but the point of a producer is that you assume that they will put the cash to good use and generate more projects, or at least maintain the equivilant.
I see what you are saying, but why then are other resources cos BHP, RIO, FMG(!!), even smaller ones like MMX etc etc trading on much higher PEs than 1?
Im by no means saying that it is a definitive analysis, but it does provide a good basis to see scope for movement. EG if the PE was already > 10 you could say it is possibly fully priced.
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