N-CSR 1 primary-document.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
FORM N-CSR
 
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
 
Investment Company Act file number 811-01700
 
Franklin Gold and Precious Metals Fund

(Exact name of registrant as specified in charter)
 
One Franklin Parkway
, San Mateo, CA  94403-1906

(Address of principal executive offices) (Zip code)
 
Craig S. Tyle, One Franklin Parkway, San Mateo, CA  94403-1906

(Name and address of agent for service)
 
Registrant's telephone number, including area code: 650 312-2000
 
Date of fiscal year end: 7/31
 
Date of reporting period: 7/31/21
 
Item 1.  Reports to Stockholders.
 
a.)
 
The following is a copy of the report transmitted to shareholders pursuant to Rule30e-1 under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30e-1.)


b.)
 
Include a copy of each notice transmitted to stockholders in reliance on Rule 30e-3 under the Act (17 CFR 270.30e-3) that contains disclosures specified by paragraph (c)(3) of that rule.
Not Applicable
.
 
ANNUAL
REPORT
AND
SHAREHOLDER
LETTER
Franklin
Gold
and
Precious
Metals
Fund
July
31,
2021
Sign
up
for
electronic
delivery
at
franklintempleton.com/edelivery
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FDIC
Insured
May
Lose
Value
No
Bank
Guarantee
franklintempleton.com
Not
part
of
the
annual
report
1
Shareholder
Letter
Dear
Shareholder:
During
the
12
months
ended
July
31,
2021,
the
global
economy
continued
to
recover
from
the
disruptions
caused
by
the
onset
of
the
novel
coronavirus
(COVID-19)
pandemic
in
early
2020
and
subsequent
economic
lockdowns
imposed
by
many
governments
worldwide.
Global
stocks
advanced
during
the
period
amid
the
reopening
of
many
economies,
the
global
rollout
of
COVID-19
vaccines
and
generally
strong
corporate
earnings
reports.
Inflation
surged
in
many
countries
during
the
period’s
second
half,
driven
by
resurgent
economic
activity,
supply
bottlenecks
and
the
base
effects
of
the
pandemic
shocks
in
2020.
Many
central
banks
signaled
the
end
of
cutting
benchmark
interest
rates,
and
some
began
to
move
toward
policy
normalization,
but
the
U.S.
Federal
Reserve,
the
European
Central
Bank
and
the
Bank
of
Japan
kept
their
policy
rates
unchanged.
Near
period-end,
investor
concerns
that
the
swiftly
spreading
Delta
variant
of
COVID-19
could
hinder
the
economic
recovery
pressured
many
global
stock
markets.
In
this
environment,
U.S.
stocks,
as
measured
by
the
Standard
&
Poor’s
®
500
Index,
posted
a
+36.45%
total
return
for
the
period,
and
global
developed
market
stocks,
as
measured
by
the
MSCI
World
Index,
posted
a
+35.67%
total
return.
1
After
starting
the
period
at
$1,976
per
ounce,
gold
rose
to
a
record
high
of
$2,067
per
ounce
in
August
2020
amid
a
weak
U.S.
dollar,
low
interest
rates,
federal
deficit
and
inflation
fears,
and
data
suggesting
a
slower
recovery
from
the
COVID-19
induced
economic
crisis.
2
However,
gold
edged
down
during
the
following
months
given
optimism
about
progress
in
vaccine
development
and
approvals,
a
gradual
reopening
of
the
global
economy
and
the
outcome
of
the
U.S.
elections.
After
a
brief
increase
in
January
2021,
gold
prices
subsequently
fell
to
$1,708
per
ounce
at
the
end
of
March
due
to
rising
U.S.
Treasury
yields,
a
stock
market
rally,
increasing
vaccinations
and
a
strengthening
U.S.
dollar.
2
Gold
recovered
some
of
those
losses
in
the
following
months
due
to
concerns
about
rising
inflation
and
periods
of
U.S.
dollar
weakness,
and
ended
the
period
at
$1,814
per
ounce.
2
In
this
environment,
gold
stocks,
as
measured
by
the
FTSE
®
Gold
Mines
Index,
posted
a
total
return
of
-21.73%
for
the
12-month
period.
1
We
are
committed
to
our
long-term
perspective
and
disciplined
investment
approach
as
we
conduct
a
rigorous,
fundamental
analysis
of
securities
with
a
regular
emphasis
on
investment
risk
management.
We
believe
active,
professional
investment
management
serves
investors
well.
We
also
recognize
the
important
role
of
financial
professionals
in
today’s
markets
and
encourage
investors
to
continue
to
seek
their
advice.
Amid
changing
markets
and
economic
conditions,
we
are
confident
investors
with
a
well-diversified
portfolio
and
a
patient,
long-term
outlook
should
be
well-positioned
for
the
years
ahead.
Franklin
Gold
and
Precious
Metals
Fund’s
annual
report
includes
more
detail
about
prevailing
conditions
and
discussions
about
investment
decisions
during
the
period.
Please
remember
all
securities
markets
fluctuate,
as
do
mutual
fund
share
prices.
We
thank
you
for
investing
with
Franklin
Templeton,
welcome
your
questions
and
comments,
and
look
forward
to
serving
your
future
investment
needs.
Sincerely,
Edward
Perks,
CFA
President
and
Chief
Executive
Officer
-
Investment
Management
Franklin
Gold
and
Precious
Metals
Fund
This
letter
reflects
our
analysis
and
opinions
as
of
July
31,
2021,
unless
otherwise
indicated.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
fund.
Statements
of
fact
are
from
sources
considered
reliable.
CFA
®
is
a
trademark
owned
by
CFA
Institute.
1.
Source:
Morningstar.
2.
Bloomberg
LP.
Based
on
spot
prices
quoted
in
U.S.
dollars
per
troy
ounce.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
franklintempleton.com
Annual
Report
2
Contents
Annual
Report
Franklin
Gold
and
Precious
Metals
Fund
3
Performance
Summary
8
Your
Fund’s
Expenses
11
Financial
Highlights
and
Statement
of
Investments
12
Financial
Statements
21
Notes
to
Financial
Statements
25
Report
of
Independent
Registered
Public
Accounting
Firm
39
Tax
Information
40
Board
Members
and
Officers
41
Shareholder
Information
46
Visit
franklintempleton.com
for
fund
updates,
to
access
your
account,
or
to
find
helpful
financial
planning
tools.
3
franklintempleton.com
Annual
Report
ANNUAL
REPORT
Franklin
Gold
and
Precious
Metals
Fund
This
annual
report
for
Franklin
Gold
and
Precious
Metals
Fund
covers
the
fiscal
year
ended
July
31,
2021
.
Your
Fund’s
Goal
and
Main
Investments
The
Fund
seeks
capital
appreciation.
Its
secondary
goal
is
to
provide
shareholders
with
current
income
through
dividends
or
interest
received
from
its
investments.
Under
normal
market
conditions,
the
Fund
invests
at
least
80%
of
its
net
assets
in
securities
of
gold
and
precious
metals
operation
companies.
The
Fund
primarily
invests
in
equity
securities,
mainly
common
stock,
and
also
invests
in
American,
global
and
European
depositary
receipts.
Performance
Overview
The
Fund’s
Class
A
shares
posted
a
-3.80%
cumulative
total
return
for
the
12
months
under
review.
In
comparison,
the
Fund’s
primary
benchmark,
the
sector-specific
FTSE
Gold
Mines
Index,
which
comprises
companies
whose
principal
activity
is
gold
mining,
posted
a
-21.73%
cumulative
total
return.
1
The
Fund’s
secondary
benchmark,
the
Standard
&
Poor’s
500
Index
(S&P
500
®
),
which
is
a
broad
measure
of
U.S.
stock
performance,
posted
a
+36.45%
cumulative
total
return.
1
You
can
find
the
Fund’s
long-term
performance
data
in
the
Performance
Summary
beginning
on
page
8
.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236
.
Economic
and
Market
Overview
Global
developed
and
emerging
market
equities,
as
measured
by
the
MSCI
All
Country
World
Index-NR,
posted
a
+33.18%
total
return
for
the
12
months
ended
July
31,
2021.
1
Global
equities
benefited
from
monetary
and
fiscal
stimulus
measures,
easing
novel
coronavirus
(COVID-19)
pandemic
restrictions
in
certain
regions
and
the
development
of
treatments
and
vaccines.
Geopolitical
tensions
and
rising
infection
rates
in
the
fall
of
2020
reduced
stock
prices,
but
the
implementation
of
vaccination
programs
and
additional
fiscal
stimulus
measures
led
many
equity
markets
to
reach
new
price
highs
during
the
rest
of
the
period.
However,
the
Chinese
government’s
imposition
of
additional
restrictions
on
some
businesses
pressured
Asian
and
global
emerging
market
stocks
late
in
the
12-month
period.
In
the
U.S.,
the
economy
continued
to
recover
and
equities
rallied
amid
monetary
and
fiscal
stimulus
measures,
vaccine
development
and
the
beginning
of
vaccination
programs.
As
economic
conditions
improved,
gross
domestic
product
(GDP)
rebounded
at
a
record
annualized
pace
in
2020’s
third
quarter.
Although
GDP
growth
was
less
robust
in
the
three
subsequent
quarters,
the
lifting
of
many
COVID-19
restrictions
and
strong
consumer
spending
continued
to
support
the
economy.
A
rebound
in
corporate
earnings
and
progress
toward
a
bipartisan
infrastructure
plan
further
bolstered
investor
sentiment.
The
U.S.
Federal
Reserve
(Fed)
kept
the
federal
funds
target
rate
at
a
record-low
range
of
0.00%–0.25%
and
continued
its
program
of
open-ended
bond
purchases
to
help
keep
markets
functioning.
Year-
over-year
inflation
rose
late
in
the
12-month
period
amid
the
economic
reopening,
higher
consumer
demand
and
constraints
in
some
supply
chains.
In
its
July
2021
meeting
statement,
the
Fed
indicated
that
rising
inflation
largely
reflected
transitory
factors
and
it
would
monitor
incoming
information
and
adjust
its
monetary
policy
stance
as
needed
to
attain
its
employment
and
price
stability
goals.
Geographic
Composition
7/31/21
%
of
Total
Net
Assets
Canada
48.8%
Australia
21.5%
South
Africa
9.2%
United
States
5.8%
Burkina
Faso
5.4%
Tanzania
2.8%
Kyrgyzstan
2.0%
Egypt
1.4%
Turkey
1.3%
Other
0.7%
Short-Term
Investments
&
Other
Net
Assets
1.1%
1.
Source:
Morningstar.
The
indexes
are
unmanaged
and
include
reinvestment
of
any
income
or
distributions.
They
do
not
reflect
any
fees,
expenses
or
sales
charges.
One
cannot
invest
directly
in
an
index,
and
an
index
is
not
representative
of
the
Fund’s
portfolio.
Net
Returns
(NR)
include
income
net
of
tax
withholding
when
dividends
are
paid.
The
dollar
value,
number
of
shares
or
principal
amount,
and
names
of
all
portfolio
holdings
are
listed
in
the
Fund’s
Statement
of
Investments
(SOI).
The
SOI
begins
on
page
16
.
Franklin
Gold
and
Precious
Metals
Fund
4
franklintempleton.com
Annual
Report
The
economic
recovery
in
the
eurozone
was
relatively
weak,
as
quarter-over-quarter
GDP
growth
rebounded
in
2020’s
third
quarter
but
slightly
contracted
over
the
subsequent
two
quarters,
before
returning
to
growth
in
2021’s
second
quarter.
GDP
growth
rates
were
mostly
sluggish
among
the
region’s
largest
economies
amid
renewed
lockdowns,
delays
in
COVID-19
vaccine
distribution
and
weak
consumer
spending.
Nevertheless,
optimism
that
the
eventual
success
of
vaccination
programs
would
lift
global
growth
helped
European
developed
market
equities,
as
measured
by
the
MSCI
Europe
Index-NR,
to
post
a
+32.50%
total
return
for
the
12
months
under
review.
1
Asian
developed
and
emerging
market
equities,
as
measured
by
the
MSCI
All
Country
Asia
Index-NR,
posted
a
+21.28%
total
return
for
the
12-month
period.
1
China’s
economic
recovery
helped
the
region
rebound,
although
the
country’s
quarter-over-quarter
GDP
growth
in
2021’s
first
and
second
quarters
was
slower
than
2020’s
last
two
quarters,
pressured
by
higher
commodity
prices.
Asian
equity
markets
experienced
heightened
volatility
toward
period-end
due
to
investor
concerns
about
higher
inflation
and
rising
COVID-19
infection
rates
in
some
countries.
Unexpected
regulatory
changes
by
the
Chinese
government,
which
negatively
impacted
education-
and
technology-related
businesses,
led
some
foreign
investors
to
shift
capital
away
from
China.
Global
emerging
market
stocks,
as
measured
by
the
MSCI
Emerging
Markets
Index-NR,
posted
a
+20.64%
total
return
for
the
12
months
under
review.
1
Generally
improving
economic
activity,
increasing
oil
prices
and
U.S.
dollar
weakness
supported
global
emerging
market
equities.
During
the
latter
part
of
the
period,
higher
COVID-19
cases
in
some
countries,
limited
vaccine
rollouts
and
concerns
about
rising
interest
rates
and
higher
inflation
amid
rising
commodity
prices
dampened
investor
enthusiasm
in
global
emerging
market
equities.
Precious
Metals
Prices
(7/31/20–7/31/21
)*
*Source:
Bloomberg
LP.
Amounts
shown
are
based
on
spot
prices
quoted
in
U.S.
dollars
per
troy
ounce.
For
illustrative
purposes
only;
not
representative
of
the
Fund’s
portfolio
composition
or
performance.
Precious
Metals
Sector
Overview
Gold
started
the
12-month
period
ended
July
31,
2021,
at
$1,976
per
ounce,
and
rose
to
a
record
high
of
$2,067
per
ounce
in
August
2020
amid
a
weak
U.S.
dollar,
low
interest
rates,
federal
deficit
and
inflation
fears,
and
data
suggesting
a
slower
recovery
from
the
COVID-19
induced
economic
crisis.
2
However,
gold
edged
down
during
the
following
months
given
optimism
about
progress
in
vaccine
development
and
approvals,
a
gradual
reopening
of
the
global
economy
and
the
resolution
of
the
U.S.
elections.
Although
the
price
of
gold
rose
in
early
January
2021
to
over
$1,900
per
ounce,
it
subsequently
fell
to
$1,708
per
ounce
at
the
end
of
March
due
to
rising
U.S.
Treasury
yields,
concern
around
growing
COVID-19
cases
in
India,
optimism
around
increasing
vaccinations
in
developed
markets
and
a
strengthening
U.S.
dollar.
2
Gold
recovered
some
of
those
losses
in
the
following
months
due
to
concerns
about
rising
inflation
and
periods
of
U.S.
dollar
weakness,
and
ended
the
period
at
$1,814
per
ounce.
2
For
the
period
as
a
whole,
worries
about
long-term
inflation
were
relatively
muted,
keeping
gold’s
price
in
check
as
investors
focused
on
general
market
equities
amid
strong
economic
data.
Among
other
precious
metals,
silver
prices
rose
modestly
during
the
12-month
period.
Silver
prices
rallied
in
the
first
half
of
the
period
due
to
growing
industrial
demand,
including
for
5G
network
equipment
and
wider
use
in
solar
panels
2.
Source:
Bloomberg
LP.
Based
on
spot
prices
quoted
in
U.S.
dollars
per
troy
ounce.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
Franklin
Gold
and
Precious
Metals
Fund
5
franklintempleton.com
Annual
Report
and
electric
vehicles.
Other
factors
were
also
in
play
in
late
January
and
early
February
2021,
when
silver
market
volatility
spiked
along
with
prices
after
being
targeted
by
day
traders
that
aggressively
bought
silver
ETF
shares,
seeking
to
create
a
squeeze
against
select
banks
and
hedge
funds.
Silver
prices
subsequently
fell
off
those
peaks
in
the
second
half
of
the
period,
impacted
along
with
other
precious
metals
by
investor
anxiety
about
potential
future
tightening
of
the
Fed’s
monetary
policy.
Platinum
and
palladium
had
double-
digit
percentage
gains
during
the
period,
benefiting
from
supply
disruptions
and
robust
demand
for
their
use
in
vehicle
pollution
control
devices.
2
However,
price
gains
were
limited
by
both
metals’
declines
in
the
last
three
months
of
the
period
as
auto
production
was
disrupted
by
semiconductor
shortages
and
other
supply
chain
issues.
Investment
Strategy
Gold
and
precious
metals
operation
companies
include
companies
that
mine,
process,
or
deal
in
gold
or
other
precious
metals,
such
as
silver,
platinum
and
palladium,
including
mining
finance
and
exploration
companies
as
well
as
operating
companies
with
long-
or
medium-life
mines.
The
Fund
may
buy
securities
of
gold
and
precious
metals
operation
companies
located
anywhere
in
the
world
and
invests
predominantly
in
non-U.S.
companies.
The
Fund
may
invest
in
companies
without
regard
to
market
capitalization,
and
may
heavily
invest
in
small-
and
mid-capitalization
companies.
We
look
for
companies
with
low
cost
reserves
and
experienced
management
teams
with
established
track
records,
particularly
focusing
on
companies
with
long
life
production
profiles,
expandable
resource
bases,
and
active
exploration
programs
that
can
potentially
drive
future
reserve
and
production
growth.
The
investment
manager’s
process
generally
includes
an
assessment
of
the
potential
impacts
of
any
material
environmental,
social
and
governance
(ESG)
factors
on
the
long-term
risk
and
return
profile
of
a
company.
Manager’s
Discussion
Key
contributors
to
the
Fund’s
absolute
performance
during
the
12-month
period
under
review
included
the
Fund’s
holdings
in
Chalice
Mining,
Impala
Platinum
Holdings
and
Ivanhoe
Mines.
Although
the
Fund’s
holdings
in
gold
miners,
representing
roughly
80%
of
total
net
assets,
traded
lower
over
the
12-month
period,
we
held
numerous
off-index
companies
that
posted
double
or
triple-digit
percentage
gains,
which
helped
the
Fund
outperform
its
benchmark.
Many
of
the
Fund’s
small-capitalization
gold
miners
performed
particularly
well,
including
Australia-based
Chalice
Mining.
Chalice
reported
successful
drilling
results
as
it
discovered
and
defined
significant
high-grade
extensions
composed
of
platinum
group
metals,
nickel,
copper
and
gold
at
its
Julimar
project,
about
an
hour’s
drive
from
the
city
of
Perth.
Discovery
of
these
vital
components
for
green
technology
infrastructure—such
as
batteries
and
hydrogen
fuel
cells—
significantly
boosted
Chalice’s
valuation,
and
in
June
2021
the
company
was
added
to
Australia’s
primary
mid-
and
large-capitalization
stock
index.
Given
the
width
and
grade
of
the
drill
results
so
far
and
continued
exploration
potential
in
the
area,
the
multi-faceted
mineralized
Julimar
complex
could
potentially
emerge
as
a
globally
significant
deposit
of
critical
metals
in
Western
Australia.
The
company’s
drilling
activity
at
Pyramid
Hill,
a
gold-focused
project
in
Southeastern
Australia,
also
yielded
some
promising
results
across
several
gold
zones
as
Chalice
continued
to
define
the
extent
of
the
overall
resource.
Unlike
the
gold
industry,
our
positions
in
metals
producers
that
focus
on
platinum,
palladium
and
other
non-gold
metals
showed
overall
positive
absolute
performance
during
the
period.
Platinum
and
palladium
miners,
including
our
position
in
South
African-based
Impala
Platinum
Holdings
(one
of
the
Fund’s
top
10
positions),
benefited
from
tightening
supply
and
demand
fundamentals.
Investment
demand
and
supply
disruptions
offset
weak
automotive
and
industrial
demand
in
2020
for
platinum,
while
2021
has
seen
a
strong
bounce
back
in
automotive
uptake
and
industrial
demand
is
expected
to
exceed
pre-pandemic
levels
on
the
back
of
strong
growth
from
the
glass
making
industry.
The
World
Platinum
Investment
Council
reported
that
first-quarter
2021
marked
the
fourth
consecutive
quarterly
deficit
for
platinum
and
expects
2021
to
deliver
a
third
year
in
a
row
of
a
supply
deficit.
The
company
also
benefited
as
palladium
has
maintained
its
status
as
the
most
valuable
of
the
four
major
precious
metals
during
the
period,
with
strong
demand
and
limited
new
supply
keeping
prices
relatively
near
all-time
highs.
Rhodium,
a
lesser-followed
precious
metal
often
found
with
platinum
and
palladium,
also
provided
a
boost
Portfolio
Composition
7/31/21
%
of
Total
Net
Assets
Gold
75.6%
Precious
Metals
&
Minerals
10.9%
Diversified
Metals
&
Mining
10.7%
Silver
1.1%
Other
0.6%
Short-Term
Investments
&
Other
Net
Assets
1.1%
Franklin
Gold
and
Precious
Metals
Fund
6
franklintempleton.com
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to
cash
flow
as
prices
more
than
tripled
from
an
elevated
level
in
July
2020,
to
reach
a
record
high
in
March
2021,
before
settling
to
more
than
double
the
price
at
period-
end
compared
with
the
beginning
of
the
reporting
period.
Although
rhodium
represents
less
than
5%
of
the
production
by
weight,
its
elevated
price
due
to
strong
automotive
catalyst
demand
has
made
it
a
significant
revenue
driver
for
many
platinum
and
palladium
producers.
Tighter
vehicle
emissions
regulations,
especially
in
China
and
India,
are
driving
greater
palladium,
platinum
and
rhodium
usage
as
companies
look
to
exceed
increasingly
stringent
standards.
Diversified
mining
companies,
such
as
Ivanhoe
Mines,
also
helped
returns.
Ivanhoe,
a
Canadian
mining
company
with
three
mining
projects
in
Africa,
benefited
from
all-time
high
copper
prices
driven
by
demand
for
the
metal’s
use
in
green
energy
technology
and
positive
outlook
for
platinum
and
palladium.
In
May
2021,
the
company
announced
it
had
begun
producing
copper
concentrate
at
its
Kamoa-
Kakula
project
in
the
Democratic
Republic
of
Congo
months
ahead
of
schedule,
further
boosting
its
share
price
as
Ivanhoe
transitions
from
a
development
stage
company
to
a
producer.
The
company
also
continued
to
advance
its
Platreef
project
in
South
Africa,
which
contains
a
large
resource
of
palladium,
platinum,
rhodium,
nickel,
copper
and
gold,
with
the
first
shaft
reaching
the
targeted
depth
of
850
meters
in
2020
and
initial
work
beginning
on
the
mine
production
shaft
sinking
in
2021.
Detractors
from
the
Fund’s
absolute
performance
during
the
period
under
review
included
the
Fund’s
holdings
in
gold
producers
B2Gold,
Barrick
Gold
and
AngloGold
Ashanti.
B2Gold,
one
of
the
Fund’s
largest
positions
at
the
beginning
of
the
period,
is
a
low-cost
senior
gold
producer
with
mines
in
Mali,
the
Philippines
and
Namibia,
and
development
projects
in
Colombia
and
Burkina
Faso.
Despite
the
company’s
share
price
decline
due
to
gold
prices
trending
lower
for
much
of
the
period,
a
decision
to
delay
development
of
their
project
in
Colombia
and
elevated
concerns
around
Mali
following
coup
d'états
in
August
of
2020
and
again
in
May
2021,
B2Gold
reported
record
revenue
(US$1.79
billion)
and
cash
flow
(US$951
million)
in
2020.
The
company’s
production
of
over
1.04
million
ounces
matched
the
upper
end
of
its
guidance
estimate,
representing
a
significant
increase
over
the
prior
year’s
production,
mostly
due
to
expanded
production
from
its
Fekola
mine
in
Mali.
B2Gold
also
reported
above-
budget
production
for
the
first
and
second
quarters
of
2021
and
in
May
announced
five
new
mining
concessions
in
the
Philippines
and
Mali.
The
share
price
of
Canada-based
Barrick
Gold,
our
second-
largest
company
holding
at
period-end,
underperformed
during
the
period,
