Vanuatu landowners on South Pentecost have signed an agreement with American company, Balli Hai Corporation, for it to prospect for gold in the area.
The agreement allows the company's specialists to drill and see if there is enough gold to justify plans to exploit it.
The deal also commits the company to compensate the land owners for the cutting of the trees in the areas listed for drilling.
The commissioner of mines, Tony Tevi, says in the past three years, specialists have been digging on the sides on the rivers of Walli and the mountains to collect rock samples for analysis.
Mr Tevi has likened the soil of Pentecost island to that of the Papua New Guinea island of Bougainville, which has been a major mining site for gold and copper.
Villagers have agreed that any payable money has to be put into the trust account of Walli Prospect.
