. Securities
(including restricted securities) for which market quotations are not readily
available are valued at their fair value. Foreign and domestic securities whose
values have been materially affected by what the Manager identifies as a
significant event occurring before the Fund's assets are valued but after the
close of their respective exchanges will be fair valued. Fair value is
determined in good faith using consistently applied procedures under the
supervision of the Board of Trustees. Short-term "money market type" debt
securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
28 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars as of the close of The New York Stock Exchange.
Amounts related to the purchase and sale of foreign securities and investment
income are translated at the rates of exchange prevailing on the respective
dates of such transactions. Foreign exchange rates may be valued primarily using
dealer supplied valuations or a portfolio pricing service authorized by the
Board of Trustees.
Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, 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
values of assets and liabilities, including investments in securities at fiscal
period end, resulting from changes in exchange rates.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. These balances are invested in one or more repurchase
agreements. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the agreements mature. Each agreement requires that
the market value of the collateral be sufficient to cover payments of interest
and principal. In the event of default by the other party to the agreement,
retention of the collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders, therefore, no federal income or excise tax provision is
required.
The tax components of capital shown in the table below represent distribution
requirements the Fund must satisfy under the income tax regulations, losses the
Fund may be able to offset against income and gains realized in future years and
unrealized appreciation or depreciation of securities and other investments for
federal income tax purposes.
29 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
NET UNREALIZED
APPRECIATION
BASED ON COST OF
SECURITIES AND
UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED OTHER INVESTMENTS
NET INVESTMENT LONG-TERM LOSS FOR FEDERAL INCOME
INCOME GAIN CARRYFORWARD 1,2,3,4,5 TAX PURPOSES
----------------------------------------------------------------------------
$ 24,604,195 $ 856,058 $ 6,665,960 $ 22,654,643
1. The Fund had $291,370 of post-October foreign currency losses which were
deferred.
2. The Fund had $6,268,089 of post-October passive foreign investment company
losses which were deferred.
3. The Fund had $106,501 of straddle losses which were deferred.
4. During the fiscal year ended June 30, 2004, the Fund did not utilize any
capital loss carryforward.
5. During the fiscal year ended June 30, 2003, the Fund utilized $11,403,409 of
capital loss carryforward to offset capital gains realized in that fiscal year.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund. Accordingly, the
following amounts have been reclassified for June 30, 2004. Net assets of the
Fund were unaffected by the reclassifications.
REDUCTION TO
REDUCTION TO ACCUMULATED NET
INCREASE TO ACCUMULATED NET REALIZED GAIN
PAID-IN CAPITAL INVESTMENT LOSS ON INVESTMENTS 6
----------------------------------------------------
$ 6,853,038 $ 17,238,432 $ 24,091,470
6. $6,407,819, including $260,014 of long-term capital gain, was distributed in
connection with Fund share redemptions.
The tax character of distributions paid during the years ended June 30, 2004 and
June 30, 2003 was as follows:
YEAR ENDED YEAR ENDED
JUNE 30, 2004 JUNE 30, 2003
--------------------------------------------------------
Distributions paid from:
Ordinary income $ 11,488,341 $ 1,800,930
Long-term capital gain 7,160,803 --
----------------------------
Total $ 18,649,144 $ 1,800,930
============================
The aggregate cost of securities and other investments and the composition of
unrealized appreciation and depreciation of securities and other investments for
federal income tax purposes as of June 30, 2004 are noted below. The primary
difference between book and tax appreciation or depreciation of securities and
other investments, if applicable, is attributable to the tax deferral of losses
or tax realization of financial statement unrealized gain or loss.
30 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
Federal tax cost of securities $ 294,654,734
Federal tax cost of other investments 2,576,897
-------------
Total federal tax cost $ 297,231,631
=============
Gross unrealized appreciation $ 41,647,624
Gross unrealized depreciation 18,992,981
-------------
Net unrealized appreciation $ 22,654,643
=============
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan for the
Fund's independent trustees. Benefits are based on years of service and fees
paid to each trustee during the years of service. During the year ended June 30,
2004, the Fund's projected benefit obligations were increased by $4,179 and
payments of $2,663 were made to retired trustees, resulting in an accumulated
liability of $18,928 as of June 30, 2004.
The Board of Trustees has adopted a deferred compensation plan for
independent trustees that enables trustees to elect to defer receipt of all or a
portion of the annual compensation they are entitled to receive from the Fund.
