gold index

Article by Birch on Bloomberg 14 April discusses how the philidelphia gold and silver index is now trading at the cheapest point it has based on forward earnings in the last two years. The index is trading at a Forward PE of 14 down from 30 as prices have not kept up with increasing earnings.

The gold and silver index trades at 14 times forward earnings and is considered cheap. GDO have an earnings guidance of 69 million for 2011 ( on a 1234 gold price)

So what should GDO be trading at if it traded at a fair value to it's peers?
69 USD million x 14 = 966 / 105.6 aud 915 / shares on issue = 1.13 per share. In 2012 with production up to 150 k oz nand costs down further the relative valuation would be circa 130-140.
Every calculation I do
Assets
Cashflow
eV per resource or per reserve Vs peers
Production and margins vs peers
Current and future prod NPV
Peer group relative valuations
They all tell me the same thing - GDOs current fair value is 1.20 plus. I don't know how long the discount will last but one would assume the degree o discount can not last too long