Australian minerals explorers have raised the most cash in nearly a decade as investors rush into gold as well as lithium and copper explorers expected to boom in the global energy transition, a report by advisor BDO showed on Tuesday.
The quarterly report showed that Australian-listed explorers raised A$2.37-billion in the March 2021 quarter, the most since BDO started the series in 2013, and almost double March 2020 when global Covid-19 shutdowns first hit.
"There's no doubt about where the money's going and why it's going there," Sherif Andrawes, BDO's Head of Global Natural Resources, said.
The flood of funding toward battery minerals and clean energy companies is in line with growing environment, social and governance (ESG) initiatives including rising electric vehicle adoption and lower carbon emission targets, he said.
Among companies that raised more than $10-million over the quarter were ten gold companies, nine lithium companies, four uranium companies, four rare earth metals companies and four graphite companies.
The remaining companies covered 14 different sectors, most notably copper-gold, copper and oil and gas, BDO said.
Gold companies have featured strongly given the record run in prices since the onset of the pandemic, but momentum in terms of capital raisings has eased, suggesting gold explorers are well capitalised, Andrawes said.
Explorers are drawn from ASX filings of preproducing companies who fund their working capital from equity raisings.
The interest in lithium explorers comes as Australia develops its own lithium processing industry, which will need to find new local supply, Andrawes said.
However, the three biggest lithium raisings were all for projects offshore, showing that Australian skills and investors are playing a major role in overseas project development.
Piedmont Lithium and ioneer are developing projects in the US; in north Carolina and Nevada respectively.
Vulcan Energy Resources is developing a project to extract lithium from geothermal energy in Germany.