New names re-populate the Australian gold space
The Australian gold sector has a number of new companies (sometimes with old
assets) coming through. We have reviewed and compared 24 of them with a
combined Enterprise Value of A$7.2B. The gold sector had lagged the industry
until recently as other commodities drew investment but with the gold price well
supported, and even more attractive in AUD terms, attention is back on the gold
names. After a decade of decline there are fewer names to invest in; so we review
who has what and how much they plan to mine.
Deutsche Bank AG/Sydney
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Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm
may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single
factor in making their investment decision. Independent, third-party research (IR) on certain companies covered by DBSI's research
is available to customers of DBSI in the United States at no cost. Customers can access IR at
http://gm.db.com/IndependentResearch or by calling 1-877-208-6300. DISCLOSURES AND ANALYST CERTIFICATIONS ARE
LOCATED IN APPENDIX 1.
Industry Update
Top picks
St Barbara (SBM.AX),AUD0.46 Buy
Companies featured
St Barbara (SBM.AX),AUD0.46 Buy
2008A 2009E 2010E
P/E (x) – 20.0 4.8
Div yield (%) 0.0 0.0 0.0
Price/book (x) 1.5 1.8 1.3
Sino Gold (SGX.AX),AUD5.34 Hold
2008A 2009E 2010E
P/E (x) 116.7 17.8 18.4
Div yield (%) 0.0 0.0 0.0
Price/book (x) 1.9 1.9 1.7
Global Markets Research Company
Resource size and resource value
Centamin Egypt has the most M&I resources, 9.0Moz, but no P&P reserves.
St Barbara has 8.6Moz of M&I resources at an attractive A$73/oz.
Sino Gold has the most P&P reserves, 5.3Moz, but fewer M&I resources, 7.3Moz.
OceanaGold has +5Moz of resources but much of it is at the suspended project.
Resolute Gold has +5Moz of resources between operations starting and ending.
Grade – better grades allow operational flexibility
There are several high grade deposits; these four have +500koz of M&I resources:
Dominion is in production, mining ~8g/t, its mine life is ~7 years at current levels.
Andean plans to begin mining in +10g/t ore when the mine starts operations.
Avoca Resources has +4g/t ore, and has built WA’s newest gold mine. Apex
Minerals also has +4g/t, it is restarting the historic Wiluna assets.
Scale of production – leverage to the gold price
St Barbara’s Gwalia Deeps is ramping-up, group output +300kozpa is likely.
Sino Gold has two mines and a development project to reach +300kozpa.
Andean plans to mine +200kopz, and study a stage 2 expansion.
Kingsgate Consolidated plans to double throughput to 5Mtpa, for +250kozpa.
Mineral Deposits’ project in Senegal is ramping up; it targets 168koz in CY09.
OceanaGold has +290kozpa capacity at the NZ operations.
Resolute Gold projects +300kozpa, but 2 of 3 assets are winding down.
Upside drivers exist for the gold price and benefit is being captured
The recent strength in gold price has allowed 8 of 24 companies to raise A$340M
since Sept. 2008. No hedging is used by 15 of 24 companies. Large investment
sums moved into US bonds in late 2008 supporting the USD; a reversal of this
process could deliver the next step up in gold price. Globally Central Bank sales
and purchases could be significant. China still has a remarkably small gold reserve
(600t) Also note the European Central Bank Gold Agreement concludes in Sept.
2009. Economic stabilization resulting in base metals strengthening and precious
metals weakening is a downside risk.
Valuation; Operational delivery is always a key factor
For companies under coverage, we use life-of-mine DCF to calculate the NPV. This
is used as a base for the target price. Often, scenario analysis and peer group
forward metrics are incorporated when determining the 12-month target price.
Project construction, commissioning and operational delivery are always key risks
for growing mid-tier companies. For risks specific to companies under coverage,
refer to pages 50 and 53.

Table of Contents
Overview – Golden prospects ...... 3
Spot Gold – Drivers & outlook ... 4
Australian Industry in decline.. 9
Australian Gold Miners . 13
Reserves and Resources ... 14
Resource Valuations 15
Size, grade & certainty.16
Production profiles growing17
Funding positions.. 18
Company Summaries.. 19
Adamus Resources (ADU) 20
Allied Gold (ALD) 21
Andean Resources (AND) 22
Avoca Resources (AVO) 23
Apex Minerals (AXM) 24
Beaconsfield Gold (BCD) 25
Bendigo Mining (BDG) 26
Centamin Egypt (CNT) 27
Crescent Gold (CRE) 28
Carrick Gold (CRK) 29
Citigold Corporation (CTO) 30
Dominion Mining (DOM) 31
Integra Mining (IGR) 32
Kingsgate Consolidated (KCN) 33
Mineral Deposits (MDL) 34
Medusa Mining (MML) 35
Navigator Resources (NAV) 36
OceanaGold Corp. (OGC) 37
Perseus Mining (PRU) 38
Ramelius Resources (RMS) 39
Resolute Mining (RSG) 40
St Barbara (SBM) 41
Sino Gold Mining (SGX) 42
Troy Resources (TRY) 43
Supplementary data.. 44
A summary of the JORC code 45
Investment thesis - SGX 50
Investment thesis – SBM 53