The latest exploration figures from the Australian Bureau of Statistics (ABS), along with an increase in mineral-related capital raising activity, are a sign that confidence is returning to the marketplace, according to Association of Mining and Exploration Companies (AMEC) chief executive Simon Bennison.
Despite being well below the levels of five years ago, greenfields exploration has risen over the past two quarters in terms of expenditure and metres drilled, the ABS reported.
Greenfields exploration was 30 per cent higher over the two quarters, recovering from the March quarter low of $87.1 million to reach $113.8 million during the September quarter. Greenfields metres drilled grew from 307,000 in the March quarter to 539,000 in the September period.
Bennison said the increase in greenfields exploration was attributable to several factors, including improved commodity prices.
“The Federal Government’s exploration development incentive (EDI) could also be having a positive impact on greenfields mineral exploration as intended,” he said.
Additionally, Bennison said the mineral-related initial public offerings (IPO) and capital raisings that were planned or have taken place over the past 12 months were pleasing.
“There were five IPOs in 2015 and eight in 2016, with at least another 12 in the pipeline. This is a great sign that confidence is starting to return to the market, and investors are coming out of hibernation,” Bennison said.
According to the ABS, total mineral exploration expenditure increased 0.6 per cent to $349.2 million in the September quarter, with Western Australia (up 1.9 per cent) the major contributor, while metres drilled rose by 0.4 per cent.
Meanwhile, total petroleum exploration fell 6.9 per cent to $324.5 million in the September quarter.