A fluffy pink fungus that decorates itself with gold nanoparticles has been found in Western Australia. Researchers believe the fungus is an indicator of gold deposits and hope the discovery will help miners narrow down where to dig.

Scientists in Australia have found a fungus that can bond with gold particles. It releases a chemical called superoxide that can dissolve gold in the soil. It is then able to mix this dissolved metal with another chemical to turn it back into solid gold, in the form of tiny nanoparticles.

So why does this gold-loving fungus have an attraction to this precious metal? The research team believes by interacting with gold in this way it can grow faster and bigger relative to other fungi that do not.

The research has been carried out by Australia's national science agency.

The Commonwealth Scientific and Industrial Research Organization, the CSIRO, believes the discovery could be a new way to mine gold. The fungi could be markers that indicate the presence of gold, and narrow down the area where exploratory drilling would be most beneficial.

The study's author is Dr. Tsing Bohu, a CSIRO geo-microbiologist.

"I think this is probably very novel because gold is very inert generally speaking but we found actually this fungus can interact with gold by dissolving gold. So I think it is very novel and it is also very important for mining and other industrial [processes] like leaching, so [it] has some potential applications," he said.

The fungus was found in soil at Boddington, 130 kilometers south-east of Perth in Western Australia.

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The research has been published in the journal Nature Communications.

Australia is the world's second-largest producer of gold, but its output is expected to fall unless more deposits are discovered.

In recent weeks, two Australians have stumbled upon large gold nuggets worth tens of thousands of dollars in Western Australia and the state of Victoria. (VOA)