Ann: Quarterly Activities Report, page-13

On that calc, I wouldn't use a one qtr FCF as a basis for a PE ratio. FCF will over the long run approximate npat (if interest is included in ocf), however short term capex can and usually will mean it's different. This appears to be the case here. If we use the qtr figures backsolving from EBITDA will give a better approach, assuming no major one offs in the "E".

In this case if we deduct D+A of approx $35m, add interest of approx $8m, gives us a before tax profit of $240m for the qtr, or $172m NPaT. Gives a PE ratio of 7, or if you used EV approx 5.8 EV/NPAT. EV/EBITDA approx 3.75.

On those metrics cheapish but not screaming bargain on a risk adjusted basis. However we're also on a pathway to significantly higher production over the next 1-2 years. With 50% higher production and all else equal those metrics change to PE ratio of 4.65, EV/NPAT of 3.88 and EV/EBITDA of 2.5. That's getting very cheap.

The big unknown and single biggest factor is coal prices. Sovereign risk is playing an increasing role. I'm not adding at this point but still happy to hold.