A new mining company with 50 per cent Chinese ownership was created Tuesday with a specific focus on exploration and development in the Yukon.

The company, Yukon-Shaanxi, was formed by an agreement between Yukon-Nevada Gold Corp. and the Northwest Non-Ferrous International Co. Ltd. (NWI), a company indirectly owned by the Peoples Republic of China.

'We are looking at an agreement that will bring Chinese resources into the Yukon,' Yukon-Nevada president Graham Dickson said during a formal signing ceremony held in Whitehorse Tuesday morning.

Dickson and Sun Feng, a director of NWI's parent company, signed the agreement before an audience of government and private sector officials representing mining and economic development interests, including Economic Development Minister Jim Kenyon.

Dickson met Sun in Beijing last year after he was invited to join Kenyon on a trade mission.

Officials with Economic Development described the arrangement as unique to the territory because it represents investment in the creation of a new company, unlike the more traditional transaction that typically involves foreign investment into existing companies.

Sun said the main focus of NWI's parent company is exploration and development of mineral resources in the Chinese Province of Shaanxi and overseas.

While NWI has partnered with other Canadian companies like Placer Dome and Teck Cominco in the past for different projects, this is the company's first investment venture in Canada, Sun explained.

'We always try our best to find new partnerships in new countries,' said Sun, speaking through an interpreter.

'We found our best plan in the Yukon Territory, and we think highly of the Yukon Territory.

'Thank you, Yukon government and the Department of Economic Development, for trying their best to push forward the agreement, and Graham is a very good partner,' the Chinese executive told the audience.

'In our future, we have a bright future.'

Under the arrangement, Yukon-Nevada and NWI will each contribute $1.5 million to the formation of Yukon-Shaanxi, a company the parties expect to take public at some point, Dickson explained.

He said the new company has its eye on several existing properties in the Yukon but was not able to elaborate for business reasons. The properties have had some exploration historically, but not to the advanced stage, he said.

'I would expect we would be spending at least that amount of money every year,' Dickson said of the $3-million amount to get Yukon-Shaanxi on its feet. 'But I would also expect if we find the right property, we would be spending a lot more.'

He said neither of the partners to Yukon-Shaanxi will obtain any rights to the assets already owned by the other.

Yukon-Nevada, for instance, has seven active properties in the Yukon that it has spent $25 million on since acquiring them, Dickson explained.

Among the properties, he added, is the former Ketza River mine site, which has seen the lion's share of expenditures, including $10 million spent in the last year.

Dickson, who was a major principal with BYG Natural Resources when it abandoned the Mount Nansen gold mine, said Yukon-Nevada Gold has an impeccable environmental track record here and in the U.S.

In an brief interview after the official ceremony, Dickson said he only became president of BYG after the mine was stuck behind the eight ball with its environmental problems.

Mount Nansen has cost taxpayers millions of dollars to baby-sit since the company walked away in 1999, and the price is still rising at somewhere around $100,000-plus a month.

BYG shareholders were left in the cold, as the company slipped into bankruptcy proceedings which are still ongoing.

But Dickson pointed out that Yukon-Nevada just recently put up a $3-million bond to cover its work at the Ketza River property, which he fully expects to be back into production once the company completes it exploration program.

Yukon-Nevada has also spent in excess of $600,000 in reclamation and cleanup of material left behind by others at the Ketza mine site, he pointed out.

Sun said NWI has a policy of dedicating 10 per cent of its profits to environmental improvements, and noted that mines operated under the control of NWI do not produce waste water, but rather re-circulate it.

'At the beginning of new mines, we will have a good plan to protect the environment.'

Kenyon told the audience that before NWI was allowed to invest outside China, under Chinese law, the Chinese government had to be assured that any project NWI was involved with would be subject all environmental standards.

The Yukon government, Kenyon told the audience, sees the territory as a player in the new pattern of global trade, particularly with its location so close to tidewater and access to Asian markets.

'The Yukon has a wealth of resources yet to be developed, or explored,' Kenyon said.

'We have a lot of potential in the Yukon that we will be developing,' Dickson said. 'I think Mr. Sun Feng has seen that and wants to be part of it.

'I think it is a big deal because it is the first step on the road that could lead to significant investment.'

Whether the company will open an office in Whitehorse is something that remains to be seen, Dickson said.