The number of ASX-listed explorers banking cash in the December 2024 quarter has reached its highest level in two years.
BDO reports in the latest Explorers Quarterly Cash Update that cash raised by explorers in the final quarter of 2024 surged 48% to $2.88 billion compared to the September 2024 quarter.
The advisory firm notes that the December quarter has historically been the strongest fundraising period and 2024 was no exception.
However, the proportion of companies that reported a financing inflow for the quarter climbed to 52%, up from 45% in the September quarter, reaching the highest level since December 2022.
BDO says this trend suggests that funding is becoming increasingly accessible not only to larger explorers and developers, but also to those at the smaller end of the market.
Sherif Andrawes, global leader of natural resources and energy, says the high gold price has been a significant driver for the increased funding in the sector.
“Gold explorers have thrived, benefiting from the global deflationary fiscal policy and political uncertainty,” he says.
Financing inflows averaged $3.78 million per company, which is a 24% bump on the two-year average of $3.05 million since December 2022.
The increase in financing inflows, coupled with a 29% drop in outflows, culminated in a 117% spike in net financing cash flow compared to the September 2024 quarter.
Fifty seven companies raised capital of over $10 million in the final quarter of the year, more than double the 28 recorded in the previous quarter.
Of those that raised capital, 19 were gold companies, nine were copper-gold, four were lithium, three were in the uranium space and three were in oil and gas.
The remaining 19 were spread across 16 different commodities including copper, coal, silver, titanium, graphite, rare earths, nickel, cobalt and gold-silver.
Equity was the main source of capital for explorers, accounting for 80% of the total funds raised.
Companies ranked in the top 10 largest fund raises for the quarter include gold explorers Spartan Resources (ASX:SPR) and Capricorn Metals (ASX:CMM), which respectively banked $220 million and $200 million from equity issues, and lithium explorer Vulcan Energy Resources (ASX:VUL), which raised just shy of $160 million — also from the issue of shares.
At the smaller end of the market, gold explorers Black Cat Syndicate (ASX:BC8) and Meeka Metals (ASX:MEK) raised just over $80 million and nearly $60 million, respectively, from equity issues, while copper-gold play Firefly Metals (ASX:FFM) boosted its bank balance by $73 million.
While investors are injecting more cash into explorers, BDO’s latest Explorers Quarterly Cash Update also shows overall exploration spending for the December quarter remained flat at $792 million.
Although relatively unchanged from the prior quarter, it is a sharp drop from high-spending levels seen in 2023, when explorers spent an average of $933 million per quarter
Andrawes says the mixed result was punctuated by the continued dominance of gold exploration, spurred by high gold prices, while other sectors, particularly lithium and nickel, faced ongoing challenges.
“Exploration activity in the lithium and nickel sectors continued to decline as falling commodity prices dampened investment,” he says.
IPO activity also slowed in the December quarter, largely due to subdued investor appetite for smaller, high-risk exploration companies.
Despite the slowdown, Andrawes says opportunities for high-quality assets, especially in gold and copper-rich mining jurisdictions, persist.
He pointed to the ASX listing of Golden Horse Minerals (ASX:GHM) on 12 December 2024, for which BDO acted as auditor and investigating accountant.
“Looking ahead, gold explorers are expected to remain the most active investors in 2025,” Andrawes notes.
“However, ongoing challenges, such as inflationary pressures, selective access to capital, and geopolitical instability, will continue to shape the sector, driving consolidation and strategic investments aimed at production growth.”
Write to Angela East at Mining.com.au
Images: BDO & iStock
