JOHANNESBURG (miningweekly.com) – The market capitalisation of Western Australia-listed companies increased by 3.3% to A$173.1-billion in November, driven by greater interest in the battery technology space and progress of a number of lithium explorers towards production.
“We have seen a number of potential customers come out of the woodwork showing an interest in Western Australian lithium, with several memoranda of understanding (MoUs) and agreements being announced to the market. This has been met with support from investors, who see the Western Australia region contributing strongly to swelling global demand over the next few years,” says Deloitte clients and markets partner Tim Richards.
Among the major index players in November were Pilbara Minerals, which saw its market capitalisation increase by 22.9% to A$321.1-million and Galaxy Resources which finished the month 19.2% higher at A$251-million.
Pilbara has signed a preliminary MoU with Polaris Shipping and LG Chem, starting discussions for a lithium chemical conversion joint venture. In addition, telecommunications and content solutions provider Swift Networks Group announced new major contracts with three lithium producers, including Pilbara, as the mine upgrades entertainment and connectivity services on site, further reassuring investors of the expected production years ahead.
At Galaxy, a series of binding long-term offtake agreements announced at the end of November brought investors rushing back to the stock after a short drop in price in the middle of the month as investors worried about overpricing. A minimum of 200 000 t/y offtake of lithium concentrate was agreed upon, starting in 2018.
Saracen Minerals Holdings experienced a variable month, with a month-end market capitalisation of A$1.07-million, 13.1% higher than the beginning of the month. The company’s share price took a sharp dive at the start of November, as investors became concerned the company’s price had peaked. Market reaction to results of a drill programme at the Pinnacles gold project was initially slow, but the price climbed throughout the remainder of the month, with a final boost following positive drill results from their Whirling Dervish ore reserve.
Deloitte says its top ‘movers and shakers’ in November included Millennium Minerals, among others. The company’s share price skyrocketed in November, with its market capitalisation finishing 14.8% higher than the start of the month at A$149-million. The increase follows encouraging results from exploration at Millennium’s Nullagine site, with a new discovery of high-grade mineralisation at Yates and visible gold indicating development for Bartons Underground on target for March 2018.