The company behind a major open-cut gold mine in western NSW said on Monday the $1 billion project was no longer viable after a rare Federal protection order on Friday to protect parts of the Belubula River that hold cultural heritage value.

ASX-listed Regis Resources said a decision by Environment Minister Tanya Plibersek to protect Indigenous heritage at its $1 billion McPhillamys Gold development in central-west NSW would stop the mine going ahead.

The NSW Independent Planning Commission in March approved Regis's application to mine gold in the area despite opposition from some in the local Aboriginal community.

In a statement to the ASX on Monday, Regis chief executive Jim Beyer said the company was "extremely surprised and disappointed" that, after nearly four years of assessment, Ms Plibersek had effectively ended the project.

Mr Beyer disputed Ms Plibersek's claim on Friday the development could still be delivered, despite also protecting the interests of Aboriginal heritage at the site.

"Minister Plibersek has stated that this declaration 'will not stop the mine'," Regis said.

"To the contrary, this decision does impact a critical area of the project development site, and means the project is not viable."

The minister's Indigenous-heritage protection declaration covered part of the Belubula River, which falls within the footprint for a proposed storage facility for cast-off material from the Regis gold mine.

Regis has argued there are no other viable options for the facility - despite Ms Plibersek claiming on Friday there were - and said developing alternatives would require the company to restart the lengthy assessments process.

The company also said the declaration would have wide-ranging implications on foreign investment in mining projects here, a view backed by the Association of Mining and Exploration Companies (AMEC).

"It shatters any confidence that development proponents Australia-wide (both private and public) can have in project approval timelines and outcomes," Mr Regis said.

Mr Regis had already spent more than $150 million on the proposal - an 11-year open cut mining operation in the Blayney-Kings Plains district, near Bathurst - which it said would have created almost 1000 jobs in the region.

On Friday, locals at the Wiradyuri Traditional Owners Central West Aboriginal Corporation celebrated being told of Ms Plibersek's partial declaration.

Wiradjuri Elder Aunty Nyree Reynolds, who in 2021 lodged an application under the ATSHIP Act to protect the proposed footprint of the mine and tailings dam, told the gathering the decision meant the most significant areas of the Belubula River, including the headwaters themselves, the springs, and the river itself would be protected.

"We knew that place was special because our old people have been talking about the Belubula for a long time," she said.

"It's a sacred songline … more than often, we get told our knowledge isn't traditional enough, and we make things up.

"But we've been told [by our ancestors] to always stay on our songline, and talk straight, and tell the truth.

"And we did that, and we did that for Country, and we did it for our mob that come from south: my father's people, my father's Country."

Industry lobby group AMEC said the government order lacked "reason and commonsense".

"It sets a truly terrible precedent for investment risk in Australia," CEO Warren Pearce said.

"The $1 billion investment to build the mine, the 580 construction jobs, the 290 operational jobs, and $200 million dollars of royalties to the State, as well as real benefits for local Traditional Owners, just went up in smoke."

He said Ms Plibersek had ignored the views of local Traditional Owners, the Orange Local Aboriginal Corporation, who did not oppose the project.

"The absolute absurdity of this this decision, is that in upholding the Section 10 Objection, the Minister has chosen to ignore the views of the recognised Traditional Owners for this country (the Orange Local Aboriginal Corporation), who did not object to the Project," Mr Pearce said.

"They could see the value and future prosperity that this project could bring to their people."

The Orange Local Aboriginal Corporation was contacted for comment.