Both men were pinned by fallen rocks at the mine on Woolshed Gully Drive at Mount Clear, northwest of Melbourne, before 5pm on Wednesday.
The body of a Bruthen man, 37, who died after the rockfall was recovered by Victoria Police on Thursday about 6am.
A second man, 21, from Ballarat was stabilised before he was taken out of the mine about 8.30pm on Wednesday with lower body injuries, Victoria Police said.
He was later flown to the Alfred Hospital in Melbourne and remains in a life-threatening condition.
Police said another 29 miners took refuge in a safety pod and were brought to the surface on Wednesday night.
The rockfall took place 500m underground and 3km from the mine's entrance.
Australian Workers Union Victoria state secretary Ronnie Hayden said it was devastating that another worker had lost their life after some workers had previously flagged concerns about the mine.
"It seems to have fallen on deaf ears," he said.
The two workers were undertaking a manual type of mining called air legging which involved drilling into a rock to create a tunnel, Mr Hayden said.
"They were working on unsupported ground, trapping both miners and killing one," he said.
A man has died following a mine collapse at Mount Clear yesterday, 13 March.— Victoria Police (@VictoriaPolice) Emergency services were called to an operational mining site on Woolshed Gully Drive about 4.50pm after reports of a rockfall.Read more: https://t.co/ErvD0YzMsv pic.twitter.com/0s3T3a8SgfMarch 13, 2024
Mr Hayden said air legging was not appropriate for the setting.
"This form of air legging should not be used to do this type of work," he said.
"This was a quick, cheap and easy way to chase gold."
Premier Jacinta Allan described the collapse as a terrible accident.
"If there is advice that comes where laws can be strengthened, we stand ready to do that work and support workers across every industry who deserve the right to come home from work every single day safely to their family and loved ones," she told reporters.
Federal Minister for Resources Madeleine King also said it was too soon to have a solid idea of what caused the incident.
Mining operations have ceased as police work with the workplace regulator to investigate the incident and prepare a report for the coroner, Acting Inspector Lisa MacDougall said.
The mine's owner Victory Minerals said its emergency response team was working closely with Victoria Police and it was focused on supporting impacted workers.
Mining operations have ceased as police and the workplace regulator investigate the incident. (Con Chronis/AAP PHOTOS)
"Our absolute priority is supporting the wellbeing of our team members and their families and loved ones as we all come to terms with this tragic news," it said in a statement.
The company took operational control of the Ballarat gold mine in December 2023.
Minerals Council of Australia chief executive Tania Constable said safety was the most important issue for the industry.
"This tragic event is a reminder of the need to always prioritise safety above all else," she said.
The mine's website states it has an extensive network of tunnels and operates deep beneath buildings, streets and homes.
Ballarat Mayor Des Hudson said the miner's death was devastating news.
"We are a very resilient community," he said.
"There will be great community concern and support by the local community to those that are involved."
In 2007, 27 miners were trapped underground at the mine for several hours before being winched to safety.
The suburb of Mount Clear was also the focus of the search for mother-of-three Samantha Murphy, who police allege was murdered by 22-year-old Patrick Orren Stephenson.
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