Victoria’s gold sector has taken a step toward deeper, more technically advanced exploration, with the approval of the state’s first modern exploration tunnels marking a turning point for underground development.
Two gold projects, Southern Cross Gold’s (SXG) Sunday Creek project east of Kilmore and the Four Eagles joint venture between Catalyst Metals and Hancock Prospecting near Mitiamo, are preparing to move underground to test the economic potential of high-grade mineralisation beneath surface workings.
In October 2024, Australian Mining noted that SXG struck a deal to acquire key land acquisitions for $1.9 million surrounding Sunday Creek.
At the same time, it entered into a share swap agreement to acquire all shares in Sparr Nominees, which saw SXG obtain “substantial” agricultural properties at around $18.75 million in cash.
As reported by the ABC, these approvals came amid record gold prices and renewed interest in Victoria following the success of the Fosterville gold mine, which reshaped industry understanding of high-grade orogenic gold systems in the state.
SXG president and chief executive officer (CEO) Michael Hudson said the discovery of high-grade mineralisation at Fosterville a decade ago had fundamentally changed how Victorian geology was interpreted, unlocking confidence in deeper exploration models.
At Sunday Creek, historic mining between 1880 and 1920 was limited to shallow depths, but modern exploration has extended the project well below previous workings.
SXG has completed approximately 100 kilometres of drilling over the past three years, delivering what Hudson described as world-class, high-grade results.
The proposed exploration tunnel would enable continuous underground drilling while reducing surface impacts such as noise, light and vibration, a step that significantly improves geological confidence before major capital decisions are made.
However, Hudson stressed to the ABC that any move toward mine development would be contingent on further approvals and economic viability.
“It will need half a billion dollars more or less to build the mine, so you want to make sure that you’re really sure,” he said.
Further north, Catalyst Metals and Hancock Prospecting’s Four Eagles project is also progressing plans for an exploration tunnel designed to test mineralisation beneath Murray Basin sediments.
Catalyst general manager of Victorian operations Rob Biro said the tunnel would allow more precise targeting of mineralised structures that are difficult to assess from surface drilling alone.
While additional permitting is still required, Biro said the project highlighted Victoria’s significant exploration potential and the growing confidence to pursue deeper development pathways.
Minerals Council of Australia Victorian executive director James Sorahan said central Victoria remained Australia’s second-largest gold-producing region after Kalgoorlie, with the Geological Survey of Victoria estimating up to 75 million ounces of gold still in the ground.
Sustained gold prices and the success of existing operations have helped attract capital back into the region, Sorahan said, encouraging companies to invest in deeper exploration techniques.
With exploration tunnels now part of Victoria’s regulatory framework, the approvals signal a more mature, predictable pathway for underground gold development, one that aligns the state more closely with established mining jurisdictions while maintaining strong environmental and community oversight.
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