Golden Prospect Precious Metals Limited

Monthly Investor Report - September 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 

Precious metals sustained positive momentum through September, with gold gaining 5.2% and Silver 8.0% over the month. Despite Sterling's relative strength, with a rise of nearly 2% against the dollar, the Fund NAV rose 4.5% in September. This is compared to sterling returns of 3-4% for the GDX and GDXJ ETFs and less than 1% for the Gold Bugs Index and Philadelphia Gold and Silver Index.

With gold continuing to make all-time highs and inflationary cost pressures for the miners easing, equities should show further margin improvement in the forthcoming Q3 reporting season, maintaining improving trends in the Q2 results. The sector is now experiencing some of the highest free cash flow on record, which could incentivise increased M&A by established producers as they look to grow or replace reserves. Reflecting the pick-up in profitability, many large gold producers continue to guide a pickup in dividends and share buybacks, which we believe should support investor confidence.

Gold's latest leg higher has been primarily driven by a return of Western investment demand, most clearly represented by known physical ETF holdings which posted a fourth consecutive month of increases in September. Given easing inflation data globally, the primary driver is lower interest rate expectations, with the 50bps cut by the US FED providing a supportive tailwind for the sector's performance.

We have previously noted the strong Chinese demand as a driver of gold price. However, this appears to have softened lately in response to the higher price and stimulus discussions in China, as evidenced by the negative Shanghai premium.

Volatility over the next month may remain elevated ahead of the US Presidential election in November. With polls moderately tied, a Trump win would likely see a more supportive backdrop for gold, as a more volatile geopolitical world could incentivise central banks to de-dollarise reserves and add gold to reserves.

That said, the strong performance of precious metals and related equities led to more concentrated portfolio positions. As a result, the Fund took some profits in Ora Banda and West African Resources over the month. Some proceeds were reinvested into a placement for UK-listed Greatland Gold after they acquired a mill and the outstanding working interest in their Havieron mine, located in Australia, from Newmont.

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.