Australian-listed explorers raised a bolstered $3.02 billion during the December quarter after lithium and gold topped the charts for the most funds secured.
Australian-listed explorers raised a bolstered $3.02 billion during the December quarter after lithium and gold topped the charts for the most funds secured.
Latest research from business advisory firm BDO revealed Australian explorers raised the second largest amount of funds since the start of the analysis in 2013.
The report also revealed an 8 per cent drop in exploration expenditure to $933 million, down from $1.04 billion in the September period.
“This quarter we saw a stark 66 per cent increase from the $1.82 billion raised in the September quarter 2022,” BDO natural resources global head Sherif Andrawes said.
“This return of strong financing inflows indicates that funds are still flowing readily into the sector and suggests that the dip in the last quarter was merely a temporary tightening of capital markets due to global economic uncertainty.”
The report’s statistics are based off BDO analysis of 51 companies which raised more than $10 million for the quarter, known as “fund finders”.
Gold fund finders attracted the highest amount of funds during the quarter, raising $379.68 million after inflationary pressures, geopolitical uncertainty and market volatility drove demand, BDO said.
Rare earth metals were a close second to gold after raising $369.5 million during the quarter, followed by lithium attracting $343.5 and coal securing $282.9 million.
WA-based gold miner De Grey Mining was amongst the top ten fund raisers for the quarter, after securing $149.05 million in proceeds.
Perth-based rare earths explorer Hastings Technology Metals raised a total $191.4 million during the period.
WA companies Global Lithium Resources and Bellevue Gold also made the top ten list.
For the 2022 calendar year, lithium hopefuls topped the charts after raising $1.2 billion, making it the leading commodity for a second consecutive year.
Mr Andrawes said other energy transition metals such as rare earths, graphite, cobalt, uranium and nickel were prominent in capital raisings in 2022.
He said they were supported by favourable investor sentiment and supply concerns.
“We see gold, lithium and rare earth metals as the commodities of the moment, and we expect this trend to continue into 2023 and beyond,” Mr Andrawes said.
“ASX listed explorers are well placed to take advantage of the focus in each of these three commodity groups over the coming quarters.”
Mr Andrawes said a vast supply of minerals was needed to meet net zero commitments for the energy transition.
“The mines that are required to supply those minerals are not currently in existence, so there is an acute need for exploration for new sources and for the expansion of existing sources of these minerals,” he said.
“Once again ASX listed explorers can expect to be at the forefront of receiving the investment to meet this demand, and to then spend those funds on exploration.
“We expect this to be the case for an extended period given the quantum of the demand and the expected shortfall.”
Coal fund finders experienced significant growth after attracting a record $519.8 million for 2022 calendar year.
“The Russia-Ukraine induced global energy crisis has led to higher natural gas prices for most of CY22 and has led to an increased reliance on coal for power generation,” BDO report said.
Oil and gas players surveyed raised $611.9 million for CY22, up from $477.5 million in 2021.
“This is likely a function of higher natural gas prices spurring additional investment as well as an evolving market sentiment which has positioned oil and gas as a vital sector to the energy transition,” BDO said.
Since 2016, there has been an increasing trend in exploration spending including the favourable capital raising conditions in late 2020.
The $933 million spent during the December quarter represents a drop from the June and September quarters but maintains the overall trend in increased spending in exploration activities.
De Grey, which has spent more than any other surveyed exploration company for the past four years, spent $15.7 million during the quarter.
But the company was overtaken by Sydney-based oil and gas producer Empire Energy Group, which raised $19 million in the same period.
The December quarter saw 10 exploration companies complete initial public offerings, including Perth-based Patriot Lithium and Moab Minerals.
Out of the 10 newly listed companies, 6 were related to clean energy minerals such as lithium, uranium, hydrogen and rare earths.