largely
due
to
price
declines
in
gold
after
a
record
high
in
August
2020.
Despite
this
trend,
the
company
capitalized
on
historically
high
gold
and
copper
prices,
beating
analyst
expectations
and
reporting
a
large
year-over-year
increase
in
first-
and
second-quarter
2021
profits.
Barrick
was
also
able
to
achieve
its
2020
annual
gold
and
copper
production
targets.
During
the
period,
the
company
successfully
resolved
grievances
with
the
Tanzanian
government,
creating
a
joint
venture,
Twiga
Minerals,
that
will
see
Barrick
and
the
government
share
the
economic
benefit
of
the
mining
operations
and
reestablishes
Tanzania
as
a
core
long-term
asset.
Barrick
also
announced
its
intention
to
form
a
new
partnership
with
the
government
of
Papua
New
Guinea
to
operate
the
Porgera
mine
that
is
currently
under
care
and
maintenance.
AngloGold
Ashanti’s
share
price
also
declined
during
the
period.
Investor
confidence
was
hurt
by
the
unexpected
resignation
of
the
gold
mining
company’s
chief
executive
officer
at
the
start
of
the
period
and
subsequent
search
for
a
permanent
replacement,
who
was
not
announced
until
July
2021.
The
company
has
operations
in
Tanzania,
Brazil,
the
Democratic
Republic
of
Congo,
Australia,
Ghana,
Mali
and
Argentina,
but
is
headquartered
in
South
Africa
despite
having
no
mines
in
the
country
after
completing
the
sale
of
their
South
African
operation
in
September
2020.
AngloGold
experienced
a
fall
of
ground
event
in
May
2021
at
their
Obuasi
mine
in
Ghana
which
stopped
mining
through
period-
end,
delaying
the
ramp
up
of
what
is
expected
to
be
one
of
AngloGold’s
largest
mining
operations
in
the
years
ahead,
but
it
expects
mining
to
resume
by
year-end
and
for
the
mine
to
ramp
up
to
previously
planned
levels
through
2022.
For
the
12
months
ended
July
31,
2021,
the
U.S.
dollar
declined
in
value
relative
to
most
foreign
currencies.
As
a
result,
the
Fund’s
performance
was
positively
affected
by
currency
appreciation
from
the
portfolio’s
investment
predominantly
in
securities
with
non-U.S.
currency
exposure.
However,
one
cannot
expect
the
same
result
in
future
periods.
Whether
the
U.S.
dollar
goes
up
or
weakens
compared
with
foreign
currencies,
company-specific
factors
may
offset
the
effects
of
the
currency
movements
on
the
value
of
individual
investments
and,
possibly,
the
Fund’s
performance
overall.
Franklin
Gold
and
Precious
Metals
Fund
7
franklintempleton.com
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Thank
you
for
your
continued
participation
in
Franklin
Gold
and
Precious
Metals
Fund.
We
look
forward
to
serving
your
future
investment
needs.
Stephen
M.
Land,
CFA
Frederick
G.
Fromm,
CFA
Portfolio
Management
Team
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
July
31,
2021
,
the
end
of
the
reporting
period.
The
way
we
implement
our
main
investment
strategies
and
the
resulting
portfolio
holdings
may
change
depending
on
factors
such
as
market
and
economic
conditions.
These
opinions
may
not
be
relied
upon
as
investment
advice
or
an
offer
for
a
particular
security.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
the
Fund.
Statements
of
fact
are
from
sources
considered
reliable,
but
the
investment
manager
makes
no
representation
or
warranty
as
to
their
completeness
or
accuracy.
Although
historical
performance
is
no
guarantee
of
future
results,
these
insights
may
help
you
understand
our
investment
management
philosophy.
Top
10
Holdings
7/31/21
Company
Sub-Industry
%
of
Total
Net
Assets
a
a
Endeavour
Mining
plc
5.4%
Gold
Barrick
Gold
Corp.
5.1%
Gold
Newmont
Corp.
3.7%
Gold
Perseus
Mining
Ltd.
3.6%
Gold
Newcrest
Mining
Ltd.
3.5%
Gold
Impala
Platinum
Holdings
Ltd.
3.4%
Precious
Metals
&
Minerals
Alamos
Gold,
Inc.
3.0%
Gold
Ivanhoe
Mines
Ltd.
2.9%
Diversified
Metals
&
Mining
SSR
Mining,
Inc.
2.9%
Gold
AngloGold
Ashanti
Ltd.
2.8%
Gold
Performance
Summary
as
of
July
31,
2021
Franklin
Gold
and
Precious
Metals
Fund
8
franklintempleton.com
Annual
Report
The
performance
table
and
graphs
do
not
reflect
any
taxes
that
a
shareholder
would
pay
on
Fund
dividends,
capital
gain
distributions,
if
any,
or
any
realized
gains
on
the
sale
of
Fund
shares.
Total
return
reflects
reinvestment
of
the
Fund’s
dividends
and
capital
gain
distributions,
if
any,
and
any
unrealized
gains
or
losses.
Your
dividend
income
will
vary
depending
on
dividends
or
interest
paid
by
securities
in
the
Fund’s
portfolio,
adjusted
for
operating
expenses
of
each
class.
Capital
gain
distributions
are
net
profits
realized
from
the
sale
of
portfolio
securities.
Performance
as
of
7/31/21
Cumulative
total
return
excludes
sales
charges.
Average
annual
total
return
includes
maximum
sales
charges.
Sales
charges
will
vary
depending
on
the
size
of
the
investment
and
the
class
of
share
purchased.
The
maximum
is
5.50%
and
the
minimum
is
0%.
Class
A
:
5.50%
maximum
initial
sales
charge;
Advisor
Class:
no
sales
charges.
For
other
share
classes,
visit
franklintempleton.com.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236
.
Share
Class
Cumulative
Total
Return
1
Average
Annual
Total
Return
2
–
A
3
1-Year
-3.80%
-9.09%
5-Year
+22.30%
+2.94%
10-Year
-32.05%
-4.33%
Advisor
1-Year
-3.59%
-3.59%
5-Year
+23.76%
+4.36%
10-Year
-30.35%
-3.55%
See
page
10
for
Performance
Summary
footnotes.
Franklin
Gold
and
Precious
Metals
Fund
Performance
Summary
9
franklintempleton.com
Annual
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See
page
10
for
Performance
Summary
footnotes.
Total
Return
Index
Comparison
for
a
Hypothetical
$10,000
Investment
Total
return
represents
the
change
in
value
of
an
investment
over
the
periods
shown.
It
includes
any
applicable
maximum
sales
charge,
Fund
expenses,
account
fees
and
reinvested
distributions.
The
unmanaged
indexes
include
reinvestment
of
any
income
or
distributions.
They
differ
from
the
Fund
in
composition
and
do
not
pay
management
fees
or
expenses.
One
cannot
invest
directly
in
an
index.
Class
A
(8/1/11–7/31/21)
Advisor
Class
(8/1/11–7/31/21)
Franklin
Gold
and
Precious
Metals
Fund
Performance
Summary
10
franklintempleton.com
Annual
Report
Each
class
of
shares
is
available
to
certain
eligible
investors
and
has
different
annual
fees
and
expenses,
as
described
in
the
prospectus.
All
investments
involve
risks,
including
possible
loss
of
principal.
The
Fund
concentrates
in
the
precious
metals
sector,
which
involves
fluctuations
in
the
prices
of
gold
and
other
precious
metals
and
increased
susceptibility
to
adverse
economic
and
regulatory
developments
affecting
the
sector.
In
times
of
stable
econom-
ic
growth,
traditional
equity
and
debt
investments
could
offer
greater
appreciation
potential
and
the
prices
of
gold
and
other
precious
metals
may
be
adversely
affected.
In
addition,
the
Fund
is
subject
to
the
risks
of
currency
fluctuation
and
political
uncertainty
associated
with
foreign
(non-U.S.)
investing.
Investments
in
emerging
and
frontier
markets
involve
heightened
risks
related
to
the
same
factors,
in
addition
to
those
associated
with
their
relatively
small
size
and
lesser
liquidity.
The
Fund
may
also
heavily
invest
in
smaller
companies,
which
can
be
particularly
sensitive
to
changing
economic
conditions,
and
their
prospects
for
growth
are
less
certain
than
those
of
larger,
more
established
companies.
Investing
in
a
non-diversified
fund
involves
the
risk
of
greater
price
fluctuation
than
a
more
diversified
portfolio.
Events
such
as
the
spread
of
deadly
diseases,
disasters,
and
financial,
political
or
social
disruptions,
may
heighten
risks
and
adverse-
ly
affect
performance.
The
Fund’s
prospectus
also
includes
a
description
of
the
main
investment
risks.
1.
Cumulative
total
return
represents
the
change
in
value
of
an
investment
over
the
periods
indicated.
2.
Average
annual
total
return
represents
the
average
annual
change
in
value
of
an
investment
over
the
periods
indicated.
Return
for
less
than
one
year,
if
any,
has
not
been
annualized.
3.
Prior
to
9/10/18
these
shares
were
offered
at
a
higher
initial
sales
charge
of
5.75%,
thus
actual
returns
(with
sales
charges)
would
have
differed.
Average
annual
total
returns
(with
sales
charges)
have
been
restated
to
reflect
the
current
maximum
initial
sales
charge
of
5.50%.
4.
Source:
Morningstar.
The
FTSE
Gold
Mines
Index
is
a
free
float-weighted
index
that
comprises
companies
whose
principal
activity
is
gold
mining.
The
S&P
500
is
a
market
capitalization-weighted
index
of
500
stocks
designed
to
measure
total
U.S.
equity
market
performance.
5.
Figures
are
as
stated
in
the
Fund’s
current
prospectus
and
may
differ
from
the
expense
ratios
disclosed
in
the
Your
Fund’s
Expenses
and
Financial
Highlights
sections
in
this
report.
In
periods
of
market
volatility,
assets
may
decline
significantly,
causing
total
annual
Fund
operating
expenses
to
become
higher
than
the
figures
shown.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
Distributions
(8/1/20–7/31/21)
Share
Class
Net
Investment
Income
A
$2.6501
C
$2.4933
R6
$2.7337
Advisor
$2.7082
Total
Annual
Operating
Expenses
5
Share
Class
A
0.93%
Advisor
0.68%
Your
Fund’s
Expenses
Franklin
Gold
and
Precious
Metals
Fund
11
franklintempleton.com
Annual
Report
As
a
Fund
shareholder,
you
can
incur
two
types
of
costs:
(1)
transaction
costs,
including
sales
charges
(loads)
on
Fund
purchases
and
redemptions;
and
(2)
ongoing
Fund
costs,
including
management
fees,
distribution
and
service
(12b-1)
fees,
and
other
Fund
expenses.
All
mutual
funds
have
ongoing
costs,
sometimes
referred
to
as
operating
expenses.
The
table
below
shows
ongoing
costs
of
investing
in
the
Fund
and
can
help
you
understand
these
costs
and
compare
them
with
those
of
other
mutual
funds.
The
table
assumes
a
$1,000
investment
held
for
the
six
months
indicated.
Actual
Fund
Expenses
The
table
below
provides
information
about
actual
account
values
and
actual
expenses
in
the
columns
under
the
heading
“Actual.”
In
these
columns
the
Fund’s
actual
return,
which
includes
the
effect
of
Fund
expenses,
is
used
to
calculate
the
“Ending
Account
Value”
for
each
class
of
shares.
You
can
estimate
the
expenses
you
paid
during
the
period
by
following
these
steps
(
of
course,
your
account
value
and
expenses
will
differ
from
those
in
this
illustration
):
Divide
your
account
value
by
$1,000
(
if
your
account
had
an
$8,600
value,
then
$8,600
÷
$1,000
=
8.6
).
Then
multiply
the
result
by
the
number
in
the
row
for
your
class
of
shares
under
the
headings
“Actual”
and
“Expenses
Paid
During
Period”
(
if
Actual
Expenses
Paid
During
Period
were
$7.50,
then
8.6
x
$7.50
=
$64.50
).
In
this
illustration,
the
actual
expenses
paid
this
period
are
$64.50.
Hypothetical
Example
for
Comparison
with
Other
Funds
Under
the
heading
“Hypothetical”
in
the
table,
information
is
provided
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
This
information
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period,
but
it
can
help
you
compare
ongoing
costs
of
investing
in
the
Fund
with
those
of
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
other
funds.
Please
note
that
expenses
shown
in
the
table
are
meant
to
highlight
ongoing
costs
and
do
not
reflect
any
transactional
costs.
Therefore,
information
under
the
heading
“Hypothetical”
is
useful
in
comparing
ongoing
costs
only,
and
will
not
help
you
compare
total
costs
of
owning
different
funds.
In
addition,
if
transactional
costs
were
included,
your
total
costs
would
have
been
higher.
1.
Expenses
are
equal
to
the
annualized
expense
ratio
for
the
six-month
period
as
indicated
above—in
the
far
right
column—multiplied
by
the
simple
average
account
value
over
the
period
indicated,
and
then
multiplied
by
181/365
to
reflect
the
one-half
year
period.
2.
Reflects
expenses
after
fee
waivers
and
expense
reimbursements.
Does
not
include
acquired
fund
fees
and
expenses.
Actual
(actual
return
after
expenses)
Hypothetical
(5%
annual
return
before
expenses)
Share
Class
Beginning
Account
Value
2/1/21
Ending
Account
Value
7/31/21
Expenses
Paid
During
Period
2/1/21–7/31/21
1,2
Ending
Account
Value
7/31/21
Expenses
Paid
During
Period
2/1/21–7/31/21
1,2
a
Net
Annualized
Expense
Ratio
2
A
$1,000
$1,038.60
$4.74
$1,020.14
$4.70
0.94%
C
$1,000
$1,034.80
$8.51
$1,016.43
$8.44
1.69%
R6
$1,000
$1,040.30
$2.97
$1,021.88
$2.94
0.59%
Advisor
$1,000
$1,039.60
$3.49
$1,021.37
$3.46
0.69%
Franklin
Gold
and
Precious
Metals
Fund
Financial
Highlights
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
12
a
Year
Ended
July
31,
2021
2020
2019
2018
2017
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$28.04
$16.68
$13.56
$16.19
$24.06
Income
from
investment
operations
a
:
Net
investment
income
(loss)
b
....................
0.04
(0.04)
(0.02)
(0.06)
(0.04)
Net
realized
and
unrealized
gains
(losses)
...........
(1.20)
11.40
3.14
(2.51)
(6.45)
Total
from
investment
operations
....................
(1.16)
11.36
3.12
(2.57)
(6.49)
Less
distributions
from:
Net
investment
income
..........................
(2.65)
—
—
(0.06)
(1.38)
Net
asset
value,
end
of
year
.......................
$24.23
$28.04
$16.68
$13.56
$16.19
Total
return
c
...................................
(3.80)%
68.05%
23.01%
(15.92)%
(26.85)%
Ratios
to
average
net
assets
Expenses
d,e
....................................
0.90%
0.93%
0.98%
1.02%
0.98%
Net
investment
income
(loss)
......................
0.17%
(0.20)%
(0.15)%
(0.37)%
(0.24)%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$921,127
$938,555
$645,108
$587,294
$776,677
Portfolio
turnover
rate
............................
18.91%
17.00%
12.82%
8.36%
13.99%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable.
d
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
e
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Gold
and
Precious
Metals
Fund
Financial
Highlights
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
13
a
Year
Ended
July
31,
2021
2020
2019
2018
2017
Class
C
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$25.42
$15.24
$12.49
$14.96
$22.39
Income
from
investment
operations
a
:
Net
investment
(loss)
b
..........................
(0.13)
(0.16)
(0.11)
(0.15)
(0.17)
Net
realized
and
unrealized
gains
(losses)
...........
(1.09)
10.34
2.86
(2.32)
(5.99)
Total
from
investment
operations
....................
(1.22)
10.18
2.75
(2.47)
(6.16)
Less
distributions
from:
Net
investment
income
..........................
(2.49)
—
—
—
(1.27)
Net
asset
value,
end
of
year
.......................
$21.71
$25.42
$15.24
$12.49
$14.96
Total
return
c
...................................
(4.53)%
66.80%
22.02%
(16.51)%
(27.41)%
Ratios
to
average
net
assets
Expenses
d,e
....................................
1.65%
1.68%
1.73%
1.77%
1.73%
Net
investment
(loss)
............................
(0.59)%
(0.94)%
(0.90)%
(1.12)%
(0.99)%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$93,615
$106,271
$75,129
$94,997
$137,487
Portfolio
turnover
rate
............................
18.91%
17.00%
12.82%
8.36%
13.99%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable.
d
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
e
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Gold
and
Precious
Metals
Fund
Financial
Highlights
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
14
a
Year
Ended
July
31,
2021
2020
2019
2018
2017
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$30.20
$17.90
$14.50
$17.31
$25.58
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.13
0.03
0.04
0.01
0.04
Net
realized
and
unrealized
gains
(losses)
...........
(1.28)
12.27
3.36
(2.68)
(6.87)
Total
from
investment
operations
....................
(1.15)
12.30
3.40
(2.67)
(6.83)
Less
distributions
from:
Net
investment
income
..........................
(2.73)
—
—
(0.14)
(1.44)
Net
asset
value,
end
of
year
.......................
$26.32
$30.20
$17.90
$14.50
$17.31
Total
return
....................................
(3.46)%
68.66%
23.45%
(15.50)%
(26.53)%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.69%
0.72%
0.83%
0.79%
0.57%
Expenses
net
of
waiver
and
payments
by
affiliates
c
......
0.56%
0.56%
0.58%
0.55%
0.52%
Net
investment
income
...........................
0.49%
0.17%
0.25%
0.10%
0.21%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$25,458
$20,574
$10,808
$8,153
$4,635
Portfolio
turnover
rate
............................
18.91%
17.00%
12.82%
8.36%
13.99%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Gold
and
Precious
Metals
Fund
Financial
Highlights
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
15
a
Year
Ended
July
31,
2021
2020
2019
2018
2017
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$29.88
$17.73
$14.38
$17.17
$25.38
Income
from
investment
operations
a
:
Net
investment
income
(loss)
b
....................
0.11
0.01
0.01
(0.02)
—
c
Net
realized
and
unrealized
gains
(losses)
...........
(1.28)
12.14
3.34
(2.67)
(6.81)
Total
from
investment
operations
....................
(1.17)
12.15
3.35
(2.69)
(6.81)
Less
distributions
from:
Net
investment
income
..........................
(2.71)
—
—
(0.10)
(1.40)
Net
asset
value,
end
of
year
.......................
$26.00
$29.88
$17.73
$14.38
$17.17
Total
return
....................................
(3.59)%
68.47%
23.30%
(15.70)%
(26.69)%
Ratios
to
average
net
assets
Expenses
d
,e
....................................
0.65%
0.68%
0.73%
0.77%
0.73%
Net
investment
income
(loss)
......................
0.41%
0.05%
0.10%
(0.12)%
0.01%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$307,110
$280,317
$143,589
$130,812
$164,253
Portfolio
turnover
rate
............................
18.91%
17.00%
12.82%
8.36%
13.99%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Amount
rounds
to
less
than
$0.01
per
share.
d
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
e
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Gold
and
Precious
Metals
Fund
Statement
of
Investments,
July
31,
2021
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
16
a
a
Country
Shares
a
Value
a
Common
Stocks
98.2%
Copper
0.6%
a,b
Imperial
Metals
Corp.
..................................
Canada
2,065,330
$
7,827,733
a
Diversified
Metals
&
Mining
10.4%
a,c
Adventus
Mining
Corp.,
144A
............................
Canada
6,350,000
4,833,734
a,d,e
Azimut
Exploration,
Inc.
.................................
Canada
1,200,000
1,978,156
a
Azimut
Exploration,
Inc.
.................................
Canada
506,900
885,450
a
Bluestone
Resources,
Inc.
...............................
Canada
550,000
687,500
a,c
Bluestone
Resources,
Inc.,
144A
..........................
Canada
6,800,000
8,500,000
a
Clean
Air
Metals,
Inc.
..................................
Canada
6,559,000
1,340,180
a,c,f
Euro
Sun
Mining,
Inc.,
144A
.............................
Canada
10,000,000
3,044,872
a,c,f
G
Mining
Ventures
Corp.,
144A
...........................
Canada
8,250,000
5,618,990
a,c
Ivanhoe
Mines
Ltd.,
144A
...............................
Canada
2,035,000
15,099,439
a
Ivanhoe
Mines
Ltd.,
A
..................................
Canada
3,200,000
23,743,590
a
Los
Cerros
Ltd.
.......................................
Australia
23,500,000
2,814,308
a
Matador
Mining
Ltd.
...................................
Australia
8,000,000
2,464,315
a,b,c
Mawson
Gold
Ltd.,
144A
................................
Canada
7,700,000
1,449,920
a
OreCorp
Ltd.
.........................................
Australia
4,200,000
2,297,101
a
Orla
Mining
Ltd.
......................................
Canada
460,000
1,938,782
a,b
Orla
Mining
Ltd.
......................................
Canada
3,490,713
14,712,460
a,c
Orla
Mining
Ltd.,
144A
..................................
Canada
2,000,000
8,429,487
a,c
Osisko
Development
Corp.,
144A
.........................
Canada
1,475,000
7,315,905
a,d,e
Prime
Mining
Corp.
....................................
Canada
1,300,000
3,895,558
a,b
Prime
Mining
Corp.
....................................
Canada
2,200,000
6,751,603
a,b
Sunrise
Energy
Metals
Ltd.
..............................
Australia
1,359,999
1,973,517
a,f
Talisker
Resources
Ltd.
.................................
Canada
15,300,000
3,555,289
a
Vizsla
Silver
Corp.
.....................................
Canada
5,550,000
11,073,317
a
Western
Copper
&
Gold
Corp.
............................
Canada
2,430,000
4,673,077
a,d,e
Western
Copper
&
Gold
Corp.
............................
Canada
930,000
1,788,461
140,865,011
Environmental
&
Facilities
Services
0.0%
†
a,b
Clean
TeQ
Water
Ltd.
..................................
Australia
679,999
451,580
a
Gold
75.5%
Agnico
Eagle
Mines
Ltd.
................................
Canada
64,000
4,139,520
Alamos
Gold,
Inc.,
(CAD
Traded),
A
........................
Canada
2,638,316
21,436,318
Alamos
Gold,
Inc.,
(USD
Traded),
A
........................
Canada
2,379,500
19,321,540
AngloGold
Ashanti
Ltd.,
ADR
.............................
Tanzania
1,854,823
37,189,201
a,c
Argonaut
Gold,
Inc.,
144A
...............................
United
States
2,350,000
6,326,923
a
Artemis
Gold,
Inc.
.....................................
Canada
2,495,000
12,494,992
a,c,f
Ascot
Resources
Ltd.,
144A
.............................
Canada
25,620,000
25,045,192
B2Gold
Corp.
........................................
Canada
7,863,694
32,954,423
a,d,e
Banyan
Gold
Corp.
....................................
Canada
12,071,429
2,853,423
Barrick
Gold
Corp.
....................................
Canada
3,169,383
68,997,468
a,b
Belo
Sun
Mining
Corp.
.................................
Canada
3,500,000
1,304,087
a,c
Belo
Sun
Mining
Corp.,
144A
.............................
Canada
3,800,000
1,415,865
a
Black
Cat
Syndicate
Ltd.
................................
Australia
7,022,800
3,082,037
a
Breaker
Resources
NL
.................................
Australia
16,000,000
1,870,393
Centamin
plc
.........................................
Egypt
12,915,200
19,220,024
Centerra
Gold,
Inc.
