BEIJING (Commodity Online): Red China, the biggest gold producer in the world, never ventured out to explore gold. But, the above $1150 per ounce gold prices have forced the Communist nation to think again on gold exploration possibilities outside the country.

And, Australia will be the first location the Chinese will target if they go for exploration outside the country.

According to a report in the Sydney Morning Herald, the Chinese are finding the lure of the untapped exploration upside in the Australian industry - ranked third in the global production stakes - too much to resist.

The paper said Range River Gold, based in Melbourne, is one of the first locals to benefit, striking a deal with Xi’an-based and state-owned North West Mining and Geological Exploration on its Indee gold project in the Pilbara region of Western Australia.

Under the deal, NWME can earn a 49 per cent interest in Indee by spending $6 million on exploration and development activities over the next four years. Indee was unsuccessful as a producer of gold from the heap leaching of oxide ores.

The Chinese interest in the project is in the potential for the discovery of higher-grade sulphide mineralisation at greater depths.

There has been encouragement on that score in the past but now the Chinese and Range River are going to test with the drill bit.

The Foreign Investment Review Board has cleared the deal, which has been close to a year in the making. It follows an earlier deal for NWME to pump $10.5 million in to Meridian Minerals, the group that plans to revive the Lennard Shelf zinc project in WA, the paper reported.