No.  Company                Code (Bloomberg)     Market Cap($m)        Annual Oz        EV per AnOz ($)

 1    Barrick                    ABX:CN                      39694                       7616000             5763

 2    GoldCorp                G:CN                          29623                       2484400           11900

 3    Newmont               NEM:US                      23759                       6860000             3741

 4    Newcrest               NCM:AU                      16176                       1508336           10776

 5    AngloGold              ANG:SJ                       15934                       4752000              3353

 6    Kinross                  K:CN                           14270                       2149761             6638

 7    Polyus                   PLZL:LI                       11133                         954000           11207

 8    Buenaventura       BVN:US                         9953                       1555388             6143

 9    Gold Fields            GFI:SJ                           9593                       3952000             2657

10   Fresnillo                FRES:LN                        9468                         877742           10588

Note: List includes Silver production as Gold Equivalent

The Top 10 companies in terms of Annual Production would be: 1 Barrick (7.6moz); 2 Newmont (6.9moz); 3 AngloGold (4.8moz); 4 Gold Fields (4.0moz); 5 GoldCorp (2.5moz); 6 Kinross (2.1moz); 7 Buenaventura (1.6moz); 8 Newcrest (1.5moz); 9 Harmony (1.5moz) and 10 Yamana (1.3moz).

It can be seen that the market value is not closely related to the level of production. The effective market valuation per ounce of annual production is shown in the right hand column (EV or Enterprise Value is the Market Capitalization adjusted for cash or debt). This shows that the largest gold company in Market Capitalisation terms has a much lower rating in EV per Annual Oz terms.

Of the companies covered by www.goldval.com, and by excluding those companies with current low levels of production (less than 50000 oz per year), the ranking of the Top 10 companies in EV per Annual Ounce terms is as follows:

No.  Company           Code (Bloomberg)      Market Cap ($m)         Annual Oz         EV per AnOz ($)

 1    Silver Wheaton SLW:CN                      5929                           278506              22509

 2    Eldorado           ELD:CN                       7947                           355672              21925

 3    Agnico Eagle     AEM:CN                      9118                           476212              19874

 4    Randgold Res   RRS:LN                       7433                            475701             14535

 5    SilverCorp        SVM:CN                       1121                             87095              12337

 6    Gammon          GAM:CN                       1459                           124450              11910

 7    GoldCorp         G:CN                          29623                         2484400              11900

 8    Red Back         RBI:CN                         3919                           320988              11773

 9    Polyus             PLZL:LI                      11133                           954000              11207

10   Newcrest        NCM:AU                      16176                         1508336              10776

As can be seen, only GoldCorp, Polyus and Newcrest  appear in both Top 10 rankings.

At the lower end of the scale, the following companies (with production of greater than 50000 oz per year), have the lowest EV per Annual Ounce values (all less than $2000/oz). These include: Intrepid (IAU:CN), DRDGold (DRD:SJ), Simmers (SIM:SJ), Minera Andes (MAI:CN), Richmont (RIC:CN), Resolute (RSG:AU), OceanaGold (OGC:CN) and Pan African (PAF:LN). All of these are Junior companies with a Market Capitalisation of less than $500m.

The figures and rankings for other measures of value, such as those relating to reserves and resources, will be addressed in other articles. These statistics can be viewed at www.goldval.com/market-value-enterprise-value.

Statistically, the trend is not strong but, with some human influence, a reasonable pattern emerges - which shows that the companies reporting the lowest cash operating costs tend to have a greater market rating - expressed here as Enterprise Value per Annual Ounce of Gold Produced. On this basis, Agnico Eagle appears to have an understandably high rating. Conversely, the South African producers - Gold Fileds and AngloGold also appear to fit - having a relatively low rating commensurate with their relatively high reported costs. Centerra, Newmont and GoldCorp might be considered to have a lower than average market value on this measure and might deserve a higher rating. Conversely, Harmony might be considered to have a relatively high market rating on this measure given its reported costs.

Of course, none of these statistics should be considered in isolation as there could be many other factors influencing the market value of a gold company - as presented in the Goldval.com site. See www.goldval.com/market-value-enterprise-value.

The cheapest is Central Rand Gold - a company operating in South Africa - with reported resources (in Indicated and Inferred categories) of 36 Million ounces and an Enterprise Value of around $45m - that equates to just over $1 per ounce. Another 4 companies having exceptionally low values on this measure (EV per Resource Ounce) are Wits Gold ($2/Oz), DRD Gold ($4/Oz), Simmers ($6/Oz) and Greystar ($6/Oz) - of which the first three are also South African companies. Do these figures suggest there are bargains available? Probably not! - especially in the case of the South African companies - as much of that gold is likely to remain underground for many, many years to come. There is also no guarantee that all of the resorces will be converted into reserves. Some investors may, however, regard such valuations as representing a low cost option on the future gold price.

