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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of July, 2003

CENTRAL FUND OF CANADA LIMITED



(Translation of registrant's name into English)

Suite 805, 1323 - 15th Avenue S.W., Calgary, Alberta, Canada T3C 0X8



(Address of principal executive office)

[Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F o                        Form 40-F ý

[Indicate by check mark whether the registrant by furnishing the information in this Form is also hereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

YES o                        NO ý

[If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A]




SIGNATURES

        Pursuant to the requirements of the Securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

    CENTRAL FUND OF CANADA LIMITED
(Registrant)

Date SEPTEMBER 10, 2003

 

By:

 

"(Signed)" J.C. STEFAN SPICER

                        (Signature)*
*Print the name and title under the signature of the signing officer   J.C. Stefan Spicer, President & CEO

GRAPHIC


3rd QUARTER REPORT

        Central Fund is currently 97.6% invested in unencumbered gold and silver bullion. At July 31, 2003, Central Fund's gold holdings were 291,894 fine oz. of physical bullion and 5,151 fine oz. of gold bullion certificates. Silver holdings were 14,600,809 oz. of physical bullion and 245,572 oz. of silver bullion certificates. The physical bullion is insured and held in safekeeping by a Canadian chartered bank in segregated vault storage. Central Fund continues to fulfil its mandate as "The Sound Monetary Fund".

On behalf of the Board of Directors:    

 

 

J.C. Stefan Spicer, President & CEO

FINANCIAL REVIEW

Results of Operations — Change in Net Assets

        Net assets increased by approximately $52,825,000 during the nine months ended July 31, 2003. Of this amount, $37,793,154 was the result of the issuance of 3,500,000 Class A shares in January 2003 and 5,448,800 Class A shares in February 2003 through private placements. In both cases, these shares were issued at a premium to net asset value such that there was no dilution of existing Class A shareholders' interests. Details of the private placements are provided in Note 3 to the accompanying financial statements. The balance of the nine months increase (approximately $15,031,846) in net assets as well as the increase in net assets for the most recent three months ended July 31, 2003 (approximately $12,054,000) were primarily the result of higher gold and silver prices at July 31, 2003 compared to October 31, 2002 (nine months) as described below and April 30, 2003 (three months).

Net Asset Value per Class A Share

 
 
  U.S.$ Terms
  Cdn. $ Terms
 
October 31, 2002   $ 3.70   $ 5.77  
Changes due to:              
  Gold price     .26     .40  
  Silver price     .20     .31  
  Stronger Cdn. $     N/A     (.62 )
  Other     (.02 )   (.03 )
   
 
 
Total changes     .44     .06  
   
 
 
July 31, 2003   $ 4.14   $ 5.83  
   
 
 

        The $0.44 or 11.9% increase in net assets per Class A share expressed in U.S. dollar terms during the past nine months was due primarily to the 11.9% increase in the price of gold and the 13.5% increase in the price of silver during the period. In contrast, net assets per Class A share as expressed in Canadian dollar terms increased by $0.06, or 1.0%, as the increases described above were, to a large extent, offset by the 9.8% decrease in the U.S. dollar relative to the Canadian dollar. The components of the change in net asset value per Class A share in U.S. and Canadian dollars are summarized in the adjacent table.

Results of Operations — Net Loss

        The net losses for the three and the nine-month periods ended July 31, 2003 were higher than the net losses for the same periods in 2002. The net proceeds from the Class A share issuances completed by the Company over the past sixteen months, (approximately $101,400,615) have, as expected, had an impact on both income and expenses. The Company has used the bulk of the proceeds from these Class A share issuances to purchase gold and silver bullion, primarily in bar form. The balance has been retained in interest-bearing cash deposits. As such, interest income has increased as a result of maintaining higher average cash balances.

        Certain expenses vary in proportion to net asset levels, such as administration fees (that are scaled) and income taxes. These expenses rose as a result of increased net assets. The increase in shareholder information costs reflects higher levels of activity brought about by the increased number of shareholders. Safekeeping fees and bullion insurance costs increased as a result of the purchases of additional physical gold and silver discussed above. Professional fees increased as a result of legal and audit work required to comply with new corporate governance rules and regulations.

        Despite an increase in overall expense levels, the operating expenses (before income taxes) as a percentage of average monthly net assets was 0.51% for the nine months ended July 31, 2003 compared to 0.63% for the same nine-month period in 2002. The decline reflects a broadening of the expenses over an increasing asset base.

Liquidity and Capital Resources

        Central Fund's dollar liquidity objective is to hold cash reserves primarily for the payment of operating expenses, taxes and Class A share dividends. Should Central Fund not have sufficient cash to meet its needs, a nominal portion of Central Fund's bullion holdings may be sold to fund tax and dividend payments, provide working capital, and pay for redemptions of Class A shares (if any).

