PERTH (miningweekly.com) – The Western Australian government has welcomed the formation of a joint venture (JV) charged with hunting gold investment opportunities for Chinese firms.

Perth-based corporate advisory firm PCF Capital Group has signed an agreement with a subsidiary of one of China’s largest gold producers, Zhaojin International Mining, to form the Golden Gateway JV.

Under the terms of the agreement, PCF will decide which project opportunities to present to the JV for consideration, and would retain full independence and flexibility to continue its role as a nonaligned corporate adviser.

PCF Capital founder Liam Twigger said that Golden Gateway would combine PCF’s deep industry knowledge with China’s willingness to successfully invest in Australia, and expand the Middle Kingdom’s overseas mining interests in Tier 1 jurisdictions.

He noted that although investments in the gold space would be the priority target for Golden Gateway, opportunities across all metals and minerals will be considered.

“There is global demand for profitable gold mining operations, which are less exposed to the fluctuations in world-wide economic growth and trade relations.

“At PCF, we have noticed an increased appetite from Chinese mining companies to invest in the right opportunities in Australia. However, there has been some hesitancy to transact because of a perceived lack by the prospective buyer of local market insight and the ability to carry out effective due diligence.”

Twigger said that Golden Gateway was structured as a conduit to identify and offer up investment opportunities, backed by locally-based technical and financial due diligence, to willing Chinese investors.

“The Australian mining industry, particularly the gold sector, has a top-tier reputation around the world and Chinese majors like Zhaojin Mining want to establish a presence here, backed by the confidence that they have access to the type of leading and independent technical and financial analysis a firm like PCF can provide.”

Twigger said that he was also expecting Golden Gateway to attract interest from the owners of Australian mining assets who want to tap into the Chinese investment community.

Western Australian Mines and Petroleum Minister Bill Johnston has welcomed the formation of the JV, saying that the partnership mirrored the state government’s commitment to building its economic ties with China.

“Western Australia's innovative and globally competitive gold industry is a key component of our reputation as a destination of choice for resource investment.

“It's also never been a better time to invest with the Australian gold price hitting record levels this month.”

China has been Western Australia's largest market for merchandise exports since 2006 and is a significant investor in the state's resources sector. Chinese companies have direct interests in projects across several commodities including iron-ore, liquefied natural gas, gold, lithium and manganese.