Golden Prospect Precious Metals says that over 2024 its NAV rose by 20.4% from 35.81p to 43.10p with a peak value of 55.87p in October. In the meantime, the share price rose from 29.50p to 35.50p, likewise gaining 20.3%, with highs in October at 46.0p. The performance was well ahead of the VanEck Gold Miners ETF which rose 12.8% and the VanEck Junior Gold Miners ETF which rose 17.9% in sterling terms. The returns also ranked well against open-ended funds in the precious metals sector. However, 2024 proved to be yet another year where performance of the miners lagged the returns of gold itself, which rose by 27.2% in US dollars and 29.7% in sterling.

The manager says that the main contributors to performance over the year were Ora Banda (up 144%), Calibre Mining (up 54%) and Mawson Gold (up 176%). The main detractor was Calidus Resources, which in July had its shares suspended from the Australian Stock Exchange after Macquarie Bank, Calidus’ largest shareholder, pulled their credit line and shut down operations despite operations having turned profitable, Macquarie subsequently sold control of the business via the debt to an Australian mining entrepreneur and the company is currently undergoing restructuring. At the portfolio level, Australian miners provided the largest proportion of gains, followed by Canadian listed miners, which is unsurprising given the weighting in the portfolio. Gold producers, developers, explorers and silver producers provided meaningful returns.

In October, under the trust’s annual subscription rights programme, shareholders had the right to subscribe for 1 new share for every 5 shares held at a price of 35.94p. The share price was 46p, and therefore well ‘in the money’ in the weeks approaching the subscription date. However, it dropped just ahead of the exercise date. The full allotment was not taken up and the shares related to the unexercised rights could not be placed. Nevertheless, the exercise raised an additional £2.78m from 7,745,478 shares issued at 35.94p. In November 2025, the subscription price will be 48.0p (being the NAV of the company on the 2024 subscription date). The current share price is 42.0p (representing a discount of almost 26% to NAV).

[The company’s small size means that share buybacks could be counterproductive – making the shares more illiquid and raising the already high ongoing charges ratio (currently 2.21%). The trust has appointed a PR firm and a sponsored research firm in an effort to improve its profile, and as a shareholder, I wish it every success. The current wide discount is frustrating, as is the seeming decoupling of returns on gold miners from the gold price.]

GPM : Golden Prospect doing well but lagging the gold price