BDO - Global Head of Natural Resources, Sherif Andrawes
Global Head of Natural Resources, Sherif Andrawes
Source: BDO
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  • ASX-listers poured an accumulated $666 million into exploration activities over the June quarter according to a recent BDO report, the highest figure since 2015
  • The report drew attention to an increasing number of explorers making their debut on the ASX, with 678 companies lodging Appendix 5Bs during the period
  • Explorers tapped investors for approximately $2.54 billion during the quarter, with 60 companies raising $10 million or more
  • BDO Global Head of Natural Resources Sherif Andrawes said exploration expenditure showed no signs of slowing down

ASX-listers poured an accumulated $666 million into exploration activities over the June quarter according to a recent BDO report, the highest figure since 2015.

The insight into the sector was compiled in BDO’s quarterly report on the financial health and cash position of Australian-listed explorers during the period.

According to the business advisory firm, spending was spurred by buoyant fundraising, strong commodity prices and increased optimism in the resources sector as COVID-19 woes subsided.

These increased cash outflows, in turn, pushed up the two-year spending average across the sector by 34 per cent.

The report highlighted a sharp increase in the number of companies lodging Appendix 5Bs —a cashflow reporting obligation specific to junior mining companies — jumping from 658 over the March quarter to 678 in the June quarter.

Explorers tapped investors for approximately $2.54 billion during the quarter, with 60 companies raising $10 million or more.

According to BDO, this momentum could hold until the end of the calendar year and potentially spill into the next.

BDO Global Head of Natural Resources Sherif Andrawes said exploration expenditure showed no signs of slowing down.

“The initial concerns around COVID-19 and its impact on the exploration sector have been swiftly mitigated by the prompt sector recovery underpinned by strong commodity prices and favourable financial markets, which in turn have resulted in the sector raising an unprecedented amount of funds to spend on operations.

“If this trend continues the sector may see average exploration expenditure hit record highs by the end of the 2021 calendar year

“Our key observation for the June 2021 quarter is that the financial health of the exploration sector continues to grow from strength to strength, especially now that healthy cash positions have translated to money being invested in the ground.”

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