A $1 billion gold mine in central west NSW would have been "a shot in the arm" for a growing region, but locals say a federal government move stalling the plan has divided the community.

Environment Minister Tanya Plibersek issued an Indigenous heritage protection order over part of the McPhillamys Gold Project on the outskirts of Blayney in mid-August.

The Wiradjuri Traditional Owners Central West Aboriginal Corporation asked the minister to protect the headwaters and the springs of the Belubula River as a site central to creation stories.

Blayney Shire mayor Scott Ferguson said the region had long been anticipating the mine, which was approved by the NSW Independent Planning Commission in March 2023.

"There was an expectation that if this mine was to start next year, it would be just the shot in the arm that we would need," Mr Ferguson told reporters in Blayney on Wednesday evening.

But the environment minister's decision process was not transparent and has left the community in a state of uncertainty, he said.

"This process is a secretive, disingenuous process that ... is serving to drive our communities apart, not bring us together."

Gold producer Regis Resources initially said Ms Plibersek's rejection of of a tailings dam site on the river's headwaters made the mine unviable due to the time it would take to get approvals for another waste site.

But chief executive Jim Beyer has met with NSW Natural Resources Minister Courtney Houssos and the company will continue to assess its options before pulling the pin.

Ms Plibersek on Wednesday reiterated her decision did not block the entire mine.

"The company has said that they need to go back to the drawing board, this could take five or 10 years - that's just nonsense," she told reporters in Sydney.

"The bulk of the project has been approved, the mine itself has been approved."

Both Mr Beyer and NSW Premier Chris Minns are due to speak at a conference in Orange on Thursday.

Mr Minns told a budget estimates hearing Ms Plibersek erred because the mine had already been approved, a process that included consultation with the Orange Local Aboriginal Land Council.

"The correct judgment was made in the initial instance," Mr Minns told the hearing at NSW parliament house in Sydney.

Mr Minns read out a letter from the land council sent in January 2023 saying a range of claims were being made by people lacking knowledge in cultural heritage.

A land council representative told the planning commission it was not "for or against" the mine, but emphasised the importance of protecting Aboriginal culture and heritage should it go ahead.

NSW Opposition Leader Mark Speakman visited Blayney on Wednesday and urged the premier to put more pressure on the federal government to change the decision.

Hundreds of jobs and millions of dollars in royalties were at risk, Mr Speakman said.

"If he is a premier with any backbone with any spine he needs to pick up the phone to Anthony Albanese and demand that this decision be reversed."

Stephanie Gardiner - AAP