For purposes of determining the amount owed to the Trustee under the plan,
deferred amounts are treated as though equal dollar amounts had been invested in
shares of the Fund or in other Oppenheimer funds selected by the Trustee. The
Fund does purchase shares of the funds selected for deferral by the Trustee in
amounts equal to his or her deemed investment, resulting in a Fund asset equal
to the deferred compensation liability. Such assets are included as a component
of "Other" within the asset section of the Statement of Assets and Liabilities.
Deferral of trustees' fees under the plan will not affect the net assets of the
Fund, and will not materially affect the Fund's assets, liabilities or net
investment income per share. Amounts will be deferred until distributed in
accordance to the Plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and amortization
of premium, is accrued as earned.
- --------------------------------------------------------------------------------
EXPENSE OFFSET ARRANGEMENT. The reduction of custodian fees, if applicable,
represents earnings on cash balances maintained by the Fund.
- --------------------------------------------------------------------------------
SECURITY TRANSACTIONS. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.
31 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
OTHER. The preparation of financial statements in conformity with U.S. generally
accepted accounting principles 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 income and expenses during the reporting
period. Actual results could differ from those estimates.
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of no par value shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:
YEAR ENDED JUNE 30, 2004 YEAR ENDED JUNE 30, 2003
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------
CLASS A
Sold 9,143,688 $ 167,740,128 12,695,881 $ 162,153,290
Dividends and/or
distributions reinvested 496,368 9,778,451 97,913 1,224,902
Redeemed (6,913,367) (122,695,714) (12,093,039) (152,183,449)
------------------------------------------------------------
Net increase 2,726,689 $ 54,822,865 700,755 $ 11,194,743
============================================================
- ------------------------------------------------------------------------------------------
CLASS B
Sold 1,951,802 $ 35,619,578 2,918,264 $ 37,034,790
Dividends and/or
distributions reinvested 154,954 2,990,617 12,921 158,928
Redeemed (1,746,193) (31,062,583) (2,655,129) (32,748,987)
------------------------------------------------------------
Net increase 360,563 $ 7,547,612 276,056 $ 4,444,731
============================================================
- ------------------------------------------------------------------------------------------
CLASS C
Sold 2,881,536 $ 51,615,696 2,514,063 $ 32,027,347
Dividends and/or
distributions reinvested 99,688 1,922,988 7,322 90,069
Redeemed (1,996,342) (36,421,277) (1,940,814) (24,126,870)
------------------------------------------------------------
Net increase 984,882 $ 17,117,407 580,571 $ 7,990,546
============================================================
- ------------------------------------------------------------------------------------------
CLASS N
Sold 232,615 $ 4,367,770 225,369 $ 2,872,002
Dividends and/or
distributions reinvested 9,048 176,533 615 7,642
Redeemed (118,946) (2,151,806) (132,004) (1,664,161)
------------------------------------------------------------
Net increase 122,717 $ 2,392,497 93,980 $ 1,215,483
============================================================
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the year ended June 30, 2004, were $367,445,467
and $317,408,867, respectively.
32 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of 0.75% of the first $200 million of average annual net assets,
0.72% of the next $200 million, 0.69% of the next $200 million, 0.66% of the
next $200 million, and 0.60% of average annual net assets in excess of $800
million.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a per account fee. For the year ended June 30, 2004, the Fund paid $662,303
to OFS for services to the Fund.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's
Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor)
acts as the Fund's principal underwriter in the continuous public offering of
the Fund's classes of shares.
- --------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class A
shares. It reimburses the Distributor for a portion of its costs incurred for
services provided to accounts that hold Class A shares. Reimbursement is made
quarterly at an annual rate of up to 0.25% of the average annual net assets of
Class A shares of the Fund. The Distributor currently uses all of those fees to
pay dealers, brokers, banks and other financial institutions quarterly for
providing personal services and maintenance of accounts of their customers that
hold Class A shares. Any unreimbursed expenses the Distributor incurs with
respect to Class A shares in any fiscal year cannot be recovered in subsequent
years. Fees incurred by the Fund under the Plan are detailed in the Statement of
Operations.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The Fund
has adopted Distribution and Service Plans for Class B, Class C and Class N
shares to compensate the Distributor for its services in connection with the
distribution of those shares and servicing accounts. Under the plans, the Fund
pays the Distributor an annual asset-based sales charge of 0.75% per year on
Class B shares and on Class C shares and 0.25% per year on Class N shares. The
Distributor also receives a service fee of up to 0.25% per year under each plan.
