Australian prospectors are searching old mines for more gold as bullion prices increase, pushing production to its record high in more than six years, according to consultant Surbiton Associates.

Surbiton Managing Director Sandra Close said, "We are experiencing an extended period of high Australian gold prices, which has led to old deposits being re-evaluated and re-developed."

Australian gold prices averaged about A$550 per ounce between 2000 and 2005, and around A$1,200 per ounce for the last two years, she said.

"It's no wonder we are seeing renewed activity in the gold sector."

According to Ms. Close, gold output in the three months to June climbed by 11 percent or 6.5 tonnes to 67 tonnes (2.2 million ounces) compared with the March quarter, and added 20 percent on the June quarter 2009.

Local gold production in the year ended June 30, 2010 jumped 11 percent to 245 tonnes versus 222 tonnes in the previous 12 months.

Only China produces more gold each year than Australia.

"It was the highest quarterly output since December 2003 and helped to turnaround annual production as well."

Ms. Close said some miners are obtaining as little as 1.5 grams of gold from each tonne of ore.

"In other words they have to mine and process around 20 tonnes of ore to produce just one ounce of gold."

"To get to those 20 tonnes of ore, they might have to move 100 tonnes or so of waste."

Source: Reuters