-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PQc9x8S9VUSSHD9S1OhLEnLatrrsPYaKR5eYZx3J0KCq8grdUCbNNEKtXfTKYVZB FI/R5PCsQjW0r8XVdn2/vw== 0000935069-06-000681.txt : 20060303 0000935069-06-000681.hdr.sgml : 20060303 20060303154029 ACCESSION NUMBER: 0000935069-06-000681 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20051231 FILED AS OF DATE: 20060303 DATE AS OF CHANGE: 20060303 EFFECTIVENESS DATE: 20060303 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER GOLD & SPECIAL MINERALS FUND CENTRAL INDEX KEY: 0000716836 IRS NUMBER: 133155639 STATE OF INCORPORATION: MA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-03694 FILM NUMBER: 06663800 BUSINESS ADDRESS: STREET 1: 6803 SOUTH TUCSON WAY STREET 2: N/A CITY: CENTENNIAL STATE: CO ZIP: 80112-3924 BUSINESS PHONE: 303-768-3200 MAIL ADDRESS: STREET 1: 6803 SOUTH TUCSON WAY STREET 2: N/A CITY: CENTENNIAL STATE: CO ZIP: 80112-3924 0000716836 S000007056 OPPENHEIMER GOLD & SPECIAL MINERALS FUND C000019242 A C000019243 B C000019244 C C000019245 N N-CSRS 1 rs410_18683-ncsrs.txt RS410_18683-NCSRS 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 (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: DECEMBER 31, 2005 ITEM 1. REPORTS TO STOCKHOLDERS. TOP HOLDINGS AND ALLOCATIONS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- TOP TEN COMMON STOCK HOLDINGS - -------------------------------------------------------------------------------- Glamis Gold Ltd. 5.9% - -------------------------------------------------------------------------------- Kinross Gold Corp. 5.1 - -------------------------------------------------------------------------------- Goldcorp, Inc. 5.1 - -------------------------------------------------------------------------------- Gold Fields Ltd., Sponsored ADR 4.9 - -------------------------------------------------------------------------------- IAMGOLD Corp. 4.8 - -------------------------------------------------------------------------------- AngloGold Ashanti Ltd., Sponsored ADR 4.7 - -------------------------------------------------------------------------------- First Quantum Minerals Ltd. 4.4 - -------------------------------------------------------------------------------- Meridian Gold, Inc. 4.0 - -------------------------------------------------------------------------------- Eldorado Gold Corp. 3.9 - -------------------------------------------------------------------------------- Agnico-Eagle Mines Ltd. 3.6 Portfolio holdings and allocations are subject to change. Percentages are as of December 31, 2005, and are based on net assets. For up-to-date Top 10 Fund holdings, please visit www.oppenheimerfunds.com. - -------------------------------------------------------------------------------- GEOGRAPHIC HOLDINGS [THE FOLLOWING TABLE WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL.] Canada 61.7% South Africa 15.6 United States 8.5 Australia 8.1 Brazil 3.6 United Kingdom 1.5 The Netherlands 1.0 Portfolio holdings and allocations are subject to change. Percentages are as of December 31, 2005, and are based on the total market value of investments. 9 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND NOTES - -------------------------------------------------------------------------------- Total returns 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 10-year 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. 10 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND 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. 11 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND FUND EXPENSES - -------------------------------------------------------------------------------- FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions; and redemption fees, if any; and (2) ongoing costs, including management fees; distribution and service fees; and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000.00 invested at the beginning of the period and held for the entire 6-month period ended December 31, 2005. ACTUAL EXPENSES. The "actual" lines of the table provide information about actual account values and actual expenses. You may use the information on this line for the class of shares you hold, together with the amount you invested, to estimate the expense that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00 = 8.60), then multiply the result by the number in the "actual" line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The "hypothetical" lines of the table provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio for each class of shares, and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or contingent deferred sales charges (loads), redemption fees, or a $12.00 fee imposed annually on accounts valued at less than $500.00 (subject to exceptions 12 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND described in the Statement of Additional Information). Therefore, the "hypothetical" lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. - -------------------------------------------------------------------------------- BEGINNING ENDING EXPENSES ACCOUNT ACCOUNT PAID DURING VALUE VALUE 6 MONTHS ENDED (7/1/05) (12/31/05) DECEMBER 31, 2005 - -------------------------------------------------------------------------------- Class A Actual $1,000.00 $1,342.30 $ 7.28 - -------------------------------------------------------------------------------- Class A Hypothetical 1,000.00 1,019.00 6.28 - -------------------------------------------------------------------------------- Class B Actual 1,000.00 1,337.30 11.95 - -------------------------------------------------------------------------------- Class B Hypothetical 1,000.00 1,015.02 10.31 - -------------------------------------------------------------------------------- Class C Actual 1,000.00 1,337.80 11.60 - -------------------------------------------------------------------------------- Class C Hypothetical 1,000.00 1,015.32 10.01 - -------------------------------------------------------------------------------- Class N Actual 1,000.00 1,340.70 9.00 - -------------------------------------------------------------------------------- Class N Hypothetical 1,000.00 1,017.54 7.76 Hypothetical assumes 5% annual return before expenses. Expenses are equal to the Fund's annualized expense ratio for that class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Those annualized expense ratios based on the 6-month period ended December 31, 2005 are as follows: CLASS EXPENSE RATIOS - ---------------------------- Class A 1.23% - ---------------------------- Class B 2.02 - ---------------------------- Class C 1.96 - ---------------------------- Class N 1.52 - -------------------------------------------------------------------------------- 13 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND STATEMENT OF INVESTMENTS December 31, 2005 / Unaudited - -------------------------------------------------------------------------------- VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- COMMON STOCKS--98.1% - -------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--0.9% - -------------------------------------------------------------------------------- TEXTILES, APPAREL & LUXURY GOODS--0.9% Charles & Colvard Ltd. 231,200 $ 4,670,240 - -------------------------------------------------------------------------------- ENERGY--3.6% - -------------------------------------------------------------------------------- OIL & GAS--3.6% Cameco Corp. 300,000 19,017,000 - -------------------------------------------------------------------------------- INDUSTRIALS--1.7% - -------------------------------------------------------------------------------- MACHINERY--1.7% Chicago Bridge & Iron Co. NV 219,500 5,533,595 - -------------------------------------------------------------------------------- Encore Wire Corp. 1 160,000 3,641,600 ----------- 9,175,195 - -------------------------------------------------------------------------------- MATERIALS--91.9% - -------------------------------------------------------------------------------- METALS & MINING--91.9% Agnico-Eagle Mines Ltd. 970,600 19,179,056 - -------------------------------------------------------------------------------- Alamos Gold, Inc. 1 500,000 2,825,928 - -------------------------------------------------------------------------------- Anglo