Gold > US treasuries as central bank reserves is a remarkable thing @Bear77. Kind of wild it gets very little coverage.

Not too make a mountain out of a mole hill, but it's not an insignificant mole hill imo!

Not that the greenback is going anywhere anytime soon, but the directionality of things is interesting and speaks volumes towards changing foreign perceptions of the USD.

Yes @Strawman - the argument that gold doesn't have any real value other than due to sentiment conveniently ignores the continued central bank buying that has seen gold exceed US Treasuries in 2025, and the reasons behind why that has happened.

Here's the view from the ECB (European Central Bank) in a report they have just released (in June 2026, so in the past 5 days) titled, "The international role of the euro":

Source: Pages 14 and 15 of: https://www.ecb.europa.eu/pub/pdf/ire/ecb.ire202606.en.pdf [June 2026]

Here's those same charts hopefully a little larger and more easily read:

Remember that (above) was published by the ECB this month and the ECB are pro-Euro so they will understandably argue that the Euro has a brighter future as a reserve currency position than gold.

And while China continuing to buy more gold quarter after quarter gets plenty of coverage, they're still in the middle of the pack in terms of the countries with the largest gold reserves globally:

(Not sure when that was actually published but my best guess would be 2024 or 2025)

So if China continue to see gold as a preferable central bank reserve asset to hold over US treasuries then there's still a heap of headroom left for them to continue to buy more gold.

In the following excerpt from a 14 May 2026 article titled, China gold market update: A notable rise in gold reserves, Ray Jia, Head of Research (Asia Pacific, ex-India) and Deputy Head of Trade Engagement (China) for the World Gold Council said:

Chinese gold ETFs expanded further while futures volumes cooled

Chinese gold ETFs witnessed their eighth consecutive monthly inflow in April, attracting RMB3.5bn (US$498mn). Following another monthly expansion their total AUM reached RMB306bn (US$45bn), 1% higher m/m. Meanwhile, collective holdings increased 3t to 301t, another month-end peak (Chart 2). 

Continued global and regional geopolitical tensions during the month, as well as falling local government bond yields, sustained Chinese investor interest in gold. Nonetheless, inflows slowed as investors may have been diverted to the rallying equity market. 

With the local gold price stabilising in May, we see continued allocation to gold ETFs from local investors even as the local stock market kept rallying. 

Chart 2: Demand for Chinese gold ETFs persisted

Chinese gold ETF demand and holdings in tonnes*

*Data to 30 April 2026. 

Source: Company filings, World Gold Council 

--- end of excerpt ---

And from further on in the report:

The PBoC added the most gold in 15 months

The PBoC reported an 8t gold purchase in April, its 18th consecutive monthly addition and the highest since December 2024 (Chart 5). This addition brought Chinese official gold holdings to 2,322t, 9% of the country’s total official reserves, which rose 2% to US$3.8tn.

Chart 5: The 18th non-stop monthly Chinese gold reserve addition

The PBoC’s reported gold purchases and gold’s share of total foreign exchange reserves*

*Data to April 2026.

Source: State Administration of Foreign Exchanges, World Gold Council

Imports rebounded notably in Q1

China imported 143t of gold on a net basis in March, a notable 49% m/m rise. The March rebound brought Q1 net gold imports to 316t, surging both q/q (+182%) and y/y (+333%) (Chart 6). This is in line with robust Chinese gold consumption, as strong bullion investment offset weak jewellery buying, during the quarter. Meanwhile, positive local gold price spread throughout the quarter also encouraged importers.

Chart 6: Q1 gold imports rose notably

Net gold imports under HS7108*

*Data to March 2026.

Source: China Customs, World Gold Council 

--- end of excerpt ---

Source: China_monthly_update_Apr.pdf

It should be noted that this is not new for gold, it's just a return towards how things have been in the past:

It's clear just how strong gold buying and US treasury selling must have been in 2025 to have changed those 2024 ratios from 21% gold to 46% US dollar - to now gold being a greater percentage of global international reserves than US dollar reserves.