....................................
Kyrgyzstan
535,700
4,305,345
a,c
Centerra
Gold,
Inc.,
144A
...............................
Kyrgyzstan
2,893,400
23,253,848
a
Cerrado
Gold,
Inc.
.....................................
Canada
2,800,000
3,208,333
a
Chalice
Mining
Ltd.,
(AUD
Traded)
........................
Australia
6,004,965
31,953,551
a
Corvus
Gold,
Inc.
.....................................
Canada
1,650,000
5,288,462
a
Dacian
Gold
Ltd.,
(AUD
Traded)
..........................
Australia
39,755,556
7,260,103
a
Dundee
Precious
Metals,
Inc.
............................
Canada
2,907,415
17,588,929
a
Eldorado
Gold
Corp.
...................................
Turkey
1,848,724
17,272,534
a
Emerald
Resources
NL
.................................
Australia
17,070,000
11,240,605
Endeavour
Mining
plc
..................................
Burkina
Faso
3,056,114
72,754,124
Franklin
Gold
and
Precious
Metals
Fund
Statement
of
Investments
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
17
a
a
Country
Shares
a
Value
a
Common
Stocks
(continued)
Gold
(continued)
a
Equinox
Gold
Corp.
....................................
Canada
480,108
$
3,339,213
a
Firefinch
Ltd.
.........................................
Australia
13,125,000
3,847,421
a,b
First
Mining
Gold
Corp.
.................................
Canada
7,500,000
2,343,750
a,b
Galiano
Gold,
Inc.
.....................................
Canada
9,264,362
9,130,741
a
Gascoyne
Resources
Ltd.
...............................
Australia
8,368,370
1,964,576
a,b,f
Geopacific
Resources
Ltd.
..............................
Australia
38,375,694
9,389,974
Gold
Fields
Ltd.
.......................................
South
Africa
1,074,800
10,615,572
a
Gold
Standard
Ventures
Corp.
............................
Canada
6,370,000
3,572,917
a
Golden
Star
Resources
Ltd.
.............................
United
States
3,554,508
9,419,446
a,b
Great
Bear
Resources
Ltd.
..............................
Canada
670,000
8,004,567
a,f
HighGold
Mining,
Inc.
..................................
Canada
4,303,000
5,620,104
Hochschild
Mining
plc
..................................
Peru
3,238,520
6,937,232
a,b
i-80
Gold
Corp.
.......................................
Canada
1,047,500
2,199,079
a
Integra
Resources
Corp.,
(CAD
Traded)
....................
Canada
2,260,000
6,446,795
a
Integra
Resources
Corp.,
(USD
Traded)
....................
Canada
300,000
861,000
Kirkland
Lake
Gold
Ltd.
.................................
Canada
509,123
21,764,192
a,b,f
Liberty
Gold
Corp.
.....................................
Canada
13,671,900
14,132,012
a,f
Lion
One
Metals
Ltd.
...................................
Canada
4,312,400
4,353,866
a,c,f
Lion
One
Metals
Ltd.,
144A
..............................
Canada
4,024,000
4,062,692
a,d,e
Lydian
International
Ltd.
................................
Jersey
6,375,000
—
a,d,e
Lydian
International
Ltd.,
144A
...........................
Jersey
25,250,000
—
a
Marathon
Gold
Corp.
...................................
Canada
3,459,000
9,146,394
a
Newcore
Gold
Ltd.
....................................
Canada
7,000,000
3,421,474
Newcrest
Mining
Ltd.
...................................
Australia
2,426,914
46,903,111
Newmont
Corp.
.......................................
United
States
786,614
49,415,091
a
Nighthawk
Gold
Corp.
..................................
Canada
3,261,000
2,508,462
Northern
Star
Resources
Ltd.
............................
Australia
1,172,254
8,734,067
a,f
O3
Mining,
Inc.
.......................................
Canada
4,090,500
7,079,712
a
OceanaGold
Corp.
....................................
Australia
9,088,488
17,696,335
a
Ora
Banda
Mining
Ltd.
.................................
Australia
20,423,529
2,014,654
Osisko
Gold
Royalties
Ltd.
..............................
Canada
275,000
3,748,197
a
Osisko
Mining,
Inc.
....................................
Canada
8,650,000
22,040,865
a,b
Pantoro
Ltd.
.........................................
Australia
38,400,000
5,888,499
a,b
Perpetua
Resources
Corp.
..............................
United
States
192,090
1,091,281
a,c
Perpetua
Resources
Corp.,
144A
.........................
United
States
403,000
2,289,479
a
Perseus
Mining
Ltd.
...................................
Australia
39,108,141
47,790,773
a
Predictive
Discovery
Ltd.
................................
Australia
51,650,000
5,685,115
a
Pretium
Resources,
Inc.
................................
Canada
2,099,000
19,560,393
a,b
Probe
Metals,
Inc.
.....................................
Canada
3,400,000
5,421,474
a,f
Red
5
Ltd.
...........................................
Australia
193,176,364
27,605,650
a,f
RTG
Mining,
Inc.
,
(CAD
Traded)
..........................
Australia
1,769,918
219,822
a,c,f
RTG
Mining,
Inc.,
(CAD
Traded),
144A
.....................
Australia
2,397,790
297,802
a,f
RTG
Mining,
Inc.,
CDI
..................................
Australia
50,687,582
5,579,182
a,f
Saturn
Metals
Ltd.
.....................................
Australia
6,200,000
2,215,282
b,c
Shandong
Gold
Mining
Co.
Ltd.,
H,
144A,
Reg
S
..............
China
1,300,000
2,297,360
a
Skeena
Resources
Ltd.
.................................
Canada
1,973,550
26,029,353
a
SolGold
plc,
(CAD
Traded)
..............................
Australia
13,650,000
5,414,062
a,b
SolGold
plc,
(GBP
Traded)
..............................
Australia
10,000,000
3,815,001
SSR
Mining,
Inc.
......................................
Canada
2,386,555
38,838,888
a
St.
Augustine
Gold
and
Copper
Ltd.,
(CAD
Traded)
............
United
States
5,613,836
483,564
a,c
St.
Augustine
Gold
and
Copper
Ltd.,
(CAD
Traded),
144A
.......
United
States
16,383,333
1,411,225
a,c
St.
Augustine
Gold
and
Copper
Ltd.,
(USD
Traded),
144A
.......
United
States
10,000,000
861,378
St.
Barbara
Ltd.
.......................................
Australia
9,008,021
11,661,957
a,f
Superior
Gold,
Inc.
....................................
Canada
6,150,000
3,400,240
a,f
Thesis
Gold,
Inc.
......................................
Canada
2,300,000
2,414,263
a
Torex
Gold
Resources,
Inc.
..............................
Canada
136,100
1,530,034
a,c
Torex
Gold
Resources,
Inc.,
144A
.........................
Canada
1,450,000
16,300,881
a,b
Treasury
Metals,
Inc.
...................................
Canada
250,226
176,441
Franklin
Gold
and
Precious
Metals
Fund
Statement
of
Investments
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
18
a
a
Country
Shares
a
Value
a
Common
Stocks
(continued)
Gold
(continued)
a,f
Troilus
Gold
Corp.
.....................................
Canada
8,900,000
$
6,418,269
a
Tulla
Resources
plc,
CDI
................................
Australia
10,300,000
4,037,200
a,b
West
African
Resources
Ltd.
.............................
Australia
10,705,384
8,232,705
a
Westhaven
Gold
Corp.
.................................
Canada
4,200,000
1,951,923
a,b
Wiluna
Mining
Corp.
Ltd.
................................
Australia
7,155,000
5,521,370
1,016,931,617
Precious
Metals
&
Minerals
10.7%
Anglo
American
Platinum
Ltd.
............................
South
Africa
133,556
17,480,423
a
Benchmark
Metals,
Inc.
.................................
Canada
7,390,300
7,106,058
a
Eastern
Platinum
Ltd.
..................................
Canada
5,184,204
1,287,743
a
GoGold
Resources,
Inc.
................................
Canada
2,175,000
5,176,082
a,b
GoGold
Resources,
Inc.
................................
Canada
7,287,858
17,343,700
Impala
Platinum
Holdings
Ltd.
............................
South
Africa
1,330,000
23,977,699
Impala
Platinum
Holdings
Ltd.,
ADR
.......................
South
Africa
1,206,100
21,733,922
a
Northam
Platinum
Ltd.
.................................
South
Africa
1,089,019
17,150,819
a,b,f
Platinum
Group
Metals
Ltd.,
(CAD
Traded)
..................
South
Africa
2,042,787
6,350,972
a,f
Platinum
Group
Metals
Ltd.,
(CAD
Traded)
..................
South
Africa
10,000
31,090
a,c,f
Platinum
Group
Metals
Ltd.,
(CAD
Traded),
144A
.............
South
Africa
97,760
303,933
a,b,f
Platinum
Group
Metals
Ltd.,
(USD
Traded)
..................
South
Africa
4,041,856
12,610,591
a,c,f
Platinum
Group
Metals
Ltd.,
(USD
Traded),
144A
.............
South
Africa
36,628
113,875
Royal
Bafokeng
Platinum
Ltd.
............................
South
Africa
1,423,527
11,261,155
a,d,e,f
Sable
Resources
Ltd.
..................................
Canada
12,000,000
2,029,587
143,957,649
Silver
1.0%
a,b
Gatos
Silver,
Inc.
......................................
United
States
482,157
6,576,621
Pan
American
Silver
Corp.
..............................
Canada
133,021
3,733,755
a
Silver
Tiger
Metals,
Inc.
.................................
Canada
7,500,000
3,185,096
13,495,472
Total
Common
Stocks
(Cost
$917,463,910)
.....................................
1,323,529,062
Rights
a
a
Rights
0.1%
Silver
0.1%
a
Pan
American
Silver
Corp.,
CVR
,
2/22/29
...................
Canada
1,850,600
1,535,998
Total
Rights
(Cost
$856,772)
..................................................
1,535,998
Warrants
a
a
a
Warrants
0.4%
Diversified
Metals
&
Mining
0.3%
a,d,e
Clean
Air
Metals,
Inc.
,
144A,
2/11/22
.......................
Canada
1,900,000
52,970
a,d,e
Clean
Air
Metals,
Inc.
,
144A,
2/23/23
.......................
Canada
1,379,500
39,549
a,d,e,f
Euro
Sun
Mining,
Inc.
,
144A,
6/05/23
.......................
Canada
5,000,000
273,474
a,d,e,f
G
Mining
Ventures
Corp.
,
144A,
5/19/22
....................
Canada
4,125,000
825,159
a,d,e
Mawson
Gold
Ltd.
,
144A,
5/20/22
.........................
Canada
3,850,000
25,142
a,d,e
Osisko
Development
Corp.
,
144A,
12/01/23
.................
Canada
507,500
22,314
a,d,e
Osisko
Development
Corp.
,
144A,
12/01/23
.................
Canada
230,000
10,113
a,d,e
Prime
Mining
Corp.
,
144A,
4/27/24
........................
Canada
650,000
403,381
a,d,e,f
Talisker
Resources
Ltd.
,
144A,
8/13/21
.....................
Canada
5,650,000
—
a,d,e
Vizsla
Silver
Corp.
,
144A,
7/30/22
.........................
Canada
3,350,000
1,478,265
a,c,d
Vizsla
Silver
Corp.
,
144A,
12/03/22
........................
Canada
850,000
270,049
3,400,416
Gold
0.1%
a,c,d
First
Mining
Gold
Corp.
,
144A,
8/26/22
.....................
Canada
3,750,000
143,176
Franklin
Gold
and
Precious
Metals
Fund
Statement
of
Investments
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
19
a
a
Country
Warrants
a
Value
a
a
a
a
a
a
Gold
(continued)
a,c,d
Nighthawk
Gold
Corp.
,
144A,
6/08/23
......................
Canada
1,630,500
$
—
a,d,e,f
O3
Mining,
Inc.
,
144A,
6/18/22
...........................
Canada
850,000
73,046
a,d,e
Osisko
Mining,
Inc.
,
144A,
12/23/21
.......................
Canada
2,125,000
79,481
a,d,e
Probe
Metals,
Inc.
,
144A,
11/24/22
........................
Canada
1,700,000
537,271
a,b
Treasury
Metals,
Inc.
,
8/07/23
............................
Canada
125,112
40,100
a,f
Troilus
Gold
Corp.
,
6/30/23
..............................
Canada
1,000,000
136,218
a
Westhaven
Gold
Corp.
,
3/03/23
...........................
Canada
2,100,000
408,053
1,417,345
Total
Warrants
(Cost
$–)
......................................................
4,817,761
Principal
Amount
*
Convertible
Bonds
0.2%
Precious
Metals
&
Minerals
0.2%
f
Platinum
Group
Metals
Ltd.,
Sub.
Note,
6.875%,
7/01/22
........
South
Africa
3,000,000
2,880,010
Total
Convertible
Bonds
(Cost
$3,000,000)
.....................................
2,880,010
Total
Long
Term
Investments
(Cost
$921,320,682)
...............................
1,332,762,831
a
Short
Term
Investments
1.9%
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Money
Market
Funds
1.3%
g,h
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0.01%
.....
United
States
16,845,034
16,845,034
Total
Money
Market
Funds
(Cost
$16,845,034)
..................................
16,845,034
i
Investments
from
Cash
Collateral
Received
for
Loaned
Securities
0.5%
Money
Market
Funds
0.5%
g,h
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0.01%
.....
United
States
6,641,000
6,641,000
Principal
Amount
*
i
Investments
from
Cash
Collateral
Received
for
Loaned
Securities
0.1%
Repurchase
Agreements
0.1%
j
Joint
Repurchase
Agreement,
BofA
Securities,
Inc.,
0.05%,
8/02/21
(Maturity
Value
$1,673,121)
Collateralized
by
U.S.
Treasury
Note,
0.125%,
10/31/22
(valued
at
$1,706,577)
........................................
1,673,114
1,673,114
Total
Investments
from
Cash
Collateral
Received
for
Loaned
Securities
(Cost
$8,314,114)
.................................................................
8,314,114
Total
Short
Term
Investments
(Cost
$25,159,148
)
................................
25,159,148
a
Total
Investments
(Cost
$946,479,830)
100.8%
..................................
$1,357,921,979
Other
Assets,
less
Liabilities
(0.8)%
...........................................
(10,611,883)
Net
Assets
100.0%
...........................................................
$1,347,310,096
Franklin
Gold
and
Precious
Metals
Fund
Statement
of
Investments
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
20
See
Abbreviations
on
page
38
.
*
The
principal
amount
is
stated
in
U.S.
dollars
unless
otherwise
indicated.
†
Rounds
to
less
than
0.1%
of
net
assets.
a
Non-income
producing.
b
A
portion
or
all
of
the
security
is
on
loan
at
July
31,
2021.
See
Note
1(d).
c
Security
was
purchased
pursuant
to
Rule
144A
or
Regulation
S
under
the
Securities
Act
of
1933.
144A
securities
may
be
sold
in
transactions
exempt
from
registration
only
to
qualified
institutional
buyers
or
in
a
public
offering
registered
under
the
Securities
Act
of
1933.
Regulation
S
securities
cannot
be
sold
in
the
United
States
without
either
an
effective
registration
statement
filed
pursuant
to
the
Securities
Act
of
1933,
or
pursuant
to
an
exemption
from
registration.
At
July
31,
2021,
the
aggregate
value
of
these
securities
was
$138,686,025,
representing
10.3%
of
net
assets.
d
Fair
valued
using
significant
unobservable
inputs.
See
Note
12
regarding
fair
value
measurements.
e
See
Note
9
regarding
restricted
securities.
f
See
Note
10
regarding
holdings
of
5%
voting
securities.
g
See
Note
3(f)
regarding
investments
in
affiliated
management
investment
companies.
h
The
rate
shown
is
the
annualized
seven-day
effective
yield
at
period
end.
i
See
Note
1(d)
regarding
securities
on
loan.
j
See
Note
1(c)
regarding
joint
repurchase
agreement.
Franklin
Gold
and
Precious
Metals
Fund
Financial
Statements
Statement
of
Assets
and
Liabilities
July
31,
2021
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
21
Franklin
Gold
and
Precious
Metals
Fund
Assets:
Investments
in
securities:
Cost
-
Unaffiliated
issuers
...................................................................
$732,267,906
Cost
-
Non-controlled
affiliates
(Note
3
f
and
10
)
...................................................
212,538,810
Cost
-
Unaffiliated
repurchase
agreements
......................................................
1,673,114
Value
-
Unaffiliated
issuers
(Includes
securities
loaned
of
$8,916,930)
.................................
$1,177,081,663
Value
-
Non-controlled
affiliates
(Note
3
f
and
10
)
..................................................
179,167,202
Value
-
Unaffiliated
repurchase
agreements
......................................................
1,673,114
Foreign
currency,
at
value
(cost
$878,144)
........................................................
878,135
Receivables:
Capital
shares
sold
........................................................................
4,179,475
Dividends
and
interest
.....................................................................
226,997
Total
assets
..........................................................................
1,363,206,586
Liabilities:
Payables:
Investment
securities
purchased
..............................................................
3,365,384
Capital
shares
redeemed
...................................................................
2,827,018
Management
fees
.........................................................................
513,114
Distribution
fees
..........................................................................
268,335
Transfer
agent
fees
........................................................................
257,315
Trustees'
fees
and
expenses
.................................................................
4,018
Payable
upon
return
of
securities
loaned
(Note
1
d)
..................................................
8,314,114
Accrued
expenses
and
other
liabilities
...........................................................
347,192
Total
liabilities
.........................................................................
15,896,490
Net
assets,
at
value
.................................................................
$1,347,310,096
Net
assets
consist
of:
Paid-in
capital
.............................................................................
$1,740,487,370
Total
distributable
earnings
(losses)
.............................................................
(393,177,274)
Net
assets,
at
value
.................................................................
$1,347,310,096
Franklin
Gold
and
Precious
Metals
Fund
Financial
Statements
Statement
of
Assets
and
Liabilities
(continued)
July
31,
2021
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
22
Franklin
Gold
and
Precious
Metals
Fund
Class
A:
Net
assets,
at
value
.......................................................................
$921,126,530
Shares
outstanding
........................................................................
38,021,153
Net
asset
value
per
share
a
..................................................................
$24.23
Maximum
offering
price
per
share
(net
asset
value
per
share
÷
94.50%)
................................
$25.64
Class
C:
Net
assets,
at
value
.......................................................................
$93,615,379
Shares
outstanding
........................................................................
4,312,562
Net
asset
value
and
maximum
offering
price
per
share
a
.............................................
$21.71
Class
R6:
Net
assets,
at
value
.......................................................................
$25,458,145
Shares
outstanding
........................................................................
967,201
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$26.32
Advisor
Class:
Net
assets,
at
value
.......................................................................
$307,110,042
Shares
outstanding
........................................................................
11,809,866
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$26.00
a
Redemption
price
is
equal
to
net
asset
value
less
contingent
deferred
sales
charges,
if
applicable.
Franklin
Gold
and
Precious
Metals
Fund
Financial
Statements
Statement
of
Operations
for
the
year
ended
July
31,
2021
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
23
Franklin
Gold
and
Precious
Metals
Fund
Investment
income:
Dividends:
(net
of
foreign
taxes
of
$1,409,995)
Unaffiliated
issuers
........................................................................
$13,095,126
Non-controlled
affiliates
(Note
3
f
and
10
)
........................................................
445
Interest:
Non-controlled
affiliates
(Note
3
f
and
10
)
........................................................
206,250
Income
from
securities
loaned:
Unaffiliated
entities
(net
of
fees
and
rebates)
.....................................................
859,661
Non-controlled
affiliates
(Note
3
f
)
.............................................................
270
Total
investment
income
...................................................................
14,161,752
Expenses:
Management
fees
(Note
3
a
)
...................................................................
6,127,282
Distribution
fees:
(Note
3c
)
    Class
A
................................................................................
2,316,793
    Class
C
................................................................................
983,825
Transfer
agent
fees:
(Note
3e
)
    Class
A
................................................................................
1,192,175
    Class
C
................................................................................
126,538
    Class
R6
...............................................................................
35,257
    Advisor
Class
............................................................................
358,785
Custodian
fees
(Note
4
)
......................................................................
200,300
Reports
to
shareholders
......................................................................
261,465
Registration
and
filing
fees
....................................................................
149,099
Professional
fees
...........................................................................
119,452
Trustees'
fees
and
expenses
..................................................................
47,503
Other
....................................................................................
45,035
Total
expenses
.........................................................................
11,963,509
Expense
reductions
(Note
4
)
...............................................................
(68)
Expenses
waived/paid
by
affiliates
(Note
3
f
and
3
g
)
..............................................
(49,333)
Net
expenses
.........................................................................
11,914,108
Net
investment
income
................................................................
2,247,644
Realized
and
unrealized
gains
(losses):
Net
realized
gain
(loss)
from:
Investments:
Unaffiliated
issuers
......................................................................
59,849,677
Non-controlled
affiliates
(Note
3
f
and
10
)
