UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY

   

Investment Company Act file number

811-21650

 

 

ASA Gold and Precious Metals Limited

(Exact name of registrant as specified in charter)

     

400 S. El Camino Real, Suite 710, San Mateo, CA

 

94402-1708

(Address of principal executive offices)

 

(Zip Code)

 

JPMorgan Chase Bank, N A

3 MetroTech Center, 6th Floor

Brooklyn, NY 11245

(Name and address of agent for service)

   

Registrant’s telephone number, including area code:

(650) 376-3135

 

   

Date of fiscal year end:

November 30

 

   

Date of reporting period:

August 31, 2017

 
 

ASA Gold and Precious Metals Limited

Schedules of Investments (Unaudited)

August 31, 2017 and August 31, 2016

   2017  2016
Name of Company  Shares / Warrants   Value   Percent
of Net
Assets		   Shares / Warrants   Value   Percent
of Net
Assets		 
                               
Common Shares                              
Gold and Silver Investments                              
Gold mining, exploration, development and royalty companies                              
Australia                              
Newcrest Mining Limited, (1)   1,015,000   $18,879,000    6.9%   1,215,000   $19,938,150    6.7%
Perseus Mining Limited, (2)   7,067,700    1,755,247    0.6    6,211,800    2,180,411    0.7 
         20,634,247    7.5         22,118,561    7.5 
                               
Canada                              
Agnico Eagle Mines Limited   450,000    23,067,000    8.4    475,000    24,058,750    8.1 
Alacer Gold Corp., (2)   2,500,000    4,386,141    1.6    -    -    - 
Alamos Gold Inc.   875,000    7,290,206    2.7    600,000    4,225,868    1.4 
Asanko Gold Inc., (2)   665,000    820,429    0.3    1,425,000    5,371,614    1.8 
Atlantic Gold Corporation – 144A, (2)(3)   2,750,000    3,458,842    1.3    3,000,000    2,014,498    0.7 
B2Gold Corp., (2)   1,594,338    4,380,997    1.6    1,594,338    4,014,739    1.4 
Barrick Gold Corporation   1,125,000    20,238,750    7.4    1,275,000    21,687,750    7.3 
Belo Sun Mining Corp., (2)   2,600,000    1,374,725    0.5    2,600,000    1,765,738    0.6 
Detour Gold Corporation, (2)   450,000    6,301,622    2.3    450,000    10,164,060    3.4 
Eldorado Gold Corporation, (1)   1,546,570    3,185,934    1.2    650,000    2,093,000    0.7 
Franco-Nevada Corporation   160,000    13,094,813    4.8    160,000    11,187,180    3.8 
Goldcorp Inc.   932,400    12,820,500    4.7    932,400    14,209,776    4.8 
Guyana Goldfields Inc., (2)   807,300    3,233,727    1.2    857,300    5,390,425    1.8 
Integra Gold Corp., (2)   -    -    -    3,000,000    1,648,226    0.6 
Kinross Gold Corporation, (2)   800,000    3,648,000    1.3    800,000    3,192,000    1.1 
New Gold Inc., (2)   500,000    1,880,000    0.7    500,000    2,395,000    0.8 
OceanaGold Corporation   2,654,013    8,249,606    3.0    1,054,013    3,321,689    1.1 
Pretium Resources Inc., (2)   725,000    6,017,500    2.2    -    -    - 
Roxgold Inc., (2)   2,827,200    2,921,761    1.1    2,059,500    2,137,291    0.7 
Semafo Inc., (2)   900,000    2,537,953    0.9    900,000    3,825,258    1.3 
Tahoe Resources Inc.   708,200    3,381,432    1.2    708,200    9,246,320    3.1 
TMAC Resources Inc., (2)   26,500    187,883    0.1    26,500    331,023    0.1 
TMAC Resources Inc. – 144A, (2)(3)   185,000    1,311,636    0.5    185,000    2,310,912    0.8 
Torex Gold Resources Inc., (2)   330,000    5,572,922    2.0    280,000    6,418,314    2.2 
Torex Gold Resources Inc. - 144A, (2)(3)   125,000    2,110,955    0.8    125,000    2,865,319    1.0 
         141,473,334    51.6         143,874,748    48.5 
                               
