Minera Andes : 49% San Jose mine ABOVE AVERAGE in Profit Margin & ROA

In the previous post I presented the case that the market is significantly undervaluing Minera Andes' primary asset, 49% of the San Jose mine.  Turning now to some fundamental metrics of the San Jose mine namely its profit margin and ROA (return-on-assets) we can see that it is above-average in its peer-group.

Within its peer-group, the San Jose mine is performing above average in both metrics Profit Margin (EBITDA / Revenue) and Return-on-Assets (EBITDA / Non-Current-Assets).  NOTE: I am using two times the revenue and EBITDA numbers from 1H2011.  Non-current assets were used instead of total-assets because 1) to exclude the large cash-balances that are above and beyond what is needed for maintenance working capital levels and 2) Hochschild Mining does not disclose the cash level of the San Jose mine subsidiary so removing all current assets was the next alternative.  NOTE on Silvercorp: Since the development-stage projects, GC & Silvertip, are not in production, I have removed their assigned assets from those listed in the table above.  Also, Silvercorp reports its revenue net of a 17% VAT tax while Minera Santa Cruz SA (San Jose) reports its export duty tax as an operating expense.  To compensate for this I have increased Silvercorp's revenue by 17%.  Lastly, revenue and EBITDA for Silvercorp were taken as 4/3 of the previous 3 qrts (Jun11-Sep10) due to the cyclically low period in Jan.