The outback's new gold rush

Kathy Marks joins the 21st-century wave of amateur fortune hunters as they set out to Kalgoorlie in search of soaring prices

In 1892, word of a sensational discovery spread across Australia and beyond. Two men digging for gold in the Western Australian desert had collected 540oz of the precious metal in a single afternoon. Fortune-hunters converged on the remote spot from all over the world, almost quadrupling the population of the "Golden West" within a decade.

The men who disembarked from ships, then walked hundreds of miles cross-country to the goldfields, picked up most of the surface treasure within a few years. But the arid, inhospitable region has continued to yield gold, and now record prices have started a new rush, with thousands of Australians heading west in the hope of striking it lucky.

Conditions are somewhat better than in the late 19th century, when water was scarce and there were frequent typhoid epidemics, but prospecting is still a chancy business. "You dig a lot of holes and find nothing," says Rod Wilson, who lives in Coolgardie, only yards from the site where William Ford and Arthur Bayley first found gold. "Then you see a little sparkle on the ground and suddenly it's payday."

Mr Wilson, 53, used to shoot foxes for a living in rural New South Wales. Now he spends his days beneath a scorching desert sun, scouring the dirt red landscapes and panning it rivers for a glint of gold. The gold price, which hit a record high of more than $1,575 (£957) per troy ounce last week, is an extra incentive. The 24oz nugget that Mr Wilson once found, for instance, would be worth $37,800 now, more than half the average Australian annual income.

The soaring price, which analysts expect to reach $1,600 before the end of this year, has triggered a frenzy of activity around Australia, the world's second-biggest gold producer after China. Gold-mining companies are expanding existing operations, reopening mines that were abandoned when the price was lower, and hunting for new deposits of the yellow metal.

Consumers, too, are cashing in on the boom; the Perth Mint, which refines most of Australia's gold, has struggled in recent times to keep up with demand for coins and bullion. People are selling their jewellery, and even gold fillings. "Gold parties", where friends gather to have their trinkets valued by an expert, have replaced Tupperware parties in the suburbs.

The likes of Mr Wilson prefer to find their own gold. "Mainly I do it for the lifestyle," he says. "You're your own boss, and if you're persistent, it pays its way. I'll never be a multi-millionaire, but as long as I can stay alive and feed my animals, I'm happy."

Despite its romantic aura, digging for gold is "bloody hard work", says another prospector, Glyn Morgan. "There's nothing flash about it. You're out in the stinking heat, with the flies. I'd be doing something else if I could. But you just get sucked into it."

Mr Morgan lives in Broad Arrow, just north of the principal gold-mining town of Kalgoorlie. In 1900, Broad Arrow had a population of 2,400 and eight hotels, two banks, two breweries and even a stock exchange. Now it is a ghost town, with just a handful of houses and one pub.

The original fortune-seekers, who pushed and dragged barrows of supplies and possessions through thick scrub to reach the goldfields, were equipped with little more than picks, shovels and panning dishes. Their modern counterparts use sophisticated metal detectors, and even earth-moving machinery. But the motivation has hardly changed.

Most gold-diggers are men, but increasing numbers of women are joining them. "It's the peace and quiet of being out in the bush," says Tracey McCrea, who leads prospecting tours around Kalgoorlie, a town which lays claim to the richest square mile on earth, known, unsurprisingly, as the Golden Mile. "You're away from everything, in the middle of nature, and it's very relaxing. The money side is just a bonus."

Kalgoorlie is the site of the Super Pit, one of the biggest goldmines on the planet, producing up to 850,000oz of gold a year. But even that mine has been overtaken by a pit complex at Boddington, south-east of Perth, which is expected to yield 40 million oz of gold over 10 years.

Aborigines originally found gold as they walked the land. It did not interest them much until white men arrived, then they realised how much white men valued it. They became highly proficient prospectors, and discovered some of Australia's main goldfields, as well as accompanying white prospectors, who relied on their tracking skills and ability to find water.

Aubrey Lynch, an elder of the Wongatha tribe, says: "As a child in the 1940s, I can remember walking around with my mother, speccing [scanning the ground] for gold. We were speccing for gold to live on, to go and buy tucker [food]. We also told the mining companies where our people had been picking up gold, then the companies went out and got themselves tenements."

Bill Powell, who lives in Coolgardie, still prospects the old-fashioned way, "loaming" (tracking a gold source by sifting soil), panning, "dollying" (crushing rock) and dry-blowing, using air to separate fine gold particles from dirt. Over the years he has discovered some major deposits. "But I never worried about getting rich," he says. "I always looked at it that as long as I had three feeds and a bed, I'm happy."

At 71, Powell is still out most days searching. "I can't get rid of the gold fever," he says. "I can't shake it; it's like a bloody disease. I've often said to myself why don't I get a little boat and go fishing? But I just keep going out prospecting. When I finally get to the cemetery, I'll still be digging, as long as they bury me standing up."

Golden times

* English prospector Edward Hargraves had a hunch that southern Australia bore similarities to California's goldfields. It paid off in 1851, when he became the first person to officially strike gold near Bathurst in New South Wales.

* Within a year, more than 370,000 immigrants arrived to cash in. During the 1850s, Victoria produced more than one third of the world's gold output.

* Irishman Paddy Hannan started a second gold rush when he discovered the precious metal near Kalgoorlie in Western Australia in 1893.