The latest data on exploration expenditure reveals a record spend but the June quarter figures may well represent a turning point.
Australian Bureau of Statistics data shows mineral exploration expenditure rose almost 25% to $1.19 billion, the highest level on record.
Among commodities, the search for gold recorded the largest rise, up 23.6% to $565.6 million.
But in a reflection of rising costs, the number of metres drilled was 3.1 million metres, up 4.4% on the previous quarter but below the peak of 3.4 million metres drilled in June 2021 when the total spend was about 23% lower.
Association of Mining and Exploration Companies (AMEC) acting CEO Neil van Drunen said the strong demand for gold in the market was providing confidence to explorers to get drill rigs on the ground.
“These results reveal an extraordinary quarter for Australian gold exploration, with more than half a billion dollars spent searching for gold in just three months,” he said.
“Gold exploration expenditure has jumped almost $108 million in a single quarter and is now 40 per cent higher than this time last year.”
He said another positive was the rise in greenfields exploration, up 27.3% to $274.5 million, with the activity “critical to discovering the mines Australia will need in the future”.
BDO said the increase in exploration expenditure was particularly notable given industry commentary at recent mining conferences highlighting constraints, including limited access to drilling contractors.
In its report on the financial health and cash position of Australian-listed explorers for the June quarter, BDO said investment remained significantly stronger than the levels recorded a decade ago, with June 2026 expenditure nearly four times the 2016 trough of $266.75 million.
“As a result, the June quarter may mark the early stages of a broader uplift in exploration activity, with explorers increasingly expanding budgets and deploying their high cash holdings capital into the ground,” the BDO report said.
But the June quarter could also mark a turning point now the capital gains tax (CGT) changes have come into effect.
BDO said the second half of 2026 would see what the initial impact was on the number of exploration IPOs.
“The abolition of the current 50% CGT discount is likely to have an outsized impact in this sector given the high risk nature of exploration,” the report said.
“Exploration IPOs commonly raise between $5 million and $10 million at IPO. Whilst raising this level of funds may not be an issue, getting the required spread of shareholders may be a concern if retail investors are put off by the CGT changes.”
AMEC said it would be watching to see whether the CGT changes began to influence investment decisions and exploration expenditure.
“The September quarter data will provide an important early indication of whether capital is starting to shift away from mineral exploration,” it said.
