Drilling down but not out

Posted December 21, 2015

Surface drill rigs

Mineral exploration in Australia is down but probably not as much as conditions would suggest.

Around 13 per cent of ASX-listed explorers failed to put a drill bit in the ground in the September quarter. That was up on the June quarter survey which was also conducted by audit, tax and advisory firm BDO.

The figures were in the company’s Explorer Quarterly Cash Update .

The report shows both a marginal decrease in the number of companies reporting and a stable median level of exploration expenditure.

Key findings were:

  • 778 companies lodged Appendix 5B reports, indicating a decrease of less than 1 per cent 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 per cent 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.

The full report is available at http://www.bdo.com.au/__data/assets/pdf_file/0020/163127/1512-Q1-Explorers-Quarterly-Cash-Update.pdf

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