The title of the Drones' new album, Havilah, is a biblical reference to a Shangri-La-esque town with an abundance of gold. It is also the name of a valley near where the album was recorded. Nestled in the forested foothills of Mount Buffalo, outside of Myrtleford, the area is steeped in goldfield and bushranger history, which provided a rich source of inspiration for the songs.

These days, only a few farmers - and the Drones - inhabit the area. All that remains of its glorious past is a graveyard and old mineshaft.

"We also want the album to go gold," says Drones frontman Gareth Liddiard.

He is joking, of course. Because unlike Powderfinger or Thirsty Merc, the Drones are not the type of band to sell the 30,000 copies required to earn a framed gold record for their wall. Their snarling, squalling, maniacal, literary rock is too confronting, too singular, too Australian. Their lyrics are too literary and dense, Liddiard's "ye olde" Australian accent too thick, their humour too dark and bent.

Liddiard's grimacing face graces the cover of a new book of academic music writing called Sounds of Then, Sounds of Now: Popular Music in Australia. In his essay, author John Encarnacao describes Liddiard as an outsider, "more like an idiot savant drunk at the local than any traditional notion of a singer with a recording deal".

Yet they are a critics' favourite and their fans are obsessive. Many hail them as heirs to the Nick Cave and the Bad Seeds' throne, and Havilah the most anticipated album of the year.

In 2005 the Drones won the inaugural peer-voted Australian Music Prize for their second album, Wait Long by the River and the Bodies of Your Enemies Will Float By, and the follow-up, Gala Mill, was shortlisted the following year. In June, Wait Long was rated No. 20 in EG's Top 50 greatest Australian albums poll.

So there was much expectation surrounding Havilah. To avoid the pressure, and to escape the city, at teh start of the year Liddiard and his bass-playing partner Fiona Kitschin moved into a mudbrick house on the Myrtleford property.

Sydney producer Burke Reid (the Mess Hall, Gerling) drove down and set up a mobile studio in the house, powered by a diesel engine.

With no electricity, television or radio to influence them, Liddiard read voraciously to research the topics and characters from the margins of society that pop up in the songs, such as space travel, the Kelly Gang, Cargo Cult, minotaurs, divorce and the end of the world. Clearly they don't mess around with trivialities.

Cormack McCarthy's apocalyptic book The Road, Buzz Aldrin's autobiography, David Attenborough documentaries and footage of Australian soldiers inspired his dark narratives.

On the first single The Minotaur Liddiard updates the mythical Greek half man-half beast as a modern-day sloth who spends all day on the net - our generation's maze, he says. "It's a metaphor for anger management problems," he says. "This beast lives in a maze that he can never find his way out of, and if anyone walks in the maze, he kills them."

On I am the Supercargo Liddiard tells the story with great pathos of the paranoia and sadness surrounding the Pacific islanders in the John Frum cult - "the great God of great whitegoods":

"You want to make good with a cannibal?/You've got to show him how to freeze a priest."

"There's no evidence of John Frum existing," Liddiard explains. "But the story goes that he turned up to Tanna Island in the Pacific, (the inhabitants of which) live in the Stone Age, and after WWII, he got blown off course and rolled up with all these whitegoods - fridges and toasters - and he blew their minds. They thought he was God. After he left they prayed that he would return."

Penumbra is about Liddiard's awe of man's flight to the moon, while Luck in Odd Numbers is his attempt to debunk the myth that the members of the Kelly Gang were brave heroes.

"The Kelly Gang thing is interesting on many levels, but no one ever seems to say that it was a stupid thing to do. They are a strange bunch of people to make into icons."

Things don't get any more optimistic on Oh My, but at least Liddiard has some fun with the theme.

"You want to shrink your stinky footprint?/Get your tubes tied, or even better yet, go commit suicide."

"It's a funny look at something that's not funny - the impending end of the world," he says.

And then there's the divorce song, The Drifting Housewife. With Dan Luscombe's slide guitar building into a dizzying, psychedelic cacophony, Kitschin wailing like Yoko Ono in the background and drummer Mike Noga playing glockenspiel like a bored child switching off, it is the sound of a family going insane while the kettle boils in the background.

Despite the heavy subject matter, the album is broader in scope and a bit mellower than their past three albums, as they add country inflections to their folk-Celtic-punk-blues brew.

This was necessary, says Luscombe, to ensure the band's survival.

"Gareth said to me towards the end of a recent tour, 'I am not writing another full-tilt album, my back just can't handle it any more.' "

"Hardcore punk albums are a young man's business," says Liddiard. "You get a bit tired in your old age. There was a conscious effort to make something a bit easier to play."

But Luscombe doesn't think it will take the edge out of the shows. "Time will tell, but even though we have these less abrasive songs, I'm sure when we get on stage Gareth won't be able to help himself and it will be the same old Drones."

Not many musicians have quit Paul Kelly's band, but that's what Luscombe did when he got the offer from the Drones to replace Rui Pereira.

"It wasn't an easy decision, because I really enjoyed working with Paul," said Luscombe, who has also played with singers such as Spencer P. Jones, Ian Rilen, Brian Hooper and Dan Kelly.

"He said to me, 'If it was any other band, I would be curious as to why you were doing it, but for the Drones, I understand and you have my blessing.'"

Luscombe recalls being "blown away" the first time he saw the band soon after they arrived from Perth at North Melbourne's Town Hall Hotel.

"When they first started playing in Melbourne, they looked like they had been washed in from a storm. They looked like they needed soup," said Luscombe, who later lived with Liddiard in Northcote and briefly played with him in Dan Kelly and the Alpha Males.

"There weren't many bands around Melbourne at the time that I was convinced by. Gareth was just plugged into something. I had no idea what he was singing about at first, but I could tell what he was singing was quite important, and I wanted to know more. And he has the most incredible guitar style. There was a lack of self-awareness that I've always noticed about the group. Once they start playing, the audience are bystanders."

But very fussy bystanders. In fact, the band are still trying to come to terms with the level of fanaticism of their fans.

"Every time we put out a record we think, 'Oh, they are going to so hate it', " Kitschin says. "When we put out Wait Long we thought, 'People that like us will think we're soft.' And the same with Gala Mill.

"I only own one Van Morrison album," adds Liddiard, "and I'm happy with that one, I don't need the rest. I'm happy for someone to pick out their (one) Drones album and stick with that."

In Britain, the band have found a way to cut their touring schedule and tap straight into their fan base by signing with fledgling label and boutique festival company ATP (All Tomorrow's Parties).

"It's been really handy in England," says Liddiard. "It means we don't have to tour so much. The whole industry over there is based on pop and trends and NME, and to be able to play at a festival that is entirely about the music, and not the haircuts, is wonderful. And we go straight to the source with the crowds there."

The band don't know whether Havilah is better or worse than previous releases; it simply captures a moment in time.

"The album's just different," says Kitschin. "It's not representative of where we are or anything, it's just the album we made."

"It's not like we stand around jamming every day and talk about a new direction," says Liddiard. "We just had a fortnight to make a record and we went for it."

Dates are in the gig guide for The Drones' Australian tour in October. Havilah is out now through ATP and MGM.

-Patrick Donovan