Cayman Islands                              
Endeavour Mining Corporation, (2)   250,000    4,966,954    1.8    -    -    - 
                               
Channel Islands                              
Lydian International Limited, (2)   1,780,000    520,489    0.2    780,000    267,837    0.1 
Lydian International Limited – 144A, (2)(3)   6,879,300    2,011,572    0.7    6,879,300    2,362,217    0.8 
Randgold Resources Limited - ADRs   254,100    26,042,709    9.5    282,100    26,418,665    8.9 
         28,574,769    10.4         29,048,718    9.8 
                               
Peru                              
Compañia de Minas Buenaventura S.A.A. - ADRs, (1)   699,000    9,387,570    3.4    699,000    8,639,640    2.9 
                               
South Africa                              
AngloGold Ashanti Limited, (1)   898,420    9,109,979    3.3    898,420    14,455,578    4.9 
Gold Fields Limited   1,029,577    4,591,913    1.7    1,029,577    5,178,772    1.7 
Sibanye-Stillwater   1,029,577    1,647,323    0.6    1,029,577    3,971,593    1.3 
         15,349,215    5.6         23,605,943    8.0 
                               
United States                              
Newmont Mining Corporation   570,368    21,867,909    8.0    695,368    26,590,872    9.0 
Royal Gold, Inc.   190,000    17,723,200    6.5    190,000    13,930,800    4.7 
         39,591,109    14.4         40,521,672    13.7 
Total gold mining, exploration, development and royalty companies
(Cost $206,191,394 - 2017, $200,471,199 - 2016)		        259,977,199    94.7         267,809,283    90.4 
                               
Silver mining, exploration and development companies                              
Canada                              
MAG Silver Corp., (2)   275,000    3,454,436    1.3    275,000    4,081,457    1.4 
Total silver mining, exploration and development companies
(Cost $2,007,500 - 2017, $2,007,500 - 2016)		        3,454,436    1.3         4,081,457    1.4 
Total gold and silver investments
(Cost $208,198,894 - 2017, $202,478,699 - 2016)		       $263,431,635    96.0%       $271,890,740    91.7%

 

The notes to financial statements form an integral part of these statements.

1

ASA Gold and Precious Metals Limited

Schedules of Investments (Unaudited) (Continued)

August 31, 2017 and August 31, 2016

   2017  2016
Name of Company  Shares / Warrants   Value   Percent
of Net
Assets		   Shares / Warrants   Value   Percent
of Net
Assets		 
                               
Platinum and Palladium Investments                              
Platinum and palladium mining companies                              
United States                              
Stillwater Mining Company, (2)   -   $-    -%   225,000   $2,846,250    1.0%
                               
Exchange traded funds                              
ETFS Palladium Trust, (2)   -    -    -    45,000    2,912,400    1.0 
ETFS Platinum Trust, (2)   -    -    -    12,500    1,258,875    0.4 
         -    -         4,171,275    1.4 
Total platinum and palladium investments
(Cost $0 - 2017, $6,911,031 - 2016)		        -    -         7,017,525    2.4 
                               
Diamond Mining, Exploration and Development Companies                              
Bermuda                              
Petra Diamonds Limited, (4)   1,000,000    1,217,454    0.4    1,000,000    1,491,050    0.5 
                               
Canada                              
Stornoway Diamond Corporation, (2)   1,389,500    846,000    0.3    1,639,500    1,401,175    0.5 
Stornoway Diamond Corporation – 144A, (2)(3)   9,698,550    5,904,985    2.2    12,448,550    10,638,974    3.6 
         6,750,986    2.5         12,040,150    4.1 
Total diamond mining, exploration and development companies
(Cost $10,222,660 - 2017, $12,624,701 - 2016)		        7,968,439    2.9         13,531,199    4.6 
                               
Total common shares
(Cost $218,421,554 - 2017, $222,014,430 - 2016)		        271,400,074    98.9         292,439,464    98.7 
                               
Warrants                              
Gold and Silver Investments                              
Gold mining, exploration, development and royalty companies                              
Australia                              
Perseus Mining Limited                              
A$0.44 Warrants, 04/18/2019, (2)(5)   -    -    -    3,105,900    271,516    0.1 
                               
