Publication:

Explorer Quarterly Cash Update: March 2018

18 July 2018

BDO’s report on the cash position of Australian-listed explorers for the March 2018 quarter (based on quarterly Appendix 5B reports lodged with the ASX) confirms that the resources sector is continuing its journey to a more settled and sustainable path with positive sentiment remaining strong across the industry.

Despite a 13% decrease in total exploration expenditure for the quarter, it is clear that investor appetite for explorers with sound fundamentals and reasonable valuation levels remains robust. This is evidenced by a 51% increase in net financing cash flows compared to the March 2017 quarter. Topping the list of explorers recording financing cash inflows greater than $10 million were companies with lithium assets, indicating that both debt and equity investors are confident in the growth prospects of the commodity. This is in line with demand for battery applications which is expected to be the driving force behind growth within the lithium industry going forward, led by the development of electric vehicles and underpinned by the use of portable electronics. We have also seen an increase in the appetite for other commodities with battery applications such as graphite and cobalt, which we expect to continue over the coming quarters.

Please view our Explorer Quarterly Cash Update for insights on the cash position of ASX-listed entities as at the March 2018 quarter.