The Spring Hill and Surrounding Districts Consultative Committee said any mine built in the area would be in a major water catchment area, was on prime agricultural land and was in a semi-urban area.

The group has overlaid scale maps of the Cadia Valley mine and proposed Blayney McPhillamy mine on the drill exploration area where preliminary work has started, to show how much land a similar-sized mine would use.

The largest area extends from Spring Creek Reservoir to Lucknow and Spring Hill.

Committee chair Anne Salter said they were concerned the Fortescue Metals drilling was "futile or pointless" as the company would struggle to get approval for a mine in such a valuable area.

She said it would be near vital infrastructure including Orange airport, the Mitchell Highway, water resources and many properties.

"The water is vulnerable and very valuable," she said.

John Holliday, who led the exploration of minerals for Newcrest at Cadia, said about 58 residences were in the area needed for a mine.

"I don't think they've thought it through properly" he said.

"Even if it was underground you would still have noise and you'd still have dust."

Resident Kerry Rains said Fortescue "had come to the wrong place" as residents were opposed to plans that would limit water supply.

"For [about] 250 square kilometres around the base of Mount Canobolas, lies a fractured basalt aquifer, an underground water supply. It is smack bang in the middle of the greater Orange water catchment area," she said.

"Some things are worth more than the mighty dollar and water trumps money any day in my book."

Tim Langmead, Fortescue's Director of Community, Environment and Government said they had talked to locals.

"We have undertaken significant community consultation and are taking a proactive approach to responsible water management, acknowledging the potential impact on water resources and consistent with our approach in our other operations," he said.

"We are working with the support of key stakeholders to create employment and business opportunities and to contribute to the local economy."

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