Resource stocks dominated the top-performing Western Australian companies over the five years to June with all but two of the top 10 involved in oil and gas, or base and precious metals production.
Escalating minerals and oil prices have translated into positive market and investor sentiment and increased confidence in the resource sector.
The two exceptions in the five-year TSR are tissue engineering company Clinical Cell Culture, or C3 as it is known, and industrial company Schaffer Corporation.
C3 has delivered a consistently strong performance over the past five years with 56.1 per cent, boosted by a 12-month TSR increase of 168.4 per cent. C3 also features in the TSR top three-year returns (up 144.2 per cent).
Schaffer Corporation, through its two core operating divisions of leather and building products, has had a more modest 12-month TSR increase of 22.5 per cent. Its three-year TSR increase 61.9 per cent also contributed to a respectable five-year TSR increase of 54.9 per cent.
However, the resources sector – particularly in oil and gas, nickel and gold – was the sector that collectively delivered the highest TSR over five years.
Hardman Resources topped the list with a 112.4 per cent TSR over five years and a 273.4 per cent increase in TSR in the past 12 months. Hardman delivered a 27.7 per cent increase in TSR over the past three years.
Hardman’s strategy, put in place in the mid 1990s, was to secure acreage in under-explored but highly prospective regions, has started to reap rewards for shareholders.
The company is now an international oil player in seven countries including projects in Australia, West Africa, New Zealand, the Falkland Islands and the Timor Sea.
Following a capital raising earlier this year of $A167.8 million, Hardman is now well positioned to capitalise on development of the Chinguetti oil field in Mauritania in West Africa.
Interests in Chinguetti, Tiof and Banda Fields in Mauritania provide Hardman with a substantial proven and probable (2P) reserve base.
Further, Hardman has interests in Production Sharing Contracts (PSCs) in eight offshore blocks in Mauritania.
The recent sale of some assets has also improved the cash position of the company.
Hardman’s Perth Basin assets were sold to ARC Energy for $7.6 million and the company also sold a partial interest in PSC A and PSC B in Mauritania to BG Group for $US132 million. The company had acquired the PSC assets for $US33 million.
The next highest five-year TSR was achieved by Mincor Resources with 77.7 per cent and Jubilee Mines with 70.3 per cent, both of which have risen on the back of the nickel boom.
Mincor’s core assets are its mines and tenement holdings in the Kambalda nickel district, which it purchased from WMC Resources.
Mincor has also recently given the go ahead for two other mine developments (Redross and Mariners) in the region.
Originally founded as a gold miner, Jubilee expanded its operations to base metals in 1997 and almost immediately discovered the Cosmos nickel sulphide ore body.
In April 2000 Jubilee commissioned the Cosmos Nickel Project – a new, low-cost nickel mining and processing operation located in the State’s Kathleen Valley area.
In its first two years of production, the Cosmos nickel project generated sales revenue of $A251 million, with operating profit of $A77 million and net profit after provision for tax of $A47 million.
Jubilee has also reactivated its gold exploration on its Kathleen Valley project where it has obtained encouraging results at Mossbecker and Main Rd Pit.
Gold and base metals miners Troy Resources (up 65.8 per cent over five years), Northern Gold (up 59.7 per cent over five years), Hampton Hill Mining (up 53.4 per cent over five years) and Equigold (up 53 per cent over five years) have also been the bearer of good tidings to shareholders.
Another star performer over the past 12 months was base and precious metals miner Anvil Mining, which was up 55.2 per cent in the five years, achieving a TSR of 246.2 per cent in the past 12 months and 120.5 per cent during the past three years.
5-YEAR RETURNS
- Hardman Resources: 112.4%
- Mincor Resources: 77.7%
- Jubilee Mines 70.3%
- Troy Resources: 65.8%
- Northern Gold: 59.7%
- Clinical Cell Culture: 56.1%
- Anvil Mining: 55.2%
- Schaffer Corporation: 54.9%
- Hampton Hill Mining: 53.4%
- Equigold: 53%