If either the Class B, Class C or Class N plan is terminated by the Fund or by
the shareholders of a class, the Board of Trustees and its independent trustees
must determine whether the Distributor shall be entitled to payment from the
Fund of all or a portion of the service fee and/or asset-based sales charge in
respect to shares sold prior to the effective date of such termination. The
Distributor's aggregate uncompensated expenses under the plan at June 30, 2004
for Class B, Class C and Class N shares were $1,710,708, $783,572 and $55,094,
respectively. Fees incurred by the Fund under the plans are detailed in the
Statement of Operations.
33 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
SALES CHARGES. Front-end sales charges and contingent deferred sales charges
(CDSC) do not represent expenses of the Fund. They are deducted from the
proceeds of sales of Fund shares prior to investment or from redemption proceeds
prior to remittance, as applicable. The sales charges retained by the
Distributor from the sale of shares and the CDSC retained by the Distributor on
the redemption of shares is shown in the table below for the period indicated.
CLASS A CLASS B CLASS C CLASS N
CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT
FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED
SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES
RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
YEAR ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- ---------------------------------------------------------------------------------------------
June 30, 2004 $ 224,045 $ 76,794 $ 192,609 $ 69,590 $ 13,745
- --------------------------------------------------------------------------------
PAYMENTS AND WAIVERS OF EXPENSES. OFS has voluntarily agreed to limit transfer
and shareholder servicing agent fees for all classes to 0.35% of average annual
net assets per class. During the year ended June 30, 2004, OFS waived $5,022,
$995, $300 and $52 for Class A, Class B, Class C and Class N shares,
respectively. This undertaking may be amended or withdrawn at any time.
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts to settle specific purchases or sales of securities
denominated in a foreign currency and for protection from adverse exchange rate
fluctuation. Risks to the Fund include the potential inability of the
counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using prevailing foreign currency exchange rates.
Unrealized appreciation and depreciation on foreign currency contracts are
reported in the Statement of Assets and Liabilities as a receivable or payable
and in the Statement of Operations with the change in unrealized appreciation or
depreciation.
The Fund may realize a gain or loss upon the closing or settlement of the
foreign transaction. Contracts closed or settled with the same broker are
recorded as net realized gains or losses. Such realized gains and losses are
reported with all other foreign currency gains and losses in the Statement of
Operations.
As of June 30, 2004, the Fund had no outstanding foreign currency
contracts.
34 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
- --------------------------------------------------------------------------------
6. OPTION ACTIVITY
The Fund may buy and sell put and call options, or write put and covered call
options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.
The Fund generally purchases put options or writes covered call options to
hedge against adverse movements in the value of portfolio holdings. When an
option is written, the Fund receives a premium and becomes obligated to sell or
purchase the underlying security at a fixed price, upon exercise of the option.
Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Fund will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a written
put option, or the cost of the security for a purchased put or call option is
adjusted by the amount of premium received or paid.
Securities designated to cover outstanding call options are noted in the
Statement of Investments where applicable. Contracts subject to call, expiration
date, exercise price, premium received and market value are detailed in a note
to the Statement of Investments. Options written are reported as a liability in
the Statement of Assets and Liabilities. Realized gains and losses are reported
in the Statement of Operations.
The risk in writing a call option is that the Fund gives up the opportunity
for profit if the market price of the security increases and the option is
exercised. The risk in writing a put option is that the Fund may incur a loss if
the market price of the security decreases and the option is exercised. The risk
in buying an option is that the Fund pays a premium whether or not the option is
exercised. The Fund also has the additional risk of not being able to enter into
a closing transaction if a liquid secondary market does not exist.
Written option activity for the year ended June 30, 2004 was as follows:
CALL OPTIONS PUT OPTIONS
------------------------ ------------------------
NUMBER OF AMOUNT OF NUMBER OF AMOUNT OF
CONTRACTS PREMIUMS CONTRACTS PREMIUMS
- ------------------------------------------------------------------------------
Options outstanding as of
June 30, 2003 -- $ -- 1,700 $ 72,599
Options written 22,550 1,887,001 17,900 1,290,970
Options closed or expired (3,350) (160,192) (3,600) (159,025)
Options exercised (1,800) (170,542) -- --
--------------------------------------------------
Options outstanding as of
June 30, 2004 17,400 $ 1,556,267 16,000 $ 1,204,544
==================================================
35 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7. ILLIQUID SECURITIES
As of June 30, 2004, investments in securities included issues that are
illiquid. A security may be considered illiquid if it lacks a readily available
market or if its valuation has not changed for a certain period of time. The
Fund intends to invest no more than 10% of its net assets (determined at the
time of purchase and reviewed periodically) in illiquid securities. The
aggregate value of illiquid securities subject to this limitation as of June 30,
2004 was $42,375, which represents 0.01% of the Fund's net assets.
