VANCOUVER, Oct. 16 /CNW/ - Helio Resource Corp. ("Helio" or the "Company") (TSX-V: HRC) is pleased to report that it has signed a binding Letter of Intent with Thorntree Minerals Limited, a private Tanzanian mining company, whereby Helio can earn a 100% interest, subject to a 2% Royalty, in the 34km(2) Saza West licence, located immediately west of Helio's SMP Gold Project in the Lupa Goldfields, SW Tanzania.
Highlights of the transaction include the following:
- Helio now controls all of the main areas of the former "New Saza
Mine" which produced 270,000 ounces of gold at an average grade of
7.5g/t Au between 1939 - 1956;
- The SMP Gold Project now covers 34km of strike length of the Saza
Shear Zone, the main known gold bearing structure in the region;
- Previous work conducted by AngloGold Ashanti in the late 1990s
(including soil sampling, trenching and RAB drilling) has identified
numerous drill-ready targets;
- There are no minimum annual exploration expenditures under this
agreement.
- Helio has the option to reduce the royalty from 2% to 1% by paying
Thorntree C$1,000,000 in cash prior to commencement of production,
and has the first right of refusal on the remaining royalty.
A map of the new project configuration is presented in the link below:
http://www.helioresource.com/i/pdf/2008-10-16_NRM1.pdf
To vest its interest, Helio must make optional share and cash payments to
Thorntree totalling C$25,000 and 1,025,000 shares over a 4 year period, as
follows:
-------------------------------------------------------------------------
Timing Cash Shares
-------------------------------------------------------------------------
Successful Completion of Due Diligence(x) C$25,000 150,000
-------------------------------------------------------------------------
1st Anniversary 125,000
-------------------------------------------------------------------------
2nd Anniversary 125,000
-------------------------------------------------------------------------
3rd Anniversary 125,000
-------------------------------------------------------------------------
4th Anniversary 500,000
-------------------------------------------------------------------------
TOTAL C$25,000 1,025,000
-------------------------------------------------------------------------
(x) - The due diligence period expires November 10, 2008.
ABOUT THE SMP GOLD PROJECT
--------------------------
Helio, through its 100% owned subsidiary BAFEX Tanzania Ltd., can earn a 100% interest in five contiguous licences, which cover a 34km strike length of the Saza Shear Zone and numerous prospective cross-cutting structures (see news releases dated December 19, 2005 and September 11, 2006). The project covers the New Saza Gold Mine, which operated between 1939 - 1956, producing approximately 270,000 ounces of gold at an average grade of 7.5g/t Au.
Since June 2006, the Company has drill-tested eleven targets, nine of which are hosted by the Saza Shear Zone. All eleven targets have intersected bedrock-hosted gold mineralisation, the most advanced being the Kenge Target, which has returned up to 22.0m grading 6.9g/t gold in the Main Zone (Company press release dated May 23, 2007). The thickest mineralised intercept at Kenge is from the Mbenge Zone (48.7m @ 2.1g/t Au - Company press release dated September 8, 2008). The thickest mineralised intercept to date at the SMP was drilled at the Porcupine target (52.2m grading 3.3g/t Au - Company press release dated July 21, 2008).
The Company has also received excellent metallurgical results from the SMP project, where recoveries of up to 96% were achieved by conventional processes at the Kenge target (Company press release August 11, 2008).
Helio's main focus is the development of the SMP Gold Project in Tanzania. As part of its strategic approach to project development, Helio has optioned 9 of its Namibian licences to Desert Minerals (UK) Ltd. and continues to pursue joint venture partners for its other projects in Namibia.
For additional information, please contact Richard Williams or Irene Dorsman at +1 604 638 8007 or by e-mail to richard@helioresource.com or irene@helioresource.com.
ON BEHALF OF THE BOARD OF DIRECTORS
"Richard D. Williams" "Chris MacKenzie"
Richard D. Williams, P.Geo Christopher J. MacKenzie, C.Geol.
CEO COO
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
%SEDAR: 00012999E