Beyond Abergynolwyn the line extended towards the disused quarry. The route ran into the scenic Gwernol valley before going up two cable-worked inclines to reach the quarry. It had always been hoped to open up this former mineral extension for passenger trains. Solicitor and member George Tibbits started work in 1959 on tracing the landowners and negotiating purchase of the land, accomplishing this in 1964. After this, it was necessary to obtain a Light Railway Order authorising the construction and operation of the extension, finally issued in 1972.
Construction work, which began on 3rd October 1970, involved a huge amount of widening cuttings, reducing gradients and easing curves, undertaken by the “Gwerns”, as the volunteers on the extension became known. The excavated material was used to widen the formation west of Abergynolwyn station to provide for the eventual platform extension and re-sited loop. A new terminus was built at the foot of the first incline, named Nant Gwernol.
The opening ceremony took place on 22nd May 1976, the first train being hauled by a suitably decorated No. 2 “Dolgoch”. The guest of honour was the well-known television presenter Wynford Vaughan Thomas. In 1980, a footbridge across the Nant Gwernol ravine was opened giving access to the footpath from Abergynolwyn village.