Gold explorers dominate funding hierarchy

Gold hunters were streets ahead of those targeting other commodities when it came to fundraising efforts by exploration companies on the ASX in the last quarter of 2024. BDO’s latest report on the financial health and cash position of Australian-listed explorers brings mixed news. While funding among those included in the report surged to $2.88 billion - an increase of 48 per cent from the previous quarter - overall exploration spending plateaued at $792 million, BDO’s Explorers Quarterly Cash Update has revealed. BDO global leader of natural resources and energy Sherif Andrawes said 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. "The high gold price has been a significant driver for the increased funding in the sector," he said. "Gold explorers have thrived, benefiting from the global deflationary fiscal policy and political uncertainty. “In contrast, exploration activity in the lithium and nickel sectors continued to decline as falling commodity prices dampened investment." Fifty-seven exploration companies raised $10 million or more - dubbed Fund Finders by BDO - making up 75 per cent of the total funds raised for the quarter. Gold explorers remained the beneficiary of the most funds for the third quarter in a row, led by Spartan Resources and Capricorn Metals. Mr Andrawes said investors’ funds were focused on near-term producers and producers aiming to increase production capacity in the coming years. "2024 was a hallmark year for gold explorers with the commodity raising $2.69 billion, representing the largest yearly Fund Finder per commodity since we began reporting," he said. "This highlights Australia’s position as one of the most attractive and reliable places for goldinvestment globally. "Copper-gold Fund Finders claimed second place on the podium for the December 2024 quarter. The data suggests that investor interests are focused on safer returns from more advanced projects and those offering exposure to commodities aligned with the energy transition and strong gold price." He said total exploration expenditure for the last three months of 2024 remained flat compared to the previous quarter, reflecting a sharp drop from the high-spending levels seen in 2023, when explorers spent an average of $933 million per quarter. Oil, gas, and uranium explorers accounted for four of the five top exploration spenders in the latest quarter. "This reflects shifting global energy dynamics, driven by geopolitical tensions and the ongoing focus on energy transition initiatives," Mr Andrawes said. Meanwhile, IPO activity continued its slowdown, as investor appetite for smaller, high-risk exploration companies remained subdued. Looking ahead, gold explorers were expected to remain the most active investors in 2025, Mr Andrawes said.

Gold explorers dominate funding hierarchy

Industry Queensland

Related News

Quick fire – industry news briefs

Board takes the blame for Callide turmoil

Production hurdles hit South32 Cannington

Get access to breaking mining news, now.