A new report has declared gold will continue its reign as one of Australia’s hottest commodities in 2025, with project investment projected to thrive.
BDO’s latest Explorers Quarterly Cash Update has revealed the final quarter of 2024 to have been mixed news for Australian-listed explorers, but with much to celebrate.
Funding surged to $2.88 billion – an increase of 48 per cent from the previous quarter. However, overall exploration spending was found to have plateaued at $792 million.
BDO global leader of natural resources and energy Sherif Andrawes said the mixed result was punctuated by the continued dominance of gold exploration, spurred by high gold prices that reached over $US3000 ($4769) last week, while other sectors, particularly lithium and nickel, faced ongoing challenges.
“The high gold price has been a significant driver for the increased funding in the sector,” Andrawes said.
“Gold explorers have thrived, benefiting from the global deflationary fiscal policy and political uncertainty.
“In contrast, exploration activity in the lithium and nickel sectors continued to decline as falling commodity prices dampened investment.
“Total exploration expenditure for the quarter remained flat compared to the previous quarter, reflecting a sharp drop from the high-spending levels seen in 2023, when explorers spent an average of $933 million per quarter.”
At the same time, the energy sector showed a different trend. Oil, gas, and uranium explorers accounted for four of the five top exploration spenders this quarter.
“This reflects shifting global energy dynamics, driven by geopolitical tensions and the ongoing focus on energy transition initiatives,” Andrawes said.
Meanwhile, the report found IPO (initial public offering) activity continued its slowdown, as investor appetite for smaller, high-risk exploration companies remaining subdued.
Despite the slowdown, Andrawes said opportunities for high-quality assets, especially in gold and copper-rich mining jurisdictions, persist.
“Looking ahead, gold explorers are expected to remain the most active investors in 2025,” he said.
“However, ongoing challenges, such as inflationary pressures, selective access to capital, and geopolitical instability, will continue to shape the sector, driving consolidation and strategic investments aimed at production growth.”
Despite the softening in lithium prices, majors and minors alike are preparing for its imminent return to glory. Rio Tinto is one major leading the charge, set to break ground on a new lithium project in Western Australia this year.
