Exploration spending reaches fresh seven-year highs

Exploration expenditure soared to new heights in the September quarter, surpassing the lofty spending levels of the June quarter.  According to business advisory firm BDO, a total of $877 million was spent on exploration in the September quarter, while a record-breaking $2.55 billion was raised across the same timeframe.

More and more explorers were active on the ASX, with 704 companies lodging appendix 5Bs (exploration quarterly cash flow reports) across the three months – 62 more than the September quarter of 2020.  BDO global head of natural resources Sherif Andrawes believes an exploration boom could be among us, with many explorers exhibiting strong balance sheets to boot.

“With the increased number of new entrants over recent periods, the exploration sector is showing no signs of slowing,” he said.

88 per cent of explorers reported cash balances of more than $1 million in the September quarter.  Battery minerals explorers played a significant role in the exploration uptick, harnessing the growing appetite for electric vehicle adoption and the larger decarbonisation movement.  Furthermore, Andrawes believes those committed to understanding and honing their environmental, social and governance (ESG) standards are getting runs on the board.

With more exploration companies on the ASX and more boasting strong cash balances, there’s enough evidence to suggest the exploration boom will continue.


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