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.
"The target is what the old-timers left behind when they mined it the first time," said Newmont's external affairs manager, Sefton Darby.