A major expansion of Australia's deepest gold mine is nearly complete.

A $100 million expansion of the Gwalia gold mine is nearing completion at the same time as the metal trades at record levels.

The three-year project involves installing kilometres of new ventilation through new shafts to send chilled air from the surface to the miners working below.

The final ventilation shaft should be completed next month – having reached a depth of 480 metres with another 37 metres to go.

The $100 million investment is expected to pay for itself over the next decade.

Gwalia extracted 171,156 ounces of gold in the 2019-20 financial year, but should be able to produce between 190,000 and 200,000 ounces a year for the two years to June 2023.

A major part of the extension project is a $20-million plant to crush waste rock underground, mix it with cement and backfill into old workings.

This means trucks will no longer carry waste to the surface, which currently takes about two hours each way.

The high gold price means the company will also be able to pay back $200 million in corporate bank debt it borrowed as a precaution.

Dr Sandra Close, from Surbiton Associates, says COVID-19 has likely driven up the price of gold.

“That's certainly part of it,” she said.

“Obviously the coronavirus has now been with us for some months and I guess the message is getting through, particularly in places like the States, that it's truly serious, given the sadness and the numbers of people affected and even dying.”

It has also been speculated that old gold mines will be dusted off and deepened, and new mines will be brought into production, if gold prices remain strong for an extended period.