For the second successive quarter, average exploration expenditure increased to $A451,000 from $418,000, according to the BDO Explorer Quarterly Cash Update.

The two positive quarters come after nine quarters of declines.

Just over half of companies were able to secure new funding during the quarter.

However, average cash reserves dropped from $5.85 million to $5.68 million.

“This indicates that companies are transitioning away from a mindset of cash preservation and instead focusing on investing in exploration and the development of their projects,” BDO said.

Net operating cash flows increased during the September quarter from $527 million to $707 million, an increase of roughly 34%.

Total net financing cashflows decreased by $470,000, with the average per company decreasing from $1.91 million in the June 2016 quarter to $1.27 million in the September 2016 quarter, though BDO noted it remained easier for companies to obtain funding than in quarters prior to June this year.

Large capital raisings dropped off, with the number of companies raising more than $10 million declining to 24 from 33 in June.

The amount of explorers with a net investment in capital expenditure has increased from 33.5% in the June 2016 quarter to 37.5% for the September quarter.

“The increase in funds committed to exploration and development reaffirms the improvement in industry sentiment, which was identified last quarter,” BDO said.

“The willingness for companies to use cash reserves for exploration and operating expenditure further illustrates the improvement in industry sentiment and suggests a positive outlook.”

A total of 698 companies lodged Appendix 5B reports for the September quarter, down by 15 due to backdoor listings, delistings and suspensions.