Hello. Welcome to Company Focus. My name's Aamer Nawid. I'm an analyst at Fat Prophets, and this week we're going to be taking a look at gold miners Randgold Resources and Petropavlovsk.

Given that gold has recently taken out all-time highs, it's probably quite a good time, quite an opportune time, to visit the gold miners. Regular viewers will be aware that the last time we spoke, I covered the gold miners, the price of gold was around about $1,100 per ounce, and it was at a crossroads, seemingly deciding which way to go. Since then, along has come European sovereign debt concerns and provided the catalyst to push the price of gold through the $1,226 high with quite some momentum.

A bit about gold. At the moment, it's all about safe-haven status, which is underpinning the gold price strength. Gold behaves more like a currency than a commodity, and it looks as though investors are fleeing currencies such as the euro and sterling, and moving into the yellow metal.

Not to be overlooked, gold is also an inflation hedge, and that is and will provide further sort of underpinning strut for strength in the future. Just look at what's going on in India now as regards inflation. And I think we should all take heed of the words of the Chinese Central Bank which said that global inflation will be a concern at some point in 2010.

Turning to the miners, investors looking for gold equity exposure will be immediately drawn to Randgold Resources, which stands out because of its size of its market capitalisation. While we were all tuned in to the election last week, Randgold produced its quarterly results, and although production for the first quarter this year didn't set the world light but there were plenty of positives.

Net profit was up by 83 per cent, although that did actually miss expectations. And production of 114,000 ounces shouldn't be scoffed at. On the cash cost side, on first glance, it doesn't look great. Cash costs increased from $461 per ounce to $617 per ounce. However, management have stated that for the full year, they see these costs being reined in to around about $500 per ounce, which is okay.

It's all about production, it's all about cash costs when it comes to these gold miners. And another one that I like is Petropavlovsk, the Russian-focused Petropavlovsk. It was recently listed on the AIM, but is on the official list now. Wouldn't be surprised to see it on the FTSE 100 at some point soon, if gold continues to sort of march forward.

Again, a bit like Randgold, 2010 hasn't set the world alight, but 2009 was a landmark year. The company saw top-line growth at 24 per cent. Underlying earnings were up by 65 per cent. Output was up by 21 per cent, at around about 487,000 ounces. That's basically neck-and-neck with what Randgold was producing.

On the cash cost side, though, Petropavlovsk definitely has the edge. Costs were actually reined in last year by a small amount, and they came in at $309 per ounce. That's basically underlines its position as one of the lowest-cost producers in the world. Production, though, for the first quarter of 2010, 66,000 ounces, 37 per cent below last year. So not on the surface of it too great, but management have said they're quite happy with the prospects of reaching minimum of 670,000 ounces for the full year.

All in all, cash cost is very important, current production very important, but reserves as well shouldn't be overlooked. Randgold's reserves - proven and probable - stand at 15.5m ounces. That's a huge amount. Petropavlovsk's 6.7m ounces. I think this is where the key difference between the two lies.

However, both are exploring and developing new projects to such a great effect that I wouldn't be surprised to see the reserves increase, production increase, over the coming quarters and years.

As for the main commodity that these guys are focused on, gold, whether it's a recovery in jewellery demand, a surge in investment demand, central bank purchases, supply-side constraints or even just the erosion of faith in paper currencies, gold is set for a period of protracted strength. And I wouldn't be surprised to see it reach $1,500 per ounce by the year-end.

If gold does reach these levels, both Randgold Resources and Petropavlovsk will be in line for share price outperformance throughout the rest of the year.

Thanks for watching. Make sure you tune in again next week.