American Platinum Corp. Ltd. 28,673 806,605 - -------------------------------------------------------------------------------- Anglo Platinum Ltd. 5,626 406,335 - -------------------------------------------------------------------------------- AngloGold Ashanti Ltd., Sponsored ADR 511,293 25,222,084 - -------------------------------------------------------------------------------- Ballarat Goldfields NL 1 7,000,000 1,993,969 - -------------------------------------------------------------------------------- Barrick Gold Corp. 2 541,900 15,102,753 - -------------------------------------------------------------------------------- Centerra Gold, Inc. 1 440,800 10,674,455 - -------------------------------------------------------------------------------- Coeur d'Alene Mines Corp. 1 696,700 2,786,800 - -------------------------------------------------------------------------------- Companhia Vale do Rio Doce, ADR 2 335,000 13,781,900 - -------------------------------------------------------------------------------- Eldorado Gold Corp. 1,3 4,281,000 20,954,785 - -------------------------------------------------------------------------------- Eldorado Gold Corp. 1,3 580,000 2,839,004 - -------------------------------------------------------------------------------- First Quantum Minerals Ltd. 726,100 23,267,431 - -------------------------------------------------------------------------------- FNX Mining Co., Inc. 1 510,000 5,962,321 - -------------------------------------------------------------------------------- Freeport-McMoRan Copper & Gold, Inc., Cl. B 4 1,700 91,460 - -------------------------------------------------------------------------------- Gammon Lake Resources, Inc. 1 494,800 5,878,264 VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- METALS & MINING Continued Gerdau SA, Sponsored ADR 320,000 $ 5,337,600 - -------------------------------------------------------------------------------- Glamis Gold Ltd. 1 1,147,200 31,525,056 - -------------------------------------------------------------------------------- Gold Fields Ltd., Sponsored ADR 2 1,480,000 26,092,400 - -------------------------------------------------------------------------------- Goldcorp, Inc. 5 180,000 4,010,495 - -------------------------------------------------------------------------------- Goldcorp, Inc. 5 1,220,000 27,181,600 - -------------------------------------------------------------------------------- Harmony Gold Mining Co. Ltd., Sponsored ADR 1 1,446,800 18,880,740 - -------------------------------------------------------------------------------- IAMGOLD Corp. 3,272,300 25,589,386 - -------------------------------------------------------------------------------- Impala Platinum Holdings Ltd. 77,934 11,479,176 - -------------------------------------------------------------------------------- Ivanhoe Mines Ltd. 1 2,001,000 14,387,190 - -------------------------------------------------------------------------------- Kimberley Diamond Co. NL 1 848,900 869,533 - -------------------------------------------------------------------------------- Kingsgate Consolidated Ltd. 300,000 1,011,678 - -------------------------------------------------------------------------------- Kinross Gold Corp. 1 2,974,090 27,421,110 - -------------------------------------------------------------------------------- LionOre Mining International Ltd. 1 750,000 3,193,686 - -------------------------------------------------------------------------------- Major Drilling Group International, Inc. 1 254,900 3,857,104 - -------------------------------------------------------------------------------- Meridian Gold, Inc. 1 982,800 21,493,836 - -------------------------------------------------------------------------------- Minara Resources Ltd. 3,000,000 4,167,675 - -------------------------------------------------------------------------------- Newcrest Mining Ltd. 1,016,654 18,237,557 - -------------------------------------------------------------------------------- Newmont Mining Corp. (Holding Co.) 134,005 7,155,867 - -------------------------------------------------------------------------------- Northgate Exploration Ltd. 1 2,470,000 4,525,872 - -------------------------------------------------------------------------------- NovaGold Resources, Inc. 1 640,000 5,824,000 - -------------------------------------------------------------------------------- Oxiana Ltd. 1 6,800,000 8,735,064 - -------------------------------------------------------------------------------- Peter Hambro Mining plc 1 510,000 8,098,859 - -------------------------------------------------------------------------------- Placer Dome, Inc. 673,900 15,452,527 - -------------------------------------------------------------------------------- Quadra Mining Ltd. 1 410,000 2,098,585 - -------------------------------------------------------------------------------- Randgold Resources Ltd., ADR 1 810,000 13,065,300 - -------------------------------------------------------------------------------- Royal Gold, Inc. 4 49,500 1,719,135 - -------------------------------------------------------------------------------- SEMAFO, Inc. 1 700,000 1,192,309 14 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- METALS & MINING Continued Stillwater Mining Co. 1 420,000 $ 4,859,400 - -------------------------------------------------------------------------------- Yamana Gold, Inc. 1,5 1,983,000 13,135,275 - -------------------------------------------------------------------------------- Yamana Gold, Inc. 1,5 200,000 1,322,000 - -------------------------------------------------------------------------------- Zinifex Ltd. 1,563,000 7,838,775 ------------ 491,531,940 ------------ Total Common Stocks (Cost $376,031,180) 524,394,375 UNITS - -------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES--0.0% - -------------------------------------------------------------------------------- Nevsun Resources Ltd. Wts., Exp. 12/19/08 1 (Cost $117,814) 70,000 12,589 PRINCIPAL VALUE AMOUNT SEE NOTE 1 - -------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS--1.4% - -------------------------------------------------------------------------------- Undivided interest of 0.61% in joint repurchase agreement (Principal Amount/Value $1,203,488,000, with a maturity value of $1,204,036,256) with UBS Warburg LLC, 4.10%, dated 12/30/05, to be repurchased at $7,315,331 on 1/3/06, collateralized by Federal Home Loan Mortgage Corp., 5%--5.50%, 1/1/35--11/1/35, with a value of $565,118,538 and Federal National Mortgage Assn., 5.50%--6%, 11/1/34--1/1/36, with a value of $676,946,908 (Cost $7,312,000) $ 7,312,000 $ 7,312,000 - -------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $383,460,994) 99.5% 531,718,964 - -------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 0.5 2,923,948 ------------------------------- NET ASSETS 100.0% $534,642,912 =============================== FOOTNOTES TO STATEMENT OF INVESTMENTS 1. Non-income producing security. 2. A sufficient amount of securities has been designated to cover outstanding written put options, as follows:
CONTRACTS EXPIRATION EXERCISE PREMIUM VALUE SUBJECT TO PUT DATES PRICE RECEIVED SEE NOTE 1 - --------------------------------------------------------------------------------------------------------- Companhia Vale do Rio Doce, ADR 800 1/23/06 $40 $ 88,431 $ 36,000 Gold Fields Ltd., Sponsored ADR 500 1/23/06 10 31,999 -- Todco, Cl. A 500 1/23/06 40 56,997 125,000 ------------------------------ $ 177,427 $ 161,000 ==============================
15 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND STATEMENT OF INVESTMENTS Unaudited / Continued - -------------------------------------------------------------------------------- FOOTNOTES TO STATEMENT OF INVESTMENTS Continued 3. Affiliated company. Represents ownership of at least 5% of the voting securities of the issuer, and is or was an affiliate, as defined in the Investment Company Act of 1940, at or during the period ended December 31, 2005. The aggregate fair value of securities of affiliated companies held by the Fund as of December 31, 2005 amounts to $23,793,789. Transactions during the period in which the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES JUNE 30, 2005 ADDITIONS REDUCTIONS DECEMBER 31, 2005 - ----------------------------------------------------------------------------------------------------- Eldorado Gold Corp. 1,440,600 2,840,400 -- 4,281,000 Eldorado Gold Corp. 580,000 -- -- 580,000 VALUE DIVIDEND SEE NOTE 1 INCOME - ----------------------------------------------------------------------------------------------------- Eldorado Gold Corp. $20,954,785 $-- Eldorado Gold Corp. 2,839,004 -- -------------------------------- $23,793,789 $-- ================================
