When dealing with mineral rights of mining enterprises, Canada has its NI 43-101 Metal Valuation Report, a standard for mining companies to comply with when reporting on their reserves and resources. Those documents are stored and can be retrieved from the repository at http://www.sedar.com/
To make thing easier and allow comparison in a glance, the website ‘Gold Miner Pulse’: gives a fair overview of many Canadian Gold Mining Valuations. There are also specific Valuation Reports for the companies reported on.
On this blogthread, I'm focussing on the gold and silver miners covered by 'Gold Miner Pulse'. Whereas this is a strict limitation, the Gold Miner Pulse database is nevertheless covering a wide range of miners: several bellwethers are included: Agnico-Eagle, Barrick, Eldorado, Kinross, Yamana to name a few. The database also covers a number of intermediate or small miners and further on a wide range of precious metal explorers and explorer-developers.
Limiting our scope to miners of the Gold Miner Pulse database has the advantage of having a uniform approach on miners complying with the same regulatory framework: things get comparable.
Composite score
The added value of this thread is the miners spreadsheet where a composite valuation score is included. (The miners spreadsheet is updated on a regular basis.) It is not a straightforward task to define a reliable composite score indicator. In my attempt to do so, I consider four metrics:
- Market Cap/Oz
- Total Au-Eq (or Ag-Eq) resource estimate
- Ore value per tonne
- Repartition between reserves and resource categories
You find more detail on this in following two blogposts. Valuation Metrics of Canadian Gold and Silver Miners and Canadian Gold and Silver Miner valuation Metrics - Update
The miners spreadsheet enables narrowing down the choice to a reduced number of Canadian miners. Avoid drowning in data and do your own due diligence on just these miners.
Outlook
Gold and silver miners have been underperforming precious metals for most of 2011. Autumn is however a seasonally strong period for precious metals and for miners. Miners are now valued far cheaper than almost any moment since the precious metals started recovering from a twenty year bear market back in 2000. As investors start realizing that high gold prices are not a temporary parabolic anomaly but are there to stay, miners will be monitored and bought instead of neglected and sold.
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Comments for "Valuation Metrics of Canadian Gold and Silver Miners"
Miners unchained
Hiring came a grinding halt, illustrating the US economy is gliding back into recession. A scary image for stock markets which were selling off with losses over 2.5% on S&P and Nasdaq. As often during a stock market sell-off, the greenback held up, firming against most currencies.
Precious metals cease to move in correlation with stock markets lately. Since the stock market slide aggravated in August, the opposite seems to be true: gold is rallying at a stock market swoon. A paradigm shift?
Today's PM rally is impressive: gold is up $57 or 3.1% to close at $1882. Silver jumps $1.75 or 4.2% to $43.25.
Miners seem unchained and edge higher, no longer spooked by the stock market sell-off: on our GMP list, gains outnumber losses by an impressive 9:2 margin.
The gold miners index is up 3.2% to 1041. The silver miners index firms 2.44% and the equal weight index is up 2.6%.
Double digit gains for:
A nice 9.4% rally also for Semafo, one of the dogs of our GMP list.
Yet those gains are balanced by double digit losses for:
and among majors, Silvercorp Metals Inc. is remarkably the victim of selling pressure (short selling on rumors ?) with a 9.72% slide.
Good WE - (as last posted on the Kitco forum on the thread: Miners Due Diligence Center)
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Gwyde
Valuation spreadsheet and Miners indices,
Valuation metrics in GoldMinerPulse, intro to the Canadian Gold and Silver Mining database.
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Gwyde