RE: Fair value of $8 per share although I agree with some of your comments it is my opinion that a couple of other issues are at play:
- these numbers do not take into account the capital burn requirement for the company in question and capital costs have increased considerably on a per oz basis over the last few years.
- the mining industry is increasingly risky due to sovereign + social + environmental risks and this is dropping the relative value of mining stocks in comparison to other less risky investments. hence lower PE/SP ratio
- the ability of the public to have direct exposure to the price of gold through ETFs has decreased the interest in mining comparies and a lot of money has gone out of stocks and into ETFs. I believe that the past days of incredible PE/SP are over.
this being said I also believe that the gold stocks have been hit so hard over the last while and the re-newed focus on the poor economy and fiat currency risk is going to cause a lot of interest in gold and there should be quite a few opportunities.