4. A sufficient amount of liquid assets has been designated to cover outstanding written call options, as follows:
CONTRACTS EXPIRATION EXERCISE PREMIUM VALUE SUBJECT TO CALL DATES PRICE RECEIVED SEE NOTE 1 - ------------------------------------------------------------------------------------------------------ Freeport-McMoRan Copper & Gold, Inc., Cl. B 17 1/23/06 $40 $ 4,071 $ 24,650 Royal Gold, Inc. 495 1/23/06 20 80,187 717,750 -------------------- $84,258 $742,400 ====================
5. The Fund holds securities which have been issued by the same entity and that trade on separate exchanges. - -------------------------------------------------------------------------------- GEOGRAPHIC HOLDINGS - -------------------------------------------------------------------------------- DISTRIBUTION OF INVESTMENTS REPRESENTING GEOGRAPHIC HOLDINGS, AS A PERCENTAGE OF TOTAL INVESTMENTS AT VALUE, IS AS FOLLOWS: - -------------------------------------------------------------------------------- Canada $327,923,617 61.7% South Africa 82,887,340 15.6 United States 45,301,802 8.5 Australia 42,854,251 8.1 Brazil 19,119,500 3.6 United Kingdom 8,098,859 1.5 The Netherlands 5,533,595 1.0 ------------------------------- Total $531,718,964 100.0% =============================== SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 16 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND STATEMENT OF ASSETS AND LIABILITIES Unaudited - -------------------------------------------------------------------------------- December 31, 2005 - ------------------------------------------------------------------------------------------------- ASSETS - ------------------------------------------------------------------------------------------------- Investments, at value--see accompanying statement of investments: Unaffiliated companies (cost $367,150,268) $ 507,925,175 Affiliated companies (cost $16,310,726) 23,793,789 ------------- 531,718,964 - ------------------------------------------------------------------------------------------------- Cash 3,318,239 - ------------------------------------------------------------------------------------------------- Receivables and other assets: Shares of beneficial interest sold 3,062,435 Interest and dividends 201,563 Other 12,452 -------------- Total assets 538,313,653 - ------------------------------------------------------------------------------------------------- LIABILITIES - ------------------------------------------------------------------------------------------------- Options written, at value (premiums received $261,685) - --see accompanying statement of investments 903,400 - ------------------------------------------------------------------------------------------------- Payables and other liabilities: Shares of beneficial interest redeemed 1,377,020 Investments purchased 880,028 Distribution and service plan fees 278,855 Transfer and shareholder servicing agent fees 79,682 Shareholder communications 74,854 Trustees' compensation 43,169 Other 33,733 -------------- Total liabilities 3,670,741 - ------------------------------------------------------------------------------------------------- NET ASSETS $ 534,642,912 ============== - ------------------------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS - ------------------------------------------------------------------------------------------------- Paid-in capital $ 369,081,233 - ------------------------------------------------------------------------------------------------- Accumulated net investment loss (1,391,535) - ------------------------------------------------------------------------------------------------- Accumulated net realized gain on investments and foreign currency transactions 19,341,692 - ------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies 147,611,522 -------------- NET ASSETS $ 534,642,912 ==============
17 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND STATEMENT OF ASSETS AND LIABILITIES Unaudited / Continued - -------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE - ---------------------------------------------------------------------------------------------------------- Class A Shares: Net asset value and redemption price per share (based on net assets of $361,519,887 and 15,519,431 shares of beneficial interest outstanding) $23.29 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $24.71 - ---------------------------------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $77,765,459 and 3,445,058 shares of beneficial interest outstanding) $22.57 - ---------------------------------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $86,023,119 and 3,816,799 shares of beneficial interest outstanding) $22.54 - ---------------------------------------------------------------------------------------------------------- Class N Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $9,334,447 and 406,853 shares of beneficial interest outstanding) $22.94
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 18 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND STATEMENT OF OPERATIONS Unaudited - -------------------------------------------------------------------------------- For the Six Months Ended December 31, 2005 - -------------------------------------------------------------------------------- INVESTMENT INCOME - -------------------------------------------------------------------------------- Dividends (net of foreign withholding taxes of $135,222) $ 1,896,766 - -------------------------------------------------------------------------------- Interest 230,608 - -------------------------------------------------------------------------------- Other income 8,988 ------------ Total investment income 2,136,362 - -------------------------------------------------------------------------------- EXPENSES - -------------------------------------------------------------------------------- Management fees 1,532,939 - -------------------------------------------------------------------------------- Distribution and service plan fees: Class A 333,347 Class B 327,048 Class C 334,510 Class N 17,839 - -------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees: Class A 285,135 Class B 75,162 Class C 61,289 Class N 8,701 - -------------------------------------------------------------------------------- Shareholder communications: Class A 41,721 Class B 13,218 Class C 9,120 Class N 942 - -------------------------------------------------------------------------------- Trustees' compensation 12,750 - -------------------------------------------------------------------------------- Custodian fees and expenses 9,042 - -------------------------------------------------------------------------------- Other 31,736 ------------ Total expenses 3,094,499 Less reduction to custodian expenses (2,111) ------------ Net expenses 3,092,388 - -------------------------------------------------------------------------------- NET INVESTMENT LOSS (956,026)
