SCHEDULE 14A
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
ASA (Bermuda) Limited
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously PAID:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
ASA (BERMUDA) LIMITED
11 SUMMER STREET
4TH FLOOR
BUFFALO, NY 14209
IMPORTANT PROXY MATERIALS
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April [ ], 2005
Dear Shareholder:
The Board of Directors believes that the time is right to change certain
fundamental investment policies which presently apply to the Company.
Accordingly, a special meeting of shareholders of ASA (Bermuda) Limited will be
held on June [9], 2005 to consider and vote on the proposed changes to these
policies. As you may know, the Company is subject to a number of fundamental
policies relating to the diversification of its portfolio and the concentration
of its investments inside and outside of South Africa. Because of structural
changes in the gold mining industry, certain of these policies hamper the
Company in implementing its investment strategy. Accordingly, the Board of
Directors seeks shareholder approval of certain changes to the Company's
investment policies. If the changes are approved, the Company would continue to
focus on investing in companies involved in the mining of gold.
YOUR PARTICIPATION IN THIS INITIATIVE IS CRITICAL. WITHOUT YOUR PARTICIPATION
THE COMPANY'S INVESTMENT POLICIES CANNOT BE CHANGED.
The Board believes that the proposed changes in investment policy are necessary
due to:
o decline in gold production by the South African gold mining industry
compared to the rest of the world and
o widespread consolidation of the worldwide gold mining industry
resulting in a decline in the number of gold mining companies located
in South Africa.
These trends are clearly evidenced in the charts below.
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GOLD PRODUCTION IN THE REPUBLIC OF SOUTH AFRICA (RSA) & THE WORLD
[GRAPHIC OMITTED]
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While South Africa will remain an important producer for many years to come,
today large gold producers are focusing on exploration and development in
regions with better prospects and lower production costs than South Africa. As
illustrated by the chart below, the gold mines of the future are likely to be
found in Russia, the Far East, South America and the rest of Africa.
2003 GOLD MINING PRODUCTION 1970 GOLD MINING PRODUCTION
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[GRAPHIC OMITTED] [GRAPHIC OMITTED]
(17.3%) RSA (67.7%) RSA
(10.6%) AUS (5.1%) Canada
(5.4%) CAN (1.3%) AUS
(7.7%) China (8.6%) Other
(6.9%) Russia (3.7%) USA
(6.6%) Peru (13.7%) Russia
(10.2%) USA
(35.2%) Other
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A further factor constricting the Company's investment in South Africa is the
sharp decline in the number of listed companies operating in the gold mining
industry in that country. This decline is principally the result of the large
scale consolidation which has taken place in the South African gold mining
industry. The chart below illustrates the reduction in the number of gold mining
companies listed on the JSE Securities Exchange (JSE), the principal stock
exchange in South Africa. Of the approximately one dozen issuers currently
remaining only 3 are of a size that management believes is appropriate for the
Fund's portfolio.
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NUMBER OF JSE LISTED GOLD COMPANIES
[GRAPHIC OMITTED]
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The Company's policies relating to the diversification of its portfolio's and
the concentration of its investments place the Company at a competitive
disadvantage compared to other gold and precious minerals funds that do not
limit investments
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in any single issuer or by country or geographic region. It is therefore
important to the Company's future that the restriction relating to investment in
South Africa be set aside so that the Company can pursue the best precious
minerals prospects on a global scale. Shareholders should be assured that the
main focus of the Company is to remain invested in securities of companies
involved in the mining of gold.
At the meeting you will be asked to consider and vote on two other proposals.
These proposals seek to change the Company's fundamental investment policy
relating to investments of cash and to change the Company's name from "ASA
(Bermuda) Limited" back to "ASA Limited".
All of the proposals have been carefully considered by the Board of Directors.
THE BOARD BELIEVES THAT THESE PROPOSALS ARE IN THE BEST INTERESTS OF THE COMPANY
AND ITS SHAREHOLDERS AND UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR EACH PROPOSAL.
PLEASE VOTE YOUR SHARES PROMPTLY. EVERYTHING YOU NEED TO VOTE IS ENCLOSED AND
VOTING IS QUICK AND EASY. We ask that you please sign, date and return the
enclosed proxy card by no later than June [XX], 2005. As an alternative to using
the proxy card to vote, you can vote through the Internet, by telephone or in
person at the Meeting. If you have any questions about the proposals or need
assistance in voting your shares, please call our proxy solicitor, D.F. King &
Co., Inc. toll free at [1-800-XXX-XXXX].
Thank you for your vote on these important proposals.
Sincerely,
ROBERT J.A. IRWIN
Chairman, President and Treasurer
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ASA (BERMUDA) LIMITED
11 SUMMER STREET
4TH FLOOR
BUFFALO, NY 14209
NOTICE OF SPECIAL GENERAL MEETING OF SHAREHOLDERS
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June [9], 2005
NOTICE IS HEREBY GIVEN that a Special General Meeting (the "Meeting") of
Shareholders of ASA (Bermuda) Limited (the "Company") will be held on
[Thursday], June [9], 2005, at [10:00] A.M., New York City Time, at the offices
of UBS, 1285 Avenue of the Americas, 14th Floor, New York, NY 10020. The purpose
of the Meeting is to consider and act upon the following proposals and to
transact such other business as may properly come before the Meeting or any
adjournment thereof.
1. To approve a change in the Company's diversification status from
a diversified to a non- diversified company and to eliminate
related fundamental investment restrictions to provide the
Company greater investment flexibility.
