p/e fundamentals on anvil Its frustrating as all hell watching...

p/e fundamentals on anvil Its frustrating as all hell watching this backpeddle with no apparent signs of let up. To put my mind at ease I'd like to be able to do some rough and ready p/e analysis on AVM to understand what the underlying business will look like say 6 months out from here.

So what I'm picking up (thanks Miningnut) is that based on say US$1.50 per pound copper prices, Dik should give us US$2m per month of profits, and the Gecamines site should give us another US$1m per month - so lets annualise that out in AUD at say A$45m per year. Not sure how much corporate cost or tax is covered in these estimates so lets say that leaves A$30m in annualised post tax profits.

Current market cap is approx $145m so prospective p/e ratio would be around 5x.

Now I know that p/e analysis isn't necessary as useful as NPV analysis in the mining world but I'm wagering that BT and crew will be able to grow production year on year for a fair while to come and therefore there is some merit to apply a p/e ratio. Its also a lot simpler for me to work out on the back of a beer coaster too...

So if I'm right (and I encourage corrections to my rudimentary calcs), then even discounting say 30% for sovereign risk this looks like a pretty good buy and would put my mind at rest as a long term hold.

All comments and derision welcome

Zinc