The report has rarely been comforting reading in recent years, a litany of crumbling cash positions and the corpses of companies who have decided to chase fast money in other sectors, but the trend in September remains the same: exploration is drying up and cash is vanishing.

The report wasn’t all bad news as 778 companies lodged Appendix 5B reports for September, indicating a decrease of less than 1% from the June 2015 quarter when 780 companies lodged reports, although during the December quarter there has been a crop of new tech companies looking to backdoor list through junior miners and oilers, so that number could spike in the new year.

In December 2014 there were 814 companies lodging 5Bs.

BDO found that while some 44% of exploration companies were generating net financing inflows either via the capital raising route or through borrowings, well up on historical averages, the proportion of exploration companies with positive financing cashflows had come off slightly.

The firm said there were early signs of a slow improvement.

“We are seeing an increase in activity that we expect to continue into the first quarter of the new year,” BDO corporate finance partner Adam Myers said.

“Companies need to position themselves now to execute their chosen strategy.”

Sadly, exploration is no longer part of the strategy with 106 companies failing to conduct any exploration in the September quarter, up from 96 a quarter earlier.

Of the companies that incurred exploration expenditure, there was a decline in the number of companies spending less than $A300,000 in the ground, down from 429 in June to 405 in September, indicating that the smaller end of the market preferred cash preservation over small amounts of exploration expenditure.

Companies spending more than $1 million on exploration was flat.

The group found the number of companies with sufficient cash to continue operations at current levels for six months increased from 56% in June to 59% in September, indicating a higher level of prudence among exploration companies and an ability to obtain greater cost efficiencies by maintaining lean operations, however the number of companies with negative financing cash flows have increased from 84 in June to 93 in September.

One third of companies no longer have the cash to survive to mid-2016.

BDO found investors continue to back convertible debt facilities, which are increasing in popularity, the potential upside returns available to investors through future conversions to equity.

Debt is also being retired where possible.

In the September quarter nine companies were used as backdoor vehicles, seven in the tech space, one company relinquished its tenements and is pursuing alternative investment options.

Four companies were delisted or suspended during the period.