2. To eliminate or amend certain fundamental investment restrictions
concerning the concentration of the Company's investments inside
and outside of South Africa to allow the Company to increase its
investments outside of South Africa.
3. To amend the fundamental investment restriction relating to sale
or purchase of commodities to permit the Company to invest in a
broader array of precious minerals bullion without limitation.
4. To amend the fundamental investment restriction relating to
investments of cash to expand the Company's liquid investment
options.
5. To change the Company's name from "ASA (Bermuda) Limited" back to
"ASA Limited".
Each proposal is discussed in greater detail in the attached Proxy Statement.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOR OF
EACH PROPOSAL.
The Board of Directors has fixed the close of business on [XXX], 2005 as the
record date for the determination of the shareholders of the Company entitled to
receive notice of, and to vote at, the Meeting and any adjournments thereof.
By order of the Board of Directors,
Paul K. Wustrack, Jr.
Secretary
April [ ], 2005
YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN
We invite you to attend the Meeting to vote on these proposals. Any
shareholder who does not expect to attend the Meeting is urged to vote by any of
the methods described below.
If your shares are registered in your name, please indicate your voting
instructions on the enclosed proxy card, sign and date the card, and return it
in the envelope provided by the date of the Meeting. IF YOU SIGN, DATE, AND
RETURN THE PROXY CARD BUT GIVE NO VOTING INSTRUCTIONS, THE PROXIES WILL VOTE IN
FAVOR OF THE PROPOSALS. The appointed proxies will vote, in their discretion, on
any other business as may properly come before the Meeting or any adjournment
thereof. To avoid the additional expense, we ask your cooperation in mailing
your proxy card promptly. As an alternative to using the proxy card to vote, you
may vote:
o by telephone, with a toll-free call to [1-877-PRX-VOTE
(1-877-XXX-XXXX)];
o through the Internet, at [www.eproxyvote.com/XXX], and by following
the instructions on the site; or
o in person at the Meeting.
If you have any questions regarding the proposals or need assistance in
voting your shares, please call our proxy solicitor, D. F. King & Co., Inc.,
toll free at [1-800-XXX-XXX].
If we do not receive your voting instructions after our original mailing,
you may be contacted by the Company or by our proxy solicitor. The Company or
our proxy solicitor will remind you to appoint a proxy.
If you hold shares in "street name" through a broker or other nominee, you
should contact your broker or nominee with your instructions for attendance or
voting at the Meeting.
2
ASA (BERMUDA) LIMITED
11 SUMMER STREET
4TH FLOOR
BUFFALO, NY 14209
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PROXY STATEMENT
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SPECIAL GENERAL MEETING OF SHAREHOLDERS
June [9], 2005
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors (the "Board") of ASA (Bermuda) Limited ("Company") for use at
a Special General Meeting of the Company's shareholders (the "Meeting") to be
held on [Thursday], June [9], 2005, at [10:00] A.M. New York City Time, and at
any and all adjournments thereof, at the offices of UBS, 1285 Avenue of the
Americas, 14th Floor, New York, NY 10020.
At the Meeting shareholders will be asked to consider and approve changes to the
Company's investment policies and restrictions described below. The approximate
mailing date of this Proxy Statement, the notice of special general meeting and
the proxy card will be [XXX], 2005.
The close of business on [XXX], 2005 has been fixed as the record date (the
"Record Date") for the determination of shareholders entitled to notice of and
to vote at the Meeting and all adjournments thereof.
BACKGROUND AND SUMMARY FOR PROPOSED CHANGES
The proposals seek to change the Company's investment policies and
restrictions in response to significant changes in the gold mining industry.
The Board believes that the proposed changes in investment policy are necessary
due to:
o THE SUBSTANTIAL DECREASE IN SOUTH AFRICAN GOLD PRODUCTION ACCOMPANIED
BY A SIGNIFICANT INCREASE IN GOLD PRODUCTION OUTSIDE OF SOUTH AFRICA.
Gold production in South Africa has fallen by more than 60% in recent
decades while gold production in other parts of the world has
increased significantly. In 1970 South Africa dominated the world gold
market, producing approximately 1,000 tonnes of gold, or more than
two-thirds (2/3) of worldwide production. By 2003 South African gold
production had dwindled to approximately 375 tonnes, accounting for
only about 17% of worldwide production. Today large gold producers are
focusing on exploration and development in regions with better
prospects and lower production costs than South Africa such as Russia,
the Far East, South America and other countries in Africa. This trend
is likely to continue. Please see the Appendix to this Proxy Statement
for more information on gold production in South Africa and the rest
of the world.
o CONSOLIDATION IN THE GOLD INDUSTRY MEANS THAT THERE ARE FEWER ISSUERS
IN WHICH THE COMPANY CAN INVEST. There are far fewer South African
companies engaged in gold mining currently than there were even a
decade ago. In 1994, there were over 50 South African gold mining
companies listed on the JSE Securities Exchange (JSE). By 2004 there
were approximately a dozen such companies listed, only three of which
management believes are suitable in size for investment by the
Company. Under the Company's current investment policies, the
Company's investment options have been largely limited to these
issuers, because the Company has been required to invest more than 50%
of its total assets in South African gold mining companies. Please see
the Appendix to this Proxy Statement for more information on the
decline in the number of gold companies listed on the JSE.
