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 Mon Sep 12, 2005
News Release & Shareholder Update

 
September 12, 2005 The Executive Management and Board of Directors of Helio Resource Corp (TSX-V: HRC) ("Helio" or the "Company") wishes to take this opportunity to provide the Company's shareholders with an update on its exploration activities in Namibia and Botswana, for the period from the Company's listing on November 4, 2004 to present.

Highlights
  1. Qualifying Transaction approved by the TSX-V and commencement of trading on November 4, 2004.
  2. Fully subscribed non-brokered private placement raised $480,000 in November 2004.
  3. Fully subscribed brokered offering raised $2,000,000 in December 2004.
  4. Completion, in July 2005, of a Phase 1 4,700m combined RC and diamond drilling programme at the Company's wholly-owned Otjitombo Cu-Au-Co property. Drilling results to date from Otjitombo indicate the presence of a large mineralised system.
  5. Teck Cominco optioned the Vredelus gold project in June 2005, and has a Year 1 exploration commitment of $250,000.
  6. Acquisition of the Lokgwabe diamond project in Botswana in November 2004.
  7. Lokgwabe diamond project optioned to Indicator Minerals Inc in February, 2005 - Year 1 expenditure commitment of $300,000.
  8. Leicester (Cu-Au-Ag) and Otjimakuru (Au) projects optioned to Yale Resources Ltd in March 2005 - Year 1 expenditure commitment of $450,000.
  9. Boulder Mining introduced a new partner, Springbok Resources Ltd, to the Tevrede iron oxide copper gold project. Expenditure commitment of C$1,500,000 before June 2006.
  10. Partners committed to spend a minimum of C$2,500,000 over the next 10 months.
  11. Reconnaissance stream sediment sampling at the Company's wholly-owned Tevrede South and Honib properties delineate numerous, large targets to follow-up.
  12. Drill programmes expected to commence on Vredelus, Tevrede, and Leicester this year, along with continued drilling of the Otjitombo project.
MANAGEMENT COMMENT

The first ten months of the Company's life has been a period of intense but rewarding activity, ranging from the completion of a significant Phase 1 drilling programme at Otjitombo, to the signing of four option agreements with a variety of partners, most notably Teck Cominco.

Over the next 12 months, the Company aims to continue drilling at the Otjitombo project, and also expects to commence drill programmes at the Vredelus (gold) project with Teck Cominco, at the Leicester (copper-gold) and Otjimakuru (gold) properties with Yale Resources, and at Tevrede (IOCG) with Boulder Mining / Springbok Resources. In addition, Indicator Minerals Inc., our partners on the Lokgwabe diamond project in Botswana, is preparing for a high resolution airborne magnetic survey to take place in October this year.

In summary, additional to the work the Company will fund, our partners are expected to spend a minimum of $2,500,000 over the next 10 months.

OTJITOMBO (100% owned) - Copper - Gold - Cobalt Targets

Over the last 10 months at Otjitombo the Company has:
  • drilled 3,381m of diamond drill core in 20 drill holes;
  • drilled 1,469m of RC drilling in 16 holes;
  • completed approximately 100 line-km of gradient array IP geophysics and 16 line-km of pole dipole IP geophysics.
  • completed over 35 line-km of MaxMin EM surveying.
Map 1 shows the gradient IP response for the entire area covered to date, together with the locations of all diamond drill and RC holes. The following Table summarises all results received to date.
--------------------------------------------------------------------
HOLE ID                From    Width (m)    Cu %    Au g/t    Co ppm
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OTD 1/4/7/15                    No significant intersections        
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OTD 2                     0       26.48     0.89                    
--------------------------------------------------------------------
OTD 3                     0        7.04     0.49                 350
And                   49.29        1.86     1.16                    
--------------------------------------------------------------------
OTD 5                  0.94       39.82     1.03      0.12          
--------------------------------------------------------------------
OTD 6                  0.00        3.29     1.54      0.09          
And                    30.6        4.00     0.33      0.36          
And                   54.15        1.55               1.60       200
And                   61.97        1.66     0.56                 154
and                   82.32        1.49     0.41                 332
--------------------------------------------------------------------
OTD 8                 26.65        3.25                          513
--------------------------------------------------------------------
OTD 9                 28.28       10.92                          250
and                   92.64        8.85                          405
--------------------------------------------------------------------
OTD                                   Results Pending               
10/11/17/19/20                                                      
--------------------------------------------------------------------
OTD 12                 1.03       49.41     0.18   pending          
Inc                   18.55       20.78     0.27                    
And                  137.77        3.01                          166
And                  163.05        2.06     0.22                 183
And                  183.57        0.75     0.48                    
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OTD 13               147.95        1.45     0.28                    
And                  187.73        1.57     0.31      0.08          
--------------------------------------------------------------------
OTD 14                23.67        1.75               0.24      1205
And                   26.48       25.53     0.23                    
And                   25.42       10.85     0.33                 109
--------------------------------------------------------------------
OTD 16                 4.55        7.47     0.21                    
--------------------------------------------------------------------
OTD 18           Hole stopped at 30.49m - did not reach target depth
--------------------------------------------------------------------
                                                                    
