WA mining index doubles since January

The market capitalisation of Western Australian listed companies featured in the Deloitte WA Index closed at $144.6b for September, increasing a further 5 per cent for the month.
Keith Jones, managing partner of Deloitte in Western Australia said, “The powerful rebound in the value of West Australian entities is reflective of sustained demand for resources, stronger commodity prices and growing market confidence.”
“The market rebound has been underpinned by demand from China for resources and investment opportunities, with many companies capitalising on the improved sentiment by raising new capital to advance projects.”
Movers and shakers during August within the Deloitte WA Index included Bauxite Resources Limited, Sandfire Resources NL and Arafura Resources Limited, with the market capitalisation of each increasing by 110.1 per cent, 97.7 per cent and 59.7 per cent, respectively.
The significant increase in Bauxite Resources followed a successful $57 million capital raising during the month. Funds raised are intended to be used for fund infrastructure enhancement with an aim to reduce costs and increase shipping tonnages.
During September, Sandfire Resource announced the drilling results of its Doolgunna Copper-Gold Project, which confirmed and extended their DeGrussa and Conductor 1 deposits, and highlighted a potential new zone of copper-gold mineralisation.
Sandfire also announced it had reached an agreement with Mineral Resources, through which it will fund and operate an exploration and development program at Sandfire’s Borroloola project. Sandfire will receive 30 per cent of future profits before interest and tax.
Arafura Resources’ market capitalisation has increased during the month following the issue of $23 million of ordinary shares to the East China Mineral Exploration and Development Board, who now have an approximate 25 per cent holding in the company. This capital will used by Arafura to progress with the Bankable Feasibility Study for the Nolan’s Rare Earths Project in the Northern Territory.
The major world indices have predominantly continued with positive growth through September. Both the FTSE and Australian All Ordinaries increased by 5.1 per cent, with the US S&P, increasing 3.1 per cent. The Nikkei fell 3.4 per cent over the same period.
The month has seen improved market sentiment for most base metals. Gold has also gained ground based on some strong economic data and a weaker US dollar.
Silver, tin and lead were up 13.8 per cent, 8.9 per cent and 7.9 per cent, respectively with gold, zinc, platinum and paladium up by 5.7 per cent, 4.7 per cent, 4.5 per cent and 2.3 per cent, respectively. Oil, copper and nickel, have all fallen, with respective declines of 2.9 per cent, 4.9 per cent and 6.6 per cent, while uranium recorded a more significant decrease of 9.6 per cent.