The fundamental investment policies under which the Company currently operates
prevent the Company from adapting to the changes in the gold mining industry in
several ways.
o LIMITS THE AMOUNT OF COMPANY ASSETS THAT CAN BE INVESTED IN A SINGLE
ISSUER. The Company is limited under both the Investment Company Act
and its fundamental investment policies from investing, with respect
to 75% of its assets, more than 5% of the Company's total assets in
securities of any single issuer or if the Company would hold more than
10% of the outstanding voting securities of that issuer.
o LIMITS THE AMOUNT OF COMPANY ASSETS THAT CAN BE INVESTED OUTSIDE OF
SOUTH AFRICA. Under its fundamental investment policies the Company
must invest more than 50% of its total assets in common shares or
securities convertible into common shares of companies conducting, as
a major portion of their business, gold mining and related activities
in South Africa.
THESE RESTRICTIONS PLACE THE COMPANY AT A COMPETITIVE DISADVANTAGE COMPARED TO
OTHER GOLD AND PRECIOUS MINERALS FUNDS that do not limit the amount of their
investments in a single issuer or in a particular country or geographic region.
The Board proposes to address these problems by eliminating or amending certain
of the Company's fundamental investment policies and restrictions and changing
its Investment Company Act status as set forth below. The proposed changes would
give the Company the flexibility to pursue the best gold and other precious
minerals prospects on a global scale. The proposed changes do not alter the
Company's investment focus. As it has in the past, the Company intends to
continue to focus on companies involved in the mining of gold.
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For the reasons discussed above, the Company is requesting shareholder approval
of the following proposed changes relating to the concentration of its
investments inside and outside of South Africa.
PROPOSAL 1
CURRENT INVESTMENT POLICY OR RESTRICTION PROPOSED CHANGE
SUB-PROPOSAL 1A
o The Company currently operates as a "diversified" company o Change the Company's status from a "diversified" to a
under the Investment Company Act of 1940 which places "non-diversified" company.
limitations on the amount of securities which the Company can
own in any one issuer.
SUB-PROPOSAL 1B
o Prohibits purchases of securities of any issuer if more than o Provide more flexibility by eliminating this
20%, or under certain circumstances 10%, of the Company's restriction.
total assets would be invested in securities of that issuer.
SUB-PROPOSAL 1C
o Prohibits purchases of securities of any issuer if the Company o Provide more flexibility by eliminating this
would own more than 10% of the outstanding securities of that restriction.
issuer.
o If Sub-proposals 1A and 1B are approved by
shareholders, replace with a non-fundamental policy
(meaning it can be changed without a shareholder vote)
that prohibits the Company from investing more than
20% of its total assets in securities of an issuer.
PROPOSAL 2
CURRENT INVESTMENT POLICY OR RESTRICTION PROPOSED CHANGE
o Requires, among other things, that over 50% of the Company's o Broadens the types of gold and precious minerals
total assets be invested in equity securities of companies related investments so that at least 80% of the
principally engaged in gold mining and related activities in Company's total assets must be invested in:
South Africa.
o equity securities of companies engaged in the
exploration, mining or processing of gold,
silver, platinum, diamonds or other precious
minerals,
o bullion or other direct forms of gold, silver,
platinum or other precious minerals,
o instruments representing interests in gold, silver,
platinum or other precious minerals and/or
o securities that seek to replicate the price
movement of gold, silver or platinum bullion.
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The Company is also seeking shareholder approval to change certain other investment policies to allow it greater investment
flexibility, as well as approval to change the Company's name back to "ASA Limited".
PROPOSAL 3
CURRENT INVESTMENT POLICY OR RESTRICTION PROPOSED CHANGE
o Limits the holding of gold bullion or certificates of deposit o Permits the Company to hold gold and other precious
for gold bullion to 25% of the Company's total assets. minerals bullion and certificates of deposit therefor
without limitation.
PROPOSAL 4
CURRENT INVESTMENT POLICY OR RESTRICTION PROPOSED CHANGE
o Cash held by the Company must be invested in certificates of o Broadens liquid investments to include U.S. Treasury
deposit issued by U.S. banks. Also, up to 5% of the Company's bills, repurchase agreements and other high grade
total assets may be invested in South African rand-denominated money market instruments. Eliminates the 5%
accounts. limitation for rand-denominated cash investments.
PROPOSAL 5
Changing the Company's name from "ASA (Bermuda) Limited" back to "ASA Limited".
FOR A MORE DETAILED DISCUSSION OF THE PROPOSED CHANGES DISCUSSED ABOVE, PLEASE
SEE "PROPOSED CHANGES TO THE COMPANY'S CONCENTRATION OF INVESTMENTS INSIDE AND
OUTSIDE SOUTH AFRICA" AND "OTHER PROPOSALS" BELOW.
The expense of preparing and mailing the proxy card and the materials used for
the solicitation of proxies will be paid by the Company. In addition, the
Company has retained D.F. King & Co., Inc., New York, NY, to aid in the
solicitation of proxies. Such solicitation will be by mail and telephone. For
these services the Company will pay D.F. King & Co., Inc. a fee of approximately
$[XXX] plus reimbursement of its out-of-pocket expenses. The Company will also
reimburse brokers, nominees and fiduciaries that are record owners of shares of
the Company for the out-of-pocket and clerical expenses of transmitting copies
of the proxy material to the beneficial owners of such shares.
ADDITIONAL INFORMATION ABOUT THE COMPANY
As of the Record Date, the Company was not aware of any beneficial owner of more
than five percent of the Company's outstanding shares. As of the Record Date,
the officers and directors of the Company as a group owned less than 1% of the
Company's outstanding shares.