        For the nine months ended July 31, 2003, Central Fund's cash reserves increased by $811,337 as amounts used to pay operating expenses, taxes and the Class A share dividend were more than offset by amounts retained in interest-bearing cash deposits for working capital purposes from the private placements completed in January and February 2003. Management monitors Central Fund's cash position with an emphasis on maintaining its mandate to hold maximum amounts of gold and silver bullion.


GRAPHIC


Statements of Net Assets
(expressed in U.S. dollars, unaudited)(note 1)

 
  July 31
2003

  October 31
2002

 
Net Assets:            
Gold bullion at market, average cost $111,164,364 (2002: $89,697,793) (note 2)   $ 105,376,609   75,716,165  
Silver bullion at market, average cost $103,068,226 (2002: $89,046,426) (note 2)     75,419,617   53,460,056  
Marketable securities at market, average cost $89,430     55,208   41,486  
Interest-bearing cash deposits     4,709,786   3,898,449  
Prepaid insurance, interest receivable and other     85,010   33,557  
   
 
 
      185,646,230   133,149,713  
Accrued liabilities     (374,000 ) (344,138 )
Dividends payable       (357,975 )
   
 
 
Net assets representing shareholders' equity   $ 185,272,230   132,447,600  
   
 
 

Represented by:

 

 

 

 

 

 
Capital Stock (note 3):            
  44,746,320 (2002: 35,797,520) Class A shares issued   $ 191,142,209   153,349,055  
  40,000 Common shares issued     19,458   19,458  
   
 
 
      191,161,667   153,368,513  
Contributed surplus (note 4)     27,581,150   28,695,029  
Unrealized depreciation of investments     (33,470,587 ) (49,615,942 )
   
 
 
    $ 185,272,230   132,447,600  
   
 
 

Net Asset Value Per Share (expressed in U.S. dollars):

 

 

 

 

 

 
Class A shares   $ 4.14   3.70  
Common shares   $ 1.14   0.70  
   
 
 

Net Asset Value Per Share (expressed in Canadian dollars):

 

 

 

 

 

 
Class A shares   $ 5.83   5.77  
Common shares   $ 1.60   1.09  
   
 
 
Exchange rate:                        U.S. $1.00 = Cdn.   $ 1.4073   1.5603  
   
 
 

Notes:

1.
The accounting policies used in the preparation of these unaudited interim financial statements conform with those presented in Central Fund's October 31, 2002 audited annual financial statements. These interim financial statements do not include all of the disclosures included in the annual financial statements and accordingly should be read in conjunction with the annual financial statements.

2.
Details of gold and silver bullion holdings at July 31, 2003, are as follows:

 
  Holdings

  Gold
   
  Silver
    100 & 400 fine oz bars   291,894   1000 oz bars   14,600,809
    Certificates   5,151   Certificates   245,572
       
     
    Total fine ounces   297,045   Total ounces   14,846,381
       
     
 
  Market Value:

  Per Fine Ounce
  Per Ounce
    October 31, 2002   U.S. $316.90   U.S. $4.4750
    July 31, 2003   U.S. $354.75   U.S. $5.0800
3.
On January 30, 2003, the Company, through a private placement, issued 3,500,000 Class A shares for gross proceeds, net of underwriting fees of $611,800, of $14,683,200. Costs relating to this private placement were approximately $125,000 and net proceeds were approximately $14,558,200 These costs were $180,900 lower than that estimated and disclosed in the first quarter report.

The Company used the net proceeds from this private placement to purchase 22,517 fine ounces of gold at a cost of $8,110,651 and 1,120,000 ounces of silver at a cost of $5,488,000 both in physical bar form. The balance of the net proceeds, approximately $959,549, was retained by the Company in interest-bearing cash deposits for working capital purposes.

On February 14, 2003, the Company, through a private placement, issued 5,448,800 Class A shares for gross proceeds, net of underwriting fees of $1,039,767, of $23,425,345. Costs relating to this private placement were approximately $190,391 and net proceeds were approximately $23,234,954. These costs were $40,000 lower than that estimated and disclosed in the second quarter report and this is reflected in the net proceeds for the three months ended July 31, 2003.



