Amid the hype surrounding gold, Wall Street is trying to figure out how to really play this sector. It’s not easy. You can own bullion or futures, but if you really want to shoot for big returns you need to make a speculative bet on mining companies. The problem is there are not too many established mining firms to choose from. Most have operations in countries with ambiguous property rights and governments that like to change the rules.

But this week the path forward may have been found by one of the most unlikely and ridiculous gold mining firms ever to trade on an exchange. After 13 years of trying, Crystallex International may have found an answer in China—although it’s unclear how profitable this answer will be.

I first wrote about Crystallex in 2006. At the time the Toronto mining company had already spent nearly a decade trying to develop Las Cristinas, a very big gold deposit in Venezuela. It had convinced investors it was on the verge of a breakthrough and Crystallex had a market cap of nearly $1 billion on the American Stock Exchange.

Crystallex is the brainchild of Marc Oppenheimer, a former loan officer at Chase Manhattan bank who has roots in Leonia, N.J. He took over Crystallex in 1995 and struck a deal for the Las Cristinas rights in 1997. Only the deal didn’t mean much because Venezuela had already cut a deal with a different company. Oppenheimer finally signed a better deal in 2002. He left the top exec job at Crystallex soon after and Todd Bruce, a Nebraska-born geologist, took over. “There is a large degree of misunderstanding of Hugo Chavez,” Bruce told me in 2006, saying the company was on the verge of getting the environmental permits needed to start work on a mine.

Within a year Bruce had left Crystallex and there were still no permits. The next chief executive lasted about a year. By last year the company was losing $314 million annually, its stock traded for 18 cents, and it was running out of cash.

But current CEO Robert Fung just pulled an interesting maneuver: He is going into business with China. Crystallex signed an agreement with China Railway Resources Group, one of China's largest state-owned companies. Crystallex is giving the China Railway Resources Group a two-thirds interest in the Las Cristinas project for a song. China Railway pledges to assist Crystallex to retire some notes and make a small equity investment in Crystallex. So far China Railway Resources has advanced $2.5 million to Crystallex. China Railway will also take over the effort to get those permits.

What Crystallex seems to be truly getting for its two-third interest in Las Cristinas is influence with Caracas. As the Globe and Mail pointed out, Chavez has boasted that China is lending Venezuela $20-billion and China Railway is building a $7.5 billion railway there.

Crystallex’s stock is down 12% today to 45 cents as investors clearly are worried about how much will be left for them in this deal. But in the global race with China for natural resources, Crystallex might be signaling a new way forward: If you can’t beat them, join them.