The principal executive office of the Company is located at 11 Summer Street,
4th Floor, Buffalo, NY 14209. LGN Associates provides certain administrative and
shareholder services to the Company. LGN Associates is located at 140 Columbia
Turnpike, 2nd Floor, Florham Park, NJ 07932. Kaufman, Rossin & Co. PA, located
at 2699 South Bayshore Drive, Suite 500, Miami, FL 33133, provides accounting
services to the Company. The Company does not have an outside investment
adviser.
The Company provides annual and semi-annual reports to its shareholders that
provide additional information about the Company's investments and discuss the
market conditions and investment strategies that significantly affected the
Company's results during its last fiscal year. You may receive an additional
copy of the most recent annual report of the Company and a copy of any more
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recent semi-annual report, without charge, by calling D.F. King & Co., Inc. toll
free at [1-800-XXX-XXX] or by writing to the Company c/o LGN Associates, P.O.
Box 269, Florham Park, NJ 07932.
VOTING AT THE MEETING
Only shareholders of record at the close of business on the Record Date
will be entitled to vote. As of the Record Date, there were 9,600,000 shares of
the Company outstanding, each of which entitles the holder to one vote. Each
valid proxy received at or before the Meeting will be voted at the Meeting in
accordance with the instructions on the proxy card. If no instructions are
indicated, the proxies will vote in favor of the proposals. SHAREHOLDERS HAVE
FOUR OPTIONS FOR SUBMITTING THEIR VOTES: (1) BY MAIL, (2) VIA THE INTERNET, (3)
BY PHONE OR (4) IN PERSON AT THE MEETING. IF YOU HAVE INTERNET ACCESS, WE
ENCOURAGE YOU TO RECORD YOUR VOTE ON THE INTERNET AT [WWW.EPROXYVOTE.COM/XXX].
When you vote via the Internet or by phone, your vote is recorded immediately
and there is no risk that postal delays will cause your vote to arrive late and
therefore not be counted. The proxy may be revoked by a shareholder at any given
time prior to its use at the Meeting by a written instrument delivered to the
Secretary, c/o ASA (Bermuda) Limited, 11 Summer Street, 4th Floor, Buffalo, NY
14209 or delivered to him at the Meeting. If you have any questions regarding
the proposals or need assistance in voting your shares, please call our proxy
solicitor, D. F. King & Co., Inc., toll free at [1-800-XXX-XXX].
QUORUM AND REQUIRED VOTING
One-third (1/3) of the Company's outstanding shares present in person or by
proxy and entitled to vote constitutes a quorum at the Meeting. If a quorum of
shareholders is not present at the Meeting or if a quorum is present but
sufficient votes in favor of any of the proposals are not received, the Meeting
may be adjourned to permit further solicitation of proxies from the shareholders
or to allow for increased attendance at the Meeting.
Assuming that a quorum is present at the Meeting, approval for each proposal
(including each sub-proposal) requires the affirmative vote of holders of a
majority of the Company's outstanding voting securities, which under the
Investment Company Act means the vote of: (1) more than 50% of the outstanding
voting securities of the Company; or (2) 67% or more of the voting securities of
the Company present at the Meeting, if the holders of more than 50% of the
outstanding voting securities are present or represented by proxy at the
Meeting, whichever is less. Votes withheld, abstentions and "broker non-votes"
(i.e., shares held by brokers or nominees as to which instructions have not been
received from the beneficial owner or persons entitled to vote and the broker or
nominee does not have discretionary voting power on a particular matter) will be
counted for purposes of determining whether a quorum is present, but will be
disregarded in determining the "votes cast" on a proposal. For this reason votes
withheld, abstentions and "broker non-votes" will have the effect of a vote
against such proposals.
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The Company operates in accordance with its investment policies and
restrictions, which are described in its prospectus and statement of additional
information. The Company's investment policies generally are classified as
"fundamental" or "non-fundamental." A fundamental policy can only be changed by
a vote of shareholders. A non-fundamental policy may be changed by a vote of a
majority of the Board without shareholder approval. The Company is requesting
shareholder approval of the following proposed changes.
PROPOSED CHANGES TO THE COMPANY'S
CONCENTRATION OF INVESTMENTS INSIDE AND OUTSIDE SOUTH AFRICA
PROPOSAL 1: TO CHANGE THE COMPANY'S DIVERSIFICATION STATUS FROM A
DIVERSIFIED TO A NON-DIVERSIFIED COMPANY AND TO ELIMINATE
RELATED FUNDAMENTAL INVESTMENT RESTRICTIONS.
PROPOSAL 1 INVOLVES SEPARATE VOTES ON SUB-PROPOSALS 1A, 1B AND 1C.
Although Sub-proposals 1A, 1B and 1C all relate to the Company's fundamental
investment restrictions concerning diversification, each will be voted on
separately as indicated on the enclosed proxy card. If any particular
Sub-proposal is not approved by the Company's shareholders, the current
fundamental investment policy or restriction will not be changed.
If Sub-proposal 1A, 1B or 1C is adopted, the Board will adopt as a
non-fundamental policy an investment restriction which would prohibit the
Company from purchasing securities of any issuer if more than 20% of the
Company's total assets would be invested in securities of that issuer. The
non-fundamental investment restriction will be adopted if any one of
Sub-proposals 1A, 1B or 1C is approved by shareholders. A shareholder vote is
not necessary to change non-fundamental policies or restrictions.
SUB-PROPOSAL 1A: TO CHANGE THE COMPANY'S DIVERSIFICATION STATUS FROM A
DIVERSIFIED TO A NON-DIVERSIFIED COMPANY.
