Emerging Junior Gold Producers Ranked – Market Cap $ per Ounce of Production 2011

Below is the latest update of my market capitalization $ per ounce of production ranking for 2011. The year 2010 is already half over and investment analysis should be forward looking to identify undervalued gold producing companies.

As I have written before, this technique provides a standard quantitative comparison of company share valuation. Again, it is just one dimension used to assess whether or not an emerging junior gold producer deserves further due diligence or recommendation. In fact, many of the most undervalued companies are undervalued for good reasons like operational challenges, permitting problems, etc..

There are several qualitative measures for assessing junior gold mining stocks that are important like political risk, currency exchange risk, property rights risk, remote site risk, single mine risk, operational risk, management competence risk, and others. Investment decisions should not be made on any single dimension of emerging gold producers.

The following is my most recent analysis of 40 emerging gold producers using the market cap to production metric based on closing share prices on July 30, 2010. The lower the value, the more undervalued the stock on this narrow dimension of valuation.

RANK	COMPANY	SYMBOL	MARKET CAP (MILLIONS $)	MC / OZ. PROD. ($) Proj. 2011
1	ATW Gold Corp.	ATWGF	$ 6	$ 206
2	Starcore Intl Mines	SHVLF	$ 6	$ 213
3	Hawthorne Gold	HWTHF	$ 7	$ 243
4	New Guinea Gold	NGUGF	$ 16	$ 403
5	Alexis Minerals	AXSMF	$ 33	$ 444
6	MDN Inc.	MDNNF	$ 37	$ 493
7	Gold-Ore	GREXF	$ 40	$ 727
8	Santa Fe Gold	SFEG	$ 80	$ 1,004
9	Timmins Gold	TMGOF	$ 110	$ 1,373
10	Dynasty Metals/Mining	DMMIF	$ 140	$ 1,478
11	La Mancha	LACHF	$ 228	$ 1,517
12	Avion Gold	AVGCF	$ 126	$ 1,575
13	Metanor Res	MEAOF	$ 66	$ 1,655
14	Troy Resources	TRYRF	$ 193	$ 1,751
15	Richmont Mines	RIC	$ 131	$ 1,874
16	Great Basin Gold	GBG	$ 623	$ 1,946
17	Jaguar Mining	JAG	$ 683	$ 2,009
18	Oceana Gold	OCANF	$ 600	$ 2,141
19	Gammon Gold (AuEq)	GRS	$ 824	$ 2,197
20	Wesdome	WDOFF	$ 232	$ 2,320
21	Claude Resources	CGR	$ 131	$ 2,380
22	Orvana Minerals	ORVMF	$ 174	$ 2,489
23	Capital Gold	CGC	$ 181	$ 2,586
24	Golden Star Res	GSS	$ 1,060	$ 2,617
25	Northgate	NXG	$ 861	$ 2,649
26	Minefinders	MFN	$ 565	$ 2,825
27	Aura Minerals	ARMZF	$ 776	$ 3,233
28	Gold Resource	GORO	$ 686	$ 4,035
29	Silvercrest Mines	STVZF	$ 55	$ 4,617
30	Jinshan Gold Mines	JINFF	$ 659	$ 5,066
31	Aurizon	AZK	$ 790	$ 5,097
32	New Gold	NGD	$ 1,950	$ 5,735
33	San Gold Corp	SGRCF	$ 1,000	$ 7,407
34	Centamin Egypt	CELTF	$ 2,460	$ 8,200
35	Lake Shore Gold	LSGGF	$ 1,050	$ 9,545
36	Alamos Gold	AGIGF	$ 1,710	$ 11,400
37	Allied Nevada	ANV	$ 1,460	$ 17,176
38	NovaGold	NG	$ 1,370	--
39	Osisko Mines	OSKFF	$ 4,670	--
40	Vista Gold	VGZ	$ 64	--
	AVERAGE		$ 646	$ 3,299

This article was originally published in the August issue of the Gold Stock Strategist newsletter.