At the other end of the scale, with the recent increase of gold company values, the effective value of the gold resources held by the several companies has also increased to new high levels. Of the companies covered by GoldVal.com, there are 7 companies having EV per Resource Ounce of over $400/Oz. These are: Citadel ($1211/Oz), Sangold ($568/Oz), Tanami ($521/Oz), Hochschild ($476/Oz), Lake Shore ($468/Oz), Buenaventura ($450/Oz) and Avoca ($419/Oz). In some cases, these figures include silver resources expressed as Gold Equivalent. (In the case of Citadel, the company valuation is likely to be more related to the copper value in the company which is not included as a Gold Equivalent.)

When Gold Reserves are considered, i.e the Proven and Probable categories, a largely different group of companies have the highest valuations (EV per Reserve Ounce). These are: Sangold ($2725/Oz), Endeavour Silver ($1570/Oz), Lake Shore ($1485/Oz), Wesdome ($1433/Oz), Intrepid ($1214/Oz), Hochschild ($1105/Oz), Medusa ($1075/Oz), Fresnillo ($1031/Oz). Again, silver companies are included with their reserves expressed as Gold Equivalent. In cases where such values are well above the current price of gold, the market presumably believes that there is a good chance that most of the resources will be converted into reserves and/or that additional reserves and resources will be discovered or acquired relatively cheaply.

Such statistics need to be treated with care, and generally should be viewed together with all other information about the company concerned, but they can provide for useful comparative anaysis. See www.goldval.com/reserves-resources.

Over the same period (the dates being those of updates on the Goldval.com site), the average share price increase of some 130 gold (and silver) companies analysed by Goldval.com has been 25.2%. Among these companies, the 38 company Mid-Cap group (Market Capitalization between $500m and $2000m) did best with an average 31.2% gain. See www.goldval.com/market-value-enterprise-value/.

There have been some spectacular winners - with 14 companies showing share price gains over 50%. The four biggest winners were Ventana - 105%, Keegan 100%, Aquiline - 99% and Imperial - 92%. Other companies showing over 70% growth were Gabriel - 82%, Jinshan - 87%, Greystar - 87%, Silvercorp - 74%, Semafo - 73%, Guyana - 71%, Resolute - 74% and Norseman - 70%.

The losers over this period included a few surprises in the Senior Group (Market Capitalization above $2000m) - Kinross (-8%), Agnico Eagle (-4%) and Osisko (-4%). In the Mid-Cap Group, Hochschild was only slightly down and Seabridge lost 7%. In the Junior Group (Market Capitalization between $100m and $500m) there were 18 losers - with the biggest decline being recorded by the South African producer - Durban Deep at -27%. Other gold companies with share price declines in excess of 10% during this period of substantial gold price improvement were Allied Gold (-19%), Patagonia (-16%), Conquest (-14%), Entree (-12%) and Intrepid (-11%). Other losers included Apollo (-9%), Cluff (-7%), Citigold (-6%), Eastmain (-6%).

Goldval.com monitors a large number of gold and silver companies with listings in Canada, USA, UK, Australia and South Africa and provides a broad range of statistics and charts demnstrating various measures of value.

Marco G. makes various interesting comments and also notes the valuations of several of the senior gold companies using such measures as (market) value per reserve or resource ounce. GoldVal.com provides such statistics (and many others) for over 130 gold (and silver) companies, not only for the "seniors" (which GoldVal.com regards as those having a Market Capitalization of over $2000m), but also for "Mid-Cap" (Market Cap $500m to $2000m) and "Juniors" (Market Cap above $100m).

If "Big" gold companies (to use Marco G.'s term) are to grow by making acquisitions of other companies(as well as through their own exploration efforts), some of the potential targets may well be included in the current universe of companies covered by GoldVal.com. The current market ratings for such factors as value (or acquisition cost?) per annual production ounce, reserve ounce and resource ounce are available from GoldVal.com (see www.goldval.com) - and may highlight some of the potential targets.

The update of the figures provided in the GoldVal.com site has been delayed due some technical hitches, and, with the recent further surge in the gold price, needs to be updated again - this is expected to be completed by 25 November.

Using a gold price around the prevailing price will usually derive a Reserve Value well in excess of the market value of the company. However, if the value is discounted over the Reserve Life (the number of years the reserves will take to exploit at the current rate), the value derived may approximate the Enterprise Value of a company. (The Enterprise Value is the Market Capitalisation adjusted for cash or debt).

As shown in the GoldVal.com web site - see www.goldval.com/reserves-resources/ this exercise was undertaken for a number of Senior companies by assuming a gold price of $1000/Oz and a discount rate of 8%p.a. The average Discounted Reserve Value did closely approximate the average Enterprise Values of those companies.

Should the Discounted Reserve Value equal the Enterprise Value? Probably not - because it is much too simplistic in that the operating costs of a gold company do not give a true indication of total costs and profit and also ignore capital expenditure. However, the value of a gold company should be related to its reserves of gold, the cost of exploiting that gold, the timing of that exploitation and the gold price. The Discounted Reserve Value does attempt to incorporate all of these factors and therefore may be a useful tool.

The analysis of these companies will be included in GoldVal's next update which is expected to be completed on 21 October 2009.