The Company currently operates as a diversified investment company for purposes
of the Investment Company Act. This means that as to 75% of its assets the
Company may not purchase securities of any one issuer, if as a result, more than
5% of the Company's total assets would be invested in securities of that issuer
or the Company would own or hold more than 10% of the outstanding voting
securities of that issuer. Thus, only 25% of the Company's assets can be
invested without regard to these limitations. The Company's diversification
status is fundamental and can only be changed by a shareholder vote.
The Board has approved a proposed change in the Company's diversification status
from diversified to non-diversified. If approved by shareholders, the Company
would be "non-diversified" and, therefore, be permitted to invest a greater
portion of its assets in the securities of a single issuer.
To the extent the Company invests a relatively high percentage of its assets in
the securities of a single issuer or a limited number of issuers, the Company
may be subject to greater risk with respect to fluctuations in the value of its
portfolio securities than a diversified investment company. However, the Board
believes managing the Company as a non-diversified investment company is
consistent with the investment risk typically associated with a sector fund, and
may make the Company more competitive within its peer group.
SUB-PROPOSAL 1B: TO ELIMINATE THE FUNDAMENTAL INVESTMENT RESTRICTION CONCERNING
THE PERCENTAGE OF ASSETS WHICH THE COMPANY MAY INVEST IN THE SECURITIES OF ANY
SINGLE ISSUER.
The Company is currently subject to a fundamental investment restriction
prohibiting it (except as to securities issued or guaranteed by the government
of South Africa) from purchasing securities of any issuer if more than 20% of
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the Company's total assets would be invested in securities of that issuer. The
policy also places further restrictions on the concentration of investments.
This fundamental investment restriction is inconsistent with Sub-proposal 1A to
operate the Company as a non-diversified investment company. Therefore the Board
proposes that this fundamental investment restriction be eliminated.
Current fundamental investment restriction proposed to be eliminated:
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(9) Percentage of Assets that the Company may Invest in the
Securities of any one Issuer. It is the policy of the
Company not to purchase the securities of any issuer if,
immediately after and as a result of such purchase, the
market value of such securities and all other securities of
the same issuer owned by the Company exceeds 20% of the
value of the Company's total assets, determined in such
manner as may be approved by the Board and applied on a
consistent basis (subject to the limitations of Section
2(a)(41) of the 1940 Act), except securities issued or
guaranteed by the Government of the Republic of South Africa
or any instrumentality thereof; provided, however, that the
Company may not purchase the securities of any issuer if,
immediately after and as a result of such purchase, the
market value of such securities and all other securities of
the same issuer owned by the Company exceeds 10% of the
value of the Company's total assets, so determined, if
either (a) such purchase will result in more than 40% of the
value of those assets consisting of investments in companies
each of which investments exceeds 10% of the value of those
assets or (b) such 40% limitation is already exceeded.
SUB-PROPOSAL 1C: TO ELIMINATE THE FUNDAMENTAL INVESTMENT RESTRICTION CONCERNING
THE PERCENTAGE OF OUTSTANDING SECURITIES OF ANY ONE ISSUER WHICH THE COMPANY MAY
ACQUIRE.
The Company is currently subject to a fundamental investment restriction
prohibiting it (except as to securities issued or guaranteed by the government
of South Africa) from purchasing securities of any issuer if it would own more
than 10% of any class of outstanding securities of that issuer. This fundamental
investment restriction is inconsistent with Sub-proposal 1A to operate the
Company as a non-diversified investment company. Therefore the Board proposes
that this fundamental investment policy be eliminated.
Current fundamental investment restriction proposed to be eliminated:
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(10) The Percentage of Voting Securities of any one Issuer
that the Company May Acquire. It is the policy of the
Company not to purchase securities of any issuer if,
immediately after and as a result of such purchase, the
Company owns more than 10% of any class of outstanding
securities of such issuer, except securities issued or
guaranteed by the Government of the Republic of South Africa
or any instrumentality thereof.
NON-FUNDAMENTAL INVESTMENT RESTRICTION TO BE ADOPTED IF SUB-PROPOSALS 1A AND 1B
ARE ADOPTED.
If shareholders approve Sub-proposals 1A and 1B, the Board will adopt the
following non-fundamental investment restriction which will be followed in
managing the Company:
The Company shall not purchase a security if, at the time of
purchase, more than 20% of the value of its total assets
would be invested in securities of the issuer of such
security.
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This non-fundamental investment restriction could be changed by a vote of a
majority of the Company's Board. By making this investment restriction
non-fundamental, the Company will be able to avoid the cost and delays
associated with holding a shareholder meeting if the Board decides in the future
that changes to this investment restriction are in the best interests of the
Company and its shareholders.
If the shareholders approve the Sub-proposals, they will become effective
immediately. If any single Sub-proposal is not approved, that policy will remain
unchanged.
THE DIRECTORS UNANIMOUSLY RECOMMEND THAT YOU VOTE FOR SUB-PROPOSALS 1A, 1B AND
1C.
PROPOSAL 2: TO ELIMINATE OR AMEND CERTAIN OF THE COMPANY'S FUNDAMENTAL
INVESTMENT RESTRICTIONS CONCERNING THE CONCENTRATION OF ITS INVESTMENTS
INSIDE AND OUTSIDE OF SOUTH AFRICA.
The Company currently is subject to fundamental investment policies that mandate
that over 50% of the Company's total assets be invested in common shares or
securities convertible into common shares of companies conducting, as a major
portion of their business, gold mining and related activities in South Africa.
The remainder of the Company's assets may be invested, subject to certain
investment limits, in other South African companies, gold bullion or
certificates of deposit therefor, or in companies outside of South Africa
engaged in extractive or related industries or real estate. Under certain
circumstances, investments in unlimited amounts may also temporarily be held in
securities issued or guaranteed by the government of South Africa, in South
Africa rand or in U.S. dollars.