19 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND STATEMENT OF OPERATIONS Unaudited/Continued - -------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) - ----------------------------------------------------------------------------------------- Net realized gain on: Investments (including premiums on options exercised) $ 23,653,602 Closing and expiration of option contracts written 894,504 Foreign currency transactions 609,713 -------------- Net realized gain 25,157,819 - ----------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on: Investments 104,464,851 Translation of assets and liabilities denominated in foreign currencies 1,007,541 Option contracts (527,869) -------------- Net change in unrealized appreciation 104,944,523 - ----------------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 129,146,316 ==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 20 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND STATEMENTS OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED ENDED DECEMBER 31, 2005 JUNE 30, (UNAUDITED) 2005 - -------------------------------------------------------------------------------------------------------------------------- OPERATIONS - -------------------------------------------------------------------------------------------------------------------------- Net investment loss $ (956,026) $ (1,524,637) - -------------------------------------------------------------------------------------------------------------------------- Net realized gain 25,157,819 33,268,605 - -------------------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation 104,944,523 18,921,231 -------------------------------- Net increase in net assets resulting from operations 129,146,316 50,665,199 - -------------------------------------------------------------------------------------------------------------------------- DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS - -------------------------------------------------------------------------------------------------------------------------- Dividends from net investment income: Class A -- (5,466,709) Class B -- (900,312) Class C -- (919,502) Class N -- (88,623) - -------------------------------------------------------------------------------------------------------------------------- Distributions from net realized gain: Class A (17,051,712) (12,254,008) Class B (3,790,867) (3,131,452) Class C (4,190,279) (2,879,452) Class N (454,501) (226,219) - -------------------------------------------------------------------------------------------------------------------------- BENEFICIAL INTEREST TRANSACTIONS - -------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from beneficial interest transactions: Class A 59,188,926 9,783,920 Class B 1,557,888 (624,379) Class C 12,114,422 5,940,517 Class N 1,706,369 1,728,860 - -------------------------------------------------------------------------------------------------------------------------- NET ASSETS - -------------------------------------------------------------------------------------------------------------------------- Total increase 178,226,562 41,627,840 - -------------------------------------------------------------------------------------------------------------------------- Beginning of period 356,416,350 314,788,510 -------------------------------- End of period (including accumulated net investment loss of $1,391,535 and $435,509, respectively) $ 534,642,912 $ 356,416,350 ================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 21 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND FINANCIAL HIGHLIGHTS - --------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED ENDED DECEMBER 31, 2005 JUNE 30, CLASS A (UNAUDITED) 2005 2004 2003 2002 2001 - ------------------------------------------------------------------------------------------------------------------------------------ PER SHARE OPERATING DATA - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 18.27 $ 16.89 $ 13.79 $ 13.37 $ 9.91 $ 8.80 - ------------------------------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income (loss) (.02) 1 (.03) 1 (.07) 1 .07 .19 .14 Net realized and unrealized gain 6.22 2.79 4.37 1 .50 3.74 1.20 ------------------------------------------------------------------------------------- Total from investment operations 6.20 2.76 4.30 .57 3.93 1.34 - ------------------------------------------------------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Dividends from net investment income -- (.43) (.75) (.15) (.47) (.23) Distributions from net realized gain (1.18) (.95) (.45) -- -- -- ------------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (1.18) (1.38) (1.20) (.15) (.47) (.23) - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 23.29 $ 18.27 $ 16.89 $ 13.79 $ 13.37 $ 9.91 ===================================================================================== - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL RETURN, AT NET ASSET VALUE 2 34.23% 16.49% 29.93% 4.35% 3 41.56% 15.60% - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $361,520 $232,702 $206,696 $131,183 $117,794 $57,294 - ------------------------------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $277,329 $232,401 $195,859 $128,266 $ 76,482 $54,347 - ------------------------------------------------------------------------------------------------------------------------------------ Ratios to average net assets: 4 Net investment income (loss) (0.21)% (0.18)% (0.40)% 0.46% 0.34% 1.82% Total expenses 1.23% 5 1.26% 5,6 1.27% 5,6 1.40% 5 1.45% 5,6 1.34% 5 - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate 77% 81% 108% 134% 60% 25%
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. 22 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
SIX MONTHS YEAR ENDED ENDED DECEMBER 31, 2005 JUNE 30, CLASS B (UNAUDITED) 2005 2004 2003 2002 2001 - ------------------------------------------------------------------------------------------------------------------------------------ PER SHARE OPERATING DATA - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 17.80 $ 16.48 $ 13.50 $ 13.10 $ 9.73 $ 8.63 - ------------------------------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income (loss) (.10) 1 (.17) 1 (.21) 1 (.01) .16 .09 Net realized and unrealized gain 6.05 2.71 4.28 1 .47 3.62 1.16 ------------------------------------------------------------------------------------- Total from investment operations 5.95 2.54 4.07 .46 3.78 1.25 - ------------------------------------------------------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Dividends from net investment income -- (.27) (.64) (.06) (.41) (.15) Distributions from net realized gain (1.18) (.95) (.45) -- -- -- ------------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (1.18) (1.22) (1.09) (.06) (.41) (.15) - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 22.57 $ 17.80 $ 16.48 $ 13.50 $ 13.10 $ 9.73 ===================================================================================== - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL RETURN, AT NET ASSET VALUE 2 33.73% 15.56% 28.91% 3.57% 3 40.46% 14.76% - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $77,766 $60,391 $56,502 $41,426 $36,585 $16,990 - ------------------------------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $65,082 $60,427 $57,639 $38,243 $23,133 $14,554 - ------------------------------------------------------------------------------------------------------------------------------------ Ratios to average net assets: 4 Net investment income (loss) (0.99)% (0.96)% (1.19)% (0.34)% (0.51)% 0.98% Total expenses 2.02% 5 2.04% 5,6 2.06% 5,6 2.18% 5 2.22% 5,6 2.11% 5 - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate 77% 81% 108% 134% 60% 25%
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. 23 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED ENDED DECEMBER 31, 2005 JUNE 30, CLASS C (UNAUDITED) 2005 2004 2003 2002 2001 - ------------------------------------------------------------------------------------------------------------------------------------ PER SHARE OPERATING DATA - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 17.77 $ 16.47 $ 13.51 $ 13.11 $ 9.74 $ 8.66 - ------------------------------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income (loss) (.09) 1 (.16) 1 (.20) 1 .09 .15 .13 Net realized and unrealized gain 6.04 2.71 4.27 1 .38 3.63 1.12 ------------------------------------------------------------------------------------ Total from investment operations 5.95 2.55 4.07 .47 3.78 1.25 - ------------------------------------------------------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Dividends from net investment income -- (.30) (.66) (.07) (.41) (.17) Distributions from net realized gain (1.18) (.95) (.45) -- -- -- ------------------------------------------------------------------------------------ Total dividends and/or distributions to shareholders (1.18) (1.25) (1.11) (.07) (.41) (.17) - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 22.54 $ 17.77 $ 16.47 $ 13.51 $ 13.11 $ 9.74 ==================================================================================== - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL RETURN, AT NET ASSET VALUE 2 33.78% 15.64% 28.90% 3.63% 3 40.46% 14.71% - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $86,023 $57,431 $47,810 $25,899 $17,526 $8,344 - ------------------------------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $66,662 $55,077 $44,168 $21,672 $11,090 $6,714 - ------------------------------------------------------------------------------------------------------------------------------------ Ratios to average net assets: 4 Net investment income (loss) (0.95)% (0.91)% (1.11)% (0.26)% (0.38)% 1.01% Total expenses 1.96% 5 1.99% 5 1.99% 5,6 2.13% 5 2.22% 5,6 2.11% 5 - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate 77% 81% 108% 134% 60% 25%
