Explorer Quarterly Cash Update: Signs of light at the end of the tunnel, is this the start of a slow improvement?

18 December 2015

Adam Myers, Partner, Corporate Finance |

This edition of the BDO Explorer Quarterly Cash Update is the ninth edition in our research series.

BDO’s report of the cash position of Australian-listed explorers for the September 2015 quarter (based on quarterly Appendix 5B reports lodged with the ASX), shows a marginal decrease in the number of companies reporting and a stable median level of exploration expenditure.

This proportion of exploration companies with positive financing cash flows has come off slightly in the September quarter with approximately 44% of exploration companies generating net financing inflows, well up on historical averages.

Key findings of the quarterly update include:

  • 778 companies lodged Appendix 5B reports, indicating a decrease of less than 1% from the June 2015 quarter where 780 companies lodged reports
  • There has been a significant increase in the number of explorers with positive financing cash flows over the last two quarters, with approximately 44% of the companies being able to raise funds either via the capital raising route or through borrowings
  • 106 companies which did not conduct any exploration activity, an increase from 96 in the June quarter
  • Of the companies which incurred exploration expenditure there has been a decline in the number of companies which incurred less than $300,000 of exploration expenditure from 429 in June to 405 in September, indicating that the smaller end of the market preferred cash preservation over small amounts of exploration expenditure.

Please view our Explorer Quarterly Cash Update for insights on the cash position of ASX-listed entities as at the September 2015 quarter.