Explorer Quarterly Cash Update: March 2022

BDO’s latest research into the financial health of Australian-listed explorers for the March quarter of 2022 shows the cash position of ASX listed explorers has slowed following a record high finish to the 2021 calendar year, but explorers remain cashed-up for the future.

The largest decline was observed in the level of financing cash inflows, which decreased by 45 per cent from $3.75 billion in the December 2021 quarter to $2.07 billion in the March 2022 quarter.

Exploration spending across the sector also decreased by 14 per cent to $832 million but this remains higher than historical levels. The number of companies that raised funds of $10 million or more reduced from 71 in the December quarter to 44 this quarter, which is the same as for the September 2021 quarter.

Despite the decline in spend for the quarter, it is still the third highest exploration spend recorded by the sector as a whole since the June quarter of 2014. Sixteen companies that recently completed an IPO lodged an Appendix 5B for the first time in the March 2022 quarter, which is significantly lower than the 40 new companies in the December 2021 quarter and 32 new companies in the September 2021 quarter.

It is the view of BDO that the global transition toward sustainability is a key differentiating factor for exploration companies, and that the companies with strong ESG value propositions will remain ahead of those unable to adapt in the future.