The old gold town in the Upper Buller Gorge peaked in the 1880s and limped on to the 1960s, when the last hotel burned down. The town site is now a Department of Conservation campground.
Siren Gold has been prospecting in the wider district, digging trenches to test the gold potential.
Chief executive Victor Rajasooriar said Lyell had the potential to be the jewel in the Reefton project crown.
"Recent rock chips samples from the Victory United Reef show immense potential, warranting a drilling programme to unlock the value."
Siren plans to start drilling once all approvals are in place.
An outcrop of the Victory United Reef was discovered in October 2022 when a flood scoured out gravel and exposed the bedrock.
The project overlays the historic Alpine United mine, which operated from 1874 to 1912.
Mr Rajasooriar said Mount Lyell North was a new discovery with no historic mining or previous exploration except for the small Victory United mine, which was mined over two levels.
No production records or details are available.
Meanwhile, another gold exploration company Rua says it is encouraged by its drill hole results in other parts of the Reefton goldfield.
It has a further 10 months of drilling ahead of it.
At Murray Creek, where it expected to hit the vein, it hit old workings 4m wide.
"The old-timers got there first, however it has confirmed that this vein is continuous and we have defined its trajectory. A hole 50m deeper is under way now and that will be reported in the coming weeks," Rua chief executive Rob Eckford said.
At Capleston, near Reefton township, the very first hole intercepted quartz veins.
Siren started its drilling programme at Murray Creek in July. A second drill rig was added in September to test the Capleston vein system.
"Our five years of meticulous surface exploration work over the Reefton project is paying dividends from the outset of this drill programme. Both of the initial drill holes have confirmed we are in right area and are locating these lodes," Mr Eckford said.
"The near-surface intercepts on Capleston are encouraging and make for compelling economic ounces. It supports our thesis that the surface veins are continuous past the old workings."
— Greymouth Star