- --------------------------------------------------------------------------------
8. BORROWING AND LENDING ARRANGEMENTS
The Fund entered into an "interfund borrowing and lending arrangement" with
other funds in the Oppenheimer funds complex, to allow funds to borrow for
liquidity purposes. The arrangement was initiated pursuant to exemptive relief
granted by the Securities and Exchange Commission (the SEC) to allow these
affiliated funds to lend money to, and borrow money from, each other, in an
attempt to reduce borrowing costs below those of bank loan facilities. The SEC's
order requires the Fund's Board of Trustees to adopt operating policies and
procedures to administer interfund borrowing and lending. Under the arrangement
the Fund may lend money to other Oppenheimer funds and may borrow from other
Oppenheimer funds at a rate set by the Fund's Board of Trustees, based upon a
recommendation by the Manager. The Fund's borrowings, if any, are subject to
asset coverage requirements under the Investment Company Act and the provisions
of the SEC order and other applicable regulations. If the Fund borrows money,
there is a risk that the loan could be called on one day's notice, in which case
the Fund might have to borrow from a bank at higher rates if a loan were not
available from another Oppenheimer fund. If the Fund lends money to another
fund, it will be subject to the risk that the other fund might not repay the
loan in a timely manner, or at all.
The Fund had no interfund borrowings or loans outstanding during the year
ended or at June 30, 2004.
36 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER GOLD & SPECIAL MINERALS
FUND:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer Gold & Special Minerals Fund, including the statement of
investments, as of June 30, 2004, and the related statement of operations for
the year then ended, the statements of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the
five 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.
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.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of June 30, 2004, by correspondence with the
custodian. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. 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
Oppenheimer Gold & Special Minerals Fund as of June 30, 2004, 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 five years in the period then ended, in conformity with U.S. generally
accepted accounting principles.
KPMG LLP
Denver, Colorado
July 22, 2004
37 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
FEDERAL INCOME TAX INFORMATION Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In early 2005, if applicable, shareholders of record will receive information
regarding all dividends and distributions paid to them by the Fund during
calendar year 2004. Regulations of the U.S. Treasury Department require the Fund
to report this information to the Internal Revenue Service.
Dividends and distributions of $1.1974, $1.0809, $1.1068 and $1.1830 per
share were paid to Class A, Class B, Class C and Class N shareholders,
respectively, on December 11, 2003, of which $0.4456 was designated as a
"capital gain distribution" for federal income tax purposes. Whether received in
stock or in cash, the capital gain distribution should be treated by
shareholders as a gain from the sale of the capital assets held for more than
one year (long-term capital gains).
Dividends, if any, paid by the Fund during the fiscal year ended June 30,
2004 which are not designated as capital gain distributions should be multiplied
by 0.92% to arrive at the amount eligible for the corporate dividend-received
deduction.
A portion, if any, of the dividends paid by the Fund during the fiscal
year ended June 30, 2004 which are not designated as capital gain distributions
are eligible for lower individual income tax rates to the extent that the Fund
has received qualified dividend income as stipulated by recent tax legislation.
$2,305,640 of the Fund's fiscal year taxable income may be eligible for the
lower individual income tax rates. In early 2005, shareholders of record will
receive information regarding the percentage of distributions that are eligible
for lower individual income tax rates.
The Fund has elected the application of Section 853 of the Internal
Revenue Code to permit shareholders to take a federal income tax credit or
deduction, at their option, on a per share basis for an aggregate amount of
$149,953 of foreign income taxes paid by the Fund during the fiscal year ended
June 30, 2004. A separate notice will be mailed to each shareholder, which will
reflect the proportionate share of such foreign taxes which must be treated by
shareholders as gross income for federal income tax purposes.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because of
the complexity of the federal regulations which may affect your individual tax
return and the many variations in state and local tax regulations, we recommend
that you consult your tax advisor for specific guidance.
38 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which
the Fund votes proxies relating to securities ("portfolio proxies") held by the
Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures
is available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and
(iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to
file new Form N-PX, with its complete proxy voting record for the 12 months
ended June 30th, no later than August 31st of each year. The Fund's Form N-PX
filing is available (i) without charge, upon request, by calling the Fund
toll-free at 1.800.525.7048, and (ii) on the SEC's website at www.sec.gov.
