Ten-year anniversary special: Explorer long-term trends preview

Every quarter since June 2013, BDO has tracked and analysed the financial health of ASX-listed explorers – seeking to understand how cash is moving in and out of the sector. The June 2023 quarter marks the ten-year anniversary of our analysis of this data.

Over the course of this ten-year period, we’ve had the privilege of witnessing the sector grow and evolve against the wider backdrop of business cycles, capital market movements, geopolitical events and trends in commodity markets.

To celebrate, and in anticipation of our June report, we are pleased to present a sneak preview of the long-term trends observed from June 2013 to the latest March 2023 quarter.

A look back on our ten years of data highlights that although current economic uncertainty and high interest rates have prompted some explorers to enter cash preservation mode, most are still cashed-up like never before, following a surge of funds into the sector post June 2020.

Other interesting trends observed in the report include:

  • An unprecedented number of IPOs entering the market, with 153 new companies joining from September 2020 to March 2023
  • Exploration spending skyrocketed 125 per cent from September 2020 to December 2021, subsequently exceeding $1 billion in the June and September quarters of 2022 – particularly noteworthy as the sector comprised less companies (750) during this period than others (850 in 2013 and 2015)
  • Funds are flowing into the sector in waves due to volatile market conditions, primarily for more advanced development projects - particularly for battery metals and energy transition commodities
  • The cyclical nature of administration expenditure is highlighted, with spending lower in the March and June quarters of the year and higher in the September and December quarters - possibly due to transaction and adviser fees being incurred in the second half of the year.