In terms of 2026, my own view is that there had been a slow down in central bank and other gold buying due to record gold prices in January and most of February, however when the direct military conflict between the US, Israel, and Iran began on February 28th, and escalated quickly into a blockage of the Strait of Hormuz, first by Iran and now aparently by both the US and Iran, there was some cashing in of liquid assets in March by a number of central banks, particularly those of countries who relied mostly on oil exports through that Strait, and/or relied on both imports and exports through the Strait. So more selling than buying pushed the gold price down.

However now, with a lower gold price than we had at the beginning of this calendar year, the central bank buying of gold has resumed and/or increased, and that increase in demand will flow into a higher gold price at some stage in the near-to-mid-future, in my opinion.

Having said that, I've just tried to find some data to back up my assertions, and here it is:

Google says: Global central banks showed a V-shaped shift in their bullion policies, moving from a net sale of 27 tonnes in March to a net purchase of 17 tonnes in April. The March contraction was driven by sizeable liquidations from Turkey and Russia, while April’s accumulation was heavily led by Poland and China.

Google referenced this article: https://www.mining.com/poland-china-lead-renewed-central-bank-gold-buying/ [June 5th 2026]

Poland, China lead renewed central bank gold buying

Blair McBride | June 5, 2026 | 7:58 am Markets Asia China Europe Russia and Central Asia Gold 

Central banks resumed net gold buying in April, bolstering their view of the yellow metal as a strategic reserve asset, the World Gold Council (WGC) said in a report this week.

After being net sellers in March, banks added a net 17 tonnes of gold to reserves in April, the latest month for which WGC has complete data. The trend was led mainly by Poland, while Russia sold 6 tonnes that month and Uzbekistan sold 1 tonne. That followed 60 tonnes sold by Turkey in March and 6 tonnes by Russia.

The move back to net gold buying in April suggests March’s sales might have been temporary rather than the start of a broader shift away from gold. The continued buying seen earlier this year helped support gold prices, which remain near record highs despite a modest pullback in recent weeks. Bullion traded for $4,390 per oz. on Friday.

Poland, China lead

The top buyers in April were Poland and China, who bought 14 and 8 tonnes of gold, respectively. China’s purchase, its largest since December 2024, extends the country’s purchase run to 18 consecutive months. The Czech Republic bought 3 tonnes in April, its 38th consecutive monthly purchase.

After Turkey’s huge sell-off in March, the country’s government reported nearly flat gold reserves in April. Weekly data showed Turkey’s short-term gold/USD swaps matured that month, leaving only longer-term gold/USD swaps outstanding, the WGC said.

Meanwhile, emerging-market central banks, particularly in Eastern Europe and Asia, continue to drive demand. They averaged 29 tonnes of net purchases per month over the past three years, according to the WGC.

--- ends ---

Source: https://www.mining.com/poland-china-lead-renewed-central-bank-gold-buying/ [June 5th, 2026]

So, yeah, the gold price has had a correction, and there have been reasons behind that, but the fundamental drivers of the longer term uptrend, including central bank buying of gold to increase central bank gold reserves, continues to drive the demand side. And on the supply side, gold is relatively stable.

Somewhere between 95% and 99% of gold producing companies sell all of the gold they produce, as they produce it, regardless of the prevailing price at the time, and new discoveries tend to take a long time (years) to go from discovery to production, so it's almost entirely the demand side that determines the direction of the gold price. And it looks like it's going up to me. Maybe not this past week. Maybe not next week. But I do believe that gold is in a healthy mini-downtrend within a longer structural bull market uptrend, and that's why I'm using this period of gold sector negativity to position myself in the companies I think are going to have the most upside potential in share price terms over the next couple of years.

Correlations are funny but I think it makes sense that gold is inverse to oil in this specific circumstance.