39 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
TRUSTEES AND OFFICERS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NAME, POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS;
FUND, LENGTH OF SERVICE, AGE OTHER TRUSTEESHIPS/DIRECTORSHIPS HELD BY TRUSTEE;
NUMBER OF PORTFOLIOS IN FUND COMPLEX CURRENTLY
OVERSEEN BY TRUSTEE
INDEPENDENT THE ADDRESS OF EACH TRUSTEE AND INTERESTED
TRUSTEES TRUSTEE IN THE CHARTS BELOW IS 6803 S. TUCSON
WAY, CENTENNIAL, CO 80112-3924. EACH TRUSTEE
SERVES FOR AN INDEFINITE TERM, UNTIL HIS OR HER
RESIGNATION, RETIREMENT, DEATH OR REMOVAL.
CLAYTON K. YEUTTER, Of Counsel (since June 1993) Hogan & Hartson (a
Chairman of the Board law firm); a director (since 2002) of Danielson
of Trustees (since 2003); Holding Corp. Formerly a director of Weyerhaeuser
Trustee (since 1993) Corp. (1999-April 2004), Caterpillar, Inc.
Age: 73 (1993-December 2002), ConAgra Foods (1993-2001),
Texas Instruments (1993-2001) and FMC Corporation
(1993-2001). Oversees 25 portfolios in the
OppenheimerFunds complex.
ROBERT G. GALLI, A trustee or director of other Oppenheimer funds.
Trustee (since 1993) Oversees 35 portfolios in the OppenheimerFunds
Age: 71 complex.
PHILLIP A. GRIFFITHS, A director (since 1991) of the Institute for
Trustee (since 1999) Advanced Study, Princeton, N.J., a director
Age: 65 (since 2001) of GSI Lumonics, a trustee (since
1983) of Woodward Academy, a Senior Advisor
(since 2001) of The Andrew W. Mellon Foundation.
A member of: the National Academy of Sciences
(since 1979), American Academy of Arts and
Sciences (since 1995), American Philosophical
Society (since 1996) and Council on Foreign
Relations (since 2002). Formerly a director of
Bankers Trust New York Corporation (1994-1999).
Oversees 25 portfolios in the OppenheimerFunds
complex.
JOEL W. MOTLEY, Director (since January 2002) Columbia Equity
Trustee (since 2002) Financial Corp. (privately-held financial
Age: 52 adviser); Managing Director (since January 2002)
Carmona Motley, Inc. (privately-held financial
adviser). Formerly a Managing Director of Carmona
Motley Hoffman Inc. (privately-held financial
adviser) (January 1998-December 2001). Oversees
25 portfolios in the OppenheimerFunds complex.
KENNETH A. RANDALL, A director (since February 1972) of Dominion
Trustee (since 1985) Resources, Inc. (electric utility holding
Age: 77 company); formerly a director of Prime Retail,
Inc. (real estate investment trust) and Dominion
Energy, Inc. (electric power and oil & gas
producer), President and Chief Executive Officer
of The Conference Board, Inc. (international
economic and business research) and a director of
Lumbermens Mutual Casualty Company, American
Motorists Insurance Company and American
Manufacturers Mutual Insurance Company. Oversees
25 portfolios in the OppenheimerFunds complex.
EDWARD V. REGAN, President, Baruch College, CUNY; a director of
Trustee (since 1993) RBAsset (real estate manager); a director of
Age: 74 OffitBank; formerly Trustee, Financial Accounting
Foundation (FASB and GASB), Senior Fellow of
Jerome Levy Economics Institute, Bard College,
Chairman of Municipal Assistance Corporation for
the City of New York, New York State Comptroller
and Trustee of New York State and Local
Retirement Fund. Oversees 25 investment companies
in the OppenheimerFunds complex.
RUSSELL S. REYNOLDS, JR., Chairman (since 1993) of The Directorship Search
Trustee (since 1989) Group, Inc. (corporate governance consulting
Age: 72 and executive recruiting); a Life Trustee of
International House (non-profit educational
organization); a former trustee of The Historical
Society of the Town of Greenwich. Oversees 25
portfolios in the OppenheimerFunds complex.
40 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
DONALD W. SPIRO, Chairman Emeritus (since January 1991) of the
Vice Chairman of the Board Manager. Formerly a director (January 1969-August
of Trustees, Trustee 1999) of the Manager. Oversees 25 portfolios in
(since 1985) the OppenheimerFunds complex.
Age: 78
- --------------------------------------------------------------------------------
INTERESTED TRUSTEE THE ADDRESS OF MR. MURPHY IN THE CHART BELOW IS
AND OFFICER TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET,
NEW YORK, NY 10281-1008. MR. MURPHY SERVES FOR AN
INDEFINITE TERM, UNTIL HIS RESIGNATION, DEATH OR
REMOVAL.
