Gold mining is at the heart of Canvastown's identity, but residents are up in arms about the prospect of a modern mine so close to their houses.

An American-owned mining company chasing gold in small town New Zealand has residents fearing for their quiet close-knit community.

Elect Mining wants to take millions of dollars of the precious metal from a farm in Canvastown, in rural Marlborough, a settlement that got its name from the tents that sprung up during the 1864 gold rush.

But the prospect of a modern mine operating six days a week, just 20 metres from neighbouring properties, has led to tensions in the valley, between Blenheim and Nelson.

Canvastown resident Carleen Shallcrass, who owns a house bordering the site, delivered an emotional testimony at a resource consent hearing on Wednesday in a bid to prevent the proposed mine going ahead.

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She claimed it would ruin her quality of life.

STUFF Canvastown, a historic gold mining settlement, is divided over plans for a modern mine in the town.

"The noise and radical lifestyle destruction to our household and surrounding households is going to be horrendous," she said.

"If we had to sell for whatever reason, the evidence is that we would not be able to. So it's basically trapping us in a situation not of our own making."

Shallcrass said she was also concerned about the impact on ground water, and thought the company had underestimated how badly the site flooded during heavy rains.

SCOTT HAMMOND/STUFF Ngati Kuia's Te Hora Marae, down the road from the proposed gold mine.

"These floods are raging torrents, they're not placid ponds of water. They're so powerful that they have ripped the tarseal off the main highway," she said.

"We don't need gold, it's not going to feed the hungry, it's not going to cure any diseases.

"This application has caused extreme stress on myself, my neighbours and friends, and I also fear the conflict and fracture in the community regarding this application will only get worse."

CARLEEN SHALLCRASS Carleen Shallcrass' property beside the proposed mine site was surrounded by water last November when the Wakamarina River burst its banks.

The company, which has extensive experience mining on the West Coast, is seeking a 10-year consent to mine a 46-hectare property currently used as farmland immediately south of State Highway 6.

But it says it will only mine for five years.

At the hearing, the company's lawyer Mike Hardy-Jones put forward a raft of mitigation measures, but residents and local iwi Ngati Kuia remain unconvinced.

SUPPLIED Canvastown got its name from the tent city that sprung up after a gold rush in 1864. Pictured here is the Trout Hotel, which still stands on the site.

Resident David Hall said he would not have bought his house, on Wakamarina Rd bordering the proposed mine, if he had known about the application.

Hall said at the hearing his wife was pregnant, and that having worked in the mines in Australia he knew how loud it could be.

"There's no way you're going to be happy living there during the day with a baby. I'm going to come home and my wife's going to strangle me if she's had to put up with that sort of noise all day long," he said.

"I'm never gong to be able to sell the place. Not for 10 years while the mine's there. So this statement there's going to be economic spin-off - I see none for me."

The Ministry of Education also opposed the gold mine, which was 300m from Canvastown School.

In its submission, the ministry said it was concerned about possible noise disruption from the site, the possibility of heavy vehicle movements at school pick-up and drop-off times, and airborne dust.

Hardy-Jones said Elect Mining planned to take a number of steps to reduce noise, including a 4m high mobile screen made from hay bales when the operation was within 180m of a house.

Operating hours had also been voluntarily reduced, and the director of the company, Tim Madden, said the gravel size was smaller than operations on the coast so there would be less noise.

The company had also tried to address concerns from Heritage New Zealand and iwi that the site could contain archaeological material.

It was in the process of applying for an archaeological authority, and had devised a site plan to monitor topsoil stripping in the areas most likely to contain artefacts.

In his evidence, Madden emphasised the economic benefits of the mine. The budgeted weekly operating cost would be $40,000, including $8000 a week on fuel, while five fulltime employees would be based in Canvastown.

Ngati Kuia had their marae, Te Hora, located near the proposed gold mine. General manager David Johnston said no iwi in the country would allow this to happen.

"I ask the commissioner, would you put one of these mines next to your home, your children's school or your place of worship?" he said.

"We have serious concerns that the proposed mining application would allow for, and ultimately result in, adverse effects on our people, waters, whenua and our marae."

Johnston said the profits from the mine would mostly end up offshore. The Companies Office website showed 90 per cent of Elect Mining was owned by shareholders in the United States.

"In our view, this proposal is being driven for short-term profits and over the long term will have adverse consequences on our environment, social, economic and cultural wellbeing," he said.

"The profits and minerals will leave our shores ... They will be long gone when we are here forever."

The company had already secured a mining permit through New Zealand Petroleum and Minerals to extract gold from the site.

Elect Mining said it expected gross revenue of $7 million a year from the mine.

The hearing was scheduled to finish on Thursday. After it was notified, the application received 20 submissions, four neutral and 16 against.