Excuse my ignorance @TommyCruise , but I just want to check that I'm getting this right.

Your ore reserves table is your estimated total ounces of gold currently available to be mined e.g. ALK has 621,000 ounces, then you are dividing your 'Enterprise Value' by the reserves to get a value per kilo-ounce?

How do you calculate the 'Enterprise Value'? It appears close to but not the same as the market caps.

You obviously have some risk weightings informing you colour schemes. Are you adjusting for extraction and refining costs?

I note that you mention you like CYL, VAU and RXL. A quick glance at your chart gives a shade of green or yellow for each of these in 'discount to price target', 'EV/Reserves' and 'EV/Resource'. So is that your primary metrics?

The EV question is simple @tomsmithidg - Market cap represents the equity value of a company, while Enterprise Value (EV) measures its total value, including debt, preferred shares, and minority interest, minus cash. EV is generally calculated as Market Cap + Total Debt - Cash and Cash Equivalents. Market cap is used for quick market valuation, whereas EV represents the true cost to acquire the company. The way I think about it, EV strips out the cash held, so it's the true value of the company, and a much better comp than market cap.

@TommyCruise I found your comp table interesting, however I reckon if you add in AISC (costs per ounce of gold produced) and Annual Production columns, it would be better, and possibly get rid of the Resources and concentrate on the Reserves since the Reserves are the economically viable (mineable) gold.

Also, including a company like RXL which is still developing their project is an interesting choice. It's hard to compare producers to a developer who has just announced funding for a mill they haven't even started building yet, and who have refractory gold (as you mention in the post, but not in the table).

Your table appears to be doing two things, firstly comparing the share price to an average of broker price targets, and secondly comparing the relative cost of the gold they own that is still underground without really factoring in how much it's likely to cost them to economically mine that gold - except via your 5-year and 10-year DCF models, which are only as good as the inputs, which are not in the table (because they wouldn't fit).

So, as an example, you have KAU (Kaiser Reef) and RXL (Rox Resources) both trading at large discounts to price targets (176% discount and 145% discount respectively) however KAU hardly produce any gold - see here: QUARTERLY PRODUCTION AND CASH BALANCE UPDATE FOR QUARTER ENDING MARCH 2026 and Rox have completed the DFS for Youanmi and made a positive FID (Final Investment Decision) one month ago (March 17, 2026) with their latest announcement (on April 7) being that they have completed the debt component of the project funding - see here: Youanmi-Project-Financing-Completed.pdf - so RXL do NOT produce ANY gold, yet.

So I personally find it difficult to compare producers to project developers based on gold they claim to own based on their drilling and interpretation of those results. There is always an element of interpretation concerning how gold systems exist underground and the truth is in the processing and recoveries but before you get that far the confidence levels can only improve with further drilling between the holes that you've already drilled. As an example, look at what Bellevue (BGL) expected vs how their mill actually performed in their first year of production. Massive difference. Recoveries were lower, head grade was much lower, and mine development did not go to plan either, due to a variety of factors. They seem to be back on track now, but it was not a smooth start-up, and their share price reflected that. And it caused them to raise more capital after production, twice.

BGL commenced first gold production in October 2023 and officially declared commercial production in May 2024.  Since then, the company has announced two significant capital raisings to fund growth, reduce debt, and manage working capital: 

• July 2024 Capital Raising: Following the transition to a producer, the company launched a $150 million institutional placement to reduce debt and fund a five-year growth plan aimed at increasing production to 250,000 ounces per annum.
• April 2025 Capital Raising: In April 2025, Bellevue announced a fully underwritten $156.5 million institutional placement at A$0.85 per share. This raise was prompted by a need to close out near-term hedge contracts, bolster working capital, and address lower-than-expected production in the March 2025 quarter.  The April 2025 raising came with a downgrade to production guidance and a scaling back of some growth plans, despite the company having transitioned to a "fully-fledged producer".