Statements of Changes in Net Assets
(expressed in U.S. dollars, unaudited)(note 1)

 
  Nine months ended July 31
  Three months ended July 31
 
 
  2003
  2002
  2003
  2002
 
Net assets at beginning of period   $ 132,447,600   66,351,795   $ 173,217,792   87,404,311  
   
 
 
 
 

Add (deduct):

 

 

 

 

 

 

 

 

 

 

 
Unrealized appreciation (depreciation) of investments during the period     16,145,355   3,105,464     12,409,611   (2,778,069 )
Net loss     (1,113,879 ) (731,269 )   (395,173 ) (297,752 )
Net issuance of Class A shares     37,793,154   63,622,354     40,000   48,022,354  
   
 
 
 
 
Increase in net assets during the period     52,824,630   65,996,549     12,054,438   44,946,533  
   
 
 
 
 
Net assets at end of period   $ 185,272,230   132,348,344   $ 185,272,230   132,350,844  
   
 
 
 
 

Statements of Loss
(expressed in U.S.dollars, unaudited)(note 1)

 
  Nine months ended July 31
  Three months ended July 31
 
 
  2003
  2002
  2003
  2002
 
Income:                      
  Interest   $ 36,443   24,140   $ 12,901   14,548  
  Dividends     199   346     84   147  
  Realized gain on investments       1,409       1,409  
   
 
 
 
 
      36,642   25,895     12,985   16,104  
   
 
 
 
 

Expenses:

 

 

 

 

 

 

 

 

 

 

 
  Administration fees     483,495   308,102     170,389   131,549  
  Safekeeping, insurance and bank charges     114,288   76,556     44,834   32,341  
  Shareholder information     107,261   72,443     35,664   10,288  
  Professional fees     52,600   24,886     15,160   9,677  
  Directors' fees and expenses     39,992   35,590     14,474   9,071  
  Registrar and transfer agents' fees     34,596   26,731     10,262   4,155  
  Miscellaneous     1,064   1,126     275   420  
  Foreign currency exchange loss (gain)     16,608   (971 )   4,078   (2,653 )
   
 
 
 
 
      849,904   544,463     295,136   194,848  
   
 
 
 
 
  Loss from operations before income taxes     (813,262 ) (518,568 )   (282,151 ) (178,744 )
  Income taxes     (300,617 ) (212,701 )   (113,022 ) (121,508 )
   
 
 
 
 
Net loss (note 5)   $ (1,113,879 ) (731,269 ) $ (395,173 ) (300,252 )
   
 
 
 
 

Net loss per share:

 

 

 

 

 

 

 

 

 

 

 
  Class A shares   $ (.02 ) (.02 ) $ (.01 ) (.01 )
  Common shares   $ (.02 ) (.02 ) $ (.01 ) (.01 )
   
 
 
 
 

Notes:


The Company used the net proceeds from this private placement to purchase 35,600 fine ounces of gold (33,838 ounces in physical bar form and 1,762 ounces in certificate form) at a cost of $13,355,920, and 1,780,000 ounces of silver (1,700,000 ounces in physical bar form and 80,000 ounces in certificate form) at a cost of $8,533,800.

The balance of the net proceeds, approximately $1,305,234, was retained by the Company in interest-bearing cash deposits for working capital.

4.
In 1985 the shareholders authorized the use of contributed surplus to eliminate any deficit that may arise from losses and on the payment of the Class A shares' stated dividend. Accordingly, $1,113,879 (2002, $731,269) has been transferred from contributed surplus on July 31, 2003 and 2002 representing the net loss for the nine months then ended. This change did not affect the net asset value of the Company.

5.
Under Canadian generally accepted accounting principles, the Company records the unrealized appreciation (depreciation) of its investments as a component of shareholders' equity. Under accounting principles generally accepted for investment companies in the United States, these amounts are reflected in the statements of loss. Net income for the nine months ending July 31, 2003 would be $15,031,476; (2002, $2,374,195) under United States principles. The net assets of the Company are identical under both Canadian and United States generally accepted accounting principles.

  GRAPHIC


Portfolio
at
July 31, 2003
  GRAPHIC

Corporate Information


Investor Inquiries   Head Office   Stock Exchange Listings    
P.O. Box 7319
55 Broad Leaf Crescent
Ancaster, Ontario
Canada L9G 3N6

Telephone: 905/648-7878
Fax: 905/648-4196
Website: www.centralfund.com
E-mail: info@centralfund.com
  Hallmark Estates
805, 1323-15th Avenue S.W.
Calgary, Alberta
Canada T3C 0X8

Telephone: 403/228-5861
Fax: 403/228-2222
 

AMEX:
Class A shares
TSX:
Class A shares
  Electronic
Ticker Symbol


CEF

CEF.A
  Newspaper
Quote Symbol


CFCda

CFund A


Net Asset Value Information

The net asset value per Class A share is available daily by calling Central Fund.
The Thursday net asset value is published in financial newspapers in the United States and Canada.
In Canada it is also published daily in the
Globe and Mail Report on Business Fund Asset Values table.


GRAPHIC


3RD QUARTER   GRAPHIC   INTERIM REPORT TO SHAREHOLDERS
for the nine months ended July 31, 2003



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SIGNATURES
Net Asset Value Information