......................................................
20,985,678
Foreign
currency
transactions
................................................................
145,183
Net
realized
gain
(loss)
..................................................................
80,980,538
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments:
Unaffiliated
issuers
......................................................................
(152,656,601)
Non-controlled
affiliates
(Note
3
f
and
10
)
......................................................
22,152,941
Translation
of
other
assets
and
liabilities
denominated
in
foreign
currencies
..............................
71
Net
change
in
unrealized
appreciation
(depreciation)
............................................
(130,503,589)
Net
realized
and
unrealized
gain
(loss)
............................................................
(49,523,051)
Net
increase
(decrease)
in
net
assets
resulting
from
operations
..........................................
$(47,275,407)
Franklin
Gold
and
Precious
Metals
Fund
Financial
Statements
Statements
of
Changes
in
Net
Assets
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
24
Franklin
Gold
and
Precious
Metals
Fund
Year
Ended
July
31,
2021
Year
Ended
July
31,
2020
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
(loss)
............................................
$2,247,644
$(2,015,454)
Net
realized
gain
(loss)
.................................................
80,980,538
12,253,151
Net
change
in
unrealized
appreciation
(depreciation)
...........................
(130,503,589)
565,070,636
Net
increase
(decrease)
in
net
assets
resulting
from
operations
................
(47,275,407)
575,308,333
Distributions
to
shareholders:
Class
A
.............................................................
(91,536,537)
—
Class
C
.............................................................
(10,260,302)
—
Class
R6
............................................................
(1,886,753)
—
Advisor
Class
........................................................
(25,940,782)
—
Total
distributions
to
shareholders
..........................................
(129,624,374)
—
Capital
share
transactions:
(Note
2
)
Class
A
.............................................................
102,536,385
(124,090,549)
Class
C
.............................................................
2,796,697
(13,468,257)
Class
R6
............................................................
7,932,977
1,382,646
Advisor
Class
........................................................
65,227,845
31,949,531
Total
capital
share
transactions
............................................
178,493,904
(104,226,629)
Net
increase
(decrease)
in
net
assets
...................................
1,594,123
471,081,704
Net
assets:
Beginning
of
year
.......................................................
1,345,715,973
874,634,269
End
of
year
...........................................................
$1,347,310,096
$1,345,715,973
Franklin
Gold
and
Precious
Metals
Fund
25
franklintempleton.com
Annual
Report
Notes
to
Financial
Statements
1.
Organization
and
Significant
Accounting
Policies
Franklin
Gold
and
Precious
Metals
Fund (Fund)
is
registered
under
the
Investment
Company
Act
of
1940
(1940
Act)
as
an
open-end
management
investment
company
and
applies
the
specialized
accounting
and
reporting
guidance
in
U.S.
Generally
Accepted
Accounting
Principles
(U.S.
GAAP).
The
Fund
offers
four
classes
of
shares:
Class
A,
Class
C,
Class
R6
and
Advisor
Class.
Class
C
shares
automatically
convert
to
Class
A
shares
after
they
have
been
held
for
10
years.
Each
class
of
shares
may
differ
by
its
initial
sales
load,
contingent
deferred
sales
charges,
voting
rights
on
matters
affecting
a
single
class,
its
exchange
privilege
and
fees
due
to
differing
arrangements
for
distribution
and
transfer
agent
fees. 
The
following
summarizes
the
Fund’s
significant
accounting
policies.
a.
Financial
Instrument
Valuation 
The
Fund's
investments
in
financial
instruments
are
carried
at
fair
value
daily.
Fair
value
is
the
price
that
would
be
received
to
sell
an
asset
or
paid
to
transfer
a
liability
in
an
orderly
transaction
between
market
participants
on
the
measurement
date.
The
Fund
calculates
the
net
asset
value
(NAV)
per
share
each business
day as
of
4
p.m.
Eastern
time
or
the
regularly
scheduled
close
of
the
New
York
Stock
Exchange
(NYSE),
whichever
is
earlier.
Under
compliance
policies
and
procedures
approved
by
the
Fund's
Board
of
Trustees
(the
Board),
the
Fund's
administrator
has
responsibility
for
oversight
of
valuation,
including
leading
the
cross-functional
Valuation
Committee
(VC).
The
Fund
may
utilize
independent
pricing
services,
quotations
from
securities
and
financial
instrument
dealers,
and
other
market
sources
to
determine
fair
value. 
Equity
securities
listed
on
an
exchange
or
on
the
NASDAQ
National
Market
System
are
valued
at
the
last
quoted
sale
price
or
the
official
closing
price of
the
day,
respectively.
Foreign
equity
securities
are
valued
as
of
the
close
of
trading
on
the
foreign
stock
exchange
on
which
the
security
is
primarily
traded,
or
as
of
4
p.m.
Eastern
time.
The
value
is
then
converted
into
its
U.S.
dollar
equivalent
at
the
foreign
exchange
rate
in
effect
at
4
p.m.
Eastern
time
on
the
day
that
the
value
of
the
security
is
determined.
Over-the-counter
(OTC)
securities
are
valued
within
the
range
of
the
most
recent
quoted
bid
and
ask
prices.
Securities
that
trade
in
multiple
markets
or
on
multiple
exchanges
are
valued
according
to
the
broadest
and
most
representative
market.
Certain
equity
securities
are
valued
based
upon
fundamental
characteristics
or
relationships
to
similar
securities. 
Debt
securities
generally
trade
in
the
OTC
market
rather
than
on
a
securities
exchange.
The
Fund's
pricing
services
use
multiple
valuation
techniques
to
determine
fair
value.
In
instances
where
sufficient
market
activity
exists,
the
pricing
services
may
utilize
a
market-based
approach
through
which
quotes
from
market
makers
are
used
to
determine
fair
value.
In
instances
where
sufficient
market
activity
may
not
exist
or
is
limited,
the
pricing
services
also
utilize
proprietary
valuation
models
which
may
consider
market
characteristics
such
as
benchmark
yield
curves,
credit
spreads,
estimated
default
rates,
anticipated
market
interest
rate
volatility,
coupon
rates,
anticipated
timing
of
principal
repayments,
underlying
collateral,
and
other
unique
security
features
in
order
to
estimate
the
relevant
cash
flows,
which
are
then
discounted
to
calculate
the
fair
value.
Investments
in open-end mutual
funds
are
valued
at
the
closing
NAV.
Investments
in
repurchase
agreements
are
valued
at
cost,
which
approximates
fair
value.
The
Fund
has
procedures
to
determine
the
fair
value
of
financial
instruments
for
which
market
prices
are
not
reliable
or
readily
available.
Under
these
procedures,
the Fund
primarily
employs
a
market-based
approach
which
may
use
related
or
comparable
assets
or
liabilities,
recent
transactions,
market
multiples,
book
values,
and
other
relevant
information
for
the
investment
to
determine
the
fair
value
of
the
investment.
An
income-based
valuation
approach
may
also
be
used
in
which
the
anticipated
future
cash
flows
of
the
investment
are
discounted
to
calculate
fair
value.
Discounts
may
also
be
applied
due
to
the
nature
or
duration
of
any
restrictions
on
the
disposition
of
the
investments.
Due
to
the
inherent
uncertainty
of
valuations
of
such
investments,
the
fair
values
may
differ
significantly
from
the
values
that
would
have
been
used
had
an
active
market
existed.
Trading
in
securities
on
foreign
securities
stock
exchanges
and
OTC
markets
may
be
completed
before
4
p.m.
Eastern
time.
In
addition,
trading
in
certain
foreign
markets
may
not
take
place
on
every
Fund's
business
day.
Events
can
occur
between
the
time
at
which
trading
in
a
foreign
security
is
completed
and
4
p.m.
Eastern
time
that
might
call
into
question
the
reliability
of
the
value
of
a
portfolio
security
held
by
the
Fund.
As
a
result,
differences
may
arise
between
the
value
of
the
Fund's
portfolio
securities
as
determined
at
Franklin
Gold
and
Precious
Metals
Fund
Notes
to
Financial
Statements
26
franklintempleton.com
Annual
Report
the
foreign
market
close
and
the
latest
indications
of
value
at
4
p.m.
Eastern
time.
In
order
to
minimize
the
potential
for
these
differences,
an
independent
pricing
service
may
be
used
to
adjust
the
value
of
the
Fund's
securities
to
the
latest
indications
of
fair
value
at
4
p.m.
Eastern
time.
At
July
31,
2021,
certain
securities
may
have
been
fair
valued
using
these
procedures,
in
which
case
the
securities
were
categorized
as
Level
2
inputs
within
the
fair
value
hierarchy
(referred
to
as
“market
level
fair
value”).
See
the
Fair
Value
Measurements
note
for
more
information.
When
the
last
day
of
the
reporting
period
is
a
non-business
day,
certain
foreign
markets
may
be
open
on
those
days
that
the
Fund's
NAV
is
not
calculated,
which
could
result
in
differences
between
the
value
of
the
Fund's
portfolio
securities
on
the
last
business
day
and
the
last
calendar
day
of
the
reporting
period.
Any
security
valuation
changes
due
to
an
open
foreign
market
are
adjusted
and
reflected
by
the
Fund
for
financial
reporting
purposes.
b.
Foreign
Currency
Translation 
Portfolio
securities
and
other
assets
and
liabilities
denominated
in
foreign
currencies
are
translated
into
U.S.
dollars
based
on
the
exchange
rate
of
such
currencies
against
U.S.
dollars
on
the
date
of
valuation.
The
Fund
may
enter
into
foreign
currency
exchange
contracts
to
facilitate
transactions
denominated
in
a
foreign
currency.
Purchases
and
sales
of
securities,
income
and
expense
items
denominated
in
foreign
currencies
are
translated
into
U.S.
dollars
at
the
exchange
rate
in
effect
on
the
transaction
date.
Portfolio
securities
and
assets
and
liabilities
denominated
in
foreign
currencies
contain
risks
that
those
currencies
will
decline
in
value
relative
to
the
U.S.
dollar.
Occasionally,
events
may
impact
the
availability
or
reliability
of
foreign
exchange
rates
used
to
convert
the
U.S.
dollar
equivalent
value.
If
such
an
event
occurs,
the
foreign
exchange
rate
will
be
valued
at
fair
value
using
procedures
established
and
approved
by
the
Board.
The
Fund
does
not
separately
report
the
effect
of
changes
in
foreign
exchange
rates
from
changes
in
market
prices
on
securities
held.
Such
changes
are
included
in
net
realized
and
unrealized
gain
or
loss
from
investments
in
the
Statement of
Operations.
Realized
foreign
exchange
gains
or
losses
arise
from
sales
of
foreign
currencies,
currency
gains
or
losses
realized
between
the
trade
and
settlement
dates
on
securities
transactions
and
the
difference
between
the
recorded
amounts
of
dividends,
interest,
and
foreign
withholding
taxes
and
the
U.S.
dollar
equivalent
of
the
amounts
actually
received
or
paid.
Net
unrealized
foreign
exchange
gains
and
losses
arise
from
changes
in
foreign
exchange
rates
on
foreign
denominated
assets
and
liabilities
other
than
investments
in
securities
held
at
the
end
of
the
reporting
period.
c.
Joint
Repurchase
Agreement
The
Fund
enters
into
a
joint
repurchase
agreement
whereby
its
uninvested
cash
balance
is
deposited
into
a
joint
cash
account
with
other
funds
managed
by
the
investment
manager
or
an
affiliate
of
the
investment
manager
and
is
used
to
invest
in
one
or
more
repurchase
agreements.
The
value
and
face
amount
of
the
joint
repurchase
agreement
are
allocated
to
the
funds
based
on
their
pro-rata
interest.
A
repurchase
agreement
is
accounted
for
as
a
loan
by
the
Fund
to
the
seller,
collateralized
by
securities
which
are
delivered
to
the
Fund's
custodian.
The
fair
value,
including
accrued
interest,
of
the
initial
collateralization
is
required
to
be
at
least
102%
of
the
dollar
amount
invested
by
the
funds,
with
the
value
of
the
underlying
securities
marked
to
market
daily
to
maintain
coverage
of
at
least
100%.
Repurchase
agreements
are
subject
to
the
terms
of
Master
Repurchase
Agreements
(MRAs)
with
approved
counterparties
(sellers).
The
MRAs
contain
various
provisions,
including
but
not
limited
to
events
of
default
and
maintenance
of
collateral
for
repurchase
agreements.
In
the
event
of
default
by
either
the
seller
or
the
Fund,
certain
MRAs
may
permit
the
non-
defaulting
party
to
net
and
close-out
all
transactions,
if
any,
traded
under
such
agreements.
The
Fund
may
sell
securities
it
holds
as
collateral
and
apply
the
proceeds
towards
the
repurchase
price
and
any
other
amounts
owed
by
the
seller
to
the
Fund
in
the
event
of
default
by
the
seller.
This
could
involve
costs
or
delays
in
addition
to
a
loss
on
the
securities
if
their
value
falls
below
the
repurchase
price
owed
by
the
seller.
The
joint
repurchase
agreement
held
by
the Fund
at
year
end,
as
indicated
in
the
Statement
of
Investments,
had
been
entered
into
on
July
30,
2021.
d.
Securities
Lending
The
Fund
participates
in
an
agency
based
securities
lending
program
to
earn
additional
income.
The
Fund
receives
collateral
in
the
form
of
cash
and/or
U.S.
Government
1.
Organization
and
Significant
Accounting
Policies
(continued)
a.
Financial
Instrument
Valuation 
(continued)
Franklin
Gold
and
Precious
Metals
Fund
Notes
to
Financial
Statements
27
franklintempleton.com
Annual
Report
and
Agency
securities
against
the
loaned
securities
in
an
amount
equal
to
at
least
102%
of
the
fair
value
of
the
loaned
securities.
Collateral
is
maintained
over
the
life
of
the
loan
in
an
amount
not
less
than
100%
of
the
fair
value
of
loaned
securities,
as
determined
at
the
close
of
Fund
business
each
day;
any
additional
collateral
required
due
to
changes
in
security
values
is
delivered
to
the
Fund
on
the
next
business
day.
Any
cash
collateral
received
is
deposited
into
a
joint
cash
account
with
other
funds
and
is
used
to
invest
in
a
money
market
fund
managed
by
Franklin
Advisers,
Inc.,
an
affiliate
of
the Fund,
and/or
a
joint
repurchase
agreement.
Additionally,
at
July
31,
2021,
the
Fund
held
$1,440,948
in
U.S.
Government
and
Agency
securities
as
collateral.
These
securities
are
held
as
collateral
in
segregated
accounts
with
the
Fund’s
custodian.
The
Fund
cannot
repledge
or
resell
these
securities
held
as
collateral.
As
such,
the
non-
cash
collateral
is
excluded
from
the
Statement
of
Assets
and
Liabilities.
The
Fund
may
receive
income
from
the
investment
of
cash
collateral,
in
addition
to
lending
fees
and
rebates
paid
by
the
borrower.
Income
from
securities
loaned,
net
of
fees
paid
to
the
securities
lending
agent
and/
or
third-party
vendor,
is
reported
separately
in
the
Statement
of
Operations.
The
Fund
bears
the
market
risk
with
respect
to any
cash collateral
investment,
securities
loaned,
and
the
risk
that
the
agent
may
default
on
its
obligations
to
the
Fund.
If
the
borrower
defaults
on
its
obligation
to
return
the
securities
loaned,
the
Fund
has
the
right
to
repurchase
the
securities
in
the
open
market
using
the
collateral
received.
The
securities
lending
agent
has
agreed
to
indemnify
the
Fund
in
the
event
of
default
by
a
third
party
borrower.
e.
Income
and
Deferred
Taxes
It
is the
Fund's
policy
to
qualify
as
a
regulated
investment
company
under
the
Internal
Revenue
Code. The
Fund
intends
to
distribute
to
shareholders
substantially
all
of
its
taxable
income
and
net
realized
gains
to
relieve
it
from
federal
income
and excise
taxes.
As
a
result,
no
provision
for
U.S.
federal
income
taxes
is
required.
The Fund
may
be
subject
to
foreign
taxation
related
to
income
received,
capital
gains
on
the
sale
of
securities
and
certain
foreign
currency
transactions
in
the
foreign
jurisdictions
in
which
it
invests.
Foreign
taxes,
if
any,
are
recorded
based
on
the
tax
regulations
and
rates
that
exist
in
the
foreign
markets
in
which
the
Fund
invests.
When
a
capital
gain
tax
is
determined
to
apply,
the
Fund
records
an
estimated
deferred
tax
liability
in
an
amount
that
would
be
payable
if
the
securities
were
disposed
of
on
the
valuation
date.
The
Fund
may
recognize
an
income
tax
liability
related
to
its
uncertain
tax
positions
under
U.S.
GAAP
when
the
uncertain
tax
position
has
a
less
than
50%
probability
that
it
will
be
sustained
upon
examination
by
the
tax
authorities
based
on
its
technical
merits.
As
of
July
31,
2021,
the
Fund
has
determined
that
no
tax
liability
is
required
in
its
financial
statements
related
to
uncertain
tax
positions
for
any
open
tax
years
(or
expected
to
be
taken
in
future
tax
years).
Open
tax
years
are
those
that
remain
subject
to
examination
and
are
based
on
the
statute
of
limitations
in
each
jurisdiction
in
which
the
Fund
invests. 
f.
Security
Transactions,
Investment
Income,
Expenses
and
Distributions
Security
transactions
are
accounted
for
on
trade
date.
Realized
gains
and
losses
on
security
transactions
are
determined
on
a
specific
identification
basis.
Interest
income
and
estimated
expenses
are
accrued
daily.
Dividend
income
is
recorded
on
the
ex-dividend
date
except
for
certain
dividends
from
securities
where
the
dividend
rate
is
not
available.
In
such
cases,
the
dividend
is
recorded
as
soon
as
the
information
is
received
by
the
Fund.
Distributions
to
shareholders
are
recorded
on
the
ex-dividend
date.
Distributable
earnings
are
determined
according
to
income
tax
regulations
(tax
basis)
and
may
differ
from
earnings
recorded
in
accordance
with
U.S.
GAAP.
These
differences
may
be
permanent
or
temporary.
Permanent
differences
are
reclassified
among
capital
accounts
to
reflect
their
tax
character.
These
reclassifications
have
no
impact
on
net
assets
or
the
results
of
operations.
Temporary
differences
are
not
reclassified,
as
they
may
reverse
in
subsequent
periods.
Realized
and
unrealized
gains
and
losses
and
net
investment
income,
excluding
class
specific
expenses,
are
allocated
daily
to
each
class
of
shares
based
upon
the
relative
proportion
of
net
assets
of
each
class.
Differences
in
per
share
distributions
by
class
are
generally
due
to
differences
in
class
specific
expenses.
1.
Organization
and
Significant
Accounting
Policies
(continued)
d.
Securities
Lending
(continued)
Franklin
Gold
and
Precious
Metals
Fund
Notes
to
Financial
Statements
28
franklintempleton.com
Annual
Report
g.
Accounting
Estimates
The
preparation
of
financial
statements
in
accordance
with
U.S.
GAAP
requires
management
to
make
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities
at
the
date
of
the
financial
statements
and
the
amounts
of
income
and
expenses
during
the
reporting
period.
Actual
results
could
differ
from
those
estimates.
h.
Guarantees
and
Indemnifications
Under
the
Fund's
organizational
documents,
its
officers
and
trustees
are
indemnified
by
the
Fund
against
certain
liabilities
arising
out
of
the
performance
of
their
duties
to
the
Fund.
Additionally,
in
the
normal
course
of
business,
the
Fund
enters
into
contracts
with
service
providers
that
contain
general
indemnification
clauses.
The
Fund's
maximum
exposure
under
these
arrangements
is
unknown
as
this
would
involve
future
claims
that
may
be
made
against
the
Fund
that
have
not
yet
occurred.
Currently,
the
Fund
expects
the
risk
of
loss
to
be
remote.
2.
Shares
of
Beneficial
Interest
At
July
31,
2021,
there
were
an
unlimited
number
of
shares
authorized
(without
par
value).
Transactions
in
the
Fund’s
shares
were
as
follows:
Year
Ended
July
31,
2021
Year
Ended
July
31,
2020
Shares
Amount
Shares
Amount
Class
A
Shares:
Shares
sold
a
...................................
30,882,746
$785,177,178
38,055,516
$722,901,303
Shares
issued
in
reinvestment
of
distributions
..........
3,140,730
73,775,753
—
—
Shares
redeemed
...............................
(29,480,089)
(756,416,546)
(43,260,928)
(846,991,852)
Net
increase
(decrease)
..........................
4,543,387
$102,536,385
(5,205,412)
$(124,090,549)
Class
C
Shares:
Shares
sold
...................................
1,354,195
$31,227,110
1,573,374
$27,069,763
Shares
issued
in
reinvestment
of
distributions
..........
480,163
10,155,453
—
—
Shares
redeemed
a
..............................
(1,701,635)
(38,585,866)
(2,323,343)
(40,538,020)
Net
increase
(decrease)
..........................
132,723
$2,796,697
(749,969)
$(13,468,257)
Class
R6
Shares:
Shares
sold
...................................
845,313
$23,304,103
766,821
$15,343,211
Shares
issued
in
reinvestment
of
distributions
..........
72,633
1,849,233
—
—
Shares
redeemed
...............................
(632,002)
(17,220,359)
(689,324)
(13,960,565)
Net
increase
(decrease)
..........................
285,944
$7,932,977
77,497
$1,382,646
Advisor
Class
Shares:
Shares
sold
...................................
5,595,597
$150,447,493
5,387,923
$111,957,923
Shares
issued
in
reinvestment
of
distributions
..........
903,757
22,747,555
—
—
Shares
redeemed
...............................
(4,071,933)
(107,967,203)
(4,103,708)
(80,008,392)
Net
increase
(decrease)
..........................
2,427,421
$65,227,845
1,284,215
$31,949,531
a
May
include
a
portion
of
Class
C
shares
that
were
automatically
converted
to
Class
A.
1.
Organization
and
Significant
Accounting
Policies
(continued)
Franklin
Gold
and
Precious
Metals
Fund
Notes
to
Financial
Statements
29
franklintempleton.com
Annual
Report
3.
Transactions
with
Affiliates
Franklin
Resources,
Inc.
is
the
holding
company
for
various
subsidiaries
that
together
are
referred
to
as
Franklin
Templeton.
Certain
officers
and
trustees
of
the
Fund
are
also
officers
and/or
directors
of
the
following
subsidiaries:
a.
Management
Fees
The
Fund
pays
an
investment
management
fee
to
Advisers
based
on
the
month-end
net
assets
of
the
Fund
as
follows:
For
the
year
ended
July
31,
2021,
the
gross
effective
investment
management
fee
rate
was
0.462%
of
the
Fund’s
