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speedybure (< 20)

Current Reserve Ratio For Precious Metal Miners

Recs

5

June 11, 2009 – Comments (0) | RELATED TICKERS: AUY , JAGGF , AEM


A reserve ration is the enterprise value ((current market price * shares out) +debt - cash)/ The current net asset value (Sale price- cost of mining) * Proven Reserves). This is one of many metrics to guage valuations, relatively speaking of course. This is trick to use with emerging juniors as they expand proven reserves by triple digits year after year until the reach the mid-tier stage. In short, the lower the valuation , the more attractive it is (all else equal). Here are a list of the current ratios. There are also many variations of this, some better some worse, so please don' t take this as gospel.

 1) Lihir Gold - .38

2)Barrick - .42

3) Newmont - .47 (likely due to due to boddington)

4) Kinross (but the russia stigma could be causation)

5)  Jaguar - .57 (great for a junior)

6) Yamana - .597) Sino - .6

8) RedBack .68

9) El Dorrado - .72

10) .Agnico Eagle - .77 

11)  GoldCorp - .84 

 I am not suggesting Barrick is better than Agnico or Yamana, but this is just another tool in the toolbox.  In Fact I Prefer yamana, Jaguar, Agnico, redback, Lihir, Newmont, Kinross, Sino, el dorado, gold corp then Barrick in that order.  

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