I thought I’d do a follow up to @Bear77 comment in the BOT thread where he mentioned that same issue with explorers and developers. For this cohort (resources) of pre-revenue company, there is no point asking if they are fully funded as they just are not. Exploration companies make no sense to ever be considered fully funded and for developers, they are not until the project funding round is completed (which I note is only true at that point in time given risks around project execution).

In this case, the alternative is to ask "what the runway is on the cash" they have on hand and what does that cover i.e. completing specific drill campaigns or feasibility work, etc… This should be crossed checked with the forward work program promoted by the company to make sure you understand what may or may not be funded.

Often in exploration, a company may say "we plan to do 10km of drilling in the year over multiple programs" but the current cash resources could only be funded to do part of those plans. This is not a bad problem per say if the initial program delivers good results in which a raise can be done off the back of a re-rate. But it is also a way to promote to investors who may help fund the company with promises of lots of catalysts to re-rate the shares.

The best way to be able to cross check what the cash resources of an explorer is to know what the all in cost of drilling is per meter i.e. inclusive of mobilisation through to sample prep and assays. Fortunately, you can ask the company and get a truthful rate (I've never been told a rate that didn't make sense) just note rates can vary based on the region, country and scale of drilling. It is also very different for the 3 main drilling types of AC, RC and Diamond. If you are unsure, ask a few companies drilling in the same area to get a better representation. With this one can solve the runway of the company and the deliverables it can produce.

As an example, USL, a company I am contracted to cover in a professional engagement talks about being fully funded for 50km drilling campaign from late CY24 to the end of CY25. Below is an exert from a recent update that breaks down the runway. It is important for this company as it firstly shows it is very well covered for the proposed plan and as such, it has a long runway to produce lots of catalysts through the drill bit. It also should have a good amount of cash left over which, if the right discovery is made, allows the company to adjust its exploration program.

I do this analysis for any explorer (i.e. ORD, EMC and PLC which I have talked on strawman) to understand to what degree of “brinkmanship” is being worked towards or if the company stumbles upon an unexpected discovery, can it flex up the metres to immediately to continue drilling that.

Estimating this isn’t meant to be an exercise in being super accurate but to create a guide on what bang for buck I am getting as an investor and mapping out when/how cautious I have to be about a raise (obvs zero caution if the drill results are good). Ironically, in a hot market like say gold, cap raises are positive catalysts when the $ raised are expected to have a high RoI.