Explorer concerns over COVID-19 fallout

A SURVEY of 63 exploration companies has found 74% do not think their cash reserves will not last the year.
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Explorers fear they may not have enough cash to last the year.

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The survey was aimed at finding out how exploration companies are dealing with the fallout from the COVID-19 crisis.

While most miners have been able to continue operating - and in some cases improve their productivity - explorers are facing a completely different situation.

Some of the restrictions have caused them to cease operations completely.

They are also struggling to tap the traditional capital markets to raise the funds they need.

Indeed, the survey found 60% of respondents did not believe they would able to raise capital in the next six months.

Of those companies surveyed, 74% had either ceased all or most exploration operations.

Nearly half the companies had actual or planned redundancies, while 75% had already cut wages.

The Association of Mining and Exploration Companies, which commissioned the survey, has already claimed some wins in trying to get expenditure relief for exploration companies.

In Western Australia, New South Wales and South Australia it has gained some expenditure relief.

AMEC is continuing to lobby for expenditure relief and fee relief across Australia.

It has also helped get the annual Australian Securities Exchange listing fees for the 2020-21 financial year staggered over six months and payable in two equal instalments.

The ASX is also looking at the issue of secondary or subsequent listing fees.

At a federal level AMEC is still lobbying for financial assistance for exploration companies and that those companies be given access to the JobKeeper initiative or an alternate measure of financial assistance.

AMEC CEO Warren Pearce said while the health, safety and wellbeing of Australians had to stay a focus during the COVID-19 pandemic, mineral explorers were doing it tough.

"Since COVID-19 restrictions were imposed a month ago, nearly half of the companies surveyed had ceased all exploration operations, and over a quarter more had ceased most exploration operations," he said.

"This at a time, two years into the exploration cycle, when new discoveries are being made and when the next year of mineral exploration could well kickstart the next mining boom and help recharge Australia's damaged economy.

"While partially exempt from travel restrictions, for which we are fortunate, we are not immune from other impacts of COVID-19, which has all but killed investment appetite, meaning that companies are unable to attract private investment to fund ongoing exploration."

 

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