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WA Index

Issue 230 | November 2024

Welcome to the 230th edition of the Deloitte WA Index, a monthly review of Western Australian stocks and indices.

 

The aggregate market capitalisation of Western Australian listed companies softened in October, down 2.7% on the back of a reversion of commodity prices from the September rally.

With all eyes on the US presidential election, global indices lost ground with the S&P 500 down 1%, while the FTSE and All Ordinaries finished down 1.5% and 1.4% respectively.

Quarterly reporting season for the WA miners confirmed many existing beliefs in the market, as lithium production reduced at some of WA’s premier lithium operations and gold companies in the index enjoyed the continued rally.

Download the list of WA’s top 100 listed companies, as of 31 October 2024, explore the sections below, and if you do not currently receive our WA Index, please register to be added to our distribution list.

Commodity review

The price of Palladium has seen an increase through October, rising 13% throughout the month on the back of further sanctions on Russian exports; Russia being the supplier of circa 40% of global palladium.

Gold experienced a 4% increase in October as geopolitical tensions and political uncertainty continue to positively influence the gold market. The “safe haven” commodity has had increased demand due to the US election in November and general uncertainty within the market regarding tensions within the Middle East.

Following from a rise in September, Iron Ore was struck with a 7% decline at the end of the month, with steel mills continuing to struggle to operate profitably. In the wake of Chinese stimulus announcements at the end of September, the commodity fell from US$110/t to close the month at $US102/t amid negative speculation of future raw material demands.

October was an overall negative month for the battery material, down 11%. EV sales data continued to perform poorly, with consumers trending towards hybrids as exemplified by BYD’s recent sales data. Producers also continued to react to the dwindling prices throughout the quarterly season – with several WA Index 100 companies cutting production and costs. Spot prices continue to phase out higher cost operators and push further down the cost curve.

The price of Nickel has seen a decrease of 11% in October 2024. Much like iron ore, September’s highs were buoyed by improved expectations of Chinese stimulus that somewhat tapered in October. Nickel demand from batteries also dwindled on the back of bearish data with respect to EV sales. Much like lithium, the nickel market is yet to fully see the flow-through impacts from global curtailed production – with current low prices also hurting higher-cost Indonesian producers.

Performance of WA Index and Global indices

Top 20 performers of the month:

Vault Minerals Ltd (ASX:VAU) market capitalisation increased 22%, spearheaded by its reserve and resource statement and quarterly update. Vault Minerals, the result of the Red 5/Silverlake merger announced updated resources of 12.3moz and reserves of 3.4moz’s. The update was underpinned by improved re-modelling of the Sugar Zone deposit, with the long-life King of the Hills project also seeing increases on the back of reoptimized pit shells. Vault’s quarterly also highlighted a positive performance for Q1, with free cashflow generation of A$35 million.

Westgold Resources Limited (ASX:WGX) saw a 21% increase in its market capitalisation in October. Westgold produced 77koz at an AISC of A$2,422/oz over the quarter. The company also bolstered it’s liquidity through an expansion of it's debt facility to A$300 million.

Genesis Minerals Ltd (ASX:GMD) had an increase of 19% in its market capitalisation. Genesis revealed quarterly results displaying a production of 36koz with an AISC of A$2,628/oz which improved upon the June quarterly figure. Additionally, the Laverton mill was re-started in October impressively ahead of its scheduled March 2025 opening. Genesis expects this to reduce AISC further while increasing production as part of its plan to deliver optimal blends and efficiencies in production through the utilization of two processing plants. 

The Top 100 performers of this month were:

Larvotto Resources Limited (ASX: LRV) has seen a notable increase of 95% in market capitalisation last month. In August 2024, China imposed export controls on antimony, a critical mineral used in electronics and military applications, which led to a spike in antimony prices, positively impacting Larvotto. Additionally, the company released a positive pre-feasibility study for its Hillgrove project in New South Wales – Australia’s largest antimony deposit. Larvotto also secured $4.5 million to fund the Hillgrove project’s development.

Canyon Resources Limited (ASX: CAY) increased 56% in market capitalisation over the month. The company is the owner of the Minim Martap Bauxite Project in Cameroon, recognised as one of the highest grade bauxite deposits for development globally. October saw a rally in bauxite prices on the back of exports from Guinea being suspended, leading to an increase in Canyon’s share price. The company awaits the receipt of sample pulps from it’s most recent drilling campaign, with batches awaiting laboratory results.

Talga Group Limited (ASX: TLG) experienced a 47% growth in market capitalisation during October. The company announced the environmental permit for its Vittangi graphite mine in Sweden had been approved, allowing the project to proceed. This milestone de-risks the project and paves the way for advancing towards production. Additionally, Talga was awarded a grant from the European Union's Innovation Fund worth approximately A$115 million to support the development of its anode refinery in Sweden, enhancing the project's financial viability and aligning with Europe's strategic push for local battery material production. 

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