Channel Islands                              
Lydian International Limited, C$0.36 Warrants, 11/27/2017, (2)   555,000    8,892    0.0    585,000    66,959    0.0 
Lydian International Limited, C$0.36 Warrants, 11/27/2017 – 144A, (2)(3)   5,159,475    82,667    0.0    5,159,475    590,554    0.2 
         91,560    0.0         657,513    0.2 
Total gold mining, exploration, development and royalty companies
(Cost $259,282 - 2017, $603,119 - 2016)		        91,560    0.0         929,029    0.3 
                               
Total warrants
(Cost $259,282 - 2017, $603,119 - 2016)		        91,560    0.0         929,029    0.3 
                               
Total investments (Cost $218,680,836 - 2017, $222,617,549 - 2016), (6)        271,491,634    98.9         293,368,493    99.0 
Cash, receivables, and other assets less liabilities        2,933,797    1.1         3,017,653    1.0 
Net assets       $274,425,431    100.0%       $296,386,147    100.0%

 

  (1) Non-income producing security in 2016 only.
  (2) Non-income producing security.
  (3) Restricted security.
  (4) Non-income producing security in 2017 only.
  (5) Level 3 security.  See note 3C in the notes to the financial statements.
  (6) Cost of investments shown approximates adjusted basis for U.S. federal income tax purposes, determined in accordance with U.S. federal income tax principles.  Gross unrealized appreciation of investments and gross unrealized depreciation of investments at August 31, 2017 were $96,332,571 and $43,521,772, respectively, resulting in net unrealized appreciation on investments of $52,810,798. Gross unrealized appreciation of investments and gross unrealized depreciation of investments at August 31, 2016 were $111,288,696 and $40,537,752, respectively, resulting in net unrealized appreciation on investments of $70,750,944.

 

ADR - American Depository Receipt.

 

May not total due to independent rounding.

 

The notes to financial statements form an integral part of these statements.

2

Notes to Financial Statements (Unaudited)

 

Nine months ended August 31, 2017 and August 31, 2016

 

1. Organization

 

ASA Gold and Precious Metals Limited (the “Company”) is a closed-end investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”), and was organized as an exempted limited liability company under the laws of Bermuda.

 

2. Investment objective and strategy

 

The Company is a non-diversified, closed-end, internally managed fund that seeks long-term capital appreciation primarily through investing in companies engaged in the exploration for, development of projects or mining of precious metals and minerals.

 

It is a fundamental policy of the Company that at least 80% of its total assets must be (i) invested in common shares or securities convertible into common shares of companies engaged, directly or indirectly, in the exploration, mining or processing of gold, silver, platinum, diamonds or other precious minerals, (ii) held as bullion or other direct forms of gold, silver, platinum or other precious minerals, (iii) invested in instruments representing interests in gold, silver, platinum or other precious minerals such as certificates of deposit therefor, and/or (iv) invested in securities of investment companies, including exchange traded funds, or other securities that seek to replicate the price movement of gold, silver or platinum bullion.

 

The Company employs bottom-up fundamental analysis and relies on detailed primary research including meetings with company executives, site visits to key operating assets, and proprietary financial analysis in making its investment decisions.

 

3. Summary of significant accounting policies

 

The following is a summary of the significant accounting policies:

 

A. Security valuation

The net asset value of the Company generally is determined as of the close of regular trading on the New York Stock Exchange (the “NYSE”) or the Toronto Stock Exchange (the “TSX”), whichever is later, on the date for which the valuation is being made (the “Valuation Time”). Portfolio securities listed on U.S. and foreign stock exchanges generally are valued at the last reported sale price as of the Valuation Time on the exchange on which the securities are primarily traded, or the last reported bid price if a sale price is not available. Securities traded over the counter are valued at the last reported sale price or the last reported bid price if a sale price is not available. Securities listed on foreign stock exchanges may be fair valued based on significant events that have occurred subsequent to the close of the foreign markets.

