Mohammad Sadegh Piroozi, the city’s police chief, confirmed the incident, saying two individuals working at the mine opened fire on a group of people, leaving four wounded who were taken to hospital.
He said one of the victims succumbed to injuries.
Norway-based human rights group Hengaw says the Islamic Republic's security forces had opened fire on local activists protesting the gold mine's operation in the village of Pir-Omran, killing a citizen identified as Mohammad Amin Rashidi.
According to the group, authorities transferred his body to the Baneh hospital and have not returned it to his family.
The Kurdish rights group identified the injured as Ramyar Rashidi, Mohammad Rashidi, and Heyman Rashidi.
In a separate report, Geneva-based rights group Hana Human Rights Organization said the shooting was carried out by guards and security personnel at the mine under the direct orders of Saeed Babamoradi, head of security at the Kurdistan Gold Mines Development Company.
Babamoradi is a Ministry of Intelligence officer on assignment at the state-owned Social Security Investment Company (SSIC), also known as SHASTA, the report added.
The rights group called for his immediate prosecution along with the security apparatus under his command for responsibility in the killing.
Saqqez was the hometown of Mahsa "Jina" Amini, the young woman whose death in morality police custody three years ago sparked nationwide protests in Iran known as the Woman Life Freedom movement.