Phichit, Thailand: If it weren't for the heavy trucks thundering by and the exodus of young workers from the rice paddies, you might never have known Thailand's only gold mine was just down the road.

The gold mineral found in the ores of this unusually arid patch of central Thailand, 300 km (185 miles) north of Bangkok, is so fine as to be invisible to the naked eye, leaving Thai rice farmers unaware for centuries that volcanoes had deposited so much valuable gold on their doorstep millions of years ago.

All of that changed, when geologists tracking a gold vein from neighboring Laos found the gold ore in Phichit, rich enough in minerals to mine at a fraction of the cost bullion merchants will pay for a precious gold bar.

Akara Mining LTD, a wholly-owned subsidiary of Australia's Kingsgate Consolidated NL, was established in 1993 to develop the gold mine, they named Chatree.

Nowadays, many of the young people of Phichit go to work in the mine, leaving only the old people to work on the paddy fields, says Thai rice farmer and local resident Khun Lar, while he sips cold Singha beer and eats mouthfuls of dried green peas.

Rice farming has always been a tough way to earn a living under Thailand's hot sun and dry climate of Phichit, which unlike wetter regions of Thailand, only allows for one rice crop a year and by comparison, working in today's modern gold mining industry is much easier than farming.

From inside fully air-conditioned prefabricated buildings, geologists and other workers, more than 200 people, most of them Thai, plot new exploration plans on drafting boards and tally on computers the mine's yield, 154,000 ounces of gold dust with a value of $ 50 million, last financial year alone.

To get the best returns, only the richest ores are shuttled by conveyor belt to chemical leaching pools before being melted and poured into gold bullion bars under the eyes of heavily armed Thai guards.

Kingsgate, in partnership with the government of Thailand, is mining the gold out of the soil of Phichit at a cost of less than $100 an ounce, a quarter of the price on international markets. Gold prices are up about 14% this year after a 25% gain last year.

All the gold that is mined in Thailand by Kingsgate is sold in Australia, allowing Thailand to repatriate a tidy sum of money as its share. Kingsgate pays the Thai government a royalty of 2.5% on each ounce of gold it sells in Australia.

The Thai workers at the Chatree gold mine can also reap some gains as they are given the option on Kingsgate shares, which trade on the Australian stock exchange. Kingsgate shares are trading up more than 35% since the start of the year.

But the Chatree mine mid-term future will depend on finding more and richer veins. As the current ratio of gold in the Phichit mine remaining ores is falling and Kingsgate has to dig deeper.

Construction of a second mill will be finished next month, allowing the gold mine in Thailand to process at least 1.8 million tonnes of gold ore a year compared with 1.32 million in the most recent July-June financial year, MacIntyre added. Still, gold production in 2004 is likely to be only 130,000 ounces, about 84% of the previous year.

MacIntyre, who has spent a career in remote mining camps around the world, believes there is more gold to be found in Thailand. I'm a believer, from what I've seen here in Phichit, he says. In the hope of striking another rich gold vein, Kingsgate is hauling its drills across a main road that runs past the mine. It is putting back into exploration $40 million already raised in the market, plus another $5 million it plans to raise by June.

Local businesses in Phichit Thailand enjoy having a gold mine on the doorstep. Khun Soi, the 51-year-old owner of a small grocery store and cafe, said monthly sales have doubled since the miners arrived here. The Thai and foreign workers of the gold mine have money to spend and come here to drink beer and whisky, Soi said.

But the fortunes made from gold mining in Thailand still pale against the Thai trade in rice, which is estimated at seven million tonnes a year. Being the world's top rice exporter, Thailand sales of rice, last year alone, brought in a revenue of $1.75 billion.

Phichit is still primarily a farming and rice-growing area of Thailand, said a Thai miner on his lunch break, while heaping his plate with a second serving of rice and meat at Soi's cafe, and the gold mine is a bonus for Phichit and the whole region.