I did some more research on Polyus and they had some mixed operating performance in 2010 -- their biggest mine, currently Olimpiada showed a decrease in production of almost 30%, from 839,000 ounces in 2008 to 584,000 ounces in 2009 -- apparently the problem is that two other mines are close by, and Polyus is allowing ore from the other two mines to be processed at the processing center at Olimpiada, which caused problems with the exaction of ore. The solution appears to build a separate processing center (which can crush the ore, and exact the gold by a bath of high-grade acids and chemical solutions) but it doesn´t appear that the firm has this in the works.
Another concern was that the production was up 10% y/y to 1.39M ou (approx) but the profit didn´t increase, mainly due to higher costs -- I´m not sure I did note that the mines are spread around the country in mainly three locations, which are extremely far away from each other (well over 1000 miles), so the co isn´t getting any syngeries from the operations.
Polyus is having serious problems with its acquisition of KazahkGold, and is going to divest this -- about 2 years after acquiring it -- the owners of Polyus and the ruling family (Nazerbyev) of Kazakhstan really got into an argument. On the negative side, KazahkGold was the one asset so far that is significantly increasing production
Current forecast is for 1.5M ou, which one analyst takes to mean that the problems at Olimpiada will continue. The capital expenditures appear to be (according to UBS) well under maintance levels -- strangley, the CEO (who is also the owner to the New York Nets) wants to sell the firm, not develop it.
The basic idea is to find Gold miners which are the most undervalued on reserves. Below is a useful chart by UBS that shows potential undervaluation by reserves, since Gold is not really concentrated in one geographical area, there are many firms and it does appear that Polyus is undervalued, although perhaps not by a whole lot (in the chart below, Anglo Gold, Harmony and Gold Fields appear to be the cheapest on an EV/Reserves and Resources). I´ll look into these -- (although I´m not sure how these miners stack up against individual gold mines, I did like the fact that Polyus had one very large mine in the works -- will research).