Current fundamental investment policies proposed to be eliminated:
-----------------------------------------------------------------
(a) General. It is the policy of the Company to invest over
50% of the value of its total assets in the common shares or
securities convertible into common shares of companies
conducting, as the major portion of their business, gold
mining and related activities in the Republic of South
Africa. It is expected that most of such companies will have
reached the production stage. The balance of the Company's
total assets, other than small amounts which may be held in
cash, may be (i) invested in common shares or securities
convertible into common shares of companies engaged in other
businesses of varied types in South Africa, (ii) held in the
form of gold bullion or certificates of deposit therefor to
be purchased, directly or indirectly, with South African
rand (provided that the Company's holdings in the form of
gold bullion or certificates of deposit therefor may not
exceed 25% of the value of the Company's total assets)
and/or (iii) invested in common shares or securities
convertible into common shares of companies primarily
engaged outside of South Africa in extractive or related
industries or in the holding or development of real estate
(provided that the Company's investment in such companies
may not exceed 20% of the value of the Company's total
assets).
If investment opportunities deemed by the Company to be
attractive are not available in the types of securities
referred to in the preceding paragraph, the Company may
deviate from the investment objectives and strategies
outlined in the preceding paragraph and make temporary
investments of unlimited amounts in securities issued or
guaranteed by the Government of South Africa or any
instrumentality thereof, or it may liquidate its investments
and temporarily retain the proceeds in South African rand.
Such proceeds may also be temporarily retained in United
8
States dollars subject to the Company's ability to obtain
dollars under exchange control regulations and the
limitations contained in the Company's agreement with, and
the letter from, the South African Reserve Bank dated July
18, 1958.
The fundamental investment policy contained in the first sentence of (a) above
is repeated in (b)(5).
(b)(5) Concentration of Investments in a Particular Industry
or Group of Industries. It is the policy of the Company to
invest over 50% of the value of its total assets in the
common shares or securities convertible to common shares of
companies conducting, as the major portion of their
business, gold mining and related activities in the Republic
of South Africa. It is expected that most of such companies
will have reached the production stage.
The Board believes that it is IMPORTANT to enhance the Company's long term
investment results and growth that the Company be able to invest wherever
opportunities in the gold and other precious minerals industry arise.
Accordingly, the Board has approved, subject to shareholder approval,
eliminating Concentration Restriction (a) above and amending Concentration
Restriction (b)(5) as set forth below. The amended policy, among other things,
(i) eliminates the requirement that a defined percentage of investments in the
gold mining industry be made in South Africa, (ii) permits the Company to invest
in bullion or other direct forms of gold, silver, platinum or other precious
minerals, (iii) permits the Company to invest in securities that seek to
replicate the price movement of gold, silver or platinum bullion and (iv) under
certain circumstances, permits the Company to make temporary investments of
unlimited amounts in securities issued by the U.S. Government or other high
quality money market instruments.
THE EXPANDED FUNDAMENTAL POLICIES WILL PROVIDE THE COMPANY WITH GREATER
FLEXIBILITY IN PURSUING ITS INVESTMENT FOCUS.
Amended fundamental investment policy to be adopted:
---------------------------------------------------
The Concentration of Investments in a Particular Industry or
Group of Industries. It is a fundamental policy of the
Company that at least 80% of its total assets be (i)
invested in common shares or securities convertible into
common shares of companies engaged, directly or indirectly,
in the exploration, mining or processing of gold, silver,
platinum, diamonds or other precious minerals, (ii) held as
bullion or other direct forms of gold, silver, platinum or
other precious minerals, (iii) invested in instruments
representing interests in gold, silver, platinum or other
precious minerals such as certificates of deposit therefor,
and/or (iv) invested in securities of investment companies,
including exchange traded funds, or other securities that
seek to replicate the price movement of gold, silver or
platinum bullion. Compliance with the percentage limitation
relating to the concentration of the Company's investments
will be measured at the time of investment.
If investment opportunities deemed by the Company to be
attractive are not available in the types of securities
referred to in the preceding paragraph, the Company may
deviate from the investment policy outlined in the preceding
paragraph and make temporary investments of unlimited
amounts in securities issued by the U.S. Government, its
agencies or instrumentalities or other high quality money
market instruments, including, without limitation, bank
9
certificates of deposit, bankers' acceptances, bank time
deposits, notes and commercial paper.
If the shareholders approve Proposal No. 2, the amended fundamental investment
policy will become effective immediately. If Proposal No. 2 is not approved, the
Company's current fundamental investment policy will remain unchanged.
THE DIRECTORS UNANIMOUSLY RECOMMEND THAT YOU VOTE FOR PROPOSAL NO. 2.
OTHER PROPOSALS
PROPOSAL 3: TO AMEND THE COMPANY'S FUNDAMENTAL
INVESTMENT RESTRICTION RELATING TO PURCHASE OR SALE OF COMMODITIES.
The Company is currently subject to a fundamental investment restriction that
mandates that holdings in gold bullion or certificates of deposit therefor not
exceed 25% of its total assets.
Fundamental investment policy to be amended:
-------------------------------------------
Purchase or Sale of Commodities or Commodities Contracts. It
is the policy of the Company not to purchase or sell
commodities or commodities contracts, except that the
Company may hold up to 25% of the value of its total assets
in the form of gold bullion or certificates of deposit
therefor. The Company does not intend to deal in gold
bullion.