 

Securities for which current market quotations are not readily available are valued at their fair value as determined in good faith by, or in accordance with procedures approved by, the Company’s Board of Directors. If a security is valued at a “fair value,” that value may be different from the last quoted price for the security. Various factors may be reviewed in order to make a good faith determination of a security’s fair value. These factors include, but are not limited to, the nature of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; conversion rights on the security; and changes in overall market conditions.

 

Where the Company holds securities listed on foreign stock exchanges and American Depository Receipts (“ADRs”) representing these securities are actively traded in U.S. markets, the securities normally are fair valued based on the last reported sales price of the ADRs.

 

The difference between cost and market value is reflected separately as net unrealized appreciation (depreciation) on investments. The net realized gain or loss from the sale of securities is determined for accounting purposes on the identified cost basis.

 

B. Restricted securities

At August 31, 2017 and August 31, 2016, the Company held investments in restricted securities of 5.42% and 7.01% of net assets, respectively, valued in accordance with procedures approved by the Company’s Board of Directors as follows:

3

Notes to Financial Statements (Unaudited) (Continued)

 

Nine months ended August 31, 2017 and August 31, 2016

 

Restricted Securities
August 31, 2017
Shares/ Warrants Cost Issuer Value
Per Unit		 Value Acquisition Date
1,841,350 $1,490,038 Stornoway Diamond Corporation – 144A $0.61 $1,121,110 06/21/2016
6,879,300 1,269,275 Lydian International Limited. – 144A 0.29 2,011,572 05/26/2016
5,159,475 234,540 Lydian International Limited, C$0.36 Warrants, 11/27/2017 – 144A 0.02 82,667 05/26/2016
2,750,000 1,285,447 Atlantic Gold Corporation – 144A 1.26 3,458,842 05/09/2016
185,000 898,101 TMAC Resources, Inc. – 144A 7.09 1,311,636 06/26/2015
7,857,200 4,641,822 Stornoway Diamond Corporation – 144A 0.61 4,783,875 07/08/2014
125,000   1,351,000 Torex Gold Resources, Inc. – 144A   16.89 2,110,955 01/22/2014
 
Restricted Securities
August 31, 2016
Shares/ Warrants Cost Issuer Value
Per Unit		 Value Acquisition Date
4,591,350 $3,715,365 Stornoway Diamond Corporation – 144A $0.85 $3,923,931 06/21/2016
6,879,300 1,269,275 Lydian International Limited. – 144A 0.34 2,362,217 05/26/2016
5,159,475 234,540 Lydian International Limited, C$0.36 Warrants, 11/27/2017 – 144A 0.11 590,554 05/26/2016
3,000,000 1,402,306 Atlantic Gold Corporation – 144A 0.67 2,014,498 05/09/2016
185,000 898,101 TMAC Resources, Inc. – 144A 12.49 2,310,912 06/26/2015
7,857,200   4,641,822 Stornoway Diamond Corporation – 144A   0.85    6,715,043 07/08/2014
125,000   1,351,000 Torex Gold Resources, Inc. – 144A 22.92   2,865,319 01/22/2014

 

C. Fair value measurement

In accordance with U.S. GAAP, fair value is defined as the price that the Company would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. U.S. GAAP establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Company’s investments. The inputs are summarized in the three broad levels listed below.

 

Level 1 – unadjusted quoted prices in active markets for identical investments

Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, credit risk, etc.)

Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments)

 

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

4

Notes to Financial Statements (Unaudited) (Continued)

 

Nine months ended August 31, 2017 and August 31, 2016

 

The following is a summary of the inputs used as of August 31, 2017 and August 31, 2016 in valuing the Company’s investments at fair value:

 

Investment in Securities
Measurements at August 31, 2017
Description (1)  Level 1  Level 2  Level 3  Total
Common Shares                    
Gold and Silver Investments                    
Gold mining, exploration, development and royalty companies  $216,855,977   $43,121,221   $-   $259,977,199 
Silver mining, exploration and development companies   3,454,436    -    -    3,454,436 
Diamond Mining, Exploration and Development Companies   2,063,454    5,904,985    -    7,968,439 
Total Common Shares   222,373,867    49,026,206    -    271,400,074 
                     
Warrants                    
Gold mining, exploration, development and royalty companies   8,892    82,667    -    91,560 
Total Investments  $222,382,759   $49,108,873   $-   $271,491,634 

 

Transfers into and out of levels are recognized at the end of the period. During the nine months ended August 31, 2017, there were no transfers into and out of Levels 1, 2, and 3.

