Qinghai Province in northwest China will use overseas funds to develop gold resources in the northern part of the Qaidam Basin.

This is the first time the province will use overseas investment to prospect gold resources, local officials say.

According to an agreement signed recently by Qinghai and Sino Mining International Co., Ltd., the Australia-headquartered company will conduct a feasibility study on prospecting gold resources at the Tanjianshan gold mine, the largest in the province.

Under the 30-year contract, Sino Mining will be responsible for raising development funds on the international market. Qinghai will own 10 percent of the mine's share if the company invests 50 million yuan (six million US dollars) for the prospecting.

The province will own 15 percent of the mine's share if the prospecting fund is 30 million yuan (3.6 million US dollars).

The Tanjianshan gold mine has produced 1,400 kg of gold over the past few years and its output value has exceeded 100 million yuan (12 million dollars).

So far this year, the mine has already produced 150 kg of gold, with output value exceeding 40 million yuan (4.8 million dollars).

Sino Mining was founded in China and is registered in the Cayman Islands.