Golden Prospect Precious Metals Limited

Monthly Investor Report - June 2024

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

NCIM - Golden Prospect Precious Metals Ltd - Fund Page

Enquiries: 

For the Investment Manager 

CQS (UK) LLP 

Craig Cleland 

0207 201 5368 

For the Company Secretary and Administrator 

Apex Administration (Guernsey) Limited

James Taylor

0203 530 3600

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Fund Description 

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

Portfolio Managers 

Keith Watson and Robert Crayfourd.

Key Advantages for the Investor 

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

·      Potential inflation protection from precious metals assets

·      Low correlation to major asset classes 

Key Fund Facts¹ 

Ordinary Share and NAV Performance² 

Commentary³ 

Gold held flat on the month, maintaining May gains at around the $2,400/oz level, close to all-time highs. Mining and Silver stocks were softer, with Silver falling 4% following strong gains through March, April and May.

The strong gold price year-to-date was initially driven by robust Chinese retail demand but has continued to trade at a premium, drawing imports from the West despite the Central Bank of China reporting a pause in additions through May and June.

Western demand started to pick up through June. A key indicator of this is physical ETF holdings which, after steady selling for two years, are now showing some additions. They added 243k oz in June, a 0.3% increase, and have continued to add through July. Global inflation expectations have continued to soften, with the US & UK CPI dropping to 2.7% and 2.0% respectively, supporting rate cuts before year-end. While the link between rates and gold has broken down over the last 18 months, it should still be supportive when cuts start.

Gold miners have continued to lag the gold price, trading at some of the most discounted levels that have been seen on earnings multiple and NAV's. This could be put down to the sector's prior cost inflation issues that have compressed producer margins despite gold strength, especially during the Covid period. These cost pressures are now easing and in some cases reversing, which should support improved cash generation for producers, given the higher gold price through the second quarter.

With Chinese demand resilient, Western demand recovering and the combination of the gold price at all-time highs yet the miners close to all-time lows on price to NAV multiples, we believe the risk-reward profile is attractive.

For the Company, we bought Robex Resources via a placement with a full warrant over the month. We believe Robex has an attractive gold development mine in Guinea with a new strong mine-building team that, in our opinion, offers significant scope to rerate.

CQS (UK) LLP

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

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

CQS (US), LLC

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

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

Tavistock Communications

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

T: +44 20 7920 3150 | [email protected]

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