While the market for public capital raising and exploration spend may look soft for ASX-listed explorers, there are definitely bright spots to point to.

Fresh analysis from BDO Australia has found that ASX-listed explorers raised $908 million for the March quarter, which was an increase of 7 percent on the previous quarter.

While that could be a sign of market appetite picking back up after a rough end to 2018, it does remain below the longer-term two year quarterly average of $1.34 billion.

And while the March quarter was well down on the previous corresponding period, the 34 percent decline between the December 17 quarter and the March 18 quarters is instructive.

The increase in net financing inflows was most noticeable for explorers raising up to $250,000, with the total number of explorers raising up to $250,000 increased from 72 in the December quarter to 89 in the March quarter.

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And while there was an overall decrease in exploration spend during the March quarter, BDO warned against jumping to conclusions on the data.

“There is no doubt that junior explorers in general are finding cash hard to come by and as a consequence are reducing exploration and administration spend,” it said.

“This does not mean that exploration has reduced. In fact the level of exploration occurring actually appears to be healthy. Rather than greenfields exploration, it appears to be more directed to brownfields.

“Relevantly for exploration companies, exploration is increasingly being funded by larger mining companies through farm-in or other equity arrangements. We are seeing exploration companies now being carried through to feasibility or even to production.”


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