Major Russian gold-producer Polymetal joined AngloGold Ashanti last year to invest in geological surveying. With new deposits discovered, the country’s gold production is expected to rise sharply.

Russia has the world's second-largest gold reserves but, in terms of mining, it's placed number six. Its top ten gold deposits are in the east, from Krasnoyarsk region to the Chukotka autonomous area.

While gold prices are rising further this year, Russia's gold production is falling. In 2006 it declined by almost three tonnes from the year before, according to the Finance ministry.

Analysts say, despite its huge reserves, Russia's active mines are running out of gold. Most of the fields operating now were discovered in Soviet times and there has been little exploration or development since then. Companies have to mine fields which contain a lower ratio of gold to other minerals.

Russia's second-largest gold-producer Polymetal joined AngloGold Ashanti last year to invest in geological surveying.

It doesn't expect any quick discoveries. However, when it does announce discoveries, Russia's gold production is expected to rise sharply. Experts forecast that in 2009 Russia will produce 180 tonnes, rising 250 tonnes by 2012.

An example of one prospective site is the Natalka field in the eastern Magadan region, owned by Polyus Gold mining company and highly estimated by analysts.

“Natalka has been recorded as having 500 tonnes of gold which makes it the largest Russia's gold deposit overtaking the well-known Sukhoy Log and, according to Polyus, Natalka is actually the third largest gold deposit in the world. Obviously, it adds a lot to Polyus Gold reserves base. Polyus is also planning to run an international audit of its reserves on an annual basis. Subject to a successful completion of this audit, they expect that most of the Russian categories of reserves in Natalka will be converted into an international standard,” says Vladimir Zhukov, a Senior Analyst at Alfa Bank.

Once the new gold is mined, analysts are confident that Russia will raise its profile among the world's gold producers.