China, already on the verge of overtaking South Africa as the world's largest gold producer, has discovered five major deposits, the China Gold Association says.

One, the Yangshan deposit in Gansu province, north-western China, has resources of 308 tonnes, the largest in the country, according to association deputy director Hou Huimin.

China is a big producer and consumer of the metal. Output is tipped to reach 300 tonnes this year, up from 270.5 tonnes last year. South Africa produced 272 tonnes in 2007.

China's demand for gold rose 23% in 2007, making it the world's second-largest consumer after India, as a booming economy spurs jewellery purchases.

Bullion soared to a record $1032.70 an ounce on 17 March as a falling dollar and declining equities led investors to buy alternative assets.

The other discoveries are the Gandise copper-gold deposit in Tibet, Dacheng gold deposit in Qinghai, Sizhuang in eastern Shandong province and Baolun in southern Hainan province, Hou said.

China's total gold resource is between 15,000 and 20,000 tonnes, the association said. Production in the country has grown at an average annual rate of 5.6% since 2001 and has attracted investment mainly from Canada and Australia, although Beijing no longer actively encourages new foreign participation.

Vancouver-based Jinshan Gold Mines operates the Chang Shan Hao mine in Inner Mongolia, with a target production of 120,000 ounces a year. Gold Fields of South Africa and Australia's Sino Gold Mining have set up a China joint venture with the potential to produce about 500,000 ounces a year.

Sino Gold has been buying stakes in Chinese gold deposits and explorers. It started production at its Jinfeng mine in southern China this month, with planned production of 180,000 ounces a year.