Western Australia is currently experiencing a significant surge in mineral exploration, with spending reaching unprecedented levels. Figures released by the Australian Bureau of Statistics (ABS) reveal that $1.57 billion was invested in exploration activities across the state alone during the 2025-26 financial year. This substantial investment underscores a period of intense activity, further amplified by the Australian dollar gold price hitting an all-time high of $7,688 per ounce in January, although it later traded at $6,236 per ounce.
Record Investment Fuels Exploration Boom
The $1.57 billion expenditure in Western Australia represents a considerable increase from the $1.03 billion recorded in the previous financial year. Nationally, the search for minerals attracted a total of $4.27 billion in the 2025-26 financial year, with gold exploration commanding the largest share at $1.93 billion. Within Western Australia, gold exploration accounted for $1.57 billion of the state’s total $2.99 billion mineral exploration spend. Notably, the June quarter of the 2025-26 financial year saw a record $461.1 million dedicated to exploration within the state.
Drilling Companies See Unprecedented Demand
The heightened exploration activity is directly impacting drilling companies, particularly those based in the heartland of Western Australia’s goldfields. Kalgoorlie-based Topdrill, a prominent drilling contractor, is reporting “unprecedented demand” as a direct consequence of the ongoing boom in mineral exploration. The company’s growth mirrors the rise in metal prices, positioning it as one of Australia’s largest drilling contractors with over 550 employees.
Tim Topham, the founder of Topdrill, who established the company 20 years ago with a single drill rig and two staff members, is preparing to welcome his 43rd drill rig in the coming weeks. Despite his aversion to the term “boom,” Topham acknowledges the extraordinary level of demand. “We’re seeing the flow-on effects of global economic factors and the gold price surge — it’s something that’s very real,” he stated. “I hate the word ‘boom,’ but this period of buoyancy has been really elevated. It’s a pretty exciting time.”
Shifting Work Patterns in the Goldfields
Topdrill’s operations highlight a significant shift in industry behaviour. Historically, the period around Christmas and New Year would see a slowdown in drilling activities, with work typically resuming in February. However, over the past two to three years, this trend has reversed. “The last two to three years we’ve seen a total change in that behaviour, so now we’re drilling right through Christmas and New Year,” Topham explained. He further noted that gold exploration constitutes approximately 95 percent of Topdrill’s current workload, underscoring its central role in the company’s success.
Concerns Over Capital Gains Tax Reforms
While the exploration sector is experiencing robust growth, industry bodies are expressing concerns about potential impacts on future investment. The Association of Mining and Exploration Companies (AMEC) has voiced apprehension regarding proposed reforms to capital gains tax. AMEC chief executive Warren Pearce warned that such changes could lead to a decrease in investment within Australia, potentially diverting capital overseas and diminishing “greenfields exploration” – the search for new mineral deposits in unexplored areas.
Pearce emphasized the sector’s reliance on retail investors, suggesting that changes to capital gains tax might deter these investors when companies seek to raise further capital. “The sector relied heavily on retail investors and that when companies needed to raise capital again the investors would not be there,” he stated.
Government’s Perspective on the Resources Sector
Federal Resources Minister Madeleine King has expressed a different view, asserting that the government has made substantial investments in the resources sector, including Geoscience Australia and critical minerals initiatives. “I would say no government in Australia has ever done more for the resources sector… I think exploration is in a very good space in Australia,” King commented, indicating confidence in the current state of exploration activities.
Strategic Approaches to Market Fluctuations
In navigating the current high-demand environment and anticipating potential market shifts, companies like Topdrill have historically employed strategic financial arrangements. The company has previously engaged in “drilling-for-equity” agreements, where it accepts shares in a client company instead of cash payment. While this can be highly profitable if a significant discovery is made, it also serves as a crucial tool for maintaining operational continuity during leaner periods.
“It’s a tool we’ve engaged with to keep our rigs busy when the market has changed,” Topham explained. “The traditional model is to lay staff off in those tougher times, so drilling-for-equity has been an important to keep the rigs spinning and we’ve been involved in some great discoveries through that initiative.” This strategy allows the company to retain its workforce and equipment, ensuring readiness for periods of high demand, such as the current gold rush.
Conclusion: A Period of Growth and Vigilance
The latest figures from the ABS paint a clear picture of a thriving mineral exploration sector in Western Australia, driven by high gold prices and significant investment. Drilling companies are experiencing a sustained period of activity, a stark contrast to historical patterns. However, the industry remains watchful, with concerns about potential policy changes impacting future investment. Despite these concerns, the current momentum suggests a strong outlook for exploration in the state, with businesses employing innovative strategies to capitalize on the opportunities presented by this modern-day gold rush.
