Hello, welcome to Company Focus. My name is Aamer Nawid, I'm an analyst at Fat Prophets. This week I'm going to be doing a bit of a gold roundup.

I'm going to be looking at three different gold companies at different stages of their business life. Two mature produces - Petropavlovsk and Medusa Mining - and I'm also going to look and assess the sustainability of the dramatic share price rise this week of Solomon Gold, a relatively unknown AIM-listed company who's seen its share price double on the back of an exploration update.

So far this week no great prizes for guessing what the main is - the price of gold reaching record highs. Regular viewing will be aware that I've been banging the gold drum for quite some time, so no great surprise from my perspective.

The catalyst this week has been the announcement from GMS, the precious metals consultancy, that they expect to reach $1,300 before the year end. They're citing sovereign debt risks and inflation fears as the main catalysts there. I'm a bit more bullish in terms of the gold price - I can see $1,300 coming into the picture relatively quickly. I see the year ending for gold a little bit higher than that. But the way gold has been trading I wouldn't be surprised if we saw a pullback, a bit of selling, before the $1,300 per ounce level was actually breached.

As you can see from this chart here, investors in GBS, Gold Bullion Securities, a gold ETF. GBS tracks the price of gold more or less and they would have done very well. Thirteen per cent is a decent result in the first three quarters, more or less, of this year. Particularly 2010, though, it's been a fairly challenging year in terms of equity markets. However, I suppose gold mining shares have that added allure - they provide a leverage to the gold price - and so they have that added appeal. There is, obviously, a bit of risk attached, operational issues have to be considered and history tells us that gold mining operations are anything but straightforward.

Take, for example, Petropavlovsk, one of my favourites - a Russian focused gold miner. They recently reported that earlier this year, for the first six months of this year, they had produced 166,000 ounces of gold. Now that's actually less than 25 per cent of what they are due to produce for the entire year, so not a great performance. The reason? Delays in the delivery of mining equipment. The result? Pre-tax profits have fallen off a bit of a cliff.

As you can see from the chart, Petropavlovsk POG has only just about kept up with the gold ETF, Gold Bullion Securities. It's been a challenging year. The company has narrowly missed out on promotion to the FTSE 100. However, looking forward, they're looking forward to an IPO of their iron ore assets in Hong Kong. They've got their work cut out to hit their production target for this year, but the commissioning of Malomir, mine number three, will help matters there. Overall valuation is [on demand]. I'm still a big, big fan of Petropavlovsk.

Another company I've mentioned previously on Company Focus is Medusa Mining, a Philippines focused gold producer.

Again, while POG was posting a loss Medusa took out record profits, record production and also announced its maiden dividend payment, all very positive steps in its quest to become an established mid-tier gold producer producing around about 300,000 to 400,000 ounces of gold per year.

It seems, as the chart shows, that being an un-hedged, cashed up, low cost gold producer is quite conducive to major share price gains. As you can see here, 32, 33 per cent this year, but much of that has been made over recent weeks.

Again, I can see maybe near-term gold price weakness translating into a more pronounced weakness for Medusa here, but I can see the shares blazing a trail for quite some time to come, so positive about Medusa.

A company which potentially has all this in front of it - I mentioned it at the outset - Solomon Gold, a junior explorer. Completely at the other end of the spectrum with regards to liquidity of shares and risk, but it's not often that a junior explorer makes a mineralization discovery - Solomon has - so definitely worth a mention.

Solomon's share price performance this week has even put Medusa's in the shade as it's all come on the back of the announcement that the Faro Island project, which is basically the Solomon Islands, is showing remarkable similarities to the Lihir deposit, which is a 40m ounce major gold deposit located nearby in Papua New Guinea. All very exciting, lots of additional drilling plans underway.

I expect the shares of Solomon Gold to move up and down like a fiddler's elbow, very volatile over the next few days, weeks and months.

In terms of Solomon it's a very speculative play, however, gold producers have to start somewhere. And it's not long ago that Medusa was at a similar level. End of 2003 Medusa listed in Australia for 20 cents - a similar sort of level. So, again, you've got to start somewhere. For embryonic companies like Solomon, life is never dull. Lots of twists and turns to come. But if management get it right earnings growth and share price re-rating can both potentially be very explosive.

So Solomon Gold is definitely one to keep your eye on. I suppose the companies that we've focused on today, completely different as to where they're at and what they're up to, but I do like them all. Their results have differed, but I do like them all. Gold price weakness in the near term is likely. This will translate to a more pronounced weakness in gold price shares but, looking beyond that, I just think that the good times for well managed and operationally sound gold companies have quite some way to go.

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