Today’s update from precious metals miner Polymetal (LSE: POLY) is positive and shows the company is on track to meet current production and cost targets for the full year.

Production of gold in the first quarter of the current year was 4% down on the comparable quarter from a year ago. But this was due to an expected grade decline at the company’s mature Okhotsk operations, a one-off release of work in progress at Voro in the same period last year and processing of lower grade stockpiles at Varvara.

Encouragingly, all other operations had strong performances and looking ahead, Polymetal is forecast to increase its bottom line by 45% in the current year. This puts its shares on a price-to-earnings-growth (PEG) ratio of just 0.3, which indicates that they’re set to continue the 17% gains recorded since the turn of the year. And while Polymetal is a relatively risky stock that’s highly dependent on the prices of gold and silver for its profitability, its margin of safety appears to be sufficiently wide to merit investment.

Revenue fall

Also reporting today was gold and silver miner Patagonia Gold (LSE: PGD), with its shares having fallen by 11% at the time of writing. Despite the company achieving cost savings of $1m during the 2015 financial year, they were insufficient to offset a fall in revenue from $35.9m in 2014 to $26.1m in 2015. The reason for the fall in revenue was lower production as well as a lower gold price.

With Patagonia Gold’s only producing asset set to end production in the next year, it’s seeking to develop new assets to improve on its current financial performance. Clearly, this brings a degree of uncertainty. While the company has the potential to deliver improved revenue and profitability over the medium-to-long term, with a number of highly profitable precious metals miners trading on very enticing valuations, there may be better options for investment available elsewhere.

Risky but rewarding

Meanwhile, BHP Billiton (LSE: BLT) continues to offer a highly enticing risk/reward ratio, with the mining major set to begin a recovery in the next financial year. In fact, its earnings per share are forecast to more than treble next year and this has the potential to significantly improve investor sentiment in the diversified resources play. Evidence of the potential for this can be seen in BHP Billiton’s share price performance in the last three months, with it having risen by a whopping 46%.

Clearly, BHP Billiton isn’t without risk and a major downturn in the price of iron ore or other commodities could severely dampen its outlook. However, with the business being much stronger than it previously was due to efficiencies being made and non-core assets having been spun-off, BHP Billiton seems to have a wide margin of safety and could be a superb performer in the coming years.

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Peter Stephens owns shares of BHP Billiton. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.