Police are still hopeful of finding the remains of a South Australian teenager as their excavation of an outback mine enters its fourth day.

Karen Williams, 16, was last seen in Coober Pedy in the early hours of August 4, 1990.

On Wednesday, police, mine rescue and SES workers began excavating an old mine on the outskirts of the town after receiving new information.

They ceased work on the weekend, after completing the digging of the shaft and finding no items of relevance.

But they have now begun digging a second mine and say they remain confident the teenager's remains will be found.

Police say Ms Williams had been with friends at the Opal Inn and at Sergio's Restaurant, before she was allegedly dropped off by a young local man in Dawes Street.

Last year a $200,000 reward was offered for information leading to an arrest in the case.