Helio Resource Corp (the
"Company") (TSX-V: HRC) is pleased to announce that it has
reached an agreement with Desert Minerals (UK) Ltd ("Desert"),
whereby Desert has the right to explore NINE of Helio's
Namibian exploration licences, and ultimately can select up to
four licences in which it can earn up to a 75% interest. The
deal is subject to the approval of the Ministry of Mines and
Energy of the Republic of Namibia. A list of the licences
concerned is presented below, and a map showing the location
of the licences covered in this agreement has been posted on
the Company's website at
www.helioresource.com.
The
Four Phase earn-in terms are as follows:
Phase 1
- Desert to spend US$1,000,000 on exploration of the nine
licences within 18 months, including a minimum of US$50,000
per licence.
- Upon successful completion of Phase 1 work, Desert can
select up to SIX licences to continue into Phase 2.
- Licences not selected for progress into Phase 2 will be
returned to Helio with no residual beneficial interest to
Desert;
Phase 2
- Licences selected for Phase 2 work will be transferred
into a new holding company ("Newco"), owned 80% by Helio and
20% by Desert.
- Desert will make a cash payment to Helio of $25,000 per
licence selected for transfer into Newco.
- Desert will be required to spend US$1,500,000 on exploration of the six licences within 12 months of
completion of Phase 1, with a minimum of US$200,000 per
licence.
- Upon successful completion of Phase 2, Desert has the
right to retain up to FOUR licences for retention in Newco
for Phase 3.
- Licences not selected for continuation into Phase 3 will
be returned to Helio with no retained interest to Desert.
- Desert will make a cash payment to Helio of US$500,000
per licence for each licence in excess of two selected for
Phase 3 (i.e. if Desert selects two licences it does not
make a cash payment to Helio, if it selects three licences
the payment is US$500,000 and if it selects four licences
Desert will pay US$1,000,000 to Helio).
- At the successful completion of Phase 2, the beneficial
ownership of Newco will be 51% Desert and 49%
Helio;
Phase 3
- Within 12 months of completion of Phase 2, Desert will
be required to spend US$1,000,000 per licence retained in
Newco in order to earn a 65% interest in Newco.
- In the event Desert fails to spend the required amount
on any licence, such licence will be returned to Helio with
no residual beneficial interest to Desert.
- At the successful completion of Phase 3, Desert can
elect to proceed to Phase 4, which requires Desert to solely
fund a bankable feasibility study on any one of the licences
held in Newco, OR:
- Desert can elect not to solely fund further work, and
each company will then fund ongoing work on a pro-rated
basis, or suffer dilution of its interest.
Phase 4
- Desert can increase its ownership interest in Newco to
75% by solely funding a bankable feasibility study on any
licence held in Newco.
Phase 5
- If Desert successfully completes Phase 5 and attains a
public listing, then Helio will be required to convert its
interest in Newco into shares of the listed entity.
- The valuation of Helio's interest at such time of
conversion shall be determined by independent valuation of a
suitably qualified valuator.
TABLE OF LICENCES
| Licence # |
Licence Type |
Licence Name |
Size (Hectares) |
| 3031 |
EPL* |
Vredelus |
11,200 |
| 3081 |
EPL* |
Makuru |
17,000 |
| 3666 |
EPL* |
Kunjas |
43,152 |
| 116 |
ERL** |
Kaoko |
835,656 |
| 121 |
ERL** |
Brukkaros |
729,359 |
| 3741 |
EPL* |
Etjo South |
99,829 |
| 3737 |
EPL* |
Etjo North |
93,742 |
| 3738 |
EPL* |
Wilhelmstal |
99,345 |
| 3739 |
EPL* |
Otjimbojo |
98,264 |
* EPL = Exclusive
Prospecting Licence
** ERL = Exclusive Reconnaissance
Licence
The licences in this deal are principally
prospective for gold, with six of the licences located in the
same belt that hosts AngloGoldAshanti's Navachab Gold Mine
(114.4 million tonnes grading 1.22g/t Au for 4.5 million
ounces: source -
www.anglogoldashanti.com) and Teal Mining
and Exploration's Otjikoto gold project which has a stated
resource of 44 million tonnes grading 1.25gt gold (1.76
million ounces) (source -
www.tealmining.com).
Helio is very
pleased with this arrangement. The deal fits very well with
the Company's strategy of generating new projects and
attracting partners to assist in the rapid advancement of
these projects. Desert's willingness to provide significant
funding over short-term demonstrates their desire to move
quickly to realize the potential of the projects included in
this deal.
Desert is a wholly owned subsidiary of
Jersey based Desert Mineral Resources Ltd., a well funded
private company, which in turn is wholly owned by Clarity
Capital Ltd. (www.claritycapital.com). Clarity Capital's
international mineral team, lead by Errol Smart and Allan
Dolan, is comprised of highly experienced industry and financial specialists that have a passion for identifying,
financing and developing companies that have the potential for
significant capital appreciation.
Helio Resource Corp.
is a dynamic, technically-driven mineral exploration company,
focused on high-quality project generation in southern Africa.
Helio is actively exploring 26 prospective gold, base-metal
and
Diamond properties in Namibia, Botswana, Mozambique and
Tanzania. The main focus for the Company is the development of
the SMP gold project in Tanzania. As part of its strategic
approach to project development, Helio continues to pursue
joint venture partners for its projects in Namibia, Botswana
and Mozambique and to assess new opportunities in Southern
Africa.
ON BEHALF OF THE BOARD OF DIRECTORS
"Richard D. Williams"
Richard D.
Williams, P.Geo
CEO |
"Chris MacKenzie"
Christopher J.
MacKenzie, C.Geol.
COO |
The
TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this
release.
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