Collins had five birdies in a six-hole stretch to overcome two opening bogeys on the Huntingdale course.
Australia's Adam Scott was second after a 69, and countryman Gavin Coles was four strokes back after his 69.
Ty Tryon had a 71 for a 145 total, leaving the 18-year-old American nine strokes behind Collins.
England's Nick Faldo (74) was at 148, and five-time British Open champion Tom Watson (77) and Australia's Aaron Baddeley (75) made the cut by a stroke at 150.
Full-field scores from the MasterCard Masters