PE ratios are historical accounting outcomes or forward projections. The figures you are referring to are historical.
Markets are forward looking and share price reflects (imperfectly) expected future earnings.
In particular the CGX PE ratio is low for a range of reasons - sag mill down for extended period in second half of last year, and the way the related capital cost was accounted against current income instead of depreciating it over several years. CGA is partly hedged at under $USD1000 which ends in early 2014, again raising future income. In addition it has plans to increase production from 200k ounces pa to 300k ounces pa and has an income tax holiday for several years.
Each company is unique and comparing PE ratios is a very poor way of judging the relative value of companies. Therefor it is essential to drill down into the data of each company and make a judgment about future profits based on a range of assumptions (costs, output and POG).
If a company is producing a heap of gold but not generating enough free cashflow to fund expansion then the market will judge it accordingly - eg NGF.
loki (disclosure - I hold CGX shares and I do not like the takeover deal.)
SLR Price at posting:
$3.68 Sentiment: Hold Disclosure: Not Held
