The quarterly isn’t a compliance chore, it’s your most-read document
By the end of October, every ASX-listed exploration company will have lodged its quarterly activities report and Appendix 5B for the September quarter. For many boards and management teams, it’s a document that gets pulled together in the final week, signed off quickly and forgotten as soon as it’s lodged.
That’s a missed opportunity. In our experience, the quarterly is often the most-read document a junior company releases all year.
WHY INVESTORS READ IT
A drilling announcement tells investors what happened on one day. The quarterly tells them how the whole business is tracking. It brings together the quarter’s exploration, the cash position, what was spent and where, and what is planned next. For a shareholder who missed an announcement or two (and most have), it’s the one place to catch up on everything at once.
It’s also the document brokers, analysts and prospective investors turn to when they want to understand a company quickly. The Appendix 5B gets particularly close attention, because it shows how much cash is in the bank and how many quarters of funding the company estimates it has left. Investors will draw their own conclusions from those numbers whether or not the company helps them.
COMPLIANCE IS THE FLOOR, NOT THE CEILING
The Listing Rules set out what a mining exploration entity must include, from a summary of exploration activities and expenditure to changes in tenements and payments to related parties. Getting all of that right is non-negotiable.
But a report can satisfy every requirement and still leave the reader no clearer about where the company is heading. The companies that get the most from their quarterlies treat the required content as the starting point, and then think carefully about who is reading and what they need to understand.
WHAT A GOOD QUARTERLY DOES
It leads with a clear summary. Most readers won’t get past the first page, so the highlights need to tell the quarter’s story on their own: what was achieved, why it matters and what comes next. If the most important development of the quarter sits on page six, many investors simply won’t find it.
It connects the work to the strategy. A list of drill holes and soil samples means far more when it’s tied back to the company’s broader plan. Why was this work done, and how does it move the project towards its next milestone?
It’s consistent from one quarter to the next. Investors notice when a target that featured prominently last quarter quietly disappears. If priorities have changed, say so and explain why. Consistency is one of the simplest ways a company can build trust with its shareholders.
It explains the numbers. If cash outflows rose because of a drilling program, or fell because the company was waiting on approvals, a sentence of context goes a long way. Leaving the Appendix 5B to speak for itself invites investors to fill in the gaps themselves.
It looks ahead carefully. The outlook section is one of the most valuable parts of the report, but everything in it needs to be grounded in the company’s actual plans and funding. Investors remember what a company said it would do, and they will check it against the next quarterly.
It brings news together rather than breaking it. Anything material that happened during the quarter should already have been announced under the company’s continuous disclosure obligations. The quarterly is the place to put those announcements in context, not to surprise the market with something new.
PLAN FOR IT RATHER THAN RUSH IT
The deadline is fixed and arrives every three months, yet quarterlies are still often started at the last minute. The better approach is to build the report as the quarter goes: keeping a running record of activities, agreeing the structure and key messages early, and allowing proper time for technical, board and company secretarial review before lodgement.
That preparation also makes the quarterly easier to use afterwards. A well-structured report gives a company material for its investor presentation, its social media and its conversations with brokers and shareholders over the following months.
At Discovir, the quarterly is one of the documents we spend the most time on with our clients. It’s rarely the most exciting release of the quarter, but it’s the one investors keep coming back to, and it deserves to be treated that way.
