The company applied for the licence in 2012.

It covers an area of 260 hectares housing Specimen, potential strike extensions, other quartz reef target zones and space for infrastructure including a waste dump.

The Victorian Department of State Development's granting of the licence follows an agreement reached in November between Octagonal and the traditional owners, the Dja Dja Wurrung people.

The plan is to extract near-surface gold at the site using open pit mining and transport the ore to Octagonal's Porcupine Flat processing facility at Maldon.

The carbon-in-leach plant has a capacity of 150,000 tonnes per annum.

"Now that this mining licence has been granted, we will complete infill drilling to upgrade resources for open pit optimisation work," Octagonal managing director Anthony Gray said.

"Our objective is to obtain all approvals to commence mining before the completion of mining at the Peal Croydon deposit."

Specimen is 40km northwest of Porcupine Flat and was discovered by Octagonal in July 2011.

Since then the company has drilled 47 reverse circulation holes to define near-surface gold over 440m strike length.

Shares in Octagonal were unchanged this morning at A9.2c.