HRG, 22nd ranked gold focused producer in world?
I’ve always felt that the Goldsheet website is a very respectable site. Among other things, they maintain an ongoing list of companies with top production ounces in the world. Their list hasn’t incorporated Q1 2009 data as yet. As such, the rankings are based on either 2008 annual ounces or 12 month trailing production (you can find the link at the bottom of my analysis).
I have put together an adjusted analysis, but using the Goldsheet production data as the foundation. I used the production data on the Goldsheet report for all companies with the exception of HRG. For HRG, I used the go forward attributable run rate production (300,000 annual, 75,000 quarterly).
I also removed companies NOT focused on gold - Xstrata plc, Buenventura, Freeport McMoran, Rio Tinto plc, Jiangxi Copper and Penoles.
Also, there is at least one company (I am aware of) that didn’t have high enough 2008 production (Agnico-Eagle) to be on my adjusted list, but we all know that they have significant future production coming on stream effective in 2009.
For this analysis only, Enterprise Value (EV) per Avg Qtr production oz = Current Market Cap divided by Avg Qtr production ounces in 2008 (exception being HRG), with no adjustments for cash and debt. It is intended to be a simple high level analysis, with focus mainly on straight production ounces.
Also, even using only gold focused producers, there is not an exact science that can be applied from company to company. Some companies may still carry more non-gold products (i.e. copper, silver….) relative to other companies (which may inflate their EV per gold production oz relative to companies with only gold production).
1) High River Gold:
Using this methodology, High River Gold ranks as the 22nd highest gold focused producer in the world.
300,000 annual go forward run rate ounces (attributable)
75,000 quarterly avg go forward run rate ounces (attributable)
EV per Avg Qtr production oz = C$2,034
2) Average - Other companies in ranking list (excluding the 4 Chinese companies):
EV per Avg Qtr production oz = C$21,373
As a side note:
C$2,034 / C$21,373 = 10.51 times * $.235 current HRG share price = $2.47
The numbers in this analysis (the 22 top ranked gold focused producers) are suggesting that HRG should be trading at $2.47 per share. It is interesting how this $2.47 share price conclusion is similar to the $2.44 share price suggested by the completely separate HRG Russian-West African peer group analysis.
3) RANKING OF TOP GOLD FOCUSED PRODUCERS IN THE WORLD (using methodology described above):
(C$)
Note: Both 2008 data and 12 month trailing data were taken directly from the Goldsheet report. I have not verified to determine if changes are required.
1) Barrick Gold – 7,657,000 annual production ounces in 2008, $18,115 EV per Avg Qtr production oz (C$34.7B Current Market Cap / 1.914M Avg 2008 Quarterly production ounces)
2) Newmont Mining – 5,188,000, $17,255 ($22.4B / 1.297M)
3) Anglogold Ashanti – 4,979,000, $11,918 ($14.8B / 1.245M)
4) Gold Fields – 3,329,000, $11,749 ($9.8B / 983K)
5) China Gold Group (Chinese) – 2,508,000
6) Goldcorp – 2,323,000, $52,122 ($30.3B / 581K)
7) Kinross Gold – 1,840,000, $33,137 ($15.3B / 460K)
8) Newcrest – 1,745,000, $32,005 ($14.0B / 436K)
9) Zijin Mining (Chinese) – 1,681,000
10) Harmony Gold – 1,468,000, $13,016 ($4.8B / 367K)
11) Polyus Gold – 1,303,000, $26,762 ($8.7B / 326K)
12) Shandong Gold (Chinese) – 1,180,000
13) Iamgold – 997,000, $17,910 ($4.5B / 249K)
14) Lihir Gold – 882,000, $26,576 ($5.9B / 221K)
15) Yamana Gold – 782,000, $40,113 ($7.8B / 196K)
16) Centerra Gold – 749,000, $7,060 ($1.3B / 187K)
17) Randgold Resources – 441,000, $52,141 ($5.8B / 110K)
18) Peter Hambro Mining – 394,000, $11,359 ($1.1B / 99K)
19) Northgate Minerals – 356,000, $7,103 ($635M / 89K)
20) Lingbao Gold (state owned, Chinese) – 333,000
21) Eldorado Gold – 309,000, $51,819 ($4.0B / 77K)
22) High River Gold – 300,000, $2,034 ($153M / 75K)
The original Goldsheet link:
https://www.goldsheetlinks.com/ptable.htm