WA stocks decline to lowest point since August 2009

Managing partner of Deloitte in Western Australia, Keith Jones, said during the month the Index had fallen to its lowest level since August 2009.
“The Western Australian market has been unsettled by the combined impacts of the instability in Europe, the uncertainty caused by the proposed Resource Super Profits Tax (RSPT) in Australia and declining commodity prices during the month,” Jones said. All of the major world indices decreased during May. However, the Deloitte WA Index which is underpinned by mining companies suffered the largest fall. The Nikkei was next, with an 11.7 per cent decrease, followed by the US S&P 500, the All Ordinaries and the FTSE 100, decreasing by 9.7 per cent, 7.9 per cent and 7.7 per cent respectively.
The “movers and shakers” within the Deloitte WA Index for May were Silver Lake Resources Limited, Aurora Oil & Gas Limited and CGA Mining Limited having increases in market capitalisation of 17.6 per cent, 16.4 per cent and 13.5 per cent respectively.
Silver Lake Resources Limited increased its market capitalisation by $38.5 million, following news that the company had produced its first 100,000 ounces of gold bullion from its Mount Monger Operations. This was 11 months ahead of the original three year time line the company flagged when production commenced in April 2008.
Aurora Oil & Gas Limited increased its market capitalisation by $23.3 million during May. This followed news that several of the wells within the Sugarloaf Area of Mutual Interest (AMI) in Texas, in which Aurora hold a 20 per cent interest, entered production during the month. In addition, a well within the Sugarloaf AMI and one within the Longhorn AMI, in which Aurora hold a 50 per cent interest, have commenced stimulation operations which is a precursor to full stage production.
CGA Mining Limited increased its market capitalisation by $102.7 million on the back of news of a record processing rate at its Masbate Gold Project, achieving a throughput in excess of 20,000 dry tonnes over a 24 hour period. This indicates a potential annual equivalent of 7mtpa, which nearly doubles the initial plant design throughput estimate of 4mtpa. During the month, CGA also announced to the market that it would not be impacted by the government’s resource tax as all of CGA’s assets are offshore.
The commodities market slumped during May, the largest fall being in nickel with an 18.9 per cent decrease during the month. This fall was driven by continuing concern over Europe’s fiscal crisis and the uncertainty surrounding China’s property market. Double digit declines were also recorded for lead (17.2 per cent), zinc (15.5 per cent), palladium (14.5 per cent), oil (13.6 per cent) and platinum (10.1 per cent). Aluminium and copper also fell substantially by 9.5 per cent and 6.6 per cent respectively. Gold managed an increase of 3.14 per cent for the month.