Sierra Resource Group Inc. (fka SIRG)

[thizsukz]

Typically mining companies are valued based on their reserves and production costs and to a lesser extent EPS. However Freeport McMoran is pretty much the best of breed copper producers and they have a TTM P/E multiple of 8.

EPS is not nearly as good of a metric value mining stocks, given the P/E multiple assumes an infinite life of the business. For example if we consider the curent situation and were willing to pay 8 times their 1 year earnings, we would pay 60% (8/5) too much given that the expected mine life is only 5 years (approximate). These numbers are solely for illustrative purposes. I know that there is the possibility of other resources and mines ect. but I was simply putting in numbers to illustrate.