Residents of one of Australia's most famous gold rush towns are divided over plans to explore for the precious metal beneath their streets, amid record prices for gold which have injected new life into Coolgardie.

Key points: Three prospecting license applications covering the Coolgardie town site are being assessed by the State Government

Three prospecting license applications covering the Coolgardie town site are being assessed by the State Government The Shire of Coolgardie has opposed an application in a residential area but supports another proposal near its industrial area

The Shire of Coolgardie has opposed an application in a residential area but supports another proposal near its industrial area Coolgardie was WAs third-largest town in 1898 with 26 hotels, seven newspapers, six banks, two stock exchanges and three breweries

Described as the 'Mother of the Goldfields' on signs posted at the town's entrance, Coolgardie, 550 kilometres east of Perth, had a population of just 865 at the last Census.

But the Shire of Coolgardie continues to punch above its weight as an economic powerhouse, generating $3.4 billion in mineral production last financial year — the equivalent of Micronesia's gross domestic product.

Most of the wealth today still comes from gold, discovered at Coolgardie in 1892 and sparking one of the biggest gold rushes the world has ever seen.

Despite its golden history, not everyone in town is convinced mineral exploration should be allowed beneath its streets.

Lands Minister to have final say



Three separate prospecting license applications — covering a combined 195 hectares of the Coolgardie town site — are currently being assessed by the Department of Planning, Lands and Heritage.

The annual Coolgardie Day celebrations in September mark the discovery of gold by prospector Arthur Bayley. ( Supplied: Shire of Coolgardie/Chuck Thomas )

The Shire of Coolgardie has objected to an application by gold miner Focus Minerals covering five hectares on the southern edge of town, adjoining Hunt Street where there are several private properties and land earmarked for future residential development.

A separate application by Focus Minerals covers six hectares near Coolgardie's industrial area to the south-east and was supported by council, subject to various conditions.

These include restricting exploration on private land and ensuring mining activities are at least 100 metres below the surface.

Both applications from Focus Minerals were lodged on September 5 last year and are still pending.

Another private company, Mineral and Gold Resources of Australia, applied for a prospecting license covering 184 hectares of the Coolgardie town site in June 2017 and is also awaiting approval.

Premier Mark McGowan met with Shire of Coolgardie representatives during a Cabinet visit in September. ( ABC News: Jarrod Lucas )

Prospecting licences on Crown land inside town sites are determined by the Minister for Lands, while those on Crown land outside town boundaries are the responsibility of the Minister for Mines.

For applications that cross both jurisdictions, a determination from each Minister is required for the parts of the licence within their remit.

A spokeswoman said the Department was yet to make a recommendation to the WA Minister for Lands Rita Saffioti who would have the final say.

Finding the right balance



Shire of Coolgardie president Malcolm Cullen said the council must find the right balance between its traditional lifeblood and what was best for the town's residents.

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"Just about everywhere you put down a drill hole, you're going to find some traces of gold in Coolgardie," he said.

"The council believes that we have the right to maintain the town site as a precinct for residential and industrial development, and we're not opposed to mining in any way or form.

"There are opportunities for companies if they wish to drill adjacent to the town site, which they've done in the past, and if they find a significant deposit of gold then they have opportunities to mine it from underground or from pits that are within a kilometre of the town."

Mining at an area south of Coolgardie, known as Tindals, was done as recently as 2013.

The open pit and underground operation at Tindals came within 900 metres of residential houses.

"We had some complaints a couple of years ago with the drilling rigs going all night and the blasting, which impacts some of the old buildings close to town," Mr Cullen said.

"It's just a matter of working out the best way forward that suits the mining as well as the residents of the town."

Retired underground miner Dave McNally overlooks land where drilling has been proposed from his back patio. ( ABC News: Jarrod Lucas )

Coolgardie residents divided



The ABC spoke with multiple Coolgardie residents who live on Hunt Street, where drilling has been proposed.

One woman, who wanted to remain anonymous, said she was opposed to mining on her doorstep but acknowledged Coolgardie had survived on gold mining.

Retired underground miner Dave McNally said there was no reason why exploration should not go ahead.

"My thoughts are they can go ahead and drill. I think everybody would like to know what's underneath these streets here," he said.

"As long as they put restrictions on the mining company in regards to what they're going to do, how they're going to drill, and they come and ask the residents, which they haven't done.

"This is the first time we've really heard of this proposal and the Shire has taken it upon themselves to turn around and try and run the show themselves.

"I think it's in our interests more than their [council] interests."

Dave McNally wants to know if there are significant gold deposits beneath Coolgardie. ( ABC News: Jarrod Lucas )

Mr McNally, who worked in 25 underground mines in a career spanning nearly 50 years, said he had done some gold panning out the back of his property which proved it was mineralised.

"I know there's some gold under here ... I've done some panning off down the back and there's a bit of gold here and there," he said.

Mr McNally said he would have no objection to an underground mine being built below his house and welcomed any mining company which would like to buy him out.

"It wouldn't worry me at all, provided they had some depth about it, and also they weren't going to put a dump right in my backyard like they've done to the north-east there," he said.

"Whether they would want to buy people out or repair damage to houses from firing is the question.

