SCHEDULE: Saba Capital Resolves ASA Gold Board Dispute

Saba Capital Management announces the resignation of two ASA Gold and Precious Metals Limited directors and a mutual standstill agreement, ending ongoing litigation.

Summary

• Saba Capital Management, L.P. and its affiliates beneficially own 3,253,837 common shares of ASA Gold and Precious Metals Limited, representing 17.24% of the outstanding shares.
• On August 6, 2025, directors Mary Joan Hoene and William Donovan submitted binding and irrevocable resignations from the Board of ASA Gold and Precious Metals Limited.
• The resignations were accepted by the Board on the same day.
• Saba Capital and the former directors entered into an agreement to resolve multiple litigations, including the "Rights Litigation" (which resulted in a judgment that the Company's shareholder rights plan violated the 1940 Act and must be rescinded), the "Second Circuit Appeal," the "SDNY Litigation," and the "Bermuda Litigation."
• The agreement includes mutual releases of claims between Saba and the former directors.
• A standstill agreement is in effect until December 31, 2026, restricting the former directors from actions related to the Company's management, governance, or Board composition.
• The agreement also includes mutual non-disparagement clauses.

Sentiment

Score: 7

Explanation: The resolution of significant litigation and the establishment of a standstill agreement are positive for corporate stability and expense reduction, despite the underlying issues that led to the conflict. The forced rescission of a shareholder rights plan highlights past governance missteps but its resolution is a net positive.

Positives

• Resolution of multiple ongoing litigations, which had caused the Company to incur significant extraordinary expenses.
• The rescission of the shareholder rights plan, as per the Rights Litigation Judgment, aligns with the Investment Company Act of 1940.
• The mutual releases and non-disparagement clauses reduce future legal and reputational risks between the parties.
• The standstill agreement provides a period of stability regarding corporate governance and potential activist actions from the former directors.

Negatives

• The Company incurred significant extraordinary expenses due to the litigations prior to this resolution.
• The shareholder rights plan, adopted on December 20, 2024, was found to be in violation of the Investment Company Act of 1940 and had to be rescinded.

Risks

• The Company previously adopted a shareholder rights plan that was found to violate the Investment Company Act of 1940, indicating potential past governance issues.
• Ongoing litigation (Rights Litigation, Second Circuit Appeal, SDNY Litigation, Bermuda Litigation) prior to this agreement resulted in significant extraordinary expenses for the Company.

Future Outlook

The agreement establishes a standstill period until December 31, 2026, during which the former directors are restricted from actions that could affect the Company's management, governance, or Board composition, suggesting a period of reduced activist pressure from these specific individuals.

Management Comments

• The Parties believe it is in the best interests of the Company, its shareholders and each of the Parties to resolve the Litigations and the related disagreements concerning the Company by and among the members of the Board and among the Parties.
• Each of Ms. Hoene and Mr. Donovan submitted to the Company binding and irrevocably resignations from the Board, which resignations were accepted by the Board at the August 6, 2025 Board meeting.

Industry Context

This filing highlights a common scenario in the investment fund industry where activist investors, like Saba Capital, engage with public companies to influence corporate governance and strategic direction, often through litigation or proxy contests. The resolution of such disputes, particularly involving board composition and shareholder rights plans, is a recurring theme in corporate governance, especially for closed-end funds or companies with significant institutional ownership.

Comparison to Industry Standards

• The rescission of a shareholder rights plan due to violation of the Investment Company Act of 1940 is a significant event, as such plans are typically designed to protect against hostile takeovers but must comply with regulatory frameworks. This outcome suggests a failure in the Company's initial governance strategy compared to best practices for compliance with investment company regulations.
• The resolution of multiple litigations through director resignations and a standstill agreement is a common mechanism for activist investors and companies to de-escalate conflicts, similar to agreements seen with other activist funds like Elliott Management or Starboard Value in their engagements with public companies.

Management Changes

Corporate Governance

Legal Proceedings

• Saba Capital Master Fund, Ltd. v. ASA Gold and Precious Metals Ltd., No. 24-CV-690 (U.S. District Court for the Southern District of New York): Initiated January 31, 2024, resulted in a judgment on March 28, 2025, requiring the rescission of the Company's shareholder rights plan due to violation of the Investment Company Act of 1940.
• Saba Capital Master Fund, Ltd. v. ASA Gold and Precious Metals, Ltd., No. 25-754 (U.S. Court of Appeals for the Second Circuit): An appeal initiated March 31, 2025, by the Company and certain directors from the Rights Litigation Judgment.
• Saba Capital Master Fund, Ltd. v. ASA Gold and Precious Metals, Ltd., No. 25-cv-03265 (U.S. District Court for the Southern District of New York): A second litigation initiated by Saba Capital on April 18, 2025.
• In the Matter of ASA Gold and Precious Metals Ltd., No. 2025-102 (Supreme Court of Bermuda): Litigation initiated by Paul Kazarian on April 30, 2025, naming the Company and certain directors as respondents.
• All aforementioned litigations were resolved as part of the agreement detailed in the filing.

Stakeholder Impact

• Shareholders: Benefit from the resolution of costly litigation, potential reduction in extraordinary expenses, and the rescission of a shareholder rights plan that was deemed non-compliant, potentially increasing shareholder influence.
• Company Management/Board: Experiences a change in board composition with two resignations and a period of reduced activist pressure from the former directors due to the standstill agreement.
• Creditors: May benefit from improved financial stability due to reduced litigation expenses.

Next Steps

• The standstill agreement between Saba Capital and the former directors, Mary Joan Hoene and William Donovan, will remain in effect until December 31, 2026.
• The Company will operate without the shareholder rights plan that was rescinded due to the Rights Litigation Judgment.

Key Dates

Recommendation

The filing indicates a resolution of significant corporate governance disputes and costly litigation, which is a positive step towards stability. However, the underlying issues that led to such extensive litigation, including a non-compliant shareholder rights plan, suggest past governance weaknesses. While the immediate uncertainty from these specific legal battles is removed, the long-term implications for the company's strategic direction and operational performance are not detailed in this filing. An investor would likely hold to observe how the company leverages this newfound stability and addresses any lingering governance concerns.

Keywords

ASA Gold and Precious Metals, Saba Capital, Shareholder Activism, Corporate Governance, SEC Filing, Schedule 13D, Director Resignation, Litigation Settlement, Standstill Agreement, Investment Company Act of 1940, Gold Mining Investment