Not all gold is the same in terms of the costs of production. Refractory/sulphide ore (such as at RXL's Youanmi GP) will require additional gold processing facility (mill) components to assist with the gold extraction. This means higher mill build costs and my understanding is that refractory ore (as opposed to oxidised ore where the gold is far easier to extract) is more costly to produce on an ongoing basis as well, whether that's due to a greater chemical usage or just more mill components that have to be kept running - all the individual components do wear out and do require preventative maintenance on a regular basis. Obviously it's doable - a lot of the gold that NST produce at KCGM (the Super Pit next to Kalgoorlie) is refractory or sulphide ore, and they are extracting that profitably, but it makes a difference to their costs.

If you look at the lowest cost producers, like EVN, CMM and RMS, the vast majority of their gold requires relatively simple extraction which keeps costs low, although the biggest factor with EVN is the use of copper by-product credits The type of gold is one factor, another is the strip ratio, so with open pits, how much cover do you need to move to get down to the gold. Another issue is whether the gold is thick and wide or thin viens, so waste produced vs gold produced. Another issue is when it's so deep it requires underground (UG) mining, which is always more costly the open pit (OP) mining.

Some of those factors (like OP/UG) are in the table, but how that has been factored into the various broker price targets is not. Or the DCFs. I admire the work, and I reckon it's a good way to go about it if your DCF models are accurate, but I personally don't find DCF models very useful for gold miners, and especially for gold project developers. I'm reminded of the old saying, DCF models are like the Hubble Telescope, one small change and you're in another galaxy.

I don't tend to find DCF models very useful for gold miners because the degree of confidence you can have around the input data is never going to be high, especially the gold price, the costs, the recoveries, etc. Mainly the costs - which change all the time, on an individual basis.

I understand that the 12 month price target average numbers are mostly there for reference purposes or for a sanity check as you put it, however something to keep in mind with broker reports and price targets on gold project developers and small gold miners is that many of those brokers have raised money for these miners / mine developers already, and/or want to be at the top of the list for the next CR, so they are going to naturally be bullish on the company that they want to work for again. Most of the ones who have done CRs for these companies have put a number of their clients into these companies as part of those capital raisings (usually through placements) so they would have been ultra-bullish at the time of the CRs and they can't back-peddle too much on their views too quickly after putting their clients into these companies - they have to stay bullish. So what I'm saying is that these broker price targets have to be taken with a grain or three of salt - they are rarely totally independent and unbiased.

Some of the data needs to be regularly updated, such as the Reserve grade and Mineral Reserve, which feeds into EV/Reserve numbers, which is much more useful than Market Cap/Reserve or Market Cap/Resource because the EV (Enterprise Value) strips out the cash that the company has, so can provide a more Apples vs Apples comp. However despite being useful, those numbers don't tell us what the costs of that miner are or are likely to be in future years.

The biggest determinant of profitability is cost, and in Gold Mining the cost is generally expressed as AISC (all-in sustaining cost), so adding an AISC guidance column would be a good improvement.

For those who may not be aware, Gold Resources represent the total estimated gold in the ground, classified by geological confidence, but not necessarily profitable to mine. Gold Reserves are the subset of resources that are technologically and economically viable to extract. Resources indicate potential; Reserves define current, profitable inventory. For this reason, the Market Cap/Resource and the EV/Resource numbers do not matter to me, it's really the EV/Reserve numbers that are useful and only when you also know what their costs are, or are likely to be. (Source data)

All that said, with the exception of KCN, who I actively avoid (they mine gold in Thailand and were locked out of their Chatree gold mine in Thailand for over six years, from 31 December 2016 until it officially reopened on 17 March 2023 - the Thai government ordered the closure due to local environmental complaints, leading to a long-running legal dispute that was only settled in 2025), you like/hold a lot of what I like/hold, or I did hold and will hold again when my ISA (income stream account) is up and running.

