The figure is 32% higher than the June quarter and represents the highest expenditure since 2013 and 2014.

The Australian Bureau of Statistics recently reported September quarter exploration expenditure of $982.4 million.

The ABS figures cover all mineral exploration, while BDO's figures incorporate mineral and petroleum exploration by companies lodging an Appendix 5B report with the ASX, which mostly rules out producers.

BDO said the number of companies lodging Appendix 5Bs broke the 700 mark in the September quarter, reaching a total of 704 companies due to the surge in new floats in 2021.

The figure is 62 more than the September quarter in 2020.

"With the increased number of new entrants over recent periods, the exploration sector is showing no signs of slowing," BDO global head of natural resources Sherif Andrawes said.

"Exploration has again seen record-breaking level of funds in the September 2021 quarter, with explorers pocketing a total of $2.55 billion in funds, on par with the $2.54 billion in the June quarter."

Bank balances continued to strengthen with 88% of explorers reporting cash balances of more than $1 million.

"With exploration spending peaking to this seven-year high, 56% of companies recorded net investing outflows, which is 13% higher than the two-year average," Andrawes said.

Battery mineral companies were a prominent group this September quarter, particularly with respect to the uptick in investment and financing.

"The rise of battery minerals is clearly linked to the global trends of rising electric vehicle adoption and lower carbon emission targets which is a key consideration of the market," Andrawes said.

"It is essential that all exploration companies, regardless of commodity exposure, constantly consider the relevance of ESG to their ongoing operations and also to any investment decisions and future strategies.

"The ones who are able to do so successfully will likely continue to be supported by investors and contribute to the push for a cleaner and greener economy."

BDO expects that the growth in exploration activity will continue in light of continual strong cash balances and the higher number of listed exploration companies, but notes that this growth may continue to be constrained by the availability of resources, travel restrictions and a shortage of skilled labour.