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. 24 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND
SIX MONTHS YEAR ENDED ENDED DECEMBER 31, 2005 JUNE 30, CLASS N (UNAUDITED) 2005 2004 2003 2002 2001 1 - ------------------------------------------------------------------------------------------------------------------------------------ PER SHARE OPERATING DATA - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $18.03 $16.69 $13.68 $ 13.31 $ 9.89 $ 9.11 - ------------------------------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income (loss) (.05) 2 (.09) 2 (.13) 2 .01 .47 (.06) Net realized and unrealized gain 6.14 2.75 4.33 2 .53 3.40 .84 ---------------------------------------------------------------------------------- Total from investment operations 6.09 2.66 4.20 .54 3.87 .78 - ------------------------------------------------------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Dividends from net investment income -- (.37) (.74) (.17) (.45) -- Distributions from net realized gain (1.18) (.95) (.45) -- -- -- ---------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (1.18) (1.32) (1.19) (.17) (.45) -- - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $22.94 $18.03 $16.69 $ 13.68 $13.31 $ 9.89 ================================================================================== - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL RETURN, AT NET ASSET VALUE 3 34.07% 16.11% 29.40% 4.17% 4 40.97% 8.56% - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $9,334 $5,893 $3,781 $ 1,419 $ 130 $ 1 - ------------------------------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $7,121 $4,816 $2,857 $ 775 $ 34 $ 1 - ------------------------------------------------------------------------------------------------------------------------------------ Ratios to average net assets: 5 Net investment income (loss) (0.51)% (0.51)% (0.71)% 0.13% 1.87% (2.09)% Total expenses 1.52% 1.57% 1.62% 1.80% 1.69% 1.11% Expenses after payments and waivers and reduction to custodian expenses 1.52% 1.57% 1.62% 1.69% 1.69% 1.11% - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate 77% 81% 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 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. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 25 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND NOTES TO FINANCIAL STATEMENTS Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 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. Class 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 may be valued primarily using dealer-supplied valuations or a portfolio pricing service authorized by the Board of Trustees. Securities listed or traded on National Stock Exchanges or other domestic 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 traded on foreign exchanges are valued based on the last sale price on the principal exchange on which the security is traded, in the country that is identified by the portfolio pricing service, prior to the time when the Fund's assets are valued. In the absence of a sale, the security is valued at the official closing price on the principal exchange. Corporate, government and municipal debt instruments having a remaining maturity in excess of sixty days and all mortgage-backed securities will be valued at the mean between the "bid" and "asked" prices. Futures contracts traded on a commodities or futures exchange will be valued at the final settlement price or official closing price on the principal exchange as reported by 26 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND such principal exchange at its trading session ending at, or most recently prior to, the time when the Fund's assets are valued. 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). - -------------------------------------------------------------------------------- FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in U.S. dollars. The values of securities denominated in foreign currencies and amounts related to the purchase and sale of foreign securities and foreign investment income are translated into U.S. dollars 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. 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. 27 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued 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. 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. - -------------------------------------------------------------------------------- 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 six months ended December 31, 2005, the Fund's projected benefit obligations were increased by $7,364, resulting in an accumulated liability of $30,584 as of December 31, 2005. 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 purchases 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. 28 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND - -------------------------------------------------------------------------------- CUSTODIAN FEES. Custodian Fees and Expenses in the Statement of Operations may include interest expense incurred by the Fund on any cash overdrafts of its custodian account during the period. Such cash overdrafts may result from the effects of failed trades in portfolio securities and from cash outflows resulting from unanticipated shareholder redemption activity. The Fund pays interest to its custodian on such cash overdrafts to the extent they are not offset by positive cash balances maintained by the Fund. The Reduction to Custodian Expenses line item, if applicable, represents earnings on cash balances maintained by the Fund during the period. Such interest expense and other custodian fees may be paid with these earnings. - -------------------------------------------------------------------------------- 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. - -------------------------------------------------------------------------------- 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:
SIX MONTHS ENDED DECEMBER 31, 2005 YEAR ENDED JUNE 30, 2005 SHARES AMOUNT SHARES AMOUNT - --------------------------------------------------------------------------------------------------------------- CLASS A Sold 4,251,826 $ 88,115,855 5,261,288 $ 96,630,330 Dividends and/or distributions reinvested 618,113 13,734,468 803,611 14,424,824 Redeemed (2,089,674) (42,661,397) 1 (5,562,151) (101,271,234) 2 ------------------------------------------------------------------------------ Net increase 2,780,265 $ 59,188,926 502,748 $ 9,783,920 ============================================================================== - --------------------------------------------------------------------------------------------------------------- CLASS B Sold 535,691 $ 10,838,922 983,623 $ 17,391,372 Dividends and/or distributions reinvested 150,702 3,246,126 197,750 3,474,438 Redeemed (634,334) (12,527,160) 1 (1,216,673) (21,490,189) 2 ------------------------------------------------------------------------------ Net increase (decrease) 52,059 $ 1,557,888 (35,300) $ (624,379) ============================================================================== - --------------------------------------------------------------------------------------------------------------- CLASS C Sold 980,024 $ 19,682,771 1,086,012 $ 19,368,257 Dividends and/or distributions reinvested 154,731 3,328,265 172,551 3,024,864 Redeemed (550,375) (10,896,614) 1 (928,550) (16,452,604) 2 ------------------------------------------------------------------------------ Net increase 584,380 $ 12,114,422 330,013 $ 5,940,517 ==============================================================================
