Thanks to the resurgence of the resources industry, the market capitalisation of Western Australian listed companies has nearly doubled in value over the past eight months, according to the Deloitte WA Index released yesterday.
The Index closed at $144.6 billion at the end of September, increasing a further 5% on the August level of $137.7 billion.
Deloitte WA managing partner Keith Jones said the Index had rebounded by nearly 100% from the $72.8 billion value on 31 January.
“The powerful rebound in the value of West Australian entities is reflective of sustained demand for resources, stronger commodity prices and growing market confidence,” Jones said.
“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.”
Bauxite Resources, Sandfire Resources and Arafura Resources increased their market capitalisation by 110.1%, 97.7% and 59.7% respectively.
The significant increase in Bauxite Resources followed a successful $57 million capital raising in September.
The company said the funds will be used to fund infrastructure improvements that will reduce costs and increase shipping tonnages.
Sandfire Resources announced the drilling results for its Doolgunna copper-gold project in September, which confirmed and extended their DeGrussa and Conductor 1 deposits and highlighted a potential new mineralisation zone.
The company also announced it had reached an agreement with Mineral Resources to fund and operate an exploration and development program at its Borroloola project.
Sandfire will receive 30% of future profits before interest and tax.
Arafura Resources’ market capitalisation increased after the East China Mineral Exploration and Development Board was issued with $23 million of ordinary shares to take a 25% holding in the company.
The company said the capital would fund a bankable feasibility study for the Nolan’s rare earths project in the Northern Territory.