Newmont Waihi Gold has been given the green light to tunnel under the Martha Mine open pit in the town, a project that could cost $55 million.
The company wants to explore below the western part of the pit which is now about 260m deep.
The work will be covered by a variation to Newmont's existing mining licence as it is within the pit area and was approved by local authorities and the Government.
Objectors have until the end of the month to appeal against the project but the company hopes to start the exploration project around the middle of the year.
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Advertise with NZME."The target is what the old-timers left behind when they mined it the first time," said Newmont's external affairs manager, Sefton Darby.
Miners over a century ago tunnelled as deep as 600m.
"In some way part of the problem is the records aren't nearly as comprehensive as they should be, so it's difficult for us to say whether it's going to be any good," he said.
If samples showed commercially viable signs of gold and silver the life of the pit could be extended beyond 2014 when mining is due to end.
"If the Martha Exploration Pit indicates the potential for underground mining we would be required to commit to a full resource management consenting process," the company said.
The tunnel will be bored into the pit wall and be about 5m high by 5m wide and zig-zag down about 2.6km long.
It will end about 20m below the bottom of the pit. Work would take two to three years to finish and coincide with the completion of more work on the east wall of the mine.
The company said the project was "small" with less waste rock and ore moved during its two year life than about one month of open pit mining.
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Advertise with NZME.The project will not tunnel under any residential property.
