CQS Natural Resources & Growth (CYN), the £134m mining fund that has delivered a 107% one-year total return in the gold and silver boom, most of it after Saba Capital exited in a tender off last July, has published a circular for a vote seeking shareholder approval to issue up to 20% more shares.
Last year’s strong performance has stoked demand for the portfolio run by Keith Watson and Robert Crayfourd at New City Investment Managers, part of Manulife. The pair enjoyed a stellar 2025 with CYN the fourth-best performing investment company with a 102% total shareholder return. Their other closed-end fund, Golden Prospect Precious Metals (GPM) did even better, achieving 165%, the best performance of a London-listed fund.
As a result, in just two months since the 2025 annual general meeting, CYN has issued over 1.5m shares held in treasury, using 43% of the issuance authority gained at the December AGM.
A general meeting will be held at midday on 2 March in London at which shareholders will be asked to vote on two resolutions, each allowing up to a further 10% share issuance. This is to give shareholders the option to back 10% share issuance, the normal limit under corporate governance guidelines, rather than 20% if they wish.
The company is seeking the higher issuance capacity to capitalise on investor demand, lower its operating costs as a percentage of assets and to restore its size after last July’s 100% tender offer. That saw over 45% of the shares sold but enabled the exit of activist Saba Capital, which sold its stake having failed to oust the board in a general meeting in February. It signed a standstill agreement not to launch further action against the board until 2028.
CYN shares have traded slightly above net asset value (NAV) on several occasions since September, when the prices of gold and silver started to surge, enabling the substantial issuance of shares. The trust, which has over half its portfolio in precious metals miners and last year hiked dividends to 8% of net assets, has dropped to a 5% discount after the sell-off on Friday and Monday. However, with the shares recovering 5% today, and gold bouncing over 6% back towards $5,000 an ounce, the gap to NAV may narrow again. Gold peaked at $5,576 before tumbling to $4,510 yesterday and currently stands at over $4,492.
Chair Christopher Casey said: “The strong performance and attractive fundamentals of the company, coupled with increased investor demand for exposure to natural resources, has resulted in the shares frequently trading at a premium to their NAV in recent months. The board believes that this reflects the strong performance of, and positive sentiment towards, natural resources equities, the company’s favourable performance relative to its comparator indices and peers over one-, three- and five-year periods, and the successful completion of the tender offer in 2025.”
In their latest factsheet commentary, the managers said: “The company’s positioning remains little changed moving into 2026, with the outlook for fundamentals remaining similar to 2025 across broader markets. Against a backdrop of aggressive US trade policies, aggregate demand growth remains relatively muted, inflation remains persistent, and the ‘affordability’ of government borrowing remains a key focus despite expected interest rate easing. This cocktail of factors is notably undermining the purchasing power of many global currencies, including the dollar. More broadly, the dominant AI weighting within investment strategies remains a key factor driving wider market momentum, though with little clarity on BigTech’s ability to monetise spending and justify the huge capex outlays being made, we believe tangible assets, including commodities, may represent a beneficial diversification to passive investment styles that remain a significant feature of broader markets.”
Our view
James Carthew, head of investment company research at QuotedData, said: “One day I’ll get bored of highlighting how much money the investors who sold CQS City Natural Resources at 208p in last year’s tender missed out on, but today is not the day (it’s currently over 75% of whatever you got for your stake). The setback in precious metals prices was healthy but the underlying reasons why gold, silver and especially copper are in demand have not gone away. I’d love to see CYN get back to its previous size and hope it can carry on reissuing shares.”
