Golden China Resources is using private placement offer funds to further its exploration and feasibility study work at the Behinyar gold project in China and hopes to start production as early as the fourth quarter in 2008.

The company raised Can$7.8 million through the private placement offering.

Golden China's president and chief executive officer Greg Starr says the funds will also be used for expansion of the BioGold processing plant and for working capital purposes.

"Expansion of our BioGold gold processing plant will significantly enhance the facility's cash flow.

"By completing a mainly convertible debenture financing, we are minimizing potential dilution, which we believe will be more than off-set by increasing shareholder value from both BioGold and Beyinhar.

Drilling has resumed at the Behinyar project in the Chinese province of Inner Mongolia following the winter break.

Beyinhar is well supplied by existing infrastructure and services. The site is 365km from Hohhot, the provincial capital, and has a bitumen road within 1km of the deposit. A new 110KVa power line has recently been constructed within 7km of the site and a potential water source lies 30km to the north-west. The town of Sonid Youqi, comprising 16,000 people, is only 50km to the south-west and the city and airport at Xilinhot is only a two hour drive to the north-east.