The Board has approved, subject to shareholder approval, amending this
fundamental investment restriction to expand the categories of permissible
commodities to include bullion and certificates of deposit therefor for silver,
platinum and other precious minerals, as well as gold, and to eliminate
percentage limitations with respect to such holdings. These amendments would
give the Company greater flexibility to hold precious minerals commodities at
times when management believes it is advantageous for the Company. In addition,
the proposed fundamental investment policy contained in Proposal No. 2 above,
among other things, also eliminates the percentage limitation on gold bullion
and certificates of deposit for gold bullion that the Company may hold. If
shareholders approve Proposal No. 2, the change proposed in Proposal No. 3
merely conforms this fundamental investment policy to the new fundamental
investment policy adopted by shareholders in Proposal No. 2.
Amended fundamental investment policy to be adopted:
---------------------------------------------------
Purchase or Sale of Commodities or Commodities Contracts. It
is the policy of the Company not to purchase or sell
commodities or commodities contracts, except that the
Company may hold assets in the form of gold, silver,
platinum or other precious minerals bullion or certificates
of deposit therefor. The Company does not intend to deal in
bullion.
THE DIRECTORS UNANIMOUSLY RECOMMEND THAT YOU VOTE FOR PROPOSAL NO. 3.
PROPOSAL 4: TO AMEND THE COMPANY'S
FUNDAMENTAL INVESTMENT RESTRICTION RELATING TO INVESTMENTS OF CASH.
The Company is currently subject to a fundamental investment restriction that
mandates that cash held by the Company be invested in certificates of deposit
issued by U.S. banks or in South African rand-denominated accounts, with an
10
eligible foreign custodian or in a branch of a U.S. bank located in South
Africa. The policy limits such rand-denominated cash investments to 5% of the
Company's total assets.
Current fundamental investment policy proposed to be amended:
------------------------------------------------------------
Investments of Cash. It is the policy of the Company to
invest its cash in certificates of deposit issued by U.S.
banks. The Company may also invest its funds in South
African rand denominated accounts, which may be interest
bearing, with an Eligible Foreign Custodian or an overseas
branch of a Qualified U.S. Bank (as such terms are defined
in the 1940 Act) located in South Africa, in an aggregate
amount not exceeding 5% of the value of the Company's total
assets.
To broaden the Company's investment options in highly liquid investments, the
Board has approved, subject to shareholder approval, amending this fundamental
investment restriction to allow the Company to invest in U.S. Treasury bills,
repurchase agreements and other high grade money market instruments. The
amendment may result in the Company generating higher returns on its investments
of cash.
The Board has also approved, subject to shareholder approval, eliminating the 5%
limitation with respect to rand-denominated cash investments located in South
Africa. While the 5% limitation would no longer be a fundamental policy, the
Company would continue to limit rand-denominated accounts located in South
Africa to 5% of its total assets pursuant to conditions under an exemptive order
granted by the Securities and Exchange Commission.
Amended fundamental investment policy proposed to be adopted:
------------------------------------------------------------
Investments of Cash. It is the policy of the Company to
invest its cash in U.S. Treasury bills, repurchase
agreements and other high grade money market instruments
including, without limitation, bank certificates of deposit,
bankers' acceptances, bank time deposits, notes and
commercial paper. The Company may also invest its funds in
South African rand denominated accounts, which may be
interest bearing, with an Eligible Foreign Custodian or an
overseas branch of a Qualified U.S. Bank (as such terms are
defined in the 1940 Act) located in South Africa.
THE DIRECTORS UNANIMOUSLY RECOMMEND THAT YOU VOTE FOR PROPOSAL NO. 4.
PROPOSAL 5: TO CHANGE THE COMPANY'S NAME
FROM "ASA (BERMUDA) LIMITED" BACK TO "ASA LIMITED".
When the Company reorganized from a South African company into a company
incorporated in Bermuda in November of last year, it changed its name from "ASA
Limited" to "ASA (Bermuda) Limited". The Board approved the name change so that
the newly formed Bermuda company could be readily distinguished from its
predecessor entity in South Africa. Now that the reorganization is complete and
ASA Limited has substantially completed the winding up of its affairs in South
Africa and will soon be dissolved, the Board believes that the Company should
now operate under its original name. ASA Limited is the name that investors have
associated with the Company for many years. The Board believes that reverting to
the original name will aid investors in identifying the Company and associating
it with the Company's established investor reputation. Subject to shareholder
approval, the Company will change its name back to "ASA Limited" only when the
affairs of its predecessor entity in South Africa have been completely wound up.
11
THE DIRECTORS UNANIMOUSLY RECOMMEND THAT YOU VOTE FOR PROPOSAL NO. 5.
SHAREHOLDER PROPOSALS
In order for a shareholder proposal to be included in the proxy statement and
proxy for the 2006 Annual General Meeting the proposal must be received no later
than September 30, 2005.
Under Rule 14a-4 of the Exchange Act, a shareholder who wishes to present a
proposal for consideration at the 2006 Annual General Meeting without inclusion
of such proposal in the Company's proxy statement and proxy must send notice of
such proposal to the Secretary of the Company no later than December 14, 2005.
If notice for such proposal is not received by December 14, 2005, management
proxies may use their discretionary authority to vote on such proposal. Bermuda
law provides that only shareholders holding not less than 5% of the total voting
rights in the Company or 100 registered shareholders together may require a
proposal to be submitted to an annual general meeting. Generally, notice of such
a proposal must be deposited at the registered office of the Company no less
than six weeks before the date of the meeting, unless the meeting is
subsequently called for a date six weeks or less after the notice has been
deposited.