29 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2. SHARES OF BENEFICIAL INTEREST Continued
SIX MONTHS ENDED DECEMBER 31, 2005 YEAR ENDED JUNE 30, 2005 SHARES AMOUNT SHARES AMOUNT - ------------------------------------------------------------------------------------------------------ CLASS N Sold 154,198 $3,141,044 296,105 $5,351,698 Dividends and/or distributions reinvested 17,896 391,736 14,862 263,812 Redeemed (92,042) (1,826,411) 1 (210,635) (3,886,650) 2 ------------------------------------------------------------------- Net increase 80,052 $1,706,369 100,332 $1,728,860 ===================================================================
1. Net of redemption fees of $15,038, $3,529, $3,615 and $386 for Class A, Class B, Class C and Class N, respectively. 2. Net of redemption fees of $7,766, $2,019, $1,840 and $161 for Class A, Class B, Class C and Class N, respectively. - -------------------------------------------------------------------------------- 3. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations, for the six months ended December 31, 2005, were as follows: PURCHASES SALES - -------------------------------------------------------------------------------- Investment securities $351,932,137 $317,343,165 - -------------------------------------------------------------------------------- 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 six months ended December 31, 2005, the Fund paid $419,272 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 periodically 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 periodically 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. 30 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND - -------------------------------------------------------------------------------- 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% on Class B and Class C shares and 0.25% on Class N shares. The Distributor also receives a service fee of 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 December 31, 2005 for Class B, Class C and Class N shares were $1,466,537, $983,347 and $65,776, respectively. Fees incurred by the Fund under the plans are detailed in the Statement of Operations. - -------------------------------------------------------------------------------- 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 SIX MONTHS RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR - ------------------------------------------------------------------------------------------------------------- December 31, 2005 $139,110 $2,500 $114,499 $23,115 $10,034
- -------------------------------------------------------------------------------- WAIVERS AND REIMBURSEMENTS 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. 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 31 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 5. FOREIGN CURRENCY CONTRACTS Continued 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 December 31, 2005, the Fund had no outstanding foreign currency contracts. - -------------------------------------------------------------------------------- 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. 32 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND Written option activity for the six months ended December 31, 2005 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, 2005 21,452 $ 2,398,632 12,347 $ 1,204,152 Options written 935 108,810 6,200 849,180 Options closed or expired (8,507) (814,804) (15,525) (1,669,811) Options exercised (13,368) (1,608,380) (1,222) (206,094) -------------------------------------------------------------------- Options outstanding as of December 31, 2005 512 $ 84,258 1,800 $ 177,427 ====================================================================
- -------------------------------------------------------------------------------- 7. LITIGATION A consolidated amended complaint has been filed as putative derivative and class actions against the Manager, OFS and the Distributor, as well as 51 of the Oppenheimer funds (as "Nominal Defendants") including the Fund, 30 present and former Directors or Trustees and 8 present and former officers of the funds. This complaint, initially filed in the U.S. District Court for the Southern District of New York on January 10, 2005 and amended on March 4, 2005, consolidates into a single action and amends six individual previously-filed putative derivative and class action complaints. Like those prior complaints, the complaint alleges that the Manager charged excessive fees for distribution and other costs, improperly used assets of the funds in the form of directed brokerage commissions and 12b-1 fees to pay brokers to promote sales of the funds, and failed to properly disclose the use of assets of the funds to make those payments in violation of the Investment Company Act of 1940 and the Investment Advisers Act of 1940. Also, like those prior complaints, the complaint further alleges that by permitting and/or participating in those actions, the Directors/Trustees and the Officers breached their fiduciary duties to shareholders of the funds under the Investment Company Act of 1940 and at common law. The complaint seeks unspecified compensatory and punitive damages, rescission of the funds' investment advisory agreements, an accounting of all fees paid, and an award of attorneys' fees and litigation expenses. The defendants believe that the allegations contained in the Complaints are without merit and that they have meritorious defenses against the claims asserted. The defendants intend to defend these lawsuits vigorously and to contest any claimed liability. The defendants believe that it is premature to render any opinion as to the likelihood of an outcome unfavorable to them and that no estimate can yet be made with any degree of certainty as to the amount or range of any potential loss. 33 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND REPORT OF SHAREHOLDER MEETING Unaudited - -------------------------------------------------------------------------------- On August 17, 2005, a shareholder meeting of the Oppenheimer Gold & Special Minerals Fund was held at which the eleven Trustees identified below were elected (Proposal No. 1). The meeting on August 17, 2005 was adjourned until September 16, 2005 for Proposal 2. At the meeting on September 16, 2005, the sub-proposals in (Proposal No. 2) were approved as described in the Fund's proxy statement for that meeting. The following is a report of the votes cast:
- --------------------------------------------------------------------------------------------- PROPOSAL NO. 1 NOMINEE FOR WITHHELD TOTAL - --------------------------------------------------------------------------------------------- TRUSTEES Matthew P. Fink 10,409,855.577 239,862.150 10,649,717.727 Robert G. Galli 10,407,859.216 241,858.511 10,649,717.727 Phillip A. Griffiths 10,405,066.723 244,651.004 10,649,717.727 Mary F. Miller 10,403,392.771 246,324.956 10,649,717.727 Joel W. Motley 10,415,255.211 234,462.516 10,649,717.727 John V. Murphy 10,410,567.697 239,150.030 10,649,717.727 Kenneth A. Randall 10,397,023.059 252,694.668 10,649,717.727 Russell S. Reynolds, Jr. 10,395,601.593 254,116.134 10,649,717.727 Joseph M. Wikler 10,407,309.775 242,407.952 10,649,717.727 Peter I. Wold 10,404,595.116 245,122.611 10,649,717.727 Clayton K. Yeutter 10,403,859.351 245,858.376 10,649,717.727
- -------------------------------------------------------------------------------- PROPOSAL NO. 2: Proposal to change policy on
BROKER FOR AGAINST ABSTAIN NON-VOTE TOTAL - --------------------------------------------------------------------------------------------- 2B: Concentration of Investments 7,147,541.993 377,713.809 451,907.824 2,583,946.000 10,561,109.626 2L: Senior Securities 7,182,044.097 362,897.987 432,221.542 2,583,946.000 10,561,109.626
