Golden Prospect Precious Metals (GPM), the £92m gold mining fund preparing to move to Baker Steel from CQS Manulife, scored a hit with its big share buybacks in the first half of the year.
Interim results today show the investment company suffered a 13.6% slide in net asset value (NAV) in the six months to 30 June, following a spectacular 2025 when the portfolio soared 170% on the back of record gold prices and surging mining stocks.
However, shareholders were shielded from the decline as the share price slipped just 0.9% to 94p after the board intervened to stop the company’s wide discount from widening further following the resignation of fund managers Keith Watson and Robert Crayfourd in March, and as the price of gold fell over 5%.
Despite last year’s “stellar” performance, new chair Monica Tepes said GPM ended 2025 with its shares standing 19.4% below NAV. The discount widened to 28% in February and, after the managers’ resignation, the board decided to act buying 12.9% of its shares between 14 April and 5 June when shareholders renewed its buyback authority at the annual general meeting.
Following the AGM and up to 7 July, GPM purchased another 13.3% of shares with the discount slashed to 7.5% at 30 June. This support meant the share price did not follow the NAV down. Since the half-year-end, the shares have rallied to 115.6p, although the discount has widened to nearly 10%.
This leaves GPM shareholders with a total return of 159.6% over five years, the second best in the Commodities and Natural Resources sector.
Mark Burridge and Trevor Steel of Baker Steel are set to take on GPM in the third quarter after the board took the surprise decision not to follow Watson and Crayfourd to Tufton Investment Management as their two other trusts had done.
However, the board was impressed by the strong performance of Baker Steel Resources Trust (BSRT) and negotiated lower fees and announced an enhanced 1.5% quarterly dividend policy.
Our view
David Batchelor, senior analyst at QuotedData, said: “This is a disappointing headline result, although there is clearly important context to the 13.6% fall in NAV. Precious metals equities endured a sharp reversal after an exceptional 2025 and GPM actually held up slightly better than the VanEck Junior Gold Miners ETF, which fell 14.4% in sterling terms. Gearing was unhelpful, detracting 2.1% from NAV, but buybacks added around 1.4% and, importantly, helped narrow the discount from 19.4% to 7.5%, meaning the share price fell by less than 1% over the period. The proposed appointment of specialist manager Baker Steel, lower management fee and new dividend policy targeting around 6% a year, should also broaden the trust’s appeal. After such strong gains last year, some volatility was inevitable, but the combination of resilient relative performance, a much narrower discount and changes intended to improve shareholder returns leaves GPM in a healthier position than the NAV decline alone implies.”