For those who might be following my progress with that, the ISA should be operational within one to two weeks as I was finally able to lodge the sell order for my Infrastructure units in my old CBUS SMSF account on Saturday (the last hurdle to close out the old account, before opening up the new tax-free account). That sell should go through this week, and then the old SMSF can be closed (as it will finally be 100% cash) and the new tax-free ISA can be opened.

I wouldn't touch Kingsgate (KCN) due to very high sovereign risk as well as low gold grades, but other than that your analysis @TommyCruise seems to have led you in the right direction, or a similar direction to me in terms of what you are holding and what you are looking to hold - although RXL is not one I'm looking to hold personally - but never say never, Youanmi has good grades - over 4g/tonne Au - it's just the chemistry that is the issue. And the development risk. And the build and commissioning risk. All of the same risks that Bellevue had. Plus the refractory ore.

I used to susbscribe to a service that provided good data - https://goldnerds.com.au/ and there's another one more recently that I have tried a free subscription to - https://www.goldhub.com.au/offer but I haven't looked at their current annual costs. You can keep your own spreadsheet updated by reading every company announcement and scraping the data yourself, however I did find the GoldNerds spreadsheet to be very good for research idea generation a couple of years ago - and they do 6-month subscriptions, or did then.

These days I have a separate investment thesis for every company I invest in and a lot of it centres around management quality - including management and Board track records in prior roles of doing what they said the would and generating good TSRs, skin in the game, project location, the gold chemistry/geology, strip ratios, etc., i.e. stuff that is not easily entered into a spreadsheet in a form that is easy to compare against peers.

But spreadsheets are useful. They're one tool in a toolkit. But I wouldn't be buying anything just because it looked good in a comp spreadsheet. But as an idea generating tool, it certainly has its uses, if kept up-to-date.

Appreciate the questions @tomsmithidg and the useful discussion @Bear77. I'll try adding context that wasn't already covered by the detail above.

The table is definitely a very blunt tool in toolkit and predominately used as a starting point for ideas. Interestingly I added the price targets just before this Straw (I don't use them) and I hid the AISC data as I hadn't kept them up to date for all companies.

With the table itself I adjust for the koz and A$M in the calculation so the values are dollars per ounce figure. The colours are a gradient scale in excel to draw my attention to what looks interesting. From there I do some mental adjustment for the "asset quality" which considers items such as mining method, grade, complexity of mining, refractory ores, management teams (if I know them). @Bear77 has done well explaining these items in detail which has been a great help. Full disclosure, I work in the gold mining industry, so I have a technical filter on all the time. It's also the reason I feel comfortable making an assessment on a startup like RLX (not that I have in this case apart from saying it looks interesting).

The resource and reserves comment is a good explanation. I also consider this for potential ounce conversion and look for indications of upside in the geology (not a geologist). Looking at this in conjunction with exploration budgets is another handy flag. On top of reserves and the factors around geology impact to mining complexity, I'll look at the mine plan/design itself to gauge any mining related recovery risks or difficulties (or rather lack thereof for an investible company).

The KCN warning is very real, I first bought this in 2007 and was left with a very small holding that sat at the bottom of the portfolio for a long time. Admittedly, this was the only thing that kept me in touch with the company and kept me close enough to cautiously invest on the restart. It's a long story.

I like the companies I own more than the two mentioned. CYL is simpler to understand compared to VAU and RXL is interesting but not one I am looking at buying, for the same reasons as @Bear77.

Appreciate the discussion.

@TommyCruise Nice work I run a similar gold sector comp sheet that is far less aesthetically pleasing than yours. I have lesser versions for other metals. Very handy tool to have to identify relative value in a sector as it grows and evolves.

Thanks for the clarifications @TommyCruise - Are you going to put some of your (virtual) 100K to work here on some of those gold producers that you like, or are you waiting for lower levels?