June 2017: Q4 – Explorer Quarterly Cash Update

23 September 2017

This edition of the BDO Explorer Quarterly Cash Update reports on the cash position of Australian-listed explorers for the June 2017 quarter, based on quarterly Appendix 5B reports lodged with the ASX.

Financing inflows increased by more than 42% during the June quarter, as investors showed signs of an increased appetite for exploration companies following a turbulent 12 month period for financial markets, which included the fallout from Brexit and the US Presidential election.

Net operating cash outflows increased from $514 million to $717 million in the June 2017 quarter, the highest since the March 2015 quarter. Companies are spending more cash on investing and exploration while managing to keep control of their administration costs which increased by only 11% in the quarter.

Key findings from the June 2017 quarter include:

  • Net investing cash flows more than doubled for the June 2017 quarter, increasing by 103% from a net outflow of $133 million for the March 2017 quarter to $269 million
  • The average cash balance of exploration companies declined marginally by $0.14 million for the quarter, from $5.93 million at 31 March 2017 to $5.79 million at 30 June 2017
  • For the quarter ended 30 June 2017, 696 companies lodged an Appendix 5B report, which was two less than the 698 to lodge in the March 2017 quarter yet six more than the 690 companies that lodged during the December 2016 quarter
  • Total exploration expenditure increased by 11% for the June 2017 quarter from $305 million to $338 million and we saw median exploration expenditure increase by 30% to the highest level since the June 2014 quarter
  • The number of companies that raised in excess of $10 million doubled this quarter, increasing from 15 in the March 2017 quarter to 30 for the June 2017 quarter.