Publication:

Explorer Quarterly Cash Update: March 2017

29 June 2017

Sherif Andrawes , Global Leader, Natural Resources
Partner, Corporate Finance
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This edition of the BDO Explorer Quarterly Cash Update reports on the cash position of Australian-listed explorers for the March 2017 quarter, based on quarterly Appendix 5B reports lodged with the ASX.

A resurgence in the number of initial public offerings (IPOs) and backdoor listings led the recovery of the cash position of Australian-listed explorers for the March 2017 quarter.
Market sentiment continues to improve with average estimated cash outflows for the June 2017 quarter increasing for a fourth consecutive quarter, up $579 million from 12 months ago.

Key findings from the March 2017 quarter include:

  • Total exploration expenditure fell from $354 million for the December 2016 quarter to $305 million for the March 2017 quarter. This is despite an increase in the number of companies lodging Appendix 5Bs, with average exploration expenditure falling from $0.51 million to $0.44 million.
  • The proportion of companies with two quarters or less of cash reserves, based on current operating expenses, decreased from 38% for the December 2016 quarter to 31% for the March 2017 quarter.
  • Total administration expenditure decreased in line with exploration expenditure, from $213 million for the December 2016 quarter to $175 million for the March 2017 quarter.
  • There has been a broad recovery in the resources sector evidenced by a 13% increase in exploration expenditure from $267 million for the March 2016 quarter to $305 million for the March 2017 quarter.
  • During the quarter, there were 19 companies that reported exploration expenditure in excess of $2.5 million, dominated by gold, oil and gas and potash explorers.
  • We have seen a resurgence in resource sector IPOs with nine in the quarter compared to six in the previous quarter and three in the one quarter before that.
  • The number of companies lodging an Appendix 5B for the March 2017 quarter (698, 8 more than in the December 2016 quarter) is the first increase we have seen since September 2013, when a total of 865 companies lodged an Appendix 5B

Please view our Explorer Quarterly Cash Update for insights on the cash position of ASX-listed entities as at the March 2017 quarter.