JOHN V. MURPHY, Chairman, Chief Executive Officer and director
President and Trustee (since June 2001) and President (since September
(since 2001) 2000) of the Manager; President and a director or
Age: 55 trustee of other Oppenheimer funds; President and
a director (since July 2001) of Oppenheimer
Acquisition Corp. (the Manager's parent holding
company) and of Oppenheimer Partnership Holdings,
Inc. (a holding company subsidiary of the
Manager); a director (since November 2001) of
OppenheimerFunds Distributor, Inc. (a subsidiary
of the Manager); Chairman and a director (since
July 2001) of Shareholder Services, Inc. and of
Shareholder Financial Services, Inc. (transfer
agent subsidiaries of the Manager); President and
a director (since July 2001) of OppenheimerFunds
Legacy Program (a charitable trust program
established by the Manager); a director of the
following investment advisory subsidiaries of the
Manager: OFI Institutional Asset Management,
Inc., Centennial Asset Management Corporation,
Trinity Investment Management Corporation and
Tremont Capital Management, Inc. (since November
2001), HarbourView Asset Management Corporation
and OFI Private Investments, Inc. (since July
2001); President (since November 1, 2001) and a
director (since July 2001) of Oppenheimer Real
Asset Management, Inc.; Executive Vice President
(since February 1997) of Massachusetts Mutual
Life Insurance Company (the Manager's parent
company); a director (since June 1995) of DLB
Acquisition Corporation (a holding company that
owns the shares of Babson Capital Management
LLC); a member of the Investment Company
Institute's Board of Governors (elected to serve
from October 3, 2003 through September 30, 2006).
Formerly, Chief Operating Officer (September
2000-June 2001) of the Manager; President and
trustee (November 1999-November 2001) of MML
Series Investment Fund and MassMutual
Institutional Funds (open-end investment
companies); a director (September 1999-August
2000) of C.M. Life Insurance Company; President,
Chief Executive Officer and director (September
1999-August 2000) of MML Bay State Life Insurance
Company; a director (June 1989-June 1998) of
Emerald Isle Bancorp and Hibernia Savings Bank (a
wholly-owned subsidiary of Emerald Isle Bancorp).
Oversees 73 portfolios as Trustee/ Director and
10 portfolios as Officer in the OppenheimerFunds
complex.
- --------------------------------------------------------------------------------
OFFICERS THE ADDRESS OF THE OFFICERS IN THE CHART BELOW IS
AS FOLLOWS: FOR MESSRS. LI AND ZACK, TWO WORLD
FINANCIAL CENTER, 225 LIBERTY STREET, NEW YORK,
NY 10281-1008, FOR MESSRS. VANDEHEY AND WIXTED,
6803 S. TUCSON WAY, CENTENNIAL, CO 80112-3924.
EACH OFFICER SERVES FOR AN ANNUAL TERM OR UNTIL
HIS OR HER EARLIER RESIGNATION, DEATH OR REMOVAL.
SHANQUAN LI, Vice President of the Manager since November
Vice President and Portfolio 1998; an officer of 1 portfolio in the
Manager (since 1997) OppenheimerFunds complex. Formerly Assistant Vice
Age: 49 President of the Manager (January 1997 - November
1998).
41 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
TRUSTEES AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
BRIAN W. WIXTED, Senior Vice President and Treasurer (since March
Treasurer, Principal 1999) of the Manager; Treasurer of HarbourView
Financial Asset Management Corporation, Shareholder
and Accounting Officer Financial Services, Inc., Shareholder Services,
(since 2003) Inc., Oppenheimer Real Asset Management
Age: 44 Corporation, and Oppenheimer Partnership
Holdings, Inc. (since March 1999), of OFI Private
Investments, Inc. (since March 2000), of
OppenheimerFunds International Ltd. and
OppenheimerFunds plc (since May 2000), of OFI
Institutional Asset Management, Inc. (since
November 2000), and of OppenheimerFunds Legacy
Program (a Colorado non-profit corporation)
(since June 2003); Treasurer and Chief Financial
Officer (since May 2000) of OFI Trust Company (a
trust company subsidiary of the Manager);
Assistant Treasurer (since March 1999) of
Oppenheimer Acquisition Corp. Formerly Assistant
Treasurer of Centennial Asset Management
Corporation (March 1999-October 2003) and
OppenheimerFunds Legacy Program (April 2000-June
2003); Principal and Chief Operating Officer
(March 1995-March 1999) at Bankers Trust
Company-Mutual Fund Services Division. An officer
of 83 portfolios in the OppenheimerFunds complex.
