"When there's one Chinese group interested in assets, there's probably a dozen more," said Dave Davidson, an analyst at Paradigm Capital.

"They're getting a little bit more aggressive, but they're looking for assets below the radar screen that would obviously not cause a lot of people concern."

Chinese miners have been very cautious on Canadian acquisitions ever since China Minmetals Corp. tried to buy Noranda Inc. in 2004 and faced huge political opposition. The Chinese recently purchased Tyler Resources Inc. and Northern Peru Copper Corp., much smaller Canadian firms with projects in Latin America.

With a market value of $81-million, Yukon Zinc is far smaller than even Tyler or Northern Peru, but its Wolverine project in Southeast Yukon is right at home. Two Chinese firms, Northwest Nonferrous Investment Co. and Jinduicheng Molybdenum Group Ltd., offered to buy it for about $100-million, or 22¢ a share in cash. That trumps a friendly bid from London-based Griffin Mining Ltd.

Nobody is expected to raise the red flag on a Chinese takeover as small as Yukon Zinc. In fact, the Yukon government has aggressively courted Chinese companies for several years.

The Chinese are experts at building roads and infrastructure, which is what the remote territory (and its population of just 35,000) badly needs.

"It's very unusual for a small jurisdiction like Yukon being very proactive [with China], but they see China as a source of major investment," said Bob McKnight, Yukon Zinc's chief financial officer.

Yukon Zinc's Wolverine project has a complete feasibility study and is fully permitted, which minimizes the risk for the buyers. The $207-million project will produce zinc as well as copper and precious metals, and could get built as quickly as next year.

Yukon Zinc's efforts to build the mine on its own were delayed after it had to redo a feasibility study. Then the credit markets collapsed and the company could not complete a key financing.

Those problems, along with a collapsing zinc price, put Yukon Zinc out of favour with investors and the stock struggled.

But with a longer-term view of metal markets and a need to track down more resources, experts said Wolverine is a logical fit for China. While it is remote, it is a high-grade operation and is not far from the coast.

"They have huge amounts of cash in China waiting to be spent, and they've been burned in some other parts of the world like Africa," Mr. Mc-Knight said.

"So a good, stable part of the world is probably the place where they'll want to put their money. And Yukon has open arms."

From this morning's Financial Post - article by Peter Koven