Historic mining village Majors Creek near Braidwood is a step closer to joining Australia's third gold boom, with Cortona Resources proposing a $30 million underground mine.
Feasibility studies have indicated a pre-tax profit of $68million from an initial mine at Dargues Reef near the town. As the studies continue to determine final economics before planning approvals are sought, Majors Creek residents and the surrounding Palerang Shire are split on the issue.
Some welcome the potential employment as many as 40 direct and 200 indirect jobs and new infrastructure.
Other residents are fed up with weeks of noisy test drilling and helicopter aerial surveys.
Concerns are rising about where large quantities of water will be found for processing the gold, and the impact on the landscape.
Cortona managing director Peter van der Borgh's assurances of a 21st-century operation and leaving the mine area in better condition than it was found have not allayed those fears.
Volatility on global financial markets following unprecedented government stimulus packages has seen the price of gold consistently above $US1000 an ounce as investors seek the safety of the precious metal. This reinforces the likelihood of mining restarting at Majors Creek.
Director of Geological Survey NSW Lindsay Gilligan said it was little known that NSW was Australia's second biggest producer behind Western Australia, with major developments at Cadia mine at Orange, Cowal near West Wyalong and Northparkes near Parkes.
Gold consultant Sandra Close said Australia was in the midst of its third gold boom, after previous ones in the 1850s and 1890s.
Dr Close said with Australia producing 220tonnes of gold a year worth $8billion, the country would replace the United States next year as the world's second-largest producer behind China.
Cortona has purchased 283ha at the Dargues Reef mine site, which is one of several within its vast 700sqkm tenement holding covering Majors Creek and Braidwood.
Mr van der Borgh said NSW was under-explored for gold. He said Dargues Reef had one of the higher grades of gold in Australia. Mines around the world tended to have much larger tonnage with lower grade ore bodies, but were viable on 112 to 2g, whereas Dargues Reef was calculated to have 6g per tonne.
''The old adage that grade is king certainly helps,'' he said.
Cortona Resources geologist Jon Hoye said with modern blasting techniques people in the nearby Majors Creek village would not hear underground explosions.
But in the village 60km east of Canberra, long-time resident Sandy McCarron said, ''In all honesty everyone in the village is trying to keep a level head, because we all have to live here.'' Her husband, Marshall, whose Irish settler descendants arrived in the 1850s, said explosions could shake mortar from the bricks of historically significant buildings.
He said when Cortona bought the gold assets from Moly Mines in 2007, it was estimated 310,000 ounces were at Dargues Reef. ''At $1000 an ounce, they're not going to leave it there,'' he said.
Between 30 and 40 jobs are proposed in the starter project at Dargues Reef: a mining office, milling facility for gold concentrate, roads and tailing dams which will generate more jobs and investment for the battling Palerang Shire.
Palerang's general manager Peter Bascomb said the challenge would be balancing noise and pollution with jobs and development.
''There's a range of views in the community; my sense is that there is majority support.''
Life-long Majors Creek resident Brian McDonald said most of the community was on side.
Cortona had donated $10,000 for tennis courts, planted trees and contributed to a new children's playground and the bushfire brigade.
''The place is coming to life. We went down to a low ebb and all of a sudden there are subdivisions it all looks bright.''
Resident Gordon Waters has started a website, saying not much information was coming from Cortona Resources. Landscape architect Arnold Struzina said proposed mining was in the Batemans Bay and Moruya catchments, so water would be a major concern. The visual impact of an open cut mine also worried residents.
Mr van der Borgh said he could not comment on open cut mining. Water-sourcing was still being investigated. The water would come from either bores or the mining activity itself and would be recycled.
Waste rock would go back underground and there would be no heaps left behind.
Shares in Cortona are currently suspended, pending a capital raising, and last traded at 20c.