ROBERT G. ZACK, Executive Vice President (since January 2004) and
Secretary (since 2001) General Counsel (since February 2002) of the
Age: 56 Manager; General Counsel and a director (since
November 2001) of the Distributor; General
Counsel (since November 2001) of Centennial Asset
Management Corporation; Senior Vice President and
General Counsel (since November 2001) of
HarbourView Asset Management Corporation;
Secretary and General Counsel (since November
2001) of Oppenheimer Acquisition Corp.; Assistant
Secretary and a director (since October 1997) of
OppenheimerFunds International Ltd. and
OppenheimerFunds plc; Vice President and a
director (since November 2001) of Oppenheimer
Partnership Holdings, Inc.; a director (since
November 2001) of Oppenheimer Real Asset
Management, Inc.; Senior Vice President, General
Counsel and a director (since November 2001) of
Shareholder Financial Services, Inc., Shareholder
Services, Inc., OFI Private Investments, Inc. and
OFI Trust Company; Vice President (since November
2001) of OppenheimerFunds Legacy Program; Senior
Vice President and General Counsel (since
November 2001) of OFI Institutional Asset
Management, Inc.; a director (since June 2003) of
OppenheimerFunds (Asia) Limited. Formerly Senior
Vice President (May 1985-December 2003), Acting
General Counsel (November 2001-February 2002) and
Associate General Counsel (May 1981-October 2001)
of the Manager; Assistant Secretary of
Shareholder Services, Inc. (May 1985-November
2001), Shareholder Financial Services, Inc.
(November 1989-November 2001); and
OppenheimerFunds International Ltd. (October
1997-November 2001). An officer of 83 portfolios
in the OppenheimerFunds complex.
MARK S. VANDEHEY, Senior Vice President and Chief Compliance
Vice President (since 2004) Officer (since March 2004) of the Manager; Vice
Age: 53 President (since June 1983) of OppenheimerFunds
Distributor, Inc., Centennial Asset Management
Corporation and Shareholder Services, Inc.
Formerly (until February 2004) Vice President and
Director of Internal Audit of OppenheimerFunds,
Inc. An officer of 83 portfolios in the
OppenheimerFunds complex.
THE FUND'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION
ABOUT THE FUND'S TRUSTEES AND IS AVAILABLE WITHOUT CHARGE UPON REQUEST.
42 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
ITEM 2. CODE OF ETHICS
The registrant 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.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The Board of Trustees of the registrant has determined that Edward V.
Regan, the Chairman of the Board's Audit Committee, possesses the technical
attributes identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as
an "audit committee financial expert," and has designated Mr. Regan as the Audit
Committee's financial expert. Mr. Regan is an "independent" Trustee pursuant to
paragraph (a)(2) of Item 3 to Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
(a) Audit Fees
The principal accountant for the audit of the registrant's annual
financial statements billed $20,000 in fiscal 2004 and $15,000 in
fiscal 2003.
(b) Audit-Related Fees
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees to the registrant during
the last two fiscal years.
The principal accountant for the audit of the registrant's annual
financial statements billed $27,733 in fiscal 2004 and $0 in
fiscal 2003 to the registrant's investment adviser or any entity
controlling, controlled by, or under common control with the
adviser that provides ongoing services to the registrant.
Such fees would include, among others: due diligence related to
mergers and acquisitions, accounting consultations and audits in
connection with acquisitions, internal control reviews and
consultation concerning financial accounting and reporting
standards.
(c) Tax Fees
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees to the registrant during
the last two fiscal years.
The principal accountant for the audit of the registrant's annual
financial statements billed $6,000 in fiscal 2004 and $0 in fiscal
2003 to the registrant's investment adviser or any entity
controlling, controlled by, or under common control with the
adviser that provides ongoing services to the registrant.
Such fees would include, among others: tax compliance, tax
planning and tax advice. Tax compliance generally involves
preparation of original and amended tax returns, claims for a
refund and tax payment-planning services. Tax planning and tax
advice includes assistance with tax audits and appeals, tax advice
related to mergers and acquisitions and requests for rulings or
technical advice from taxing authorities.
(d) All Other Fees
The principal accountant for the audit of the registrant's annual
financial statements billed $0 in fiscal 2004 and $48 in fiscal
2003.
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees during the last two
fiscal years to the registrant's investment adviser or any entity
controlling, controlled by, or under common control with the
adviser that provides ongoing services to the registrant.
Such fees would include the cost to the principal accountant of
attending audit committee meetings and consultations regarding the
registrant's retirement plan with respect to its trustees.
(e) (1) During its regularly scheduled periodic meetings, the
registrant's audit committee will pre-approve all audit,
audit-related, tax and other services to be provided by the
principal accountants of the registrant.
