The higher the calculated number, the "more expensive" miners are relative to gold. The lower the number, the "cheaper" they are. Looking at the graph above, you can see that as of yesterday's close, miners are literally the cheapest they've ever been relative to gold since the index began trading 31 years ago.
Putting that in context, take a look at the next chart:
Regardless, historical valuation extremes offer huge opportunities for the patient investor if you believe in mean reversion (which I do). The average daily close of the XAU since it's inception is 107.6, or 82% higher than current levels. In the last 31 years, there have been only two years where the XAU has traded lower than it is today. Said differently, in the last 31 years, it's been higher 93.5% of the time. Yes, miners could continue to trade lower, further coiling the spring, but I believe the odds favor a sustained bounce back to the historical mean, if nothing else.