average
daily
net
assets. 
b.
Administrative
Fees
Under
an
agreement
with
Advisers,
FT
Services
provides
administrative
services
to
the
Fund.
The
fee
is
paid
by
Advisers
based
on
the
Fund's
average
daily
net
assets,
and
is
not
an
additional
expense
of
the
Fund.
c.
Distribution
Fees
The
Board
has
adopted
distribution
plans
for
Class
A
and
Class
C
shares,
pursuant
to
Rule
12b-1
under
the
1940
Act.
Under
the
Fund’s
Class
A
reimbursement
distribution
plan,
the
Fund
reimburses
Distributors
for
costs
incurred
in
connection
with
the
servicing,
sale
and
distribution
of
the
Fund's
shares
up
to
the
maximum
annual
plan
rate.
Under
the
Class
A
reimbursement
distribution
plan,
costs
exceeding
the
maximum
for
the
current
plan
year
cannot
be
reimbursed
in
subsequent
periods.
In
addition,
under
the
Fund’s
Class
C
compensation
distribution
plan,
the
Fund
pays
Distributors
for
costs
incurred
in
connection
with
the
servicing,
sale
and
distribution
of
the
Fund's
shares
up
to
the
maximum
annual
plan
rate.
The
plan
year,
for
purposes
of
monitoring
compliance
with
the
maximum
annual
plan
rates,
is
February
1
through
January
31.
The
maximum
annual
plan
rates,
based
on
the
average
daily
net
assets,
for
each
class,
are
as
follows:
Subsidiary
Affiliation
Franklin
Advisers,
Inc.
(Advisers)
Investment
manager
Franklin
Templeton
Services,
LLC
(FT
Services)
Administrative
manager
Franklin
Distributors,
LLC
(Distributors)
(formerly
Franklin
Templeton
Distributors,
Inc.)
Principal
underwriter
Franklin
Templeton
Investor
Services,
LLC
(Investor
Services)
Transfer
agent
Annualized
Fee
Rate
Net
Assets
0.625%
Up
to
and
including
$100
million
0.500%
Over
$100
million,
up
to
and
including
$250
million
0.450%
Over
$250
million,
up
to
and
including
$7.5
billion
0.440%
Over
$7.5
billion,
up
to
and
including
$10
billion
0.430%
Over
$10
billion,
up
to
and
including
$12.5
billion
0.420%
Over
$12.5
billion,
up
to
and
including
$15
billion
0.400%
In
excess
of
$15
billion
Class
A
....................................................................................
0.25%
Class
C
....................................................................................
1.00%
Franklin
Gold
and
Precious
Metals
Fund
Notes
to
Financial
Statements
30
franklintempleton.com
Annual
Report
d.
Sales
Charges/Underwriting
Agreements
Front-end
sales
charges
and
contingent
deferred
sales
charges
(CDSC)
do
not
represent
expenses
of
the
Fund.
These
charges
are
deducted
from
the
proceeds
of
sales
of
Fund
shares
prior
to
investment
or
from
redemption
proceeds
prior
to
remittance,
as
applicable.
Distributors
has
advised
the
Fund
of
the
following
commission
transactions
related
to
the
sales
and
redemptions
of
the
Fund's
shares
for
the
year:
e.
Transfer
Agent
Fees
Each
class
of
shares
pays
transfer
agent
fees
to
Investor
Services
for
its
performance
of
shareholder
servicing
obligations.
The
fees
are
based
on
an
annualized
asset
based
fee
of
0.02%
plus
a
transaction
based
fee.
In
addition,
each
class
reimburses
Investor
Services
for
out
of
pocket
expenses
incurred
and,
except
for
Class
R6,
reimburses
shareholder
servicing
fees
paid
to
third
parties.
These
fees
are
allocated
daily
based
upon
their
relative
proportion
of
such
classes'
aggregate
net
assets.
Class
R6
pays
Investor
Services
transfer
agent
fees
specific
to
that
class.
For
the
year
ended
July
31,
2021,
the
Fund
paid
transfer
agent
fees
of
$1,712,755,
of
which
$775,696
was
retained
by
Investor
Services.
f.
Investments
in
Affiliated
Management
Investment
Companies
The
Fund
invests
in
one
or
more
affiliated
management
investment
companies.
As
defined
in
the
1940
Act,
an
investment
is
deemed
to
be
a
“Controlled
Affiliate”
of
a
fund
when
a
fund
owns,
either
directly
or
indirectly,
25%
or
more
of
the
affiliated
fund’s
outstanding
shares
or
has
the
power
to
exercise
control
over
management
or
policies
of
such
fund.
The
Fund
does
not
invest
for
purposes
of
exercising
a
controlling
influence
over
the
management
or
policies.
Management
fees
paid
by
the
Fund
are
waived
on
assets
invested
in
the
affiliated
management
investment
companies,
as
noted
in
the
Statement
of
Operations,
in
an
amount
not
to
exceed
the
management
and
administrative
fees
paid
directly
or
indirectly
by
each
affiliate.
During
the
year
ended
July
31,
2021,
the
Fund
held
investments
in
affiliated
management
investment
companies
as
follows:
Sales
charges
retained
net
of
commissions
paid
to
unaffiliated
brokers/dealers
..............................
$171,072
CDSC
retained
..............................................................................
$31,587
    aa
Value
at
Beginning
of
Year
Purchases
Sales
Realized
Gain
(Loss)
Net
Change
in
Unrealized
Appreciation
(Depreciation)
Value
at
End
of
Year
Number
of
Shares
Held
at
End
of
Year
Investment
Income
a      
a  
a  
a  
a  
a  
a  
a  
Franklin
Gold
and
Precious
Metals
Fund
Non-Controlled
Affiliates
Dividends
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0.01%
..
$11,151,454
$313,314,550
$(307,620,970)
$—
$—
$16,845,034
16,845,034
$445
Non-Controlled
Affiliates
Income
from
securities
loaned
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0.01%
..
$4,254,000
$93,105,000
$(90,718,000)
$
—
$
—
$6,641,000
6,641,000
$270
Total
Affiliated
Securities
....
$15,405,454
$406,419,550
$(398,338,970)
$—
$—
$23,486,034
$715
3.
Transactions
with
Affiliates
(continued)
Franklin
Gold
and
Precious
Metals
Fund
Notes
to
Financial
Statements
31
franklintempleton.com
Annual
Report
g.
Waiver
and
Expense
Reimbursements
Investor
Services
has
contractually
agreed
in
advance
to
waive
or
limit
its
fees
so
that
the
Class
R6
transfer
agent
fees
do
not
exceed
0.03%
based
on
the
average
net
assets
of
the
class
until
November
30,
2021
.
h.
Other
Affiliated
Transactions
During
the
year
ended
July
31,
2021,
affiliated
parties
reimbursed
the
Fund
$27,191
for
losses
resulting
from
a
NAV
error.
This
reimbursement
is
reflected
in
capital
share
transactions
in
the
Statements
of
Changes
in
Net
Assets.
4.
Expense
Offset
Arrangement
The
Fund has
entered
into
an
arrangement
with
its
custodian
whereby
credits
realized
as
a
result
of
uninvested
cash
balances
are
used
to
reduce
a
portion
of
the
Fund’s
custodian
expenses.
During
the
year
ended
July
31,
2021,
the
custodian
fees
were
reduced
as
noted
in
the
Statement
of
Operations. 
5.
Income
Taxes
For
tax
purposes,
capital
losses
may
be
carried
over
to
offset
future
capital
gains.
At
July
31,
2021,
the
capital
loss
carryforwards
were
as
follows:
The
tax
character
of
distributions
paid
during
the
years
ended
July
31,
2021
and
2020,
was
as
follows:
At
July
31,
2021,
the
cost
of
investments,
net
unrealized
appreciation
(depreciation)
and
undistributed
ordinary
income
for
income
tax
purposes
were
as
follows:
Differences
between
income
and/or
capital
gains
as
determined
on
a
book
basis
and
a
tax
basis
are
primarily
due
to
differing
treatments
of
wash
sales,
passive
foreign
investment
company
shares
and
corporate
actions.
Capital
loss
carryforwards
not
subject
to
expiration:
Short
term
................................................................................
$3,241,431
Long
term
................................................................................
692,263,807
Total
capital
loss
carryforwards
...............................................................
$695,505,238
2021
2020
Distributions
paid
from:
Ordinary
income
..........................................................
$129,624,374
$—
Cost
of
investments
..........................................................................
$1,167,911,564
Unrealized
appreciation
........................................................................
$557,950,957
Unrealized
depreciation
........................................................................
(367,940,542)
Net
unrealized
appreciation
(depreciation)
..........................................................
$190,010,415
Distributable
earnings:
Undistributed
ordinary
income
...................................................................
$112,317,477
3.
Transactions
with
Affiliates
(continued)
Franklin
Gold
and
Precious
Metals
Fund
Notes
to
Financial
Statements
32
franklintempleton.com
Annual
Report
6.
Investment
Transactions
Purchases
and
sales
of
investments
(excluding
short
term
securities)
for
the
year
ended
July
31,
2021,
aggregated
$296,513,368
and
$243,980,381,
respectively.
At
July
31,
2021,
in
connection
with
securities
lending
transactions,
the
Fund
loaned
equity
investments
and
received
$8,314,114
of
cash
collateral.
The
gross
amount
of
recognized
liability
for
such
transactions
is
included
in
payable
upon
return
of
securities
loaned
in
the
Statement
of
Assets
and
Liabilities.
The
agreements
can
be
terminated
at
any
time.
7.
Concentration
of
Risk
Investing
in
foreign
securities
may
include
certain
risks
and
considerations
not
typically
associated
with
investing
in
U.S.
securities,
such
as
fluctuating
currency
values
and
changing
local,
regional
and
global
economic,
political
and
social
conditions,
which
may
result
in
greater
market
volatility.
Political
and
financial
uncertainty
in
many
foreign
regions
may
increase
market
volatility
and
the
economic
risk
of
investing
in
foreign
securities.
In
addition,
certain
foreign
securities
may
not
be
as
liquid
as
U.S.
securities.
8.
Novel
Coronavirus
Pandemic 
The
global
outbreak
of
the
novel
coronavirus
disease,
known
as
COVID-19, has
caused
adverse
effects
on
many
companies,
sectors,
nations,
regions
and
the
markets
in
general, and
may
continue for
an unpredictable duration.
The
effects
of
this
pandemic
may
materially
impact
the
value
and
performance
of
the Fund, its ability
to
buy
and
sell
fund
investments
at
appropriate
valuations
and its ability
to
achieve its investment
objectives.
9.
Restricted
Securities
The
Fund
invests
in
securities
that
are
restricted
under
the
Securities
Act
of
1933
(1933
Act).
Restricted
securities
are
often
purchased
in
private
placement
transactions,
and
cannot
be
sold
without
prior
registration
unless
the
sale
is
pursuant
to
an
exemption
under
the
1933
Act.
Disposal
of
these
securities
may
require
greater
effort
and
expense,
and
prompt
sale
at
an
acceptable
price
may
be
difficult.
The Fund
may
have
registration
rights
for
restricted
securities.
The
issuer
generally
incurs
all
registration
costs.
At
July
31,
2021,
investments
in
restricted
securities,
excluding
securities
exempt
from
registration
under
the
1933
Act,
were
as
follows:
Franklin
Gold
and
Precious
Metals
Fund
Notes
to
Financial
Statements
33
franklintempleton.com
Annual
Report
10.
Holdings
of
5%
Voting
Securities
of
Portfolio
Companies
The
1940
Act
defines
"affiliated
companies"
to
include
investments
in
portfolio
companies
in
which
a
fund
owns
5%
or
more
of
the
outstanding
voting
securities.
Additionally,
as
defined
in
the
1940
Act,
an
investment
is
deemed
to
be
a
“Controlled
Affiliate”
of
a
fund
when
a
fund
owns,
either
directly
or
indirectly,
25%
or
more
of
the
affiliated
companies’
outstanding
shares
or
has
the
power
to
exercise
control
over
management
or
policies
of
such
company.
During
the
period
ended
July
31,
2021,
investments
in
“affiliated
companies”
were
as
follows:
Shares
/
Warrants
Issuer
Acquisition
Date
Cost
Value
Franklin
Gold
a
nd
Precious
Metals
Fund
1,200,000
a
Azimut
Exploration,
Inc.
.......................
7/09/21
$
1,831,472
$
1,978,156
12,071,429
Banyan
Gold
Corp.
..........................
7/27/21
2,683,818
2,853,423
1,900,000
b
Clean
Air
Metals,
Inc.,
144A,
2/11/22
.............
5/15/20
—
52,970
1,379,500
b
Clean
Air
Metals,
Inc.,
144A,
2/23/23
.............
5/15/20
-
2/24/21
—
39,549
5,000,000
c
Euro
Sun
Mining,
Inc.,
144A,
6/05/23
.............
6/09/20
—
273,474
4,125,000
d
G
Mining
Ventures
Corp.,
144A,
5/19/22
...........
11/27/20
—
825,159
6,375,000
Lydian
International
Ltd.
.......................
11/24/17
2,098,016
—
25,250,000
Lydian
International
Ltd.,
144A
..................
3/06/12
14,750,154
—
3,850,000
e
Mawson
Gold
Ltd.,
144A,
5/20/22
................
5/22/20
—
25,142
850,000
f
O3
Mining,
Inc.,
144A,
6/18/22
..................
6/23/20
—
73,046
737,500
g
Osisko
Development
Corp.,
144A,
12/01/23
........
11/27/20
-12/31
/20
—
32,427
2,125,000
h
Osisko
Mining,
Inc.,
144A,
12/23/21
..............
6/24/20
—
79,481
1,300,000
i
Prime
Mining
Corp.
..........................
4/23/21
3,073,409
3,895,558
650,000
i
Prime
Mining
Corp.,
144A,
4/27/24
...............
4/28/21
—
403,381
1,700,000
j
Probe
Metals,
Inc.,
144A,
11/24/22
...............
11/23/20
-11/24/20
—
537,271
12,000,000
Sable
Resources
Ltd.
.........................
6/08/21
2,971,400
2,029,587
5,650,000
k
Talisker
Resources
Ltd.,
144A,
8/13/21
............
8/17/20
—
—
3,350,000
l
Vizsla
Silver
Corp.,
144A,
7/30/22
...............
8/03/20
—
1,478,265
930,000
m
Western
Copper
&
Gold
Corp.
..................
7/26/21
1,646,280
1,788,461
Total
Restricted
Securities
(Value
is
1.2%
of
Net
Assets)
..............
$29,054,549
$16,365,350
a
The
Fund
also
invests
in
unrestricted
securities
of
the
issuer,
valued
at
$885,450
as
of
July
31,
2021.
b
The
Fund
also
invests
in
unrestricted
securities
of
the
issuer,
valued
at
$1,340,180
as
of
July
31,
2021.
c
The
Fund
also
invests
in
unrestricted
securities
of
the
issuer,
valued
at
$3,044,872
as
of
July
31,
2021.
d
The
Fund
also
invests
in
unrestricted
securities
of
the
issuer,
valued
at
$5,618,990
as
of
July
31,
2021.
e
The
Fund
also
invests
in
unrestricted
securities
of
the
issuer,
valued
at
$1,449,920
as
of
July
31,
2021.
f
The
Fund
also
invests
in
unrestricted
securities
of
the
issuer,
valued
at
$7,079,712
as
of
July
31,
2021.
g
The
Fund
also
invests
in
unrestricted
securities
of
the
issuer,
valued
at
$7,315,905
as
of
July
31,
2021.
h
The
Fund
also
invests
in
unrestricted
securities
of
the
issuer,
valued
at
$22,040,865
as
of
July
31,
2021.
i
The
Fund
also
invests
in
unrestricted
securities
of
the
issuer,
valued
at
$6,751,603
as
of
July
31,
2021.
j
The
Fund
also
invests
in
unrestricted
securities
of
the
issuer,
valued
at
$5,421,474
as
of
July
31,
2021.
k
The
Fund
also
invests
in
unrestricted
securities
of
the
issuer,
valued
at
$3,555,289
as
of
July
31,
2021.
l
The
Fund
also
invests
in
unrestricted
securities
of
the
issuer,
valued
at
$11,343,366
as
of
July
31,
2021.
m
The
Fund
also
invests
in
unrestricted
securities
of
the
issuer,
valued
at
$4,673,077
as
of
July
31,
2021.
9.
Restricted
Securities
(continued)
Franklin
Gold
and
Precious
Metals
Fund
Notes
to
Financial
Statements
34
franklintempleton.com
Annual
Report
Value
at
Beginning
of
Year
Purchases
Sales
Realized
Gain
(Loss)
Net
Change
in
Unrealized
Appreciation
(Depreciation)
Value
at
End
of
Year
Number
of
Shares/Principal
Amount
*
Held
at
End
of
Year
Investment
Income
Franklin
Gold
a
nd
Precious
Metals
Fund
Non-Controlled
Affiliates
Dividends
Ascot
Resources
Ltd.,
144A
...........
$
13,441,989
$
6,454,549
$
—
$
—
$
5,148,654
$
25,045,192
25,620,000
$
—
Battle
North
Gold
Corp.,
144A
...........
11,899,142
2,240,133
(20,226,364)
11,255,114
(5,168,025)
—
a
—
—
Benchmark
Metals,
Inc.
—
6,561,194
—
—
—
b
—
b
—
b
—
Chalice
Mining
Ltd.
...
21,059,387
—
(59,261,164)
51,522,121
—
b
—
b
—
b
—
Dacian
Gold
Ltd.
,
(AUD
Traded)
..........
7,673,415
1,543,494
—
—
—
b
—
b
—
b
—
Euro
Sun
Mining,
Inc.,
144A
...........
4,106,316
—
—
—
(1,061,444)
3,044,872
10,000,000
—
Euro
Sun
Mining,
Inc.,
144A,
6/05/23
.....
888,663
—
—
—
(615,189)
273,474
5,000,000
—
G
Mining
Ventures
Corp.,
144A
...........
—
3,149,937
—
—
2,469,053
5,618,990
8,250,000
—
G
Mining
Ventures
Corp.,
144A,
5/19/22
.....
—
—
—
—
825,159
825,159
4,125,000
—
Geopacific
Resources
Ltd.
5,744,253
8,223,040
—
—
(4,577,319)
9,389,974
38,375,694
—
HighGold
Mining,
Inc.
..
6,523,515
—
—
—
(903,411)
5,620,104
4,303,000
—
INV
Metals,
Inc.,
144A
.
4,019,187
—
(3,499,281)
(2,447,628)
1,927,722
—
a
—
—
Liberty
Gold
Corp
....
17,555,488
3,347,123
—
—
(6,770,599)
14,132,012
13,671,900
—
Lion
One
Metals
Ltd.
..
9,080,715
—
(1,031,735)
520,887
(4,216,001)
4,353,866
4,312,400
—
Lion
One
Metals
Ltd.,
144A
...........
5,237,158
1,076,704
—
—
(2,251,170)
4,062,692
4,024,000
—
Lion
One
Metals
Ltd.,
6/06/21
..........
922,513
—
(86,777)
620
(836,356)
—
a
—
—
O3
Mining,
Inc.
......
3,068,312
4,469,779
—
—
(458,379)
7,079,712
4,090,500
—
O3
Mining,
Inc.,
144A,
6/18/22
..........
333,248
—
—
—
(260,202)
73,046
850,000
—
Platinum
Group
Metals
Ltd.,
(CAD
Traded)
..
4,894,438
—
(939,698)
(17,881,651)
20,308,973
6,382,062
2,052,787
—
Platinum
Group
Metals
Ltd.,
(CAD
Traded),
144A
...........
212,395
—
—
—
91,538
303,933
97,760
—
Platinum
Group
Metals
Ltd.,
(USD
Traded)
..
10,296,035
—
(2,686,818)
(21,983,785)
26,985,159
12,610,591
4,041,856
—
Platinum
Group
Metals
Ltd.,
(USD
Traded),
144A
...........
79,579
—
—
—
34,296
113,875
36,628
—
Red
5
Ltd.
.........
29,322,847
3,831,135
—
—
(5,548,332)
27,605,650
193,176,364
—
RTG
Mining,
Inc.,
(CAD
Traded)
..........
171,785
—
—
—
48,037
219,822
1,769,918
—
10.
Holdings
of
5%
Voting
Securities
of
Portfolio
Companies
(continued)
Franklin
Gold
and
Precious
Metals
Fund
Notes
to
Financial
Statements
35
franklintempleton.com
Annual
Report
11.
Credit
Facility
The
Fund,
together
with
other
U.S.
registered
and
foreign
investment
funds
(collectively,
Borrowers),
managed
by
Franklin
Templeton,
are
borrowers
in
a
joint
syndicated
senior
unsecured
credit
facility
totaling
$2.675
billion
(Global
Credit
Facility)
which
matures
on
February
4,
2022.
This
Global
Credit
Facility
provides
a
source
of
funds
to
the
Borrowers
for
temporary
and
emergency
purposes,
including
the
ability
to
meet
future
unanticipated
or
unusually
large
redemption
requests.
Under
the
terms
of
the
Global
Credit
Facility,
the
Fund
shall,
in
addition
to
interest
charged
on
any
borrowings
made
by
the
Fund
and
other
costs
incurred
by
the
Fund,
pay
its
share
of
fees
and
expenses
incurred
in
connection
with
the
implementation
and
maintenance
of
the
Global
Credit
Facility,
based
upon
its
relative
share
of
the
aggregate
net
assets
of
all
of
the
Borrowers,
including
an
annual
commitment
fee
of
0.15%
based
upon
the
unused
portion
of
the
Global
Credit
Facility.
These
fees
are
reflected
in
other
expenses
in
the
Statement
of
Operations.
During
the
year
ended
July
31,
2021,
the Fund
did
not
use
the
Global
Credit
Facility.
Value
at
Beginning
of
Year
Purchases
Sales
Realized
Gain
(Loss)
Net
Change
in
Unrealized
Appreciation
(Depreciation)
Value
at
End
of
Year
Number
of
Shares/Principal
Amount*
Held
at
End
of
Year
Investment
Income
Franklin
Gold
and
Precious
Metals
Fund
(continued)
Non-Controlled
Affiliates
RTG
Mining,
Inc.,
(CAD
Traded),
144A
.....
$
232,726
$
—
$
—
$
—
$
65,076
$
297,802
2,397,790
$
—
RTG
Mining,
Inc.,
CDI.
.
4,527,351
—
—
—
1,051,831
5,579,182
50,687,582
—
Sable
Resources
Ltd.
..
—
2,971,400
—
—
(941,813)
2,029,587
12,000,000
—
Saturn
Metals
Ltd.
....
—
3,132,575
—
—
(917,293)
2,215,282
6,200,000
—
Superior
Gold,
Inc.
....
—
3,287,844
—
—
112,396
3,400,240
6,150,000
—
Talisker
Resources
Ltd.
.
—
5,109,467
—
—
(1,554,178)
3,555,289
15,300,000
—
Talisker
Resources
Ltd.,
144A,
8/13/21
.....
—
—
—
—
—
—
5,650,000
—
Thesis
Gold,
Inc.
.....
—
2,806,247
—
—
(391,984)
2,414,263
2,300,000
—
Troilus
Gold
Corp.
....
—
7,620,255
—
—
(1,201,986)
6,418,269
8,900,000
—
Troilus
Gold
Corp.,
6/30/23
—
—
—
—
136,218
136,218
1,000,000
—
Interest
Platinum
Group
Metals
Ltd.,
Sub.
Note,
6.875%,
7/01/22
..........
2,257,500
—
—
—
622,510
2,880,010
3,000,000
206,250
Total
Affiliated
Securities
(Value
is
11.6%
of
Net
Assets)
..........
$163,547,957
$65,824,876
$(87,731,837)
$
20,985,678
$
22,152,941
$155,681,168
$206,250
*
In
U.S.
dollars
unless
otherwise
indicated.
a
As
of
July
31,
2021,
no
longer
held
by
the
fund.
b
As
of
July
31,
2021,
no
longer
an
affiliate.
10.
Holdings
of
5%
Voting
Securities
of
Portfolio
Companies
(continued)
Franklin
Gold
and
Precious
Metals
Fund
Notes
to
Financial
Statements
36
franklintempleton.com
Annual
Report
12.
Fair
Value
Measurements
The
Fund
follows
a
fair
value
hierarchy
that
distinguishes
between
market
data
obtained
from
independent
sources
(observable
inputs)
and
the Fund's
own
market
assumptions
(unobservable
inputs).
These
inputs
are
used
in
determining
the
value
of
the
Fund’s
financial
instruments
and
are
summarized
in
the
following
fair
value
hierarchy:
Level
1
–
quoted
prices
in
active
markets
for
identical
financial
instruments
Level
2
–
other
significant
observable
inputs
(including
quoted
prices
for
similar
financial
instruments,
interest
rates,
prepayment
speed,
credit
risk,
etc.)
Level
3
–
significant
unobservable
inputs
(including
the
Fund’s
own
assumptions
in
determining
the
fair
value
of
financial
instruments)
The
input
levels
are
not
necessarily
an
indication
of
the
risk
or
liquidity
associated
with
financial
instruments
at
that
level.
A
summary
of
inputs
used
as
of
July
31,
2021,
in
valuing
the
Fund’s
assets
carried
at
fair
value,
is
as
follows:
Level
1
Level
2
Level
3
Total
Franklin
Gold
and
Precious
Metals
Fund
Assets:
Investments
in
Securities:
a
Common
Stocks
:
Copper
..............................
$
7,827,733
$
—
$
—
$
7,827,733
Diversified
Metals
&
Mining
...............
123,653,595
9,549,241
7,662,175
140,865,011
Environmental
&
Facilities
Services
.........
451,580
—
—
451,580
Gold
................................
733,794,078
280,284,116
2,853,423
b
1,016,931,617
Precious
Metals
&
Minerals
...............
100,799,544
41,128,518
2,029,587
143,957,649
Silver
...............................
13,495,472
—
—
13,495,472
Rights
................................
1,535,998
—
—
1,535,998
Warrants
:
Diversified
Metals
&
Mining
...............
—
—
3,400,416
b
3,400,416
Gold
................................
584,371
—
832,974
