Benchmarking

Benchmarking can be a very useful tool when deciding on company investment.

Basically it is a comparison of companies using various parameters, or

an average of all parameters.

Looking at the International Gold Producers Excel file below:

If you prefer an average of all parameters, then Barrick on Page 1 would be your

choice.

Graphs 1 and 2 show various comparisons, Annual gold production, working cost,

capital expenditure etc..which may influence your investment choice.

Good Luck!

Lets have a look at Enterprise Value (EV).

EV is simply Market Capitalisation plus Debt minus Cash and equivalents.

These are easy numbers to determine as they relate to the current number of issued shares and

share price which are published daily.

Debt and Cash and equivalents are shown by most gold companies in their quarterly reports.

An example of two companies will illustrate what this means:

Company A  Issued shares 1000  Share price 1    Debt 100   Cash and Equivalents 1000. EV = 100

Company B  Issued shares 1000  Share price 10 Debt 1000 Cash and Equivalents 100.   EV = 10900

Company A, with the lowest EV would be the better investment using EV as a basis.

The EV of the same companies considered in the benchmarking exercise is shown in the

international Gold Producers Excel file Enterprise Value sheet below:

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