WA Index continues downward trend in June

Despite recent declines, the Index increase by 18.8 per cent or $22.5 billion for the year ended June 30th, 2010.
“The demand for commodities has been subdued in the past month with concerns over China’s economic growth, Europe’s sovereign debt issues and investors evaluating the possible effects of RSPT in Australia,” said Keith Jones, managing partner for Deloitte Western Australia.
The market price of all commodities surveyed declined in June, with zinc down by 7.61 per cent followed by nickel (7.51 per cent), copper (6.18 per cent) and lead (5.37 per cent).
The fall in commodity prices was largely driven by disappointing economic information released during the month which raised fears that the global economic recovery may be faltering. In contrast, the price of gold increased by 2.13 per cent over the month.
All major world indices declined during the month of June. The FTSE 100 suffered the most, down 4.7 per cent, closely followed by the US S&P 500, which fell by 4.2 per cent and the Nikkei, down 4.0 per cent. The decline in Australian companies was comparatively modest, with the All Ordinaries falling by 2.9 per cent.
The ‘movers and shakers’ for the month of June included Avoca Resources Limited, Coalspur Mines Limited and Perseus Mining Limited, with the market capitalisation of each company increasing by 33.0 per cent, 28.2 per cent and 28.1 per cent respectively.
The market capitalisation of Avoca Resources Limited jumped by $197.4 million in June to close at $794.8 million. This increase follows the announcement of an upgrade to the ore resource (to 1.57 million ounces) and ore reserve (to 803,000 ounces) at Avoca’s Higginsville Gold Project. This represented a reserve increase of 38 per cent and a resource increase of 5 per cent from the previously published pre-mined reserve results.
Coalspur Mines Limited recorded a $66.8 million increase in market capitalisation to finish the financial year at $303.9 million. This followed the acquisition of new coal leases neighbouring Coalspur’s existing Hinton Coal Project. The acquisition has the potential to be developed into one of the largest thermal coal mines in North America and has increased Coalspur’s combined coal resource to over 900 million tonnes of low sulphur thermal coal.
The market capitalisation of Perseus Mining Limited increased by $210.8 million, and closed at $960.0 million for the month of June. The increase was driven by an announcement of the commencement of site works at the Central Ashanti Gold Project in Ghana, signalling the beginning of mine construction and moving a step closer to production.