Production & Value

Comparison of Value and Production – Senior Gold Companies

The following chart shows the annual production of the Senior gold and silver companies - listed (from right to left) in order of Market Capitalisation:

The following graph and table shows Enterprise Value and Annual Production ounces for the Senior Gold Companies:

The charts and table do not appear to show a strong relationship between the value of the company (expressed here as Enterprise Value) - but when plotted as a scattergram a relationship does become more evident: 

The symbol on the bottom right area of the above chart represents Goldcorp - and highlights its relative high market value against its level of gold production - when compared to the other Senior companies. Conversely, Newmont appears to have a relatively low Enterprise Value and for its level of annual production might be expected to have a significantly higher value. AngloGold Ashanti and Gold Fields also appear to show low ratings on this measure - possibly related to their strong African production element.

EV per Annual Oz - Senior Companies

The chart below shows the Enterprise Value expressed per Annual Ounce of Gold (or Equivalent) produced: 

This chart shows the high value attributed to GoldCorp, as indicated above. The average of the 24 producers in this group is $9358/Oz (EV/ An Oz). The highest value of the Senior companies is Silver Wheaton - with a value of $21657 (Ev per Annual Oz) - this includes Silver produced as Gold Equivalent. Agnico Eagle is almost as high at $21626. Eldorado and Randgold Resources are also shown to have higher than average values.

In contrast, the South African companies - AngloGold Ashanti, Gold Fields and Harmony - all have below average values (EV per An Oz) of less than $4000.

Mid-Cap & Junior Companies

It can be expected that the values will tend to be lower in these groups- and this is the case.  However the values can be erratic and several companies show relatively high values but this may be due to the current low levels of production - in some cases companies are in an initial start-up low production stage. Because of such occurences, the computation of average values can be misleading and it is appropriate to consider the actual value for a range of companies.