--------------------------------------------------------------------
OTR 1                     0          64     0.62                    
Inc                       0          32     0.97      0.11          
--------------------------------------------------------------------
OTR 2                    12          44     0.41                    
Inc                      14          14     0.74                    
--------------------------------------------------------------------
OTR 3                     0          40     0.23                    
Inc                      20          18     0.33                 270
--------------------------------------------------------------------
OTR 4                     0          44     0.49                    
--------------------------------------------------------------------
OTR 5                    22          22     1.06      0.26          
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OTR 6                    16           2     0.91                    
And                      44          22                          201
--------------------------------------------------------------------
OTR 7 - 16                            Results Pending               
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As is evident from Map 1 (attached), the majority of the area covered by the extensive IP chargeability anomalies has not been tested by drilling. Most of the drilling to date focused on:
  1. outcropping mineralization;
  2. under cover, projected extensions of outcropping mineralization, and;
  3. IP anomalies generated in a smaller 2004 geophysics programme.
A second phase of drilling is being planned, and will follow-up on successful intersections from the first phase of drilling and test new targets.

The style of mineralization, and the presence and nature of multiple mineralized sections throughout the stratigraphy is indicative of copperbelt-type mineralization, as is the association with strong, pervasive albite alteration. The widespread distribution of copper mineralization suggests the presence of a large mineralized system.

The success of the programme to date has led to increased activity in the area, with both Teck Cominco and Rio Tinto initiating base-metal exploration programmes in areas surrounding Otjitombo.



TEVREDE SOUTH and HONIB (100% owned) - Iron Oxide Copper Gold Targets

The Company has completed detailed stream sediment sampling over the entire 81,000 hectare (810km2) area of the two licences (878 samples including duplicates). All results have been received, and eight high priority areas, covering a total of 80km2, have been defined for follow-up soil sampling (a total of ~3,500 samples). Map 2, showing the two adjacent licenses, shows the high resolution magnetic response, the anomalous drainages, and the area for soil sampling follow-up.

All the target grids are located proximal to high heat production granites (uranium-thorium-potassium enriched) or structures emanating from them. Grids 1,2,3,4, and 7 are located in areas that have never been explored before. Rock grab samples taken by Helio on Tevrede South have returned up to 23% Cu, 430g/t Ag and 0.12g/t Au (Grid 5). A 3m channel sample across a newly discovered mineralized schist on the Honib property (Grid 6) returned 6.5% Cu, 160g/t Ag, and 1.1g/t Au.

The Company has just completed the soil sampling programme, and expects to receive the assay results by the end of September. Further follow-up work will be planned dependent upon the results.


VREDELUS Gold Project - Optioned to Teck Cominco

The deal with Teck Cominco on the Vredelus gold project has demonstrated the Company's ability to identify high quality projects which are attractive to major mining companies. We are currently working with Teck Cominco planning a significant drill programme that is anticipated to commence within the next 2 months.

The Vredelus project lies within the same belt as AngloGold Ashanti's Navachab Gold Mine (current resource of 137.7Mt grading 1.18g/t Au for 5.2 million ounces: AngloGoldAshanti 2004 Annual Report). It was previously explored by Rössing Uranium Limited, a subsidiary of RTZ, which discovered multiple zones of gold mineralization through RC and diamond drilling. Drill intercepts include:
  • 5.4g/t Au over 12.35m in ERD 2;
  • 12.85g/t Au over 5m in ERD 3;
  • 6.2g/t over 4m in ERRC 16
  • 9.53g/t Au over 9m in ERRC18.
A NI 43-101 compliant technical report on this property can be found on the Company's page at www.sedar.com.

