Explorer Quarterly Cash Update: December 2018

29 March 2019

BDO’s report on the cash position of Australian-listed explorers for the December 2018 quarter (based on quarterly Appendix 5B reports lodged with the ASX) provides mixed signals with the highlight being exploration expenditure for the quarter reaching the second highest level since the December quarter of 2014. This was contrasted with the 28% decline in financing cash inflows, but this is not uncommon for the December quarter.

The continuation of high exploration expenditure reflects the favourable economic and market conditions in recent years which supported Australian-listed explorers. The strength of exploration was reinforced by the Australian Bureau of Statistics (‘ABS’) data which reported total metres drilled by exploration companies increased by 0.8% for the December 2018 quarter. Interestingly, this was 16.5% higher than the December quarter in 2017.

The December 2018 quarter was characterised by the continuation of high share market volatility caused by concerns surrounding the impact of global trade tensions and rising interest rates on economic growth. 

Key findings for the quarter include:

  • Second highest exploration expenditure recorded since the December quarter of 2014
  • Five IPO’s, with gold being the flavour of the quarter
  • Financing inflows declined by 28% to $848 million, down from $1.17 billion in the September quarter.

For more information, please contact Sherif Andrawes, Global Natural Resources Leader or Adam Myers, Partner Corporate Finance