Explorer Quarterly Cash Update: January-March 2014

30 June 2014

Bruce Gordon |

Research into the financial health of Australian-listed explorers | Mixed news for junior explorers

For the past year, BDO has undertaken quarterly research into the cash position of Australian-listed explorers. 

Our mixed findings for the March 2014 quarter reveal that:

  • 58% of explorers have sufficient cash to cover more than two quarters' net operating expenditure (an increase from 54% recorded in the December quarter)
  • 76% (74% in the December quarter) have sufficient cash to maintain administrative expenditure for more than two quarters 
  • 94% of companies that had two quarters of cash to fund net operating expenditure in the December quarter, still only have two quarters of available cash this quarter
  • 10% of explorers maintained their cash position by not undertaking any exploration (an increase from 9% in the December quarter).

Our analysis of the March 2014 quarter, combined with our research findings from the December, September and June 2013 quarters, provides the following key insights:

  • An increasing number of explorers have ceased exploration in order to survive
  • Despite low cash positions, the majority of explorers have managed to continue operations
  • Some entities have successfully raised additional capital, primarily sourced from existing shareholders.

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