PERTH (miningweekly.com) – Australian ASX-listed explorers raised some A$2-billion in financing during the September quarter, new data from accounting firm BDO has shown.

In its Explorer Quarterly Cash Update, BDO noted that the cash position of ASX-listed explorers was the strongest since June 2013, with access to funding peaking to a two-year high, with total financing inflows reaching A$2.02-billion in the September quarter, a 51% increase from the June report.

These figures signify a dramatic 142% surge since the four-year low of A$834-million recorded in March this year.

The number of companies raising funds of A$10-million or more increased from 28 companies in the June quarter to 46 companies this quarter, exceeding the two-year average prior to the June 2020 quarter of 24 companies, BDO noted.

The accounting firm noted that exploration companies were yet to pull the trigger on spending, with growth in the sector not translating into expenditure. This was due to prevailing economic uncertainty, travel restrictions and limited supply of drilling and other exploration support services in the sector.

Total exploration expenditure increased by 10% in the September 2020 quarter, from A$391-million in the June 2020 quarter to A$431-million in the September 2020 quarter. Average exploration expenditure for exploration companies increased from A$0.60-million for the June quarter to A$0.67-million for the September quarter.

BDO noted that in the last two quarters, and potentially in the current December 2020 quarter, companies are focused on capitalising on the current opportunity in equity markets to strengthen their cash position in preparation for future operations.

“We note from many quarterly activities reports that exploration programmes and accelerated drilling plans are currently underway, and as long as supply of such services can keep up with current demand, we should see a large spike in exploration spending in the next two quarters,” BDO stated.

The report states that 95% of funds raised were through equity raisings and only 5% through debt, with the average generally being a percentage split of around 70% and 30%.

Gold continued to dominate the category, with oil and gas appearing to have fallen out of favour with only 3% of funds raised.

Significantly, the growing level of initial public offering activity in the sector, reflective of BDO’s own pipeline, was a key highlight of the quarter with an expected increase in activity over the coming year.

“With an unprecedented cash position, the September quarter can be considered a hallmark for the exploration sector. The data in the September 2020, Explorer Quarterly Cash Update, clearly demonstrates there is money to be raised and explorers know it,” BDO said this week.