b
1,417,345
Convertible
Bonds
.......................
—
2,880,010
—
2,880,010
Short
Term
Investments
...................
23,486,034
1,673,114
—
25,159,148
Total
Investments
in
Securities
...........
$1,005,628,405
$335,514,999
c
$16,778,575
$1,357,921,979
a
For
detailed
categories,
see
the
accompanying
Statement
of
Investments.
b
Includes
securities
determined
to
have
no
value
at
July
31,
2021.
c
Includes
foreign
securities
valued
at
$330,961,875,
which
were
categorized
as
Level
2
as
a
result
of
the
application
of
market
level
fair
value
procedures.
See
the
Financial
Instrument
Valuation
note
for
more
information.
Franklin
Gold
and
Precious
Metals
Fund
Notes
to
Financial
Statements
37
franklintempleton.com
Annual
Report
A
reconciliation
in
which
Level
3
inputs
are
used
in
determining
fair
value
is
presented
when
there
are
significant
Level
3
assets
and/or
liabilities
at
the
beginning
and/or
end
of
the
year.
At
July
31,
2021,
the
reconciliation
is
as
follows:
Significant
unobservable
valuation
inputs
for
material
Level
3
assets
and/or
liabilities
and
impact
to
fair
value
as
a
result
of
changes
in
unobservable
valuation
inputs
as
of
July
31,
2021,
are
as
follows:
Balance
at
Beginning
of
Year
Purchases
a
Sales
b
Transfer
Into
Level
3
Transfer
Out
of
Level
3
c
Net
Accretion
(
Amortiza
-
tion
)
Net
Realized
Gain
(Loss)
Net
Unr
ealized
Appreciatio
n
(
Depreciation
)
Balance
at
End
of
Year
Net
Change
in
Unrealized
Appreciation
(Depreciation)
on
Assets
Held
at
Year
End
a
a          
a
a
a
a
a
a
a
a
a
Franklin
Gold
and
Precious
Metals
Fund
Assets:
Investments
in
Securities:
Common
Stocks
Diversified
Metals
&
Mining
.........
$
20,121,498
$
6,551,162
$
(16,075,663)
$
—
$
—
$
—
$
—
$
(2,934,822)
$
7,662,175
$
1,111,014
Gold
............
16,111,904
d
2,683,818
(8,522,388)
—
(329,023)
—
—
(7,090,888)
2,853,423
d
169,605
Precious
Metals
&
Minerals
........
—
2,971,401
—
—
—
—
—
(941,814)
2,029,587
(941,814)
Warrants
Diversified
Metals
&
Mining
.........
2,839,658
—
d
(176,308)
—
—
—
4,208
732,858
3,400,416
d
2,387,003
Gold
............
3,608,163
—
d
(86,835)
—
—
—
623
(2,688,977)
832,974
76,814
Total
Investments
in
Securities
.
$42,681,223
$12,206,381
$(24,861,194)
$—
$(329,023)
$
—
$
4,831
$
(12,923,643)
$16,778,575
$
2,802,622
a
Purchases
include
all
purchases
of
securities
and
securities
received
in
corporate
actions.
b
Sales
include
all
sales
of
securities,
maturities,
paydowns
and
securities
tendered
in
corporate
actions.
c
Transferred
out
of
Level
3
as
a
result
of
the
availability
of
other
significant
observable
valuation
inputs.
May
include
amounts
related
to
a
corporate
action.
d
Includes
securities
determined
to
have
no
value.
Description
Fair
Value
at
End
of
Year
Valuation
Technique
Unobservable
Inputs
Amount
/
Range
(Weighted
Average)
a
Impact
to
Fair
Value
if
Input
Increases
b
Franklin
Gold
and
Precious
Metals
Fund
Assets:
Investments
in
Securities:
Common
Stocks:
Diversified
Metals
&
Mining
....
$5,873,714
Market
comparables
Discount
for
lack
of
marketability
3.4%
-
5.6%
(4.1%)
Decrease
c
Precious
Metals
&
Minerals
....
2,029,587
Market
comparables
Discount
for
lack
of
marketability
12.1%
Decrease
c 
Warrants:
Diversified
Metals
&
Mining
....
1,478,265
Market
comparables
Discount
for
lack
of
marketability
13.6%
Decrease
c
All
Other
Investments
7,397,009
d,e
Total
.......................
$16,778,575
a
Weighted
based
on
the
relative
fair
value
of
the
financial
instruments.
12.
Fair
Value
Measurements
(continued)
Franklin
Gold
and
Precious
Metals
Fund
Notes
to
Financial
Statements
38
franklintempleton.com
Annual
Report
13.
New
Accounting
Pronouncements
In
March
2020,
the
Financial
Accounting
Standards
Board
(FASB)
issued
Accounting
Standards
Update
(ASU)
No.
2020-04,
Reference
Rate
Reform
(Topic
848)
–
Facilitation
of
the
Effects
of
Reference
Rate
Reform
on
Financial
Reporting.
In
January
2021,
the
FASB
issued
ASU
No.
2021-01,
with
further
amendments
to
Topic
848.
The
amendments
in
the
ASUs
provide
optional
temporary
accounting
recognition
and
financial
reporting
relief
from
the
effect
of
certain
types
of
contract
modifications
due
to
the
planned
discontinuation
of
the
London
Interbank
Offered
Rate
and
other
interbank-offered
based
reference
rates
as
of
the
end
of
2021
and
2023.
The
ASUs
are
effective
for
certain
reference
rate-related
contract
modifications
that
occur
during
the
period
March
12,
2020
through
December
31,
2022.
Management
has
reviewed
the
requirements
and
believes
the
adoption
of
these
ASUs
will
not
have
a
material
impact
on
the
financial
statements.
14.
Subsequent
Events
The
Fund
has
evaluated
subsequent
events
through
the
issuance
of
the financial
statements
and
determined
that
no
events
have
occurred
that
require
disclosure
,
except
for
the
following:
On
July
14,
2021,
the
Board
approved
a
change
to
the
automatic
conversion
feature
for
Class
C
that
will
convert
shareholders’
Class
C
shares
into
Class
A
shares
after
they
have
been
he
ld
for
8
years.
The
change
bec
a
me
effective
August
2,
2021.
Further
details
are
disclosed
in
the
Fund's
Prospectus.
Abbreviations
b
Represents
the
directional
change
in
the
fair
value
that
would
result
from
a
significant
and
reasonable
increase
in
the
corresponding
input.
A
significant
and
reasonable
decrease
in
the
input
would
have
the
opposite
effect.
Significant
impacts,
if
any,
to
fair
value
and/or
net
assets
have
been
indicated.
c
Represents
a
significant
impact
to
fair
value
but
not
net
assets.
d
Includes
financial
instruments
with
values
derived
using
private
transaction
prices
or
non-public
third
party
pricing
information
which
is
unobservable.
May
also
include
fair
value
of
immaterial
financial
instruments
developed
using
various
valuation
techniques
and
unobservable
inputs.
e
Includes
securities
determined
to
have
no
value
at
July
31,
2021.
Currency
CAD
Canadian
Dollar
AUD
Australian
Dollar
GBP
British
Pound
USD
United
States
Dollar
Selected
Portfolio
ADR
American
Depositary
Receipt
CDI
CREST
Depository
Interest
CVR
Contingent
Value
Right
12.
Fair
Value
Measurements
(continued)
Franklin
Gold
and
Precious
Metals
Fund
Report
of
Independent
Registered
Public
Accounting
Firm
39
franklintempleton.com
Annual
Report
To
the
Board
of
Trustees
and
Shareholders
of
Franklin
Gold
and
Precious
Metals
Fund
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statement
of
assets
and
liabilities,
including
the
statement
of
investments,
of
Franklin
Gold
and
Precious
Metals
Fund
(the
“Fund”)
as
of
July
31,
2021,
the
related
statement
of
operations
for
the
year
ended
July
31,
2021,
the
statements
of
changes
in
net
assets
for
each
of
the
two
years
in
the
period
ended
July
31,
2021,
including
the
related
notes,
and
the
financial
highlights
for
each
of
the
five
years
in
the
period
ended
July
31,
2021,
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Fund
as
of
July
31,
2021,
the
results
of
its
operations
for
the
year
then
ended,
the
changes
in
its
net
assets
for
each
of
the
two
years
in
the
period
ended
July
31,
2021,
and
the
financial
highlights
for
each
of
the
five
years
in
the
period
ended
July
31,
2021,
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Fund’s
management.
Our
responsibility
is
to
express
an
opinion
on
the
Fund’s
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(PCAOB)
and
are
required
to
be
independent
with
respect
to
the
Fund
in
accordance
with
the
U.S.
federal
securities
laws
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
of
these
financial
statements
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audit
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
Our
audits
included
performing
procedures
to
assess
the
risks
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
July
31,
2021,
by
correspondence
with
the
custodian,
transfer
agent,
and
brokers;
when
replies
were
not
received
from
brokers,
we
performed
other
auditing
procedures.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
PricewaterhouseCoopers
LLP
San
Francisco,
California
September
23,
2021
We
have
served
as
the
auditor
of
one
or
more
investment
companies
in
the
Franklin
Templeton
Group
of
Funds
since
1948.
Franklin
Gold
and
Precious
Metals
Fund
Tax
Information
(unaudited)
40
franklintempleton.com
Annual
Report
Under
Section
853
of
the
Internal
Revenue
Code,
the
Fund
intends
to
elect
to
pass
through
to
its
shareholders
$1,409,711
of
foreign
taxes
paid
and
$16,760,731
of
foreign
source
income
earned
by
the
fund,
or
amounts
as
finally
determined,
during
the
fiscal
year
ended
July
31,
2021.
Under
Section
854(b)(1)(B)
of
the
Internal
Revenue
Code,
the
Fund
hereby
reports
the
maximum
amount
allowable
but
no
less
than
$14,117,336
as
qualified
dividends
for
purposes
of
the
maximum
rate
under
Section
1(h)(11)
of
the
Internal
Revenue
Code
for
the
fiscal
year
ended
July
31,
2021.
Distributions,
including
qualified
dividend
income,
paid
during
calendar
year
2021
will
be
reported
to
shareholders
on
Form
1099-DIV
by
mid-February
2022.
Shareholders
are
advised
to
check
with
their
tax
advisors
for
information
on
the
treatment
of
these
amounts
on
their
individual
income
tax
returns.
Franklin
Gold
and
Precious
Metals
Fund
Board
Members
and
Officers
41
franklintempleton.com
Annual
Report
The
name,
year
of
birth
and
address
of
the
officers
and
board
members,
as
well
as
their
affiliations,
positions
held
with
the
Fund,
principal
occupations
during
at
least
the
past
five
years
and
number
of
U.S.
registered
portfolios
overseen
in
the
Franklin
Templeton
fund
complex,
are
shown
below.
Generally,
each
board
member
serves
until
that
person’s
successor
is
elected
and
qualified.
Independent
Board
Members
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Harris
J.
Ashton
(1932)
Trustee
Since
1982
125
Bar-S
Foods
(meat
packing
company)
(1981-2010).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
and
formerly
,
Director,
RBC
Holdings,
Inc.
(bank
holding
company)
(until
2002);
and
President,
Chief
Executive
Officer
and
Chairman
of
the
Board,
General
Host
Corporation
(nursery
and
craft
centers)
(until
1998).
Terrence
J.
Checki
(1945)
Trustee
Since
2017
107
Hess
Corporation
(exploration
of
oil
and
gas)
(2014-present).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Member
of
the
Council
on
Foreign
Relations
(1996-present);
Member
of
the
National
Committee
on
U.S.-China
Relations
(1999-present);
member
of
the
board
of
trustees
of
the
Economic
Club
of
New
York
(2013-present);
member
of
the
board
of
trustees
of
the
Foreign
Policy
Association
(2005-present);
member
of
the
board
of
directors
of
Council
of
the
Americas
(2007-present)
and
the
Tallberg
Foundation
(2018-present);
and
formerly
,
Executive
Vice
President
of
the
Federal
Reserve
Bank
of
New
York
and
Head
of
its
Emerging
Markets
and
Internal
Affairs
Group
and
Member
of
Management
Committee
(1995-2014);
and
Visiting
Fellow
at
the
Council
on
Foreign
Relations
(2014).
Mary
C.
Choksi
(1950)
Trustee
Since
2014
126
Omnicom
Group
Inc.
(advertising
and
marketing
communications
services)
(2011-present)
and
White
Mountains
Insurance
Group,
Ltd.
(holding
company)
(2017-present);
and
formerly
,
Avis
Budget
Group
Inc.
(car
rental)
(2007-2020).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
and
formerly
,
Founder
and
Senior
Advisor,
Strategic
Investment
Group
(investment
management
group)
(2015-2017);
Founding
Partner
and
Senior
Managing
Director,
Strategic
Investment
Group
(1987-2015);
Founding
Partner
and
Managing
Director,
Emerging
Markets
Management
LLC
(investment
management
firm)
(1987-2011);
and
Loan
Officer/Senior
Loan
Officer/Senior
Pension
Investment
Officer,
World
Bank
Group
(international
financial
institution)
(1977-1987).
Franklin
Gold
and
Precious
Metals
Fund
42
franklintempleton.com
Annual
Report
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Edith
E.
Holiday
(1952)
Lead
Independent
Trustee
Trustee
since
2003
and
Lead
Independent
Trustee
since
2019
126
Hess
Corporation
(exploration
of
oil
and
gas)
(1993-present),
Santander
Consumer
USA
Holdings,
Inc.
(consumer
finance)
(2016-present);
Santander
Holdings
USA
(holding
company)
(2019-present);
and
formerly
,
Canadian
National
Railway
(railroad)
(2001-April
2021),
White
Mountains
Insurance
Group,
Ltd.
(holding
company)
(2004-May
2021),RTI
International
Metals,
Inc.
(manufacture
and
distribution
of
titanium)
(1999-2015)
and
H.J.
Heinz
Company
(processed
foods
and
allied
products)
(1994-2013).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
or
Trustee
of
various
companies
and
trusts;
and
formerly
,
Assistant
to
the
President
of
the
United
States
and
Secretary
of
the
Cabinet
(1990-1993);
General
Counsel
to
the
United
States
Treasury
Department
(1989-1990);
and
Counselor
to
the
Secretary
and
Assistant
Secretary
for
Public
Affairs
and
Public
Liaison-United
States
Treasury
Department
(1988-1989).
J.
Michael
Luttig
(1954)
Trustee
Since
2009
126
Boeing
Capital
Corporation
(aircraft
financing)
(2006-2010).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Private
investor;
and
formerly
,
Counselor
and
Senior
Advisor
to
the
Chairman,
CEO,
and
Board
of
Directors,
of
The
Boeing
Company
(aerospace
company),
and
member
of
the
Executive
Council
(May
2019-January
1,
2020);
Executive
Vice
President,
General
Counsel
and
member
of
the
Executive
Council,
The
Boeing
Company
(2006-2019);
and
Federal
Appeals
Court
Judge,
United
States
Court
of
Appeals
for
the
Fourth
Circuit
(1991-2006).
Larry
D.
Thompson
(1945)
Trustee
Since
2007
126
Graham
Holdings
Company
(education
and
media
organization)
(2011-present);
and
formerly
,
The
Southern
Company
(energy
company)
(2014-2020;
previously
2010-2012)
and
Cbeyond,
Inc.
(business
communications
provider)
(2010-2012).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
Counsel,
Finch
McCranie,
LLP
(law
firm)
(2015-present);
John
A.
Sibley
Professor
of
Corporate
and
Business
Law,
University
of
Georgia
School
of
Law
(2015-present;
previously
2011-2012);
and
formerly
,
Independent
Compliance
Monitor
and
Auditor,
Volkswagen
AG
(manufacturer
of
automobiles
and
commercial
vehicles)
(2017-2020);
Executive
Vice
President
-
Government
Affairs,
General
Counsel
and
Corporate
Secretary,
PepsiCo,
Inc.
(consumer
products)
(2012-2014);
Senior
Vice
President
-
Government
Affairs,
General
Counsel
and
Secretary,
PepsiCo,
Inc.
(2004-2011);
Senior
Fellow
of
The
Brookings
Institution
(2003-2004);
Visiting
Professor,
University
of
Georgia
School
of
Law
(2004);
and
Deputy
Attorney
General,
U.S.
Department
of
Justice
(2001-2003).
Independent
Board
Members
(continued)
Franklin
Gold
and
Precious
Metals
Fund
43
franklintempleton.com
Annual
Report
Interested
Board
Members
and
Officers
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Valerie
M.
Williams
(1956)
Trustee
Since
May
2021
107
Omnicom
Group,
Inc.
(advertising
and
marketing
communications
services)
(2016-present),
DTE
Energy
Co.
(gas
and
electric
utility)
(2018-present),
Devon
Energy
Corporation
(exploration
and
production
of
oil
and
gas)
(January
2021-present);
and
formerly
,
WPX
Energy,
Inc.
(exploration
and
production
of
oil
and
gas)
(2018-January
2021).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
and
formerly
,
Regional
Assurance
Managing
Partner,
Ernst
&
Young
LLP
(public
accounting)
(2005-2016),
various
roles
of
increasing
responsibility
at
Ernst
&
Young
(1981-2005).
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
**Gregory
E.
Johnson
(1961)
Trustee
Since
2007
137
None
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Executive
Chairman,
Chairman
of
the
Board
and
Director,
Franklin
Resources,
Inc.;
officer
and/or
director
or
trustee,
as
the
case
may
be,
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
39
of
the
investment
companies
in
Franklin
Templeton;
Vice
Chairman,
Investment
Company
Institute;
and
formerly
,
Chief
Executive
Officer
(2013-2020)
and
President
(1994-2015),
Franklin
Resources,
Inc.
**Rupert
H.
Johnson,
Jr.
(1940)
Chairman
of
the
Board
and
Trustee
Since
2013
126
None
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
(Vice
Chairman),
Franklin
Resources,
Inc.;
Director,
Franklin
Advisers,
Inc.;
and
officer
and/or
director
or
trustee,
as
the
case
may
be,
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
37
of
the
investment
companies
in
Franklin
Templeton.
Alison
E.
Baur
(1964)
Vice
President
Since
2012
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Deputy
General
Counsel,
Franklin
Templeton;
and
officer
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
44
of
the
investment
companies
in
Franklin
Templeton.
Breda
M.
Beckerle
(1958)
Chief
Compliance
Officer
Since
October
2020
Not
Applicable
Not
Applicable
280
Park
Avenue,
New
York,
NY
10017
Principal
Occupation
During
at
Least
the
Past
5
Years:
Chief
Compliance
Officer,
Fiduciary
Investment
Management
International,
Inc.,
Franklin
Advisers,
Inc.,
Franklin
Advisory
Services,
LLC,
Franklin
Mutual
Advisers,
LLC,
Franklin
Templeton
Institutional,
LLC;
and
officer
of
39
of
the
investment
companies
in
Franklin
Templeton.
Independent
Board
Members
(continued)
Franklin
Gold
and
Precious
Metals
Fund
44
franklintempleton.com
Annual
Report
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Steven
J.
Gray
(1955)
Vice
President
and
Co-Secretary
Vice
President
since
2009
and
Co-Secretary
since
2019
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Associate
General
Counsel,
Franklin
Templeton;
Vice
President,
FASA,
LLC;
Assistant
Secretary,
Franklin
Distributors,
LLC;
and
officer
of
44
of
the
investment
companies
in
Franklin
Templeton.
Matthew
T.
Hinkle
(1971)
Chief
Executive
Officer
–
Finance
and
Administration
Since
2017
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Vice
President,
Franklin
Templeton
Services,
LLC;
officer
of
44
of
the
investment
companies
in
Franklin
Templeton;
and
formerly
,
Vice
President,
Global
Tax
(2012-April
2017)
and
Treasurer/Assistant
Treasurer,
Franklin
Templeton
(2009-2017).
Susan
Kerr
(1949)
Vice
President
–
AML
Compliance
Since
July
2021
Not
Applicable
Not
Applicable
620
Eighth
Avenue
New
York,
NY
10018
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Compliance
Analyst,
Global
Compliance,
Franklin
Templeton;
Chief
Anti-Money
Laundering
Compliance
Officer,
Legg
Mason
&
Co.
or
its
affiliates;
Anti
Money
Laundering
Compliance
Officer;
Senior
Compliance
Officer,
LMIS;
and
officer
of
41
of
the
investment
companies
in
Franklin
Templeton.
Robert
G.
Kubilis
(1973)
Chief
Financial
Officer,
Chief
Accounting
Officer
and
Treasurer
Since
December
2020
Not
Applicable
Not
Applicable
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Treasurer,
U.S.
Fund
Administration
&
Reporting
and
officer
of
39
of
the
investment
companies
in
Franklin
Templeton.
Edward
D.
Perks
(1970)
President
and
Chief
Executive
Officer
–
Investment
Management
Since
2018
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
President
and
Director,
Franklin
Advisers,
Inc.;
and
officer
of
eight
of
the
investment
companies
in
Franklin
Templeton
(since
December
2018).
Navid
J.
Tofigh
(1972)
Vice
President
Since
2015
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Associate
General
Counsel
and
officer
of
44
of
the
investment
companies
in
Franklin
Templeton.
Craig
S.
Tyle
(1960)
Vice
President
Since
2005
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
General
Counsel
and
Executive
Vice
President,
Franklin
Resources,
Inc.;
and
officer
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
44
of
the
investment
companies
in
Franklin
Templeton.
Interested
Board
Members
and
Officers
(continued)
Franklin
Gold
and
Precious
Metals
Fund
45
franklintempleton.com
Annual
Report
*We
base
the
number
of
portfolios
on
each
separate
series
of
the
U.S.
registered
investment
companies
within
the
Franklin
Templeton
fund
complex.
These
portfolios
have
a
common
investment
manager
or
affiliated
investment
managers.
**Gregory
E.
Johnson
is
considered
to
be
an
interested
person
of
the
Fund
under
the
federal
securities
laws
due
to
his
position
as
an
officer
and
director
of
Franklin
Resources,
Inc.
(Resources),
which
is
the
parent
company
of
the
Fund’s
investment
manager
and
distributor.
Rupert
H.
Johnson,
Jr.
is
considered
to
be
an
interested
person
of
the
Fund
under
the
federal
securities
laws
due
to
his
position
as
an
officer
and
director
and
major
shareholder
of
Resources.
Note
1:
Rupert
H.
Johnson,
Jr.
is
the
uncle
of
Gregory
E.
Johnson.
Note
2:
Officer
information
is
current
as
of
the
date
of
this
report.
It
is
possible
that
after
this
date,
information
about
officers
may
change.
The
Sarbanes-Oxley
Act
of
2002
and
Rules
adopted
by
the
Securities
and
Exchange
Commission
require
the
Fund
to
disclose
whether
the
Fund’s
Audit
Committee
includes
at
least
one
member
who
is
an
audit
committee
financial
expert
within
the
meaning
of
such
Act
and
Rules.
The
Fund’s
Board
has
determined
that
there
is
at
least
one
such
financial
expert
on
the
Audit
Committee
and
has
designated
Mary
C.
Choksi
as
its
audit
committee
financial
expert.
The
Board
believes
that
Ms.
Choksi
qualifies
as
such
an
expert
in
view
of
her
extensive
business
background
and
experience.
She
served
as
a
director
of
Avis
Budget
Group,
Inc.
(2007-2020)
and
formerly,
Founder
and
Senior
Advisor,
Strategic
Investment
Group
(1987
to
2017).
Ms.
Choksi
has
been
a
Member
of
the
Fund’s
Audit
Committee
since
2014.
As
a
result
of
such
background
and
experience,
the
Board
believes
that
Ms.
Choksi
has
acquired
an
understanding
of
generally
accepted
accounting
principles
and
financial
statements,
the
general
application
of
such
principles
in
connection
with
the
accounting
estimates,
accruals
and
reserves,
and
analyzing
and
evaluating
financial
statements
that
present
a
breadth
and
level
of
