Exploration spend up 13 per cent: BDO

Exploration spending among ASX-listed resources juniors increased about 13 per cent in the December quarter, the third consecutive uptick, according to recent research by professional services firm BDO.

Across the 690 listed entities that filed quarterly exploration reports, spending on searching for new deposits rose from an average of $450,000 in the three months to September to about $510,000 in the December quarter.

That comes after two years of sustained decreases, BDO said, with that trend now definitely in reverse.

BDO national resources lead Sherif Andrawes said median expenditure had also increased, by around 23 per cent.

That meant that the uplift in exploration spending was widespread and not just at the larger end of the market, he said.

“The increase in funds committed to exploration and estimated future expenditure illustrates the positive market sentiment for junior explorers, which was first identified in the June 2016 quarter,” Mr Andrawes said.

The number of companies lodging exploration reports was down, however, from 698 to 690.

In June 2013, it had been more than 860, BDO said.

The report also found that 20.6 per cent of the companies had a cash burn rate that would use up their reserves within a quarter.

That was slightly down from 21.1 per cent in September.