Explorer Quarterly Cash Update: December 2014

04 March 2015

Bruce Gordon |

Research into the financial health of Australian-listed Explorers confirm declining commodity prices accentuate the funding squeeze

This edition of the BDO Explorer Quarterly Cash Update is the sixth iteration of our research series, which since September 2013 has examined the cash position of Australian-listed mining, oil and gas explorers, based on quarterly Appendix 5B reports lodged with the ASX.

Our analysis of the December 2014 quarter cash position of Australian-listed explorers, confirms that an increasing number of junior explorers are undercapitalised and have insufficient cash reserves to continue operating effectively for any extended period of time.

Key findings from the December 2014 quarter include:

  • The 814 Appendix 5B reports lodged for the December quarter eclipses the previous low of 831 reports lodged in the September 2014 quarter
  • The number of companies with cash available to continue operational spending at current rates for more than two quarters has fallen from 56% in September to 53% in December
  • One in nine explorers undertook no exploration in the December quarter
  • 46% of companies had positive net financing cash flows
  • Only 37% of companies had a net investment in capital expenditure.

Please view our Explorer Quarterly Cash Update for insights on the cash position of ASX-listed entities as at the December 2014 quarter.