The state's mining regulator has confirmed that it will start community consultation about the site's future only after rehabilitation works to Kangaroo Flat and Woodvale sites have started.

It is likely a major blow for a consortium hoping to access the tunnel and salvage mining in the 170-year-old goldfield.

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Some "very significant" industry players had hoped to start operations at the Kangaroo Flat site, according to a Bendigo Advertiser source familiar with early discussions.

The source asked for anonymity to discuss commercially sensitive matters.

The consortium had hoped for a signal about whether regulators intended to close the site, hand it to another company or auction it off.

Earth Resources Regulation's has told the Bendigo Advertiser that rehabilitation will begin after administrators finish dealing with Kralcopic, the company that went into voluntary administration several weeks ago after years of financial troubles.

"Consultation with the Bendigo community regarding future uses of the sites will commence after matters with the administrators are finalised and rehabilitation has begun," the regulator's executive director Anthony Hurst said.

Earth Resources Regulation has already applied an exemption to Kralcopic's Kangaroo Flat and Woodvale sites to stop any more mining companies from obtaining licences.

It remains unclear exactly how much money will be available to rehabilitate both the Kangaroo Flat mine site and shallow Woodvale mining dams where arsenic-laden water was once pumped to evaporate.

Earth Resources Regulation is still chasing $572,000 Kralcopic promised to pay into a $5.9 million environmental rehabilitation fund before it went into administration.

A number of other groups also want to recover debts in the fallout from Kralcopic's collapse.

Administrators expect to make recommendations to stakeholders later in April.

The regulator has not publicly disclosed more details about planned community consultations but do already have closure plans for both sites, including ideas for an 18-km tunnel under Bendigo streets called the Swan Decline.

The tunnel was built by company Bendigo Mining between 1998 and 2006, which believed it could find as much as 600,000 ounces of gold a year at full production.

Bendigo Mining reached goldfields deep under the city streets.

It officially launched the first stage of proper gold mining in October 2006.

But even by that stage it was clear that initial estimates of gold loads were overstated.

Bendigo Mining had earlier that month told investors that its $350 million operation would likely dig up 30 to 45 per cent less gold than originally hoped.

The company halted trade the following January.

Company Unity Mining ended up closing the mine in 2011.

Kralcopic took over in 2016 but struggled to pay off debts and raise funds for new works, prompting Earth Resources Regulation to revoke its licences in 2019.

The company lost its appeal against that decision last week.

The Kangaroo Flat site could eventually be turned into box-ironbark bushland, assuming previous company's closure plans for the site are followed.

The miners who wrote the plans assumed that the site would be incorporated into public forest.

Earth Resources Regulation wants to turn Woodvale's ponds back into agricultural land, though that would not necessarily preclude Kralcopic or its parent company GBM Gold from building a solar farm at the site.

The company has been pushing for a solar farm there since 2019, though that would depend both on who would pay for it and the outcome of the current business administration process.

Meanwhile, authorities are still working out how to deal with a problem linked to Bendigo Mining's old patch.

Authorities have been pumping groundwater out of mining voids beneath Bendigo ever since it made a 2017 emergency intervention to protect Central Deborah's tourist attraction from inundation.

The water was rising after miners closed the Swan Decline.

The water was once pumped into Woodvale's evaporation ponds, but that has not been an option for many years.

Authorities had hoped to have a long-term solution this year, but it remains unclear whether they will meet that target.

"Consideration of long term solutions is on-going - while the Victorian Government continues to support the interim solution to manage this contaminated water safely," a government spokesperson said on Tuesday.

The interim solution will be funded until June 30, but a statement on the project's website says an extension is being considered.

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