The Otago Goldfields Heritage Trust has been granted more than $84,000 to restore the Stewart Town cottage and dam at Pipe Clay Gully, near Bannockburn.
Trust secretary Terry Davis said the grant was ``exciting''.
The site had been slowly falling into disrepair since the 1950s, and the stone cottage had suffered without a roof, as it was vulnerable to the elements.
``The money will go towards the costs of masonry and installation of a roof on the stone cottage to protect from and prevent further erosion,'' Mr Davis said.
Masonry work on the nearby 1.4ha Menzies Dam would also be carried out to make it safe and halt any further deterioration.
The dam was built by David Stewart and John Menzies in 1873.
Water was diverted from streams originating in the Carrick Range high above Stewart Town.
The water was then channelled via races through gullies that zig-zagged down the mountain to the Menzies Dam, Mr Davis said.
The water was used for high-pressure sluicing of gold-bearing gravel deposits in the Bannockburn basin.
``The Pipe Clay Gully site is unique because you are able to see the whole mining operation, from the water races, to the dam, to the sluiced-out hills, plus examples of home life, with the Stewart cottage and orchard,'' Mr Davis said.
Stewart Town is in the Crown-owned Bannockburn sluicings historic reserve.
Trust treasurer Odette Hopgood-Bride said the grant provided half the funds needed to restore the site.
`We spent $9000 commissioning a conservation plan in partnership with the Department of Conservation,'' Mrs Hopgood-Bride said.
The plan, drawn up by heritage specialists Origin Consultants, outlined the history of the area plus conservation measures needed to repair old structures and stem the rate of decay.
Mrs Hopgood-Bride said the trust had also applied to the Lottery Grants Board for funding, and was expecting to hear back by the end of November.
If the Lottery Grants Board came through, a second phase of restoration could start, including weed control, hiring an arborist, installing a toilet and getting irrigation to the site.
