Known as the Mandalong Southern Extension Project, the expansion is well under way with planning based on the integration and continuation of the existing Mandalong longwall operations.

Thirty exploration drill holes have been completed of the 53-hole program.

Extensive testing is being undertaken to determine the quality, viability, safety and environmental impacts of the extension project.

The collected information will provide an updated geological model so mine expansion plans can proceed.

Centennial Coal's Northern Operations general manager Andrew Myors said he expected a final mine design to be completed by early 2012.

"As a significant part of this project, Centennial Coal has undertaken a range of environmental surveys over the last few months to collect baseline environmental information to ascertain the impact of the expansion," Mr Myors said.

"The information gathered will be used to improve Centennial's understanding of the existing environment and to better determine the potential for impacts to the environment as a result of any future underground mining," he said.

Environmental surveys undertaken include archaeological surveys for Aboriginal and European heritage, flora and fauna surveys, and stream assessment surveys.

The area is rich in Aboriginal heritage with about 130 new sites found within the project area.

"Centennial Coal is committed to ensuring positive outcomes for our local communities," Mr Myors said.

"The reason we carry out these studies is to identify areas of significance to incorporate them into the mine plan decision-making process to best protect the sites.

"Centennial Coal is currently in the process of registering the artefacts and sites with the state government.

"They will then be entered into the government's Aboriginal heritage database and we will continue to consult with the local Aboriginal community and land councils."

Eight groundwater monitoring bores have been installed in the low-lying creek areas around the project area to determine if aquifers are present.

Centennial Coal has also begun monthly monitoring of water quality in major creeks.

"A landholder information session is planned for later this month to discuss the results of the surveys," Mr Myors said.