Spain finds El Dorado at home

Spaniards conquered the Americas in pursuit of gold, but El Dorado was in their back yard all the time. While Cortes brought the empire of Mexico to its knees and Pizarro kidnapped the last Inca emperor, the largest gold reserves in western Europe lay trapped beneath the isolated sierras and valleys of Asturias, northern Spain.

A Spanish-Canadian company that moved into the area three years ago says it has found high-grade ore which will yield at least 62 tons of gold and up to 700 tons of copper. This is not far short of the 74 tons plundered by the conquistadores in their "golden era" between 1501 and 1545.

Work on a processing plant starts this autumn, and the first ingot is due to pour late next year. Meanwhile, heavy rigs with diamond-tipped drills are plunging deep into the earth day and night to chart the extent of the subterranean treasure.

Rio Narcea Gold Mines, with Spanish, North American and British capital, has set up offices in the small town of Salas, a medieval stopping point for pilgrims on the road west to Santiago de Compostela, and a short drive to the gold belt. The 4 sq mile area lies some 30 miles west of the Asturian capital, Oviedo, and the company has secured mineral rights across the ancient and complex rock formations throughout western Asturias.

The ore so far discovered is only "a small fraction", says Alberto Lavandeira, director of operations. "We haven't uncovered 10 per cent of it yet." He adds: "The deposits are much deeper than expected, about 100 yards down, under tons of rock. We had to reinterpret existing knowledge before we realised what we had."

The Romans knew about Asturian gold. Two thousand years ago, 60,000 slaves toiled in what was the Klondyke of the Roman empire. They built an elaborate system of gently descending canals to cascade over the gold-bearing gulches, then filtered the mud through straw and twigs to allow the heavy gold to drop through.

Traces of Roman channels and open-cast mines still dent the verdant slopes, iridescent in the spring sunshine, but the ancient workings were stripped long ago. Today's prospectors would find nothing if they panned the River Narcea except trout and salmon.

The villages of La Valle, Sierra Begega and Boinas are not uncharted frontier zones offering a bonanza for wild-eyed prospectors, but long- established - if tiny - pastoral communities. Accordingly, the company spent most of last year buying up properties on the land it proposed to mine.

"We spent $5m [pounds 3.3m] buying land, but it's worth it," says Mr Lavandeira. Most owners, some absentee, sold up, some offering their land before being asked. The abandoned dwellings of nine families in the hamlet of La Valle are swiftly being reclaimed by rampant grass and flowers.

But one canny local, sitting on a goldmine, is holding out for a better deal. Faustino Suarez stands before his spacious old house and complains the constant noise from the machines keeps him awake. He has finally accepted the company's offer of 77 million pesetas (pounds 380,000) for his house and 40 acres of pasture, but he won't move until the summer, when his sons, aged 10 and 14, finish their school term. He wants another 300,000 pesetas compensation for the noise and inconvenience.

"Don't press me, Faustino," snaps Mr Lavandeira. "We'll arrange for sound- proofing or lodgings nearby, but we're not giving you any more money," and he stamps away across the umber mud. Faustino then concedes he has done well from the deal - he bought a 16th-century palace in the next valley with the proceeds - "but it needs a lot of work, and the land isn't as good as here.

"We never wanted to go; now we just want peace for the short time remaining. This house has been in my wife's family for generations: now I know there's gold, I'm worried I've sold too cheap."

Overlooking Faustino's house, up the hill in Begega, is the company's preparation plant, where a dozen young geologists analyse the long cylinders of rock screwed from the earth. The gold does not appear in nuggets but is dispersed in microscopic fragments, so the ore must be ground and subjected to a succession of chemical processes to yield its treasure of five grams of gold per ton.

The gold belt lies in the municipality of Belmonte de Miranda, whose beady eyed socialist mayor, Roberto Perez, takes a pragmatic view. "If the company want permission to start mining and to take the gold away, we want some crumbs of compensation for our little community," he says, and ticks them off: local recruitment to alleviate the region's 24 per cent unemployment, training in manual skills for local youth, rehabilitation of gashed countryside, a cultural museum.

A company-sponsored survey showed that more than 70 per cent of locals thought the project "very positive", especially young people and those working in restaurants and hotels. Gold fever for them means higher land values and more work.

Drilling is already transforming a region that for centuries was disturbed only by munching livestock, jumping fish and frequent hailstorms. When the mining starts, and pastures are ripped away and heavy vehicles crunch across ancient narrow bridges, it will provide fewer than 300 jobs, and then for only a decade or so.

But even this comforts Faustino Suarez, whose dreams are more modest than those of the conquistadores: "If it creates work, that's fine. My sons may have something for the future."