fund managers view, page-20

Yanlin;

"For SAR, the POG at say A$1,400/ oz will still yield a profit. At the current level of circa A$1,550/ oz SAR will have a gross operating margin of >A$550/ oz. And, based on their expected guidance for output of 130,000 oz this financial year (and growing next year), SAR's gross margin still should be $71.5m for FY13. That means, based on todays closing price, SAR is trading at a PER of 2.8 times for FY13. That's pretty damn low if you ask me"

Thats incorrect logic. PERs are calculated on NPAT. You cant use gross revenue as an input otherwise you'll over-inflate the figures which is what has occured. Also, you have not included the ~$40M that will be captialised for whirling dervish cut-back, plant upgrades, and exploration.

Most analysts are forcasting between 4-6cps, EPS. So a ST SP of 40-60 based on a PE of 10x makes sense in this environment.