Seems it was the thing to do back in 1887 for all sorts organisations to knock up medallions to mark the Jubilee, no matter what business they were in.
Yes. 1887 was the big celebration, and many cities and towns had medal struck, mainly for giving away to schoolchildren for for presenting to anyone who attended the official festivities. The schoolchild ones are, understandably, more common than the event ones. This one isn't too scarce, and not hard to find in better condition. It was probably used both for schoolchildren and at the event.
If you think the numbers of 1887 medals were high, check out the medals issued for the diamond jubilee in 1897. Nearly twice as many.
As for the casual racism, well, that's just a sign of the times. You'll notice Aboriginal Australians weren't considered worthy of mention on the medal at all, even though the Native Police were busy ethnically cleansing them from central Queensland at this time. Chinese gold miners were stuck in a vicious circle of negative feedback. They were mistrusted, because they looked different, dressed different, believed different, and most of the gold they found was shipped back to China, and so they were shunned by mainstream community. They were nevertheless very successful in finding gold, particularly finding gold in places where the "white" gold-diggers had already been through and found nothing. This, of course, only made them even more hated. Chinese gold miners received much the same treatment wherever they went, be it California, British Columbia, New Zealand or Australia.
Interesting fact: The Chinese name for California was "Jinshan" (or Gan Saan in the Cantonese most miners would have spoken), meaning "Gold Mountain". Many of the Chinese miners in Australia came not directly from China, but from California and so they called their new home "Xin Jinshan", or "New Gold Mountain".
So, from a certain point of view, the original Chinese name for Australia was "New California".
Don't say "infinitely" when you mean "very"; otherwise, you'll have no word left when you want to talk about something really infinite. - C. S. Lewis