Exploration expenditure falls in March quarter

Exploration expenditure took a hit during the March 2024 quarter, according to BDO’s recent explorers quarterly cash update.

Financing cash inflows fell to $1.62 billion during the quarter – a two-year low – down 39 per cent from the previous quarter.

BDO Global Head of Natural Resources Sherif Andrawes said this was due to a variety of factors.

“The recent volatility in financing cash flows stems from the adverse reaction of capital markets to interest rate rises, which have been in play since 2022,” he said.

“This is likely to have been compounded by elevated inflation and uncertainty stemming from other macroeconomic and geopolitical events.

“However despite wider macroeconomic factors, we also highlight a season trend that has been apparent since the March 2015 quarter – in that capital raises tend to be lower in March quarters.”

During the period, 38 companies raised more than $10 million, down from 43 during December 2023, with uranium companies accounting for 27 per cent of the $1.21 billion raised.

“As Australia navigates its stance on nuclear energy, the international demand for uranium paints a dynamic outlook for the industry’s future, with nuclear seeming to have an important role as a portfolio energy source in the energy transition," Mr Andrawes said.

Last month, US president Joe Biden signed the Prohibiting Russian Uranium Imports Act – a policy which has the potential to provide benefits for Australian companies with North American-based uranium assets.

The US is the largest global consumer of the commodity, despite only producing 50,000 pounds of uranium domestically last year.

Since 2017, uranium mining has been banned in Western Australia, however opposition leader Libby Mettam has publicly said the Liberal Party WA would abolish the ban should they win the 2025 state election.

The present uranium spot price is $US85.70 per pound, after reaching a high of $US106.25 per pound on January 29.