OTHER MATTERS
The management of the Company knows of no other business that will be presented
for consideration at the Meeting, but should any other matters requiring a vote
of shareholders arise, the persons named in the enclosed proxy card will, if
appointed as proxy, vote thereon in accordance with their best judgment.
ASA (Bermuda) Limited
Robert J.A. Irwin, Chairman, President and Treasurer
April [ ], 2005
12
APPENDIX
--------------------------------------------------------------------------------
GOLD PRODUCTION IN THE REPUBLIC OF SOUTH AFRICA (RSA) & THE WORLD
[GRAPHIC OMITTED]
--------------------------------------------------------------------------------
2003 GOLD MINING PRODUCTION 1970 GOLD MINING PRODUCTION
------------------------------------ ----------------------------------------
[GRAPHIC OMITTED] [GRAPHIC OMITTED]
(17.3%) RSA (67.7%) RSA
(10.6%) AUS (5.1%) Canada
(5.4%) CAN (1.3%) AUS
(7.7%) China (8.6%) Other
(6.9%) Russia (3.7%) USA
(6.6%) Peru (13.7%) Russia
(10.2%) USA
(35.2%) Other
------------------------------------ ----------------------------------------
GOLD COMPANIES LISTED ON THE JSE SECURITIES EXCHANGE FROM 1970 TO 2004.
--------------------------------------------------------------------------------
NUMBER OF JSE LISTED GOLD COMPANIES
[GRAPHIC OMITTED]
--------------------------------------------------------------------------------
2
ASA (BERMUDA) LIMITED
C/O EQUISERVE TRUST COMPANY N.A.
P.O. BOX 8641
EDISON, NJ 08818-8641
YOUR VOTE IS IMPORTANT. PLEASE VOTE IMMEDIATELY.
Vote-by-Internet:
Log on to the Internet and go to
[http://www.eproxyvote.com/XXX]
Follow the easy steps outlined
on the secured website.
Vote-by-Telephone:
Call toll-free
[1-877-PRX-VOTE (1-877-XXX-XXXX)]
Follow the easy recorded instructions.
YOUR VOTE IS IMPORTANT. IF YOU ARE NOT VOTING BY PHONE OR INTERNET, PLEASE MARK,
DATE AND SIGN THIS PROXY BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
DETACH AND RETURN THE BOTTOM PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
[X] Please mark
votes as in
this example.
VOTE ON PROPOSALS:
FOR AGAINST ABSTAIN
1. To change the Company's
diversification status under
the Investment Company Act of
1940 from a diversified to a
non-diversified company and
eliminate related fundamental
investment restrictions.
1A. To change the Company's [ ] [ ] [ ]
diversification status under the
Investment Company Act of
1940 from a diversified to
a non-diversified company.
FOR AGAINST ABSTAIN
1B. To eliminate the [ ] [ ] [ ]
fundamental investment
restriction concerning the
percentage of assets which
the Company may invest in
the securities of any one
issuer.
1C. To eliminate the [ ] [ ] [ ]
fundamental investment
restriction concerning the
percentage of outstanding
securities of any one
issuer which the Company
may acquire.
2. To eliminate or amend certain [ ] [ ] [ ]
of the Company's fundamental
investment restrictions
concerning the concentration of
its investments inside and outside
of South Africa.
3. To amend the Company's [ ] [ ] [ ]
fundamental investment restriction
relating to purchase and sale of
commodities.
4. To amend the Company's [ ] [ ] [ ]
fundamental investment restriction
relating to investments of cash.
5. To change the Company's name from [ ] [ ] [ ]
"ASA (Bermuda) Limited" back to
"ASA Limited".
Please sign this proxy exactly as the name appears hereon. When shares are held
by joint tenants, both should sign. When signing as attorney, administrator,
trustee or guardian, please give full title as such.
Signature:________________________________ Date: _______________________
Signature:________________________________ Date: _______________________
DETACH HERE
4
ASA (BERMUDA) LIMITED
PROXY FOR THE SPECIAL GENERAL MEETING OF SHAREHOLDERS
June [9], 2005
YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN. PLEASE MARK, SIGN,
DATE, AND RETURN THE PORTION BELOW IN THE ENCLOSED ENVELOPE.
This proxy is being solicited on behalf of the Board of Directors of ASA
(Bermuda) Limited ("Company"). The undersigned hereby appoints as proxies Henry
R. Breck and Lawrence G. Nardolillo, and each of them (with power of
substitution), to vote all of the undersigned's shares in the Company at the
Special General Meeting of Shareholders to be held on June [9], 2005 at [10:00]
a.m., at the offices of UBS, 1285 Avenue of the Americas, 14th Floor, New York,
NY 10020, and any adjournment or postponement thereof ("Meeting"), with all the
power the undersigned would have if personally present.
The shares represented by this proxy will be voted as instructed. Unless
indicated to the contrary, this proxy shall be deemed to grant authority to vote
"FOR" each proposal relating to the Company, with discretionary power to vote
upon such other business as may properly come before the Meeting.
Please sign exactly as your name appears hereon. If shares are held in the name
of joint owners, each should sign. Attorneys-in-fact, executors, administrators,
etc. should so indicate. If shareholder is a corporation or partnership, please
sign in full corporate or partnership name by authorized person.
YOUR VOTE IS IMPORTANT. IF YOU ARE NOT VOTING BY PHONE OR INTERNET, PLEASE MARK,
DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
TO VOTE, MARK BLOCKS IN BLUE OR BLACK INK AS FOLLOWS: [X]
5