After the drop in share prices during April, we saw prices fall a further 10% in early May. However, a strong recovery at the end of the month ensured the NAV came in only 2.09% lower. Now that a bottom in precious metals prices finally seems to be forming, we can expect shares to continue to recover. A new surge in the price of precious metals seems to be only a matter of time, now that a bottom around $1,330 appears to have formed. The global physical demand for precious metals is very large. Gold demand from India and China is now estimated at 3,500 tons, while annual mine production is only 2,800 tons. In addition, the supply of gold from scrap, which is needed to cover the deficit in the gold market, has declined dramatically due to the low prices. Starting after our Annual Meeting of April 22, 2013, the inflow into our fund is high. Since then, we have received about four million Euros from new and existing participants. As a result, we have been able to significantly expand some of our positions at these very low levels. Our cash position is therefore now historically low.
At the end of May, the 22nd takeover of a position in our portfolio was announced. New Gold (NGD, also in portfolio) announced a bid of more than $400 million for Rainy River Resources (RR). This company has worked on a large Canadian gold discovery (>5 million oz) since 2006, and has been a position in our portfolio since our inception in 2008. This is yet another confirmation of the fact that significant discoveries are almost always taken over by producers who seek to replenish their reserves. Gold producer Agnico Eagle has taken minority interests in no less than four exploration companies (all four in our portfolio), in recent weeks. Due to delays at many new gold mining projects, and the general failure to find new significant discoveries, a peak in mine production (Peak Gold) is expected in the coming years. It is therefore unrealistic to assume that gold production will keep up with demand. We also learned that investor George Soros, like the CDFund, owns shares of Tasman Metals (TSM). Tasman is developing a rare earth discovery in Sweden.