34 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES; UPDATES TO STATEMENTS OF INVESTMENTS 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 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 voting record is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, and (ii) in the Form N-PX filing on the SEC's website at www.sec.gov. The Fund files its complete schedule of portfolio holdings with the SEC for the first quarter and the third quarter of each fiscal year on Form N-Q. The Fund's Form N-Q filings are available on the SEC's website at http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public Reference Room in Washington D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. 35 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND BOARD APPROVAL OF THE FUND'S INVESTMENT ADVISORY AGREEMENT Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Each year, the Board of Trustees (the "Board"), including a majority of the independent Trustees, is required to determine whether to renew the Fund's investment advisory agreement (the "Agreement"). The Investment Company Act of 1940, as amended, requires that the Board request and evaluate, and that the Manager provide, such information as may be reasonably necessary to evaluate the terms of the Agreement. The Board employs an independent consultant to prepare a report that provides information, including comparative information, that the Board requests for that purpose. In addition, the Board receives information throughout the year regarding Fund services, fees, expenses and performance. The Manager and the independent consultant provided information to the Board on the following factors: (i) the nature, quality and extent of the Manager's services, (ii) the investment performance of the Fund and the Manager, (iii) the fees and expenses of the Fund, including comparative expense information, (iv) the profitability of the Manager and its affiliates, including an analysis of the cost of providing services by the Manager and its affiliates, (v) the extent to which economies of scale are realized as the Fund grows and whether fee levels reflect these economies of scale for Fund investors and (vi) other benefits to the Manager from its relationship with the Fund. The Board was aware that there are alternatives to retaining the Manager. NATURE AND EXTENT OF SERVICES. The Board considered information on the nature and extent of the services provided to the Fund and information regarding the Manager's key personnel that provide such services. The Manager's duties include providing the Fund with the services of the portfolio manager and the Manager's investment team, who provide research, analysis and other advisory services in regard to the Fund's investments; securities trading services; oversight of third party service providers; monitoring compliance with applicable Fund policies and procedures and adherence to the Fund's investment restrictions. The Manager is responsible for providing certain administrative services to the Fund as well. Those services include providing, and supervising the activities of, all administrative and clerical personnel that are necessary in order to provide effective corporate administration for the Fund; compiling and maintaining records with respect to the Fund's operations; preparing and filing reports required by the Securities and Exchange Commission; preparing periodic reports regarding the operations of the Fund for its shareholders; preparing proxy materials for shareholder meetings; and preparing the registration statements required by Federal and state securities laws for the sale of the Fund's shares. The Manager also provides the Fund with office space, facilities and equipment. 36 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND QUALITY OF SERVICES. The Board also considered the quality of the services provided and the quality of the Manager's resources that are available to the Fund. The Board took account of the facts that the Manager has had over forty years of experience as an investment adviser and that its assets under management rank it among the top mutual fund managers in the United States. The Board evaluated the Manager's administrative, accounting, legal and compliance services, and information the Board has received regarding the experience and professional qualifications of the Manager's personnel and the size and functions of its staff. In its evaluation of the quality of the portfolio management services provided, the Board considered the experience of Shanquan Li and the Manager's Global investment team and analysts. Mr. Li has had over 16 years of experience managing equity investments. The Board members also considered their experiences with the Manager and its officers and other personnel through their service as directors or trustees of the Fund and other funds advised by the Manager. The Board considered information regarding the quality of services provided by affiliates of the Manager, which it also reviews at other times during the year in connection with the renewal of the Fund's service agreements. In light of the foregoing, the Board concluded that the Fund benefits from the services provided under the Agreement as a result of the Manager's experience, reputation, personnel, operations, and resources. INVESTMENT PERFORMANCE OF THE MANAGER AND THE FUND. During the year, the Manager provided information on the investment performance of the Fund and the Manager at each Board meeting, including comparative performance information. The Board also reviewed information, prepared by the Manager and by the independent consultant, comparing the Fund's historical performance to relevant market indices and to the performance of other gold-oriented funds advised by other investment advisers. The Board noted that the Fund's one-year, three-year and ten-year performance were better than its peer group average. However, its five-year performance was below its peer group average. MANAGEMENT FEES AND EXPENSES. The Board reviewed the fees paid to the Manager and its affiliates and the other expenses borne by the Fund. The independent consultant provided comparative data in regard to the fees and expenses of the Fund, other gold-oriented funds and other funds with comparable asset levels and distribution features. The Board noted that the Fund's contractual and actual management fees and total expenses are all lower than its peer group median and average. The Board also evaluated to what extent the fees charged and the services provided to the Fund are comparable to the fees and services for other clients or accounts advised by the Manager. 37 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND BOARD APPROVAL OF THE FUND'S INVESTMENT ADVISORY AGREEMENT Unaudited / Continued - -------------------------------------------------------------------------------- ECONOMIES OF SCALE. The Board reviewed the extent to which the Manager may realize economies of scale in managing and supporting the Fund, to what extent those economies of scale benefit the Fund shareholders and the current level of Fund assets in relation to the Fund's breakpoint schedule for its management fees. The Board considered that the Fund has recently experienced moderate asset growth and that, based on current asset levels, the Fund is not yet approaching its last management fee breakpoint. BENEFITS TO THE MANAGER. The Board considered information regarding the Manager's costs in serving as the Fund's investment adviser, including the costs associated with the personnel and systems necessary to manage the Fund, and information regarding the Manager's profitability from its relationship with the Fund. The Board considered that the Manager must be able to pay and retain experienced professional personnel at competitive rates to provide services to the Fund and that maintaining the financial viability of the Manager is important in order for the Manager to continue to provide significant services to the Fund and its shareholders. In addition to considering the profits realized by the Manager, the Board considered information regarding the direct and indirect benefits the Manager receives as a result of its relationship with the Fund, including compensation paid to the Manager's affiliates for services provided and research provided to the Manager in connection with permissible brokerage arrangements (soft dollar arrangements). CONCLUSIONS. These factors were also considered by the independent Trustees meeting separately from the full Board, assisted by experienced counsel to the Fund and the independent Trustees. Fund counsel is independent of the Manager within the meaning and intent of the Securities and Exchange Commission Rules. Based on its review of the information it received and its evaluations described above, the Board, including a majority of the independent Trustees, concluded that the nature, extent and quality of the services provided to the Fund by the Manager are a benefit to the Fund and in the best interest of the Fund's shareholders and that the amount and structure of the compensation received by the Manager and its affiliates are reasonable in relation to the services provided. Accordingly, the Board elected to continue the advisory agreement for another year. In arriving at this decision, the Board did not single out any factor or factors as being more important than others, but considered all of the factors together. The Board judged the terms and conditions of the advisory agreement, including the management fee, in light of all of the surrounding circumstances. 