 

(1) See schedules of investments for country classifications.
  May not total due to independent rounding.

 

Investment in Securities
Measurements at August 31, 2016
Description (1)  Level 1  Level 2  Level 3  Total
Common Shares                    
Gold and Silver Investments                    
Gold mining, exploration, development and royalty companies  $214,712,244   $53,097,039   $-   $267,809,283 
Silver mining, exploration and development companies   4,081,457    -    -    4,081,457 
Platinum and Palladium Investments                    
Platinum and palladium mining companies   2,846,250    -    -    2,846,250 
Exchange traded funds   4,171,275    -    -    4,171,275 
Diamond Mining, Exploration and Development Companies   2,892,225    10,638,974    -    13,531,199 
Total Common Shares   228,703,451    63,736,013    -    292,439,464 
                     
Warrants                    
Gold mining, exploration, development and royalty companies   66,959    590,554    271,516    929,029 
Total Investments  $228,770,410   $64,326,567   $271,516   $293,368,493 

 

Transfers into and out of levels are recognized at the end of the period. During the nine months ended August 31, 2016, there were no transfers into and out of Levels 1, 2, and 3.

 

(1) See schedules of investments for country classifications.
  May not total due to independent rounding.
5

Notes to Financial Statements (Unaudited) (Continued)

 

Nine months ended August 31, 2017 and August 31, 2016

 

The table below presents a reconciliation for all financial assets and liabilities measured at fair value on a recurring basis, excluding accrued interest components, using significant unobservable inputs (Level 3) for the nine months ended August 31, 2016.

 

      Net Change        
  Balance   In Unrealized       Balance
  December 1, 2015   Depreciation (1)   Purchases   August 31, 2016
Warrants $                           -     $            (70,824)    $   342,340   $             271,516

 

(1) Included in net increase (decrease) in net unrealized appreciation (depreciation) on investments in the accompanying Statements of Operations. The net change in unrealized depreciation for investments still held as of August 31, 2016 was $(70,824).

 

The following table provides quantitative information about the Company’s Level 3 fair value measurements of its investments as of August 31, 2016. In addition to the techniques and inputs noted in the table below, the Company may also use other valuation techniques and methodologies when determining the fair value measurements. The table below is not intended to be all-inclusive, but rather provide information on the significant Level 3 inputs as they relate to the Company’s fair value measurements.

 

    Fair Value as of       Unobservable    
Investment Type   August 31, 2016   Valuation Techniques   Inputs (a)   Range
Warrants   $            271,516   Market Adjusted Black Scholes   Liquidity Discount   15%
        Options Pricing Model   Volatility   40%

 

(a) Represents amounts used when the Company has determined that market participants would use such multiples when pricing the investments.

6

Item 2. Controls and Procedures.

 

 

(a)

The registrant’s Principal Executive Officer and its Principal Financial Officer, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) are effective, based on their evaluation of these controls and procedures as of a date within 90 days prior to the filing date of this report.

 

 

(b)

There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the registrant’s most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

Item 3. Exhibits.

 

     

 

 

The certifications required by Rule 30a-2(a) under the Act are attached hereto.
 

SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

       

 

 

ASA Gold and Precious Metals Limited

 

 

 

 

By

/s/ David J. Christensen

 
       
       

 

 

David J. Christensen

 

 

 

President and Chief Executive Officer

 

 

 

(Principal Executive Officer)

 

Date: September 29, 2017

          Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.

       

 

By

/s/ David J. Christensen

 
       
       

 

 

David J. Christensen

 

 

 

President and Chief Executive Officer

 

 

 

(Principal Executive Officer)

 

Date: September 29, 2017

       

 

By

/s/ David S. Lin

 
       
       

 

 

David S. Lin

 

 

 

Chief Financial Officer

 

 

 

(Principal Financial Officer)

 

 

Date: September 29, 2017