Gold is glowing and critical minerals are warming up as cash returns to the ground in a cautious comeback for Aussie exploration companies

After a shaky start to 2025, the Australian exploration sector appears to be tentatively turning a corner. The latest Explorer Quarterly Cash Update from BDO reveals an industry reawakening, with exploration spend on the rise and financing activity gaining pace - led once again by the enduring strength of gold and the growing appeal of energy-transition commodities.

“This quarter’s performance offers cautious optimism,” said Sherif Andrawes, BDO’s global natural resources and energy leader. “We’re seeing a rebound from the subdued March quarter, with financing inflows rising 20 percent to $1.93 billion and exploration expenditure climbing 13 percent to $728.97 million”.

While the headlines suggest green shoots, the recovery is uneven. Cash remains king, and the divide between well-capitalised developers and capital-constrained juniors is widening. But for the explorers with a compelling story—and increasingly, a critical minerals angle—investor appetite is slowly returning.

Financing bounces back

BDO’s analysis shows a broad-based lift in capital raising across the sector, with a total of 42 companies securing more than $10 million each—up from 26 in the previous quarter. Gold explorers once again led the pack, accounting for the lion’s share of funds raised. Copper-gold plays held second place, while oil and gas made a notable return to the podium, reflecting both energy market dynamics and the ongoing demand for ‘transition fuel’.

“Equity remains the dominant source of capital, comprising 83 percent of total funds raised,” Sherif explained. “Debt financing continues to be a challenge in the current interest rate environment”.

Among the standout raisings were:

• Minerals 260 Limited, which raised $219.67 million to fund the acquisition and development of the Bullabulling Gold Project

• Bellevue Gold, which secured $156.46 million through an institutional placement to eliminate hedges and bolster working capital

• Firefly Metals, raising $70.16 million via a multi-part equity placement including a flow-through structure targeting Canadian investors

These top 10 "Fund Finders" alone accounted for nearly 70 percent of all capital raised in the quarter. The trend reflects a market rewarding advanced-stage projects, near-term production potential, and companies with strong institutional backing.

Exploration spend climbs

The sector’s willingness to put capital to work also lifted notably. Total exploration spend jumped to $728.97 million, marking the first quarterly increase since December 2023.

“The average spend per explorer rose to $980,000, up from a multi-year low of $860,000 in March,” said Sherif. “This suggests that explorers are beginning to deploy capital more confidently”.

While still below the $1 billion highs of 2022–23, the uptick breaks a persistent four-quarter downtrend and points to renewed boots-on-ground activity. Significantly, there was a marked increase in the number of companies spending over $2 million on exploration, and a corresponding decline in those reporting nil or minimal spend.

Gold once again dominated, both in terms of number of spenders and absolute dollars, but copper-gold, graphite, uranium and rare earths also made strong showings in the top 20 exploration spenders, pointing to a broader pivot back to field activity across a range of commodities.

Cash reserves still falling

Despite the rise in fundraising, cash balances continued to drift lower. Average cash holdings fell seven percent to $9.13 million—down for the fourth consecutive quarter.

“This reflects the lag between raising funds and deploying them, as well as ongoing cost pressures,” said Sherif. “Still, over half of explorers hold more than $2 million in cash, indicating that many remain well-positioned to pursue near-term programmes”.

The data reveals a bifurcation in the sector: while well-funded explorers press ahead, many juniors continue to struggle. Nearly 30 percent of companies now report less than $1 million in cash, raising concerns about funding gaps heading into the back half of the year.

For some, the clock is ticking. Treasury discipline remains front-of-mind, and many management teams are choosing to raise now—even at discounted valuations—rather than risk being caught short.

Energy transition and the role of traditional fuels

While gold remains the path of least resistance for capital, the June quarter saw renewed attention on energy-transition commodities. Copper-gold plays continue to attract capital for their dual exposure to gold price upside and copper’s critical role in electrification.

Graphite, too, saw action, with Sovereign Metals Limited landing a top 10 raise of $39.94 million to advance its Kasiya graphite project. Interestingly, tungsten made a reappearance, with two explorers making the Fund Finders list for the first time since March 2024—a sign that investors are still seeking diversified critical mineral exposure.

At the same time, traditional fuels haven’t fallen away. Oil and gas explorers accounted for five of the 42 top fundraisers, led by Strike Energy’s $73.91 million debt drawdown to support its Perth Basin projects. “The continued presence of oil and gas on the podium highlights its role as a ‘transition fuel’ needed in the medium-term,” Sherif noted.

Outlook: green shoots or seasonal bounce?

Sherif believes the sector may be entering a period of cautious recovery.

“With inflation easing and interest rates potentially peaking, investor sentiment may continue to improve, particularly for gold, copper-gold and critical minerals,” he said. “Explorers appear to be re-engaging in growth strategies and we’ll be watching closely to see how this momentum carries into the second half of the year.”

Historically, the June and December quarters tend to be stronger for capital raising, while March and September are typically weaker. Sherif expects a modest pullback in the September quarter, followed by a busier run into December. Equity will likely remain the preferred instrument, while debt financing remains reserved for advanced developers.

Policy settings may also shape the outlook. The 2025–26 Federal Budget did not renew the Junior Minerals Exploration Incentive (JMEI)—a move expected to dampen enthusiasm for early-stage greenfields exploration. However, several states are stepping in, with Western Australia doubling its EIS funding and Queensland, NSW and the Northern Territory all expanding co-investment and drilling grant programs.

Offshore, the landscape is increasingly competitive. Canada continues to lead with generous flow-through share structures, and the EU’s Critical Raw Materials Act is expected to streamline permitting and prioritise upstream investment. Sherif predicts more ASX explorers will tap North American and European JV capital heading into 2026.

The final word

BDO’s report doesn’t claim a full recovery—but it does point to a sector shaking off its inertia. The next few quarters will be crucial in confirming whether this is a sustained shift in sentiment or a brief seasonal bounce.

For now, the money is flowing again—albeit selectively. And for explorers that can demonstrate project maturity, strong commodity exposure, and a clear growth story, the door to funding is once again ajar.