38 | OPPENHEIMER GOLD & SPECIAL MINERALS FUND ITEM 2. CODE OF ETHICS. Not applicable to semiannual reports. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable to semiannual reports. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable to semiannual reports. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS. Not applicable. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. THE FUND'S GOVERNANCE COMMITTEE PROVISIONS WITH RESPECT TO NOMINATIONS OF DIRECTORS/TRUSTEES TO THE RESPECTIVE BOARDS 1. The Fund's Governance Committee (the "Committee") will evaluate potential Board candidates to assess their qualifications. The Committee shall have the authority, upon approval of the Board, to retain an executive search firm to assist in this effort. The Committee may consider recommendations by business and personal contacts of current Board members and by executive search firms which the Committee may engage from time to time and may also consider shareholder recommendations. The Committee may consider the advice and recommendation of the Funds' investment manager and its affiliates in making the selection. 2. The Committee shall screen candidates for Board membership. The Committee has not established specific qualifications that it believes must be met by a trustee nominee. In evaluating trustee nominees, the Committee considers, among other things, an individual's background, skills, and experience; whether the individual is an "interested person" as defined in the Investment Company Act of 1940; and whether the individual would be deemed an "audit committee financial expert" within the meaning of applicable SEC rules. The Committee also considers whether the individual's background, skills, and experience will complement the background, skills, and experience of other nominees and will contribute to the Board. There are no differences in the manner in which the Committee evaluates nominees for trustees based on whether the nominee is recommended by a shareholder. 3. The Committee may consider nominations from shareholders for the Board at such times as the Committee meets to consider new nominees for the Board. The Committee shall have the sole discretion to determine the candidates to present to the Board and, in such cases where required, to shareholders. Recommendations for trustee nominees should, at a minimum, be accompanied by the following: o the name, address, and business, educational, and/or other pertinent background of the person being recommended; o a statement concerning whether the person is an "interested person" as defined in the Investment Company Act of 1940; o any other information that the Funds would be required to include in a proxy statement concerning the person if he or she was nominated; and o the name and address of the person submitting the recommendation and, if that person is a shareholder, the period for which that person held Fund shares. The recommendation also can include any additional information which the person submitting it believes would assist the Committee in evaluating the recommendation. 4. Shareholders should note that a person who owns securities issued by Massachusetts Mutual Life Insurance Company (the parent company of the Funds' investment adviser) would be deemed an "interested person" under the Investment Company Act of 1940. In addition, certain other relationships with Massachusetts Mutual Life Insurance Company or its subsidiaries, with registered broker-dealers, or with the Funds' outside legal counsel may cause a person to be deemed an "interested person." 5. Before the Committee decides to nominate an individual as a trustee, Committee members and other directors customarily interview the individual in person. In addition, the individual customarily is asked to complete a detailed questionnaire which is designed to elicit information which must be disclosed under SEC and stock exchange rules and to determine whether the individual is subject to any statutory disqualification from serving as a trustee of a registered investment company. ITEM 11. CONTROLS AND PROCEDURES. Based on their evaluation of the registrant's disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940 (17 CFR 270.30a-3(c)) as of December 31, 2005, the registrant's principal executive officer and principal financial officer found the registrant's disclosure controls and procedures to provide reasonable assurances that information required to be disclosed by the 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. There have been no changes in the registrant's internal controls over financial reporting that occurred during the registrant's second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a) (1) Not applicable to semiannual reports. (2) Exhibits attached hereto. (3) Not applicable. (b) Exhibit 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. Oppenheimer Gold & Special Minerals Fund By: /s/ John V. Murphy ------------------ John V. Murphy Principal Executive Officer Date: February 14, 2006 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 dates indicated. By:/s/ John V. Murphy ------------------ John V. Murphy Principal Executive Officer Date: February 14, 2006 By: /s/ Brian W. Wixted ------------------- Brian W. Wixted Principal Financial Officer Date: February 14, 2006 EX-99.CERT 2 rs410_18683-ex302.txt RS410_18683-EX302.TXT Exhibit 99.CERT Section 302 Certifications CERTIFICATIONS I, John V. Murphy, certify that: 1. I have reviewed this report on Form N-CSR of Oppenheimer Gold & Special Minerals Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of Trustees (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 14, 2006 /s/ John V. Murphy - ------------------ John V. Murphy Principal Executive Officer Exhibit 99.CERT Section 302 Certifications CERTIFICATIONS I, Brian W. Wixted, certify that: 1. I have reviewed this report on Form N-CSR of Oppenheimer Gold & Special Minerals Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of Trustees (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 14, 2006 /s/ Brian W. Wixted - -------------------- Brian W. Wixted Principal Financial Officer EX-99.906CERT 3 rs410_18683-ex906.txt RS410_18683-EX906.TXT EX-99.906CERT Section 906 Certifications CERTIFICATION PURSUANT TO 18 U.S.C SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 John V. Murphy, Principal Executive Officer, and Brian W. Wixted, Principal Financial Officer, of Oppenheimer Gold & Special Minerals Fund (the "Registrant"), each certify to the best of his knowledge that: 1. The Registrant's periodic report on Form N-CSR for the period ended December 31, 2005 (the "Form N-CSR") fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. This certification is being furnished to the Commission solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Form N-CSR filed with the Commission. Principal Executive Officer Principal Financial Officer Oppenheimer Gold & Special Minerals Fund Oppenheimer Gold & Special Minerals Fund /s/ John V. Murphy /s/ Brian W. Wixted - ------------------------------- ------------------------------- John V. Murphy Brian W. Wixted Date: February 14, 2006 Date: February 14, 2006 -----END PRIVACY-ENHANCED MESSAGE-----