complexity
of
accounting
issues
generally
comparable
to
those
of
the
Fund,
as
well
as
an
understanding
of
internal
controls
and
procedures
for
financial
reporting
and
an
understanding
of
audit
committee
functions.
Ms.
Choksi
is
an
independent
Board
member
as
that
term
is
defined
under
the
relevant
Securities
and
Exchange
Commission
Rules
and
Releases.
The
Statement
of
Additional
Information
(SAI)
includes
additional
information
about
the
board
members
and
is
available,
without
charge,
upon
request.
Shareholders
may
call
(800)
DIAL
BEN/342-5236
to
request
the
SAI.
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Lori
A.
Weber
(1964)
Vice
President
and
Co-Secretary
Vice
President
since
2011
and
Co-Secretary
since
2019
Not
Applicable
Not
Applicable
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Associate
General
Counsel,
Franklin
Templeton;
Assistant
Secretary,
Franklin
Resources,
Inc.;
Vice
President
and
Secretary,
Templeton
Investment
Counsel,
LLC;
and
officer
of
44
of
the
investment
companies
in
Franklin
Templeton.
Interested
Board
Members
and
Officers
(continued)
Franklin
Gold
and
Precious
Metals
Fund
Shareholder
Information
46
franklintempleton.com
Annual
Report
Board
Approval
of
Investment
Management
Agreements
FRANKLIN
GOLD
AND
PRECIOUS
METALS
FUND
(Fund)
At
a
meeting
held
on
April
20,
2021
(Meeting),
the
Board
of
Trustees
(Board)
of
the
Fund,
including
a
majority
of
the
trustees
who
are
not
“interested
persons”
as
defined
in
the
Investment
Company
Act
of
1940
(Independent
Trustees),
reviewed
and
approved
the
continuance
of
the
investment
management
agreement
between
Franklin
Advisers,
Inc.
(Manager)
and
the
Fund
(Management
Agreement)
for
an
additional
one-year
period.
The
Independent
Trustees
received
advice
from
and
met
separately
with
Independent
Trustee
counsel
in
considering
whether
to
approve
the
continuation
of
the
Management
Agreement.
In
considering
the
continuation
of
the
Management
Agreement,
the
Board
reviewed
and
considered
information
provided
by
the
Manager
at
the
Meeting
and
throughout
the
year
at
meetings
of
the
Board
and
its
committees.
The
Board
also
reviewed
and
considered
information
provided
in
response
to
a
detailed
set
of
requests
for
information
submitted
to
the
Manager
by
Independent
Trustee
counsel
on
behalf
of
the
Independent
Trustees
in
connection
with
the
annual
contract
renewal
process.
In
addition,
prior
to
the
Meeting,
the
Independent
Trustees
held
a
telephonic
contract
renewal
meeting
at
which
the
Independent
Trustees
conferred
amongst
themselves
and
Independent
Trustee
counsel
about
contract
renewal
matters
and,
in
some
cases,
requested
additional
information
from
the
Manager
relating
to
the
contract.
The
Board
reviewed
and
considered
all
of
the
factors
it
deemed
relevant
in
approving
the
continuance
of
the
Management
Agreement,
including,
but
not
limited
to:
(i)
the
nature,
extent
and
quality
of
the
services
provided
by
the
Manager;
(ii)
the
investment
performance
of
the
Fund;
(iii)
the
costs
of
the
services
provided
and
profits
realized
by
the
Manager
and
its
affiliates
from
the
relationship
with
the
Fund;
(iv)
the
extent
to
which
economies
of
scale
are
realized
as
the
Fund
grows;
and
(v)
whether
fee
levels
reflect
these
economies
of
scale
for
the
benefit
of
Fund
investors.
In
approving
the
continuance
of
the
Management
Agreement,
the
Board,
including
a
majority
of
the
Independent
Trustees,
determined
that
the
terms
of
the
Management
Agreement
are
fair
and
reasonable
and
that
the
continuance
of
such
Management
Agreement
is
in
the
best
interests
of
the
Fund
and
its
shareholders.
While
attention
was
given
to
all
information
furnished,
the
following
discusses
some
primary
factors
relevant
to
the
Board’s
determination.
Nature,
Extent
and
Quality
of
Services
The
Board
reviewed
and
considered
information
regarding
the
nature,
extent
and
quality
of
investment
management
services
provided
by
the
Manager
and
its
affiliates
to
the
Fund
and
its
shareholders.
This
information
included,
among
other
things,
the
qualifications,
background
and
experience
of
the
senior
management
and
investment
personnel
of
the
Manager,
as
well
as
information
on
succession
planning
where
appropriate;
the
structure
of
investment
personnel
compensation;
oversight
of
third-
party
service
providers;
investment
performance
reports
and
related
financial
information
for
the
Fund;
reports
on
expenses
and
shareholder
services;
legal
and
compliance
matters;
risk
controls;
pricing
and
other
services
provided
by
the
Manager
and
its
affiliates;
and
management
fees
charged
by
the
Manager
and
its
affiliates
to
US
funds
and
other
accounts,
including
management’s
explanation
of
differences
among
accounts
where
relevant.
The
Board
also
reviewed
and
considered
an
annual
report
on
payments
made
by
Franklin
Templeton
(FT)
or
the
Fund
to
financial
intermediaries,
as
well
as
a
memorandum
relating
to
third-
party
servicing
arrangements,
which
included
discussion
of
the
changing
distribution
landscape
for
the
Fund.
The
Board
noted
management’s
continuing
efforts
and
expenditures
in
establishing
effective
business
continuity
plans
and
developing
strategies
to
address
areas
of
heightened
concern
in
the
mutual
fund
industry,
such
as
cybersecurity
in
the
current
work-from-home
environment
and
liquidity
risk
management.
The
Board
also
reviewed
and
considered
the
benefits
provided
to
Fund
shareholders
of
investing
in
a
fund
that
is
part
of
the
FT
family
of
funds.
The
Board
noted
the
financial
position
of
Franklin
Resources,
Inc.
(FRI),
the
Manager’s
parent,
and
its
commitment
to
the
mutual
fund
business
as
evidenced
by
its
reassessment
of
the
fund
offerings
in
response
to
the
market
environment
and
project
initiatives
and
capital
investments
relating
to
the
services
provided
to
the
Fund
by
the
FT
organization.
The
Board
specifically
noted
FT’s
commitment
to
enhancing
services
and
controlling
costs,
as
reflected
in
its
outsourcing
of
certain
administrative
functions,
and
growth
opportunities,
Franklin
Gold
and
Precious
Metals
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47
franklintempleton.com
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as
evidenced
by
its
recent
acquisition
of
the
Legg
Mason
companies.
The
Board
also
noted
FT’s
attention
focused
on
expanding
the
distribution
opportunities
for
all
funds
in
the
FT
family
of
funds.
Following
consideration
of
such
information,
the
Board
was
satisfied
with
the
nature,
extent
and
quality
of
services
provided
by
the
Manager
and
its
affiliates
to
the
Fund
and
its
shareholders.
Fund
Performance
The
Board
reviewed
and
considered
the
performance
results
of
the
Fund
over
various
time
periods
ended
January
31,
2021.
The
Board
considered
the
performance
returns
for
the
Fund
in
comparison
to
the
performance
returns
of
mutual
funds
deemed
comparable
to
the
Fund
included
in
a
universe
(Performance
Universe)
selected
by
Broadridge
Financial
Solutions,
Inc.
(Broadridge),
an
independent
provider
of
investment
company
data.
The
Board
received
a
description
of
the
methodology
used
by
Broadridge
to
select
the
mutual
funds
included
in
a
Performance
Universe.
The
Board
also
reviewed
and
considered
Fund
performance
reports
provided
and
discussions
that
occurred
with
portfolio
managers
at
Board
meetings
throughout
the
year.
A
summary
of
the
Fund’s
performance
results
is
below.
The
Performance
Universe
for
the
Fund
included
the
Fund
and
all
retail
and
institutional
precious
metals
equity
funds.
The
Board
noted
that
the
Fund’s
annualized
total
return
for
the
10-year
period
was
below
the
median
of
its
Performance
Universe,
but
for
the
one-,
three-
and
five-year
periods
was
above
the
median
of
its
Performance
Universe.
The
Board
concluded
that
the
Fund’s
performance
was
satisfactory.
Comparative
Fees
and
Expenses
The
Board
reviewed
and
considered
information
regarding
the
Fund’s
actual
total
expense
ratio
and
its
various
components,
including,
as
applicable,
management
fees;
transfer
agent
expenses;
underlying
fund
expenses;
Rule
12b-1
and
non-Rule
12b-1
service
fees;
and
other
non-
management
fees.
The
Board
also
noted
the
quarterly
and
annual
reports
it
receives
on
all
marketing
support
payments
made
by
FT
to
financial
intermediaries.
The
Board
considered
the
actual
total
expense
ratio
and,
separately,
the
contractual
management
fee
rate,
without
the
effect
of
fee
waivers,
if
any
(Management
Rate)
of
the
Fund
in
comparison
to
the
median
expense
ratio
and
median
Management
Rate,
respectively,
of
other
mutual
funds
deemed
comparable
to
and
with
a
similar
expense
structure
as
the
Fund
selected
by
Broadridge
(Expense
Group).
Broadridge
fee
and
expense
data
is
based
upon
information
taken
from
each
fund’s
most
recent
annual
report,
which
reflects
historical
asset
levels
that
may
be
quite
different
from
those
currently
existing,
particularly
in
a
period
of
market
volatility.
While
recognizing
such
inherent
limitation
and
the
fact
that
expense
ratios
and
Management
Rates
generally
increase
as
assets
decline
and
decrease
as
assets
grow,
the
Board
believed
the
independent
analysis
conducted
by
Broadridge
to
be
an
appropriate
measure
of
comparative
fees
and
expenses.
The
Broadridge
Management
Rate
includes
administrative
charges,
and
the
actual
total
expense
ratio,
for
comparative
consistency,
was
shown
for
Class
A
shares
for
the
Fund
and
for
each
of
the
other
funds
in
the
Expense
Group.
The
Board
received
a
description
of
the
methodology
used
by
Broadridge
to
select
the
mutual
funds
included
in
an
Expense
Group.
The
Expense
Group
for
the
Fund
included
the
Fund
and
10
other
precious
metals
equity
funds.
The
Board
noted
that
the
Management
Rate
and
actual
total
expense
ratio
for
the
Fund
were
below
the
medians
and
in
the
first
quintile
(least
expensive)
of
its
Expense
Group.
The
Board
concluded
that
the
Management
Rate
charged
to
the
Fund
is
reasonable.
Profitability
The
Board
reviewed
and
considered
information
regarding
the
profits
realized
by
the
Manager
and
its
affiliates
in
connection
with
the
operation
of
the
Fund.
In
this
respect,
the
Board
considered
the
Fund
profitability
analysis
provided
by
the
Manager
that
addresses
the
overall
profitability
of
FT’s
US
fund
business,
as
well
as
its
profits
in
providing
investment
management
and
other
services
to
each
of
the
individual
funds
during
the
12-month
period
ended
September
30,
2020,
being
the
most
recent
fiscal
year-
end
for
FRI.
The
Board
noted
that
although
management
continually
makes
refinements
to
its
methodologies
used
in
calculating
profitability
in
response
to
organizational
and
product-related
changes,
the
overall
methodology
has
remained
consistent
with
that
used
in
the
Fund’s
profitability
report
presentations
from
prior
years.
The
Board
further
noted
management’s
representation
that
the
profitability
analysis
excluded
the
impact
of
the
recent
acquisition
of
the
Legg
Mason
companies
and
that
management
expects
to
incorporate
the
legacy
Legg
Mason
companies
into
the
profitability
analysis
beginning
next
year.
The
Board
also
noted
that
PricewaterhouseCoopers
LLP,
auditor
to
FRI
and
certain
FT
funds,
has
been
engaged
by
the
Manager
to
periodically
review
and
assess
the
allocation
methodologies
to
be
used
solely
by
the
Fund’s
Board
with
respect
to
the
profitability
analysis.
The
Board
noted
management’s
belief
that
costs
incurred
in
establishing
the
infrastructure
necessary
for
the
type
of
mutual
fund
operations
conducted
by
the
Manager
and
its
affiliates
may
not
be
fully
reflected
in
the
expenses
allocated
to
the
Fund
in
determining
its
profitability,
as
Franklin
Gold
and
Precious
Metals
Fund
Shareholder
Information
48
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well
as
the
fact
that
the
level
of
profits,
to
a
certain
extent,
reflected
operational
cost
savings
and
efficiencies
initiated
by
management.
As
part
of
this
evaluation,
the
Board
considered
management’s
outsourcing
of
certain
operations,
which
effort
has
required
considerable
up-front
expenditures
by
the
Manager
but,
over
the
long
run
is
expected
to
result
in
greater
efficiencies.
The
Board
also
noted
management’s
expenditures
in
improving
shareholder
services
provided
to
the
Fund,
as
well
as
the
need
to
implement
systems
and
meet
additional
regulatory
and
compliance
requirements
resulting
from
recent
US
Securities
and
Exchange
Commission
and
other
regulatory
requirements.
The
Board
also
considered
the
extent
to
which
the
Manager
and
its
affiliates
might
derive
ancillary
benefits
from
fund
operations,
including
revenues
generated
from
transfer
agent
services,
potential
benefits
resulting
from
personnel
and
systems
enhancements
necessitated
by
fund
growth,
as
well
as
increased
leverage
with
service
providers
and
counterparties.
Based
upon
its
consideration
of
all
these
factors,
the
Board
concluded
that
the
level
of
profits
realized
by
the
Manager
and
its
affiliates
from
providing
services
to
the
Fund
was
not
excessive
in
view
of
the
nature,
extent
and
quality
of
services
provided
to
the
Fund.
Economies
of
Scale
The
Board
reviewed
and
considered
the
extent
to
which
the
Manager
may
realize
economies
of
scale,
if
any,
as
the
Fund
grows
larger
and
whether
the
Fund’s
management
fee
structure
reflects
any
economies
of
scale
for
the
benefit
of
shareholders.
With
respect
to
possible
economies
of
scale,
the
Board
noted
the
existence
of
management
fee
breakpoints,
which
operate
generally
to
share
any
economies
of
scale
with
the
Fund’s
shareholders
by
reducing
the
Fund’s
effective
management
fees
as
the
Fund
grows
in
size.
The
Board
considered
the
Manager’s
view
that
any
analyses
of
potential
economies
of
scale
in
managing
a
particular
fund
are
inherently
limited
in
light
of
the
joint
and
common
costs
and
investments
the
Manager
incurs
across
the
FT
family
of
funds
as
a
whole.
The
Board
concluded
that
to
the
extent
economies
of
scale
may
be
realized
by
the
Manager
and
its
affiliates,
the
Fund’s
management
fee
structure
provided
a
sharing
of
benefits
with
the
Fund
and
its
shareholders
as
the
Fund
grows.
Conclusion
Based
on
its
review,
consideration
and
evaluation
of
all
factors
it
believed
relevant,
including
the
above-described
factors
and
conclusions,
the
Board
unanimously
approved
the
continuation
of
the
Management
Agreement
for
an
additional
one-year
period.
Liquidity
Risk
Management
Program-
Funds
no
HLIM
Each
Fund
has
adopted
and
implemented
a
written
Liquidity
Risk
Management
Program
(the
“LRMP”)
as
required
by
Rule
22e-4
under
the
Investment
Company
Act
of
1940
(the
“Liquidity
Rule”).
The
LRMP
is
designed
to
assess
and
manage
each
Fund’s
liquidity
risk,
which
is
defined
as
the
risk
that
the
Fund
could
not
meet
requests
to
redeem
shares
issued
by
the
Fund
without
significant
dilution
of
remaining
investors’
interests
in
the
Fund.
In
accordance
with
the
Liquidity
Rule,
the
LRMP
includes
policies
and
procedures
that
provide
for:
(1)
assessment,
management,
and
review
(no
less
frequently
than
annually)
of
each
Fund’s
liquidity
risk;
(2)
classification
of
each
Fund’s
portfolio
holdings
into
one
of
four
liquidity
categories
(Highly
Liquid,
Moderately
Liquid,
Less
Liquid,
and
Illiquid);
(3)
for
Funds
that
do
not
primarily
hold
assets
that
are
Highly
Liquid,
establishing
and
maintaining
a
minimum
percentage
of
the
Fund’s
net
assets
in
Highly
Liquid
investments
(called
a
“Highly
Liquid
Investment
Minimum”
or
“HLIM”);
and
(4)
prohibiting
the
Fund’s
acquisition
of
Illiquid
investments
that
would
result
in
the
Fund
holding
more
than
15%
of
its
net
assets
in
Illiquid
assets.
The
LRMP
also
requires
reporting
to
the
Securities
and
Exchange
Commission
(“SEC”)
(on
a
non-public
basis)
and
to
the
Board
if
the
Fund’s
holdings
of
Illiquid
assets
exceed
15%
of
the
Fund’s
net
assets.
Funds
with
HLIMs
must
have
procedures
for
addressing
HLIM
shortfalls,
including
reporting
to
the
Board
and,
with
respect
to
HLIM
shortfalls
lasting
more
than
seven
consecutive
calendar
days,
reporting
to
the
SEC
(on
a
non-public
basis).
The
Director
of
Liquidity
Risk
within
the
Investment
Risk
Management
Group
(the
“IRMG”)
is
the
appointed
Administrator
of
the
LRMP.
The
IRMG
maintains
the
Investment
Liquidity
Committee
(the
“ILC”)
to
provide
oversight
and
administration
of
policies
and
procedures
governing
liquidity
risk
management
for
FT
products
and
portfolios.
The
ILC
includes
representatives
from
Franklin
Templeton’s
Risk,
Trading,
Global
Compliance,
Investment
Compliance,
Investment
Operations,
Valuation
Committee,
Product
Management
and
Global
Product
Strategy.
In
assessing
and
managing
each
Fund’s
liquidity
risk,
the
ILC
considers,
as
relevant,
a
variety
of
factors,
including
the
Fund’s
investment
strategy
and
the
liquidity
of
its
portfolio
investments
during
both
normal
and
reasonably
foreseeable
stressed
conditions;
its
short
and
long-term
cash
flow
projections;
and
its
cash
holdings
and
access
to
other
funding
sources
including
the
Funds’
interfund
lending
facility
and
line
of
credit.
Classification
of
the
Fund’s
portfolio
holdings
in
the
four
liquidity
categories
is
based
on
the
number
of
days
it
is
reasonably
expected
to
take
to
convert
Franklin
Gold
and
Precious
Metals
Fund
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Information
49
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Annual
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the
investment
to
cash
(for
Highly
Liquid
and
Moderately
Liquid
holdings)
or
sell
or
dispose
of
the
investment
(for
Less
Liquid
and
Illiquid
investments),
in
current
market
conditions
without
significantly
changing
the
investment’s
market
value.
Each
Fund
primarily
holds
liquid
assets
that
are
defined
under
the
Liquidity
Rule
as
"Highly
Liquid
Investments,"
and
therefore
is
not
required
to
establish
an
HLIM.
Highly
Liquid
Investments
are
defined
as
cash
and
any
investment
reasonably
expected
to
be
convertible
to
cash
in
current
market
conditions
in
three
business
days
or
less
without
the
conversion
to
cash
significantly
changing
the
market
value
of
the
investment.
At
meetings
of
the
Funds’
Board
of
Trustees
held
in
May
2021,
the
Program
Administrator
provided
a
written
report
to
the
Board
addressing
the
adequacy
and
effectiveness
of
the
program
for
the
year
ended
December
31,
2020.
The
Program
Administrator
report
concluded
that
(i.)
the
LRMP,
as
adopted
and
implemented,
remains
reasonably
designed
to
assess
and
manage
each
Fund’s
liquidity
risk;
(ii.)
the
LRMP,
including
the
Highly
Liquid
Investment
Minimum
(“HLIM”)
where
applicable,
was
implemented
and
operated
effectively
to
achieve
the
goal
of
assessing
and
managing
each
Fund’s
liquidity
risk;
and
(iii.)
each
Fund
was
able
to
meet
requests
for
redemption
without
significant
dilution
of
remaining
investors’
interests
in
the
Fund.
Proxy
Voting
Policies
and
Procedures
The
Fund’s
investment
manager
has
established
Proxy
Voting
Policies
and
Procedures
(Policies)
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
portfolio
securities.
Shareholders
may
view
the
Fund’s
complete
Policies
online
at
franklintempleton.com.
Alternatively,
shareholders
may
request
copies
of
the
Policies
free
of
charge
by
calling
the
Proxy
Group
collect
at
(954)
527-
7678
or
by
sending
a
written
request
to:
Franklin
Templeton
Companies,
LLC,
300
S.E.
2nd
Street,
Fort
Lauderdale,
FL
33301,
Attention:
Proxy
Group.
Copies
of
the
Fund’s
proxy
voting
records
are
also
made
available
online
at
franklintempleton.com
and
posted
on
the
U.S.
Securities
and
Exchange
Commission’s
website
at
sec.gov
and
reflect
the
most
recent
12-month
period
ended
June
30.
Quarterly
Statement
of
Investments
The
Fund
files
a
complete
statement
of
investments
with
the
U.S.
Securities
and
Exchange
Commission
for
the
first
and
third
quarters
for
each
fiscal
year
as
an
exhibit
to
its
report
on
Form
N-PORT.
Shareholders
may
view
the
filed
Form
N-PORT
by
visiting
the
Commission’s
website
at
sec.gov.
The
filed
form
may
also
be
viewed
and
copied
at
the
Commission’s
Public
Reference
Room
in
Washington,
DC.
Information
regarding
the
operations
of
the
Public
Reference
Room
may
be
obtained
by
calling
(800)
SEC-0330.
Householding
of
Reports
and
Prospectuses
You
will
receive,
or
receive
notice
of
the
availability
of,
the
Fund’s
financial
reports
every
six
months.
In
addition,
you
will
receive
an
annual
updated
summary
prospectus
(detail
prospectus
available
upon
request).
To
reduce
Fund
expenses,
we
try
to
identify
related
shareholders
in
a
household
and
send
only
one
copy
of
the
financial
reports
(to
the
extent
received
by
mail)
and
summary
prospectus.
This
process,
called
“householding,”
will
continue
indefinitely
unless
you
instruct
us
otherwise.
If
you
prefer
not
to
have
these
documents
householded,
please
call
us
at
(800)
632-2301.
At
any
time
you
may
view
current
prospectuses/
summary
prospectuses
and
financial
reports
on
our
website.
If
you
choose,
you
may
receive
these
documents
through
electronic
delivery.
132
A
09/21
©
2021
Franklin
Templeton
Investments.
All
rights
reserved.
Authorized
for
distribution
only
when
accompanied
or
preceded
by
a
summary
prospectus
and/or
prospectus.
Investors
should
carefully
consider
a
fund’s
investment
goals,
risks,
charges
and
expenses
before
investing.
A
prospectus
contains
this
and
other
information;
please
read
it
carefully
before
investing.
To
help
ensure
we
provide
you
with
quality
service,
all
calls
to
and
from
our
service
areas
are
monitored
and/or
recorded.
Annual
Report
and
Shareholder
Letter
Franklin
Gold
and
Precious
Metals
Fund
Investment
Manager
Distributor
Shareholder
Services
Franklin
Advisers,
Inc.
Franklin
Distributors,
LLC
(800)
DIAL
BEN
®
/
342-5236
franklintempleton.com
(800)
632-2301
Item 2.  Code of Ethics.
 
