The Exploration Finance panel looks at the current state of exploration activity and financing as well as expectations for the coming year, highlighting some key trends that the panellists are noticing.
The discussion kicks off with panellists noting their current allocations towards exploration and how this has changed over time. We note that as risk appetite grows (a theme we’re seeing across the investment universe), the interest in exploration grows as well. We can see the appetite for exploration evidenced through the significant rise in Australian IPOs this year – there is a lot of money being raised in the industry and an interesting shift in commodities being focused on.
So, where is the money going? Panellists note an obvious shift towards the battery metals (lithium, in particular), though there is still a lot of equity capital being raised in the gold space. Companies overall are looking to expand their resources bases – more so through exploration or JVs with juniors than with M&A, which was previously dominating for the past few years. There is also a general trend moving from saving to spending.
The panel moves on to a discussion on energy transition and our zero-carbon future, noting the amount of copper and other minerals required for this. It has been well noted that we don’t have enough supply coming onstream to support this and so the panel looks at how much more investment in exploration is needed to support this energy transition.
The panel also looks at the importance of ESG and the opportunities for explorers as we see investors putting more and more money into ESG funds.
Finally, the discussion moves on to look at various regions that are attracting attention for exploration and the panellists note how jurisdictional risks plays into this and also how ESG compliance may influence decision-making in this regard.
Jamie Strauss, CEO, Digbee
Hedley Widdup, Manager, Lion Selection Group
John Forwood, Investment Committee Member, Lowell Resources Fund Management