Teck Cominco has committed to spend a minimum C$250,000 before June 2006. The terms of the agreement can be viewed on the Company's news release dated June 2, 2005 on our website at www.helioresource.com.

LEICESTER Cu-Au Project - Optioned to Yale Resources Ltd

This deal was signed in March 2005, and allows Yale an opportunity to earn up to a 75% interest by funding all exploration costs to the completion of a Bankable Feasibility Study. The first year commitment of C$300,000 has been advanced to the Company, and exploration activities have commenced.

To date we have completed high resolution magnetics, soil sampling (1,584 samples including duplicates), re-sampling old Falconbridge trenches (180 samples covering a total of 323m of trenching) and gradient array IP geophysics (90 line kms), which have identified numerous targets, the most significant of which is a 7km+ long IP anomaly located between a regional fault and a strong magnetic anomaly. Recent prospecting has discovered the Quest showing (see News Release dated August 31, 2005), extending the strike length of intermittent copper mineralization along the Rehderstal Fault to over 10km.

Current activities include geological mapping, extensions to the soil sampling and gradient array IP grids, and infill pole-dipole IP geophysics over priority areas to better define drill targets. Drilling is anticipated to commence in late 2005.

TEVREDE IOCG Project - Optioned to Boulder Mining Corporation

Boulder Mining Corporation, our partners on this project, have entered the final year of a 4-year earn-in Option Agreement on the Tevrede licence. Boulder introduced Springbok Resources Inc. into the agreement in April this year, and Springbok has recently committed to spend the $1,500,000 required to complete the earn-in.

Current exploration activities include 14 line km of gradient array IP and 23 line km of pole dipole IP geophysics in three different areas, plus geological mapping. This new data will complement recently acquired ground gravity and gradient array IP geophysics data, which has defined multiple exploration targets in three key areas.

The Company anticipates commencing a significant drill programme (in the order of 5,000 - 10,000m) in September / October this year.

OTJIMAKURU Gold Project - Optioned to Yale Resources Ltd

This project is west of and contiguous with the Vredelus project, which is subject to an agreement with Teck Cominco. Yale Resources has advanced the funds to cover the first year exploration expenditure commitment (C$150,000).

A combined soil-sampling and IP geophysics grid covering approximately 16km2 has been completed resulting in over 1,300 samples being taken. The main target area (4km x 1.5km) has been covered with 60 line kilometers of gradient array IP geophysics. Planning for the next phase of work will be undertaken once all outstanding soil assays have been received.

BOTSWANA - Lokgwabe Diamond Project - Optioned to Indicator Minerals Inc.

This 3,000km2 diamond project has numerous kimberlite indicator mineral (KIM) anomalies, and probe results from previous work indicate the presence of G10 garnets within certain of the KIM anomalies, suggesting that the source of the KIMs has tapped the diamond stability field. Indicator Minerals is planning a high resolution airborne magnetic survey for late September / early October, 2005, the results of which will guide future ground follow-up, and identify possible drill targets.

Indicator's exploration expenditure commitment for Year 1 of our agreement is C$300,000.

OUTLOOK

The Company expects to continue to be very busy for the rest of 2005, with drill programmes planned for Otjitombo, Vredelus, Leicester, Tevrede and possibly Otjimakuru.

The growth of the Company has been complemented by the addition of Mr. Stephen Smith to Helio's exploration team. Steve was formerly with Anglo American PLC for 14 years and worked extensively throughout Southern Africa on many gold and base-metal projects from grass-roots to production stage. He ended his career with Anglo as a Country Exploration Manager. Steve brings his extensive knowledge and experience of southern African geology and exploration targets to Helio. This addition allows the Company to expand its growth strategy and continue seeking new, high quality opportunities.

For additional information, please contact Richard Williams at (604) 668 8356 or by e-mail at richard@helioresource.com or visit the Company's website at www.helioresource.com.

ON BEHALF OF THE BOARD OF DIRECTORS

"Richard D. Williams"

Richard D. Williams, P.Geo
President

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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