(a) The Registrant has adopted a code of ethics that applies to its principal executive officers and principal financial and accounting officer.
 
(c) N/A
 
(d) N/A
 
(f) Pursuant to Item 13(a)(1), the Registrant is attaching as an exhibit a copy of its code of ethics that applies to its principal executive officers and principal financial and accounting officer.
 
 
Item 3.  Audit Committee Financial Expert.
 
(a)(1) The Registrant has an audit committee financial expert serving on its audit committee.
 
(2) The audit committee financial expert is Mary C. Choksi and she is "independent" as defined under the relevant Securities and Exchange Commission Rules and Releases.
 
Item 4. Principal Accountant Fees and Services.      
 
(a)      Audit Fees
The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or for services that are normally provided by the principal accountant in connection with statutory and regulatory filings or engagements were $54,761 for the fiscal year ended July 31, 2021 and $69,759 for the fiscal year ended July 31, 2020.
 
(b)      Audit-Related Fees
The aggregate fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of Item 4 were $0 for the fiscal year ended July 31, 2021 and $3,133 for the fiscal year ended July 31, 2020.  The services for which these fees were paid included attestation services.
 
There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant's investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant that are reasonably related to the performance of the audit of their financial statements.  
 
(c)      Tax Fees
There were no fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant for tax compliance, tax advice and tax planning.
 
There were no fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant for tax compliance, tax advice and tax planning.
 
(d)      All Other Fees
The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant not  reported in paragraphs (a)-(c) of Item 4 were $0 for the fiscal year ended July 31, 2021 and $357 for the fiscal year ended July 31, 2020.  The services for which these fees were paid included review of materials provided to the fund Board in connection with the investment management contract renewal process. 
 
The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant not reported in paragraphs (a)-(c) of Item 4 were $29,000 for the fiscal year ended July 31, 2021 and $183,444 for the fiscal year ended July 31, 2020.  The services for which these fees were paid included for the issuance of an Auditor's Certificate for South Korean regulatory shareholders disclosures, professional fees in connection with determining the feasibility of a U.S. direct lending structure, valuation services related to a fair value engagement, assets under management certification, and benchmarking services in connection with the ICI TA Survey.  
 
(e) (1) The registrant’s audit committee is directly responsible for approving the services to be provided by the auditors, including:
 
      (i)   pre-approval of all audit and audit related services;
 
      (ii)  pre-approval of all non-audit related services to be provided to the Fund by the auditors;
 
      (iii) pre-approval of all non-audit related services to be provided to the registrant by the auditors to the registrant’s investment adviser or to any entity that controls, is controlled by or is under common control with the registrant’s investment adviser and that provides ongoing services to the registrant where the non-audit services relate directly to the operations or financial reporting of the registrant; and
 
      (iv)  establishment by the audit committee, if deemed necessary or appropriate, as an alternative to committee pre-approval of services to be provided by the auditors, as required by paragraphs (ii) and (iii) above, of policies and procedures to permit such services to be pre-approved by other means, such as through establishment of guidelines or by action of a designated member or members of the committee; provided the policies and procedures are detailed as to the particular service and the committee is informed of each service and such policies and procedures do not include delegation of audit committee responsibilities, as contemplated under the Securities Exchange Act of 1934, to management; subject, in the case of (ii) through (iv), to any waivers, exceptions or exemptions that may be available under applicable law or rules.
 
(e) (2) None of the services provided to the registrant described in paragraphs (b)-(d) of Item 4 were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of regulation S-X.
 
(f) No disclosures are required by this Item 4(f).
 
(g) The aggregate non-audit fees paid to the principal accountant for services rendered by the principal accountant to the registrant and the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant were $29,000 for the fiscal year ended July 31, 2021 and $186,934 for the fiscal year ended July 31, 2020.
 
(h) The registrant’s audit committee of the board has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.
 
 
Item 5.  Audit Committee
 
of Listed Registrants.       N/A
 
 
Item 6.  Schedule of Investments.                     N/A


 
Item 7.  Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.            N/A
 
 
Item 8.  Portfolio Managers of Closed-End Management Investment Companies.                               N/A
 
 
Item 9.  Purchases of Equity Securities by Closed-End Management Investment Company and
Affiliated Purchasers.     N/A
 
 
Item 10. Submission of Matters to a Vote of Security Holders.
 
There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant's Board of Trustees that would require disclosure herein.
 
 
Item 11. Controls and Procedures.
 
(a)
 Evaluation of Disclosure Controls and Procedures.
The Registrant maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant’s management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
Within 90 days prior to the filing date of this Shareholder Report on Form N-CSR, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant’s management, including the Registrant’s principal executive officer and the Registrant’s principal financial officer, of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures. Based on such evaluation, the Registrant’s principal executive officer and principal financial officer concluded that the Registrant’s disclosure controls and procedures are effective.
(b)
 Changes in Internal Controls.
There have been no changes in the Registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect the internal control over financial reporting.
 
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Company                  N/A
 
 
Item 13. Exhibits.
 
(a) (1) Code of Ethics
 
 
(a) (2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Robert G. Kubilis, Chief Financial Officer and Chief Accounting Officer
 
 
(b)   Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Robert G. Kubilis, Chief Financial Officer and Chief Accounting Officer
 
 
 
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.
 
 
FRANKLIN GOLD AND PRECIOUS METALS FUND
 
 
 
By S\MATTHEW T. HINKLE______________________
      Matthew T. Hinkle
      Chief Executive Officer – Finance and Administration
Date
September 27, 2021
 
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\MATTHEW T. HINKLE______________________
      Matthew T. Hinkle
      Chief Executive Officer – Finance and Administration
Date
September 27, 2021
 
 
 
By S\Robert G. Kubilis________________________
     
Robert G. Kubilis
      Chief Financial Officer
and Chief Accounting Officer
Date September
27, 2021