Explorer Quarterly Cash Update: September 2023 quarter

Explorer Quarterly Cash Update: September 2023 quarter

BDO’s Natural Resources team analyses the financial health and cash position of ASX-listed exploration companies each quarter to deliver you the latest insights into the sector.

In our latest edition, we examine the resilience of the sector demonstrated in the September 2023 quarter, characterised by a healthy level of fundraising, stable cash balances and an increase in exploration expenditure, specifically in the clean energy transition.

The focus on energy transition resulted in Lithium rising to the podium in our Fund Finders, securing a total of $430 million and becoming the top capital-raised commodity, and consequently surpassing gold for the first time in four quarters.

Key findings for the Natural Resources industry

Our data has ascertained healthy sector activity through overall growth in raised capital, a developing sentiment towards ‘clean energy’ based on our findings by commodity and a moderate appetite for exploration company IPOs as projected from the June 2023 quarter.

We predict further M&A and joint venture activity will arise as small players may seek to consolidate with larger players due to their ability to access capital markets. Moreover, as the demand for lithium continues for years to come, it presents a significant area of opportunity for explorers to implement and practice their commitment to Environmental, Social, and Governance (‘ESG’) standards in order to secure funding.