Twenty-one years after the mine closed down, Heron Resources has recommenced processing of zinc, copper, lead and other minerals at the Tarago district.

Managing director and CEO Wayne Taylor said it's on a small scale at this stage but production will ramp up throughout the year.

"We're in the first stage of testing all the equipment in the process and putting materials through," he said.

"We're concentrating on throughput recovery and product specifications."

This includes putting materials through the flotation tanks.

The company has allowed 15 months to achieve full recovery and throughput.

It's aiming to produce 40,000 tonnes of zinc, 10,000t of copper, 12,000t of lead, 900,000 ounces of silver and 4000 ounces of gold over 9.3 years. However, Heron Resources also expects this life to be extended through the conversion of "high-grade underground resources and further exploration success."

"It's early days but this (the start of processing) is a significant step in terms of the overall project," Mr Taylor said.

Mr Taylor said the first trainload of material wouldn't leave the site for another six to eight weeks, given it would take time to build up the material. The community and others would be made aware when this happened.

Heron Resources has enlisted Crawford Freight Lines, which has a depot in Goulburn, to haul the product to port.

The CEO anticipated 10 trucks per day carrying material to Tarago for rail transport in the early stages.

Meantime, further mineral exploration is underway to the mine's north, towards Cowley Hills.

Mr Taylor said remote sensing that could detect 700 to 800 metres underground had picked up extensive magnetic anomalies, suggesting basaltic rocks.

This could be disseminated pyrite or another significant Woodlawn deposit.

"We won't know until we have it tested over the next six to eight weeks but the exploration manager is quite excited," Mr Taylor said.

In related news, Heron Resources has rejected two further claims from the company Sedgman, which it contracted to build the processing plant at Woodlawn.

The parties are involved in an ongoing financial dispute. Earlier this year, Sedgman lodged a claim for $49 million above the contracted $109m to build the plant. It revised this to $53m in March.

Heron has refused to pay the extra. Mr Taylor previously said there was no basis for the claim. Heron has paid the $109m.

"It's all quiet at the moment but it's not over and we anticipate further talks to resolve the dispute," Mr Taylor said.

Sedgman is at the "tail end" of commissioning the processing plant.

"All in all it's a good plant but certainly what has happened has tempered our dealings with Sedgman," Mr Taylor said.

The mine is expected to employ up to 150 people longer-term.

Currently, Heron has some 70 employees onsite and Pybar Mining Services, contracted to undertake underground mining, has about 60 employees. Sedgman has employed another twenty.

Mr Taylor said numbers would ramp up later in the year with the progress of underground mining.

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