The audit committee has delegated pre-approval authority to its
Chairman for any subsequent new engagements that arise between
regularly scheduled meeting dates provided that any fees such
pre-approved are presented to the audit committee at its next
regularly scheduled meeting.
Pre-approval of non-audit services is waived provided that: 1) the
aggregate amount of all such services provided constitutes no more
than five percent of the total amount of fees paid by the
registrant to it principal accountant during the fiscal year in
which services are provided 2) such services were not recognized
by the registrant at the time of engagement as non-audit services
and 3) such services are promptly brought to the attention of the
audit committee of the registrant and approved prior to the
completion of the audit.
(2) 100%
(f) Not applicable as less than 50%.
(g) The principal accountant for the audit of the registrant's annual
financial statements billed $33,733 in fiscal 2004 and $48 in
fiscal 2003 to the registrant and the registrant's investment
adviser or any entity controlling, controlled by, or under common
control with the adviser that provides ongoing services to the
registrant related to non-audit fees. Those billings did not
include any prohibited non-audit services as defined by the
Securities Exchange Act of 1934.
(h) The registrant's audit committee of the board of trustees has
considered whether the provision of non-audit services that were
rendered to the registrant's investment adviser, and any entity
controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with
maintaining the principal account's independence. No such services
were rendered.
ITEM 5. NOT APPLICABLE
ITEM 6. SCHEDULE OF INVESTMENTS
Not applicable
ITEM 7. NOT APPLICABLE
ITEM 8. NOT APPLICABLE
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Board is responsible for approving nominees for election as
trustees. To assist in this task, the Board has designated the Audit Committee
as the nominating committee for the Board. It reviews and recommends nominees to
the Board. The Committee is comprised entirely of disinterested trustees as
defined in Section 2(a)(19) of the Investment Company Act of 1940.
The Audit Committee charter describes the responsibilities of the Committee in
nominating candidates for election as independent Trustees of the Registrant.
The Registrant's Board has adopted a written charter for the Committee. A
current copy of the Audit Committee charter is available to shareholders on the
OppenheimerFunds website at www.oppenheimerfunds.com.
Under the current policy, if the Board determines that a vacancy exists or is
likely to exist on the Board, the Audit Committee of the Board will consider
candidates for Board membership including recommended by Registrant
shareholders. The Audit Committee will consider nominees recommended by
independent Board members or recommended by any other Board members including
Board members affiliated with the Registrant's investment advisors. The
Committee may, upon Board approval, retain an executive search firm to assist in
screening potential candidates. Upon Board approval, the Audit Committee may
also use the services of legal, financial, or other external counsel that it
deems necessary or desirable in the screening process. Shareholders wishing to
submit a nominee for election to the Board may do so by mailing their submission
to the offices of OppenheimerFunds, Inc., 6803 South Tucson Way, Centennial, CO
80112, to the attention of the Board of Trustees of the named Registrant, c/o
the Secretary of the Registrant.
The Committee's process for identifying and evaluating nominees for trustees
includes a number of factors. In screening candidates for board membership,
whether the candidate is suggested by Board members, shareholders or others, the
Committee considers the candidate's professional experience, soundness of
judgment, integrity, ability to make independent, analytical inquiries,
collegiality, willingness and ability to devote the time required to perform
Board activities adequately, ability to represent the interests of all
shareholders of the Registrant, and diversity relative to the board's
composition. Candidates are expected to provide a mix of attributes, experience,
perspective and skills necessary to effectively advance the interests of
shareholders.
ITEM 10. CONTROLS AND PROCEDURES
(a) Based on their evaluation of registrant's disclosure controls and
procedures (as defined in rule 30a-2(c) under the Investment
Company Act of 1940 (17 CFR 270.30a-2(c)) as of June 30, 2004,
registrant's principal executive officer and principal financial
officer found registrant's disclosure controls and procedures to
provide reasonable assurances that information required to be
disclosed by registrant in the reports that it files under the
Securities Exchange Act of 1934 (a) is accumulated and
communicated to registrant's management, including its principal
executive officer and principal financial officer, to allow timely
decisions regarding required disclosure, and (b) is recorded,
processed, summarized and reported, within the time periods
specified in the rules and forms adopted by the U.S. Securities
and Exchange Commission.
(b) There have been no significant changes in registrant's internal
controls over financial reporting that occurred during the
registrant's last fiscal half-year that has materially affected,
or is reasonably likely to materially affect, the registrant's
internal control over financial reporting.
ITEM 11. EXHIBITS.
(A) EXHIBIT ATTACHED HERETO. (ATTACH CODE OF ETHICS AS EXHIBIT)
(B) EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS)