Peak Gold Mines was convicted and ordered to pay a penalty of $50,000 to the Cobar Shire Council for the expansion of its Effluent Re-use Scheme.

It was also ordered to publicise details of the offence in several newspapers and to pay prosecution costs of $52,000 and investigation costs of $4567.

The court proceedings related to an incident between November 24, 2011, and December 21, 2011, when tailings were discharged into a clean water drain during an upgrade of the mine's tailings storage facility.

The incident occurred while contractors carried out construction works at the mine.

Tailings are a potentially hazardous material generated during the processing of mined minerals and contain a range of chemicals including potentially acid material, heavy metals (such as zinc, copper and iron) and cyanide.

As a condition of the mine's licence tailings must be kept separate from clean water.

The EPA's chief environmental regulator Mark Gifford has welcomed the outcome, and said it was a lesson for all mining companies to ensure their staff, visitors and contractors comply with environmental protection procedures.

"Peak Gold Mines could have prevented the offence by making sure their contractor was informed of and complied with environment protection procedures when doing works at the mine site," Mr Gifford said.

"The company should have also conducted more rigorous inspections of the mine's tailings storage facility upgrade to make sure an appropriate diversion drain was put in place as well as a plan to prevent pollution from occurring.

"Although the degree of environmental harm was not significant, tailings were still discharged into the clean water drain and dispersed into bushland onsite.

He said Peak Gold Mines immediately began a clean-up operation once it was alerted to the incident. The clean up was successful and the company is working with EPA officers to ensure no pollution incidents like this occur in the future.