"I was up at the Sons of Gwalia mine when they had a lot of trouble with the townspeople there and we put in firing restrictions on the shots that could be loaded underground.

"We got by up there and I couldn't see why we couldn't get by here."

Denver City Hotel owner Deborah Ovens in the heritage-listed pub. ( ABC News: Jarrod Lucas )

Publican supports exploration



The owner of Coolgardie's only pub said she supported gold exploration beneath the town.

But Deborah Ovens said any future mining would need to consider heritage-listed buildings, including the 122-year-old Denver City Hotel which she has recently put on the market.

She said many old prospectors had told her stories about shafts running underneath the centre of town on Bayley Street, named after Arthur Bayley who discovered gold at Coolgardie.

"I bet you there's plenty of gold under there," she said.

"As long as it [drilling and mining] doesn't interfere and have any structural problems with the infrastructure of the town, I can't see any problem.

"My only concern is any blasting that is going to get done might have an issue with the town and old buildings such as this one and the courthouse across the road.

"Even with the trucks driving up and down the street we do get vibrations, so having extra drilling and stuff going on it would have to be plenty deep and assure us that it's all good."

Coolgardie's industrial area is surrounded by bushland. ( ABC News: Jarrod Lucas )

Looking below a long-running topic

The issue of exploration within the Coolgardie townsite was last raised in September 2015 when Focus Minerals applied for a prospecting license adjacent Hunt Street.



The Shire's then-CEO Paul Webb wrote in a report to council that the townsite boundary was "effectively sacrosanct", but added the council was only interested in development on the surface.



"If a local miner is interested in underground access to an ore body, council cannot object to this activity, and due to the nature of local industry, it is the officer's opinion that council should conditionally support such activity," he said.



"The first part of finding sub-surface ore is through drilling.



"It is expected that the investigation may benefit council in future planning, knowing what is under this portion of the town."

Beacon Minerals project manager Alex McCulloch at the Jaurdi gold mine near Coolgardie. ( ABC News: Jarrod Lucas )

Record gold prices bring renaissance

The prospect of exploration beneath Coolgardie comes amid record gold prices — which surpassed $2,000 an ounce for the first time this year — and a resurgence in mining activity.



The $21 million Jaurdi mine is a new discovery, 35 kilometres north-west of Coolgardie, which poured its first gold bar in September and is expected to operate for at least the next five years.



Focus Minerals, in which China's Shandong Gold holds a 49 per cent stake, also appears close to finalising the sale of its mothballed Coolgardie operations.



Hundreds of workers were out of a job when Focus shut its Coolgardie operations in 2013 amid a gold price crash.



The company has been in negotiations to sell since August last year, with Horizon Minerals offering $55 million in cash and shares.



Last month, China's Hanking Gold attempted to trump the offer with a $65 million cash bid.



It remains to be seen if the new owners follow through on Focus' plans to drill beneath the town site.

The entrance to Focus Minerals' Three Mile Hill processing plant at Coolgardie. ( ABC News: Jarrod Lucas )

There are also plans to restart two historic underground mines at Burbanks, 9 kilometres south-east of Coolgardie.

Burbanks was the biggest gold producing region in WA in 1900, but there has been only limited mining since the 1980s.

Barra Resources managing director Sean Gregory said the mining plan being considered could create 48 jobs and would require about 70,000 litres of diesel per month and 25 tonnes of explosives per month.

"Coolgardie's the mother of the Goldfields, where gold was discovered before Kalgoorlie, and Burbanks was the heart of that action," he said.

"I think Coolgardie has been forgotten about.

"We are seeing a refocus. There does appear to be some activity around consolidation, and that will create some opportunities.



"It's an exciting time around Coolgardie, particularly with the drive for higher-grade ounces."

Mining at the Tindals underground complex near Coolgardie. ( Supplied: Focus Minerals )

Potential 'motherlode' below town?



Association of Mining and Exploration Companies chief executive Warren Pearce said any proposal to mine underneath Coolgardie's town site would be a "long shot".

"In theory, you can go about exploring and mining or make an application to do that pretty much anywhere," he said.

"The reality of it though, depending on where you put your application is going to depend on whether you've got any reasonable prospect to go through with the activity or actually develop it if it bears some fruit."



Coolgardie in the 1890s. ( Supplied: National Library of Australia/Rex Nan Kivell Collection )

Former Kalgoorlie stockbroker turned mining entrepreneur David Reed has been drilling below his old home town for years in a bid to find a repeat of the historic Golden Mile.

The Shire of Leonora in WA's Goldfields adopted policies for drilling activities within the Leonora townsite in 1998, including regulations requiring residents living within 500 metres of any drill site to be consulted prior to the start of any drilling.

Many experts have also raised the possibility of significant mineral deposits existing beneath the Queensland mining town of Mount Isa.

Mr Pearce said any proposal to mine beneath Coolgardie would require significant community support.

"The chances of you being able to develop it and for the community to support it are going to be relatively low," he said.

"But you never know, maybe there's a motherlode sitting underneath the town of Coolgardie and it might turn out to be worth moving the entire town, but I suspect that's probably a long shot."