Gold exploration spending soars in WA as drilling company reports 'unprecedented demand'

The ABS data shows the bulk of Australia's investment in mineral exploration is being directed towards gold, with $1.93 billion out of a total of $4.27 billion dedicated to the search. In Western Australia, gold accounted for $1.57 billion of the state's total $2.99 billion spend on mineral exploration, including a record $461.1 million spent in the June quarter alone.

The figures come after the Australian dollar gold price hit an all-time high of $7,688 per ounce in January. It was trading at $6,236 per ounce earlier today. The national exploration expenditure represents a significant increase on the $1.03 billion recorded in the 2024-25 financial year.

Kalgoorlie-based drilling contractor Topdrill is experiencing what founder Tim Topham describes as "unprecedented demand". The company, which started 20 years ago with a single drill rig and two employees, now ranks among Australia's largest drilling contractors with more than 550 workers. It is set to take delivery of its 43rd drill rig in coming weeks.

"We're seeing the flow-on effects of Trump's behaviours and the gold price boom — it's something that's very real," Mr Topham said. He noted that gold exploration accounts for 95 per cent of Topdrill's workload.

The company has also seen a shift in seasonal patterns, with drilling now continuing through Christmas and New Year — a period that historically saw little activity.

While the exploration expenditure figures indicate a booming sector, the Association of Mining and Exploration Companies (AMEC) has expressed concern about proposed federal reforms to capital gains tax. AMEC chief executive Warren Pearce warned the changes could impact investment flows.

Why This Matters

WA economy: Exploration spending directly supports jobs and regional communities in Western Australia's Goldfields, with Topdrill alone employing over 550 workers.
Investment climate: The surge reflects broader investor appetite for gold amid geopolitical uncertainty, but proposed tax changes could reshape future capital flows.
What happens next: If the gold price holds above current levels, exploration activity may continue at elevated rates; if tax reforms deter investors, the boom could cool.

Background

Gold exploration has long been a cornerstone of Western Australia's mining sector, particularly in the Kalgoorlie region. The current boom is notable for its intensity and duration, with record expenditure figures and drilling companies operating at near-full capacity. The Australian dollar gold price has been driven higher by global economic uncertainty and trade tensions, making Australian gold deposits more attractive to mine. The ABS data released today covers the full 2025-26 financial year and the June quarter.

Key Perspectives

Topdrill (drilling contractor): Benefiting directly from high demand, the company is expanding its fleet and workforce. Founder Tim Topham describes the period as one of unprecedented demand, though he avoids the word 'boom'. Association of Mining and Exploration Companies (AMEC): The industry body welcomes the strong exploration figures but is concerned that proposed federal capital gains tax reforms could negatively affect investment decisions. Critics/Skeptics: The article does not include counter-arguments or concerns about the sustainability of the boom, environmental impacts, or the potential for a price correction. These remain open questions.

What to Watch

Gold price movements: The Australian dollar gold price has already fallen from its January peak of $7,688/oz to $6,236/oz. Further declines could slow exploration.
Federal budget or tax legislation: The proposed capital gains tax reforms will be debated; their final form will influence mining investment.
June quarter data next year: A comparison of Q2 2026 expenditure figures will indicate whether the record $461.1 million quarter was a peak or a new baseline.

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