No doubt it all looks good on face value. You’ve got to take a...

No doubt it all looks good on face value.

You’ve got to take a long term view though and perhaps that’s why PLS will never have a 15 x multiple (IMO).

I made a comment somewhere else that ‘nothing goes up forever’ and commodities are in my view one of the most efficient markets going around.

I remember the early days of the iron ore boom when China’s demand for the bulk was never going to end and on supply - the ore quality, processing, transport (access to rail) and shipping of the products where viewed as barriers to entry and was why there’d only be a handful of suppliers in Australia. Spot prices rose so much that margins were so attractive so you saw mines that had no access to rail infrastructure loading DSO on trucks to get to port.

I guess what I am trying to say is I have no doubt processing will be a barrier like you suggest but while margins are so attractive (and will only continue through spot increases and demand lags supply), supply will inevitably find a way to come to market in the medium term to balance out (efficient market).

Not suggesting in any way PLS are not in a great position but for someone to suggest a share price of $30-$50 is outrageous and find it difficult to make a case for $3, let alone 10 x that.

I remember Charlie Aitken putting research out on FMG (post share split) valuing FMG at $30 on the never ending demand from China.