In an effort to provide a comparative basis to analyze junior gold miners and to help focus my limited research time, I've put together a spreadsheet that measures 15 junior gold miners by their cost per ounce of gold resources. This was done by dividing each miner's total measured and inferred resources by the company's market cap to come up with the company's valuation per ounce of gold.
The spreadsheet is a fantastic starting point for investors looking to prioritize their research time towards what seem to be the most attractive opportunities. The 15 companies that appear in the table below are all US listed and have market caps between $300 million and $3.5 billion.
This analysis is not intended to tell the whole story, but rather, to provide a big picture idea of how the market is valuing the assets of junior miners. Please note that many of these miners have significant non-gold assets that have not been included in the analysis. Additionally, significant differences in valuation can be justified by factors such as the time horizon to production, expected cost of production, exploration prospects, and balance sheet factors.
I hope this will provide a useful starting point for investors looking to invest in the more speculative side of the gold sector. Since finding the resource data of junior miners can sometimes be as difficult as finding the yellow metal itself, I have in a few cases been forced to make assumptions about recovery grades and used back of the envelope calculations for resources. I encourage all readers to provide feedback if any numbers are imprecise or out of date. The companies are sorted by lowest to highest valuation per ounce of measured and indicated gold resources.
Ticker M&I Oz Au Mkt cap
$ per Oz M&I (NYSE:SA) 38.9 1.170b 30.1 (JAG) 8.1 530m 65.4 (NYSEMKT:NAK) 22.5 1.750b 77.8 (NYSEMKT:GBG) 13.6 1.090b 80.1 (NYSEMKT:EGI) 3.3 330m 100.0 (NYSEMKT:NG) 25.4 3.110b 122.4 (NXG) 3.8 780m 205.3 (NYSE:UXG) 3.3 800m 242.4 (NYSEMKT:ANV) 7.1 2.340m 329.6 (NYSEMKT:GORO) 3.4 1.250b 367.6 (FRG) 3.7 1.440b 389.2 (AZK) 2.5 1.050b 420.0 (GRS) 1.8 1.060b 588.9 (NYSEMKT:NSU) 1.6 1.150b 718.8 (NYSEMKT:GSS) 1.3 990m 761.5
Disclosure: I am long NG, JAG.