AMN - NAMIBIA/TANZANIA: Helio and Damara transfer licences

Helio Resources has reached agreement with Damara Gold whereby the earn-in agreement between Damara and Helio will be cancelled, and they will transfer their respective interests in two Namibian exploration licences, through wholly-owned subsidiaries, namely EPL 3738 (Wilhelmstal) and EPL 3739 (Otjimbojo), into Osino Resources Corp, a privately-held British Columbia corporation in return for shares in Osino.

In March 2014 Helio announced an agreement with Damara (formerly Solomon Resources) whereby Damara had the option to earn up to a 60% interest in the property. To date Damara has spent $300,000 on the projects and issued 500,000 common shares to Helio as part of the earn-in.

Under the terms of the arms-length agreement between Osino, Damara and the company, Helio will transfer the shares of its wholly owned subsidiary holding the property to Osino and Damara will forgo its rights under the earn-in agreement with Helio for an interest in Osino. Osino currently owns four Namibian exploration licences, all of which will remain in Osino.

Post consolidation Helio will own 60.5% of the shares of Osino, and Damara will own 22% of the shares of Osino. Each party will appoint two directors to the Board of Osino.

Helio CEO Richard Williams says: "We believe this transaction represents the best opportunity for our Otjitombo and Wilhelmstal projects to advance quickly under difficult market conditions. Our company's focus has been, and continues to be, the development of the SMP gold project in Tanzania. The initial plan is for Osino to remain a private company with a focus on spending any money raised in the ground, and only returning to the public markets when conditions are supportive".

Helio Resource is focused on advancing the 100% owned SMP gold project in Tanzania to a production decision, and outlining the resource potential at the DGP project in Namibia.

The SMP project covers a 238sqkm area in the Lupa Goldfield, southwest Tanzania and is adjacent to the New Luika gold mine, operated by Shanta Gold.

Helio released a new resource calculation from SMP which classified the SMP Mineral Resource almost entirely as Indicated, giving greater confidence in the quality of the resource estimation and allowing Helio to advance the project to a production decision through a feasibility study.

The resource reports a total Indicated Resource of 7.5 million tonnes grading 2.4 grams/tonne gold. This can be broken down into 5.9 million tonnes grading 1.8 grams/tonne gold inside a pit constrained shell at $1400/oz gold price and 1.6 million tonnes grading 4.9 grams/tonne of potentially underground mineable material.

The total Inferred Resource is 0.56 million tonnes at 2.5 grams/tonne gold containing 45,000 oz gold in the same pit constrained shell and underground configurations. Metallurgical test work indicated recoveries of up to 96% using a gravity and cyanidation process.

Helio's DGP project in central Namibia is located 20 km east of the Navachab gold mine, sold last year by AngloGoldAshanti to QKR, for a reported $110 million. Drill results from the 2011 and 2012 RC and diamond drill programs returned multiple mineralised intercepts, including 7 metres @ 9 grams/tonne gold from 54 metres, 12 metres @ 6.8 grams/tonne gold from 12 metres, 14 metres @ 3.1 grams/tonne gold from 2 metres and 4 metres @ 11.6 grams/tonne told from 20 metres, over a 1 km strike length (intercepts are drilled width; more drilling is required to establish true width).

www.helioresource.com; www.damaragoldcorp.com

News courtesy of International Mining