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 Mon Dec 19, 2005
Helio Acquires Option on Former Gold Mines in Tanzania

 
Helio Resource Corp. (TSX-V: HRC) ("Helio") is pleased to announce that it has signed a Letter of Intent with Thorn Tree Minerals Limited ("Thorntree"), a private Tanzanian mining company, whereby Helio can earn a 100% interest, subject to a 2% Royalty, in the 51km2 Saza licence, located in the Lupa Goldfields. The licence includes the eastern section of the Saza Mine and all of the Razorback Mine.

Records show that the mines produced 260,000 ounces of gold from high grade shear zones, between 1939 and 1959, at an average grade of 7.5g/t gold. Exploited veins varied from 2m to 20m in width, extending to a maximum depth of 220m. Drilling from the same period intersected mineralization 330m below surface, indicating that mineralization is open to depth and along strike. Operations ceased in 1959 due to low gold prices.

Helio is very excited by this opportunity. The combination of historic gold production from the licence, coupled with recent impressive drill intercepts, indicate very strong potential to develop an economic resource at Saza.

To vest its interest, Helio must spend C$2,000,000 on exploration over 4 years, and issue 50,000 common shares and make cash / share payments totaling C$400,000 to Thorntree over the earn-in period. Helio also 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. A finders fee of 100,000 common shares is payable in connection with the acquisition.

Initial work will involve further compilation of all existing data, mapping and sampling of all mineralized outcrops, and geophysical surveys (IP and magnetics) over the entire property, followed by drilling.

AngloGoldAshanti ("Anglo") conducted exploration in the area between 1997 and 2000, including soil sampling (940 samples), 910m of trenching, 515 Rotary Air Blast ("RAB") holes (total of 3,891 metres; average 7.5m per hole) and 7 RC-Diamond drill holes (total of 1,590m). Helio's analysis of all the available data indicates the presence of over 20km of prospective structures within the Saza licence.

Significant exploration targets within the licence include:
  1. New Saza Mine 2 Shaft - From available mine maps, Saza 2 Shaft was mined on four levels to a depth of 50m. Anglo drilled only one diamond drill hole (DDH5) under the western extremity of the 2 Shaft area, intersecting 17m @ 1.13g/t Au from 117m and 2m @ 3.67g/t Au from 150m. To the east, Anglo conducted trenching and RAB drilling with impressive results: individual RAB hole intercepts include 8m @ 2.3g/t Au from 12m (open), 12m @ 6.83g/t Au from 8m (open), 20m @ 3.37g/t Au from 0m (open), 4m @ 10.4g/t Au and 12m @ 6.88g/t Au from 12m (open). No deep drilling was conducted under these RAB intercepts, which occur up to 600m away on strike from DDH5.

  2. Area 14 - located at the intersection of the Saza Shear Zone and the Razorback Shear Zone, 2km along strike from the 2 Shaft mine. Two fences of RAB holes, located 200m apart, were drilled by Anglo, with gold intersected in each fence. One of the RAB holes intersected 9m grading 6.7g/t gold from 11m depth, and bottomed in mineralization.

  3. Stockwork - a 1,400m x 400m gold-in-soil anomaly, hosting multiple sheeted quartz veins, located on a "blow" in the Saza Shear Zone, 4km ENE along strike from Area 14. Recent artisanal activity here has targeted a number of veins exceeding 1m in thickness. Anglo drilled six RC / Diamond drill holes averaging 200m each on Stockwork. DDH7 intercepted multiple auriferous structures, including 5m @ 2.52g/t Au from 87m (open), 20m @ 1.16g/t Au from 105m (open), and 10m @ 0.46g/t Au from 143m. Mineralization intersected in the drilling is open at depth and along strike.

  4. Razorback - the Razorback Shear Zone is a 1.5km long NW-SE trending ridge hosting the Razorback Mine, which was an integral part of the New Saza Mine. The Razorback Mine only exploited approximately 150m of the strike length of the Razorback Shear Zone. Historical trenching, including 1.59g/t Au over 8m (open), located 300m SE of the Razorback Mine, indicates the potential for further significant mineralization to be discovered. No recent drilling has been undertaken in the vicinity of the Razorback mine.
Chris MacKenzie, M.Sc., C.Geol., Helio's Executive Chairman and a Qualified Person as designated by NI 43-101, has reviewed the available data on the Saza licence and has reviewed and approved the technical content of this news release.

Helio Resource Corp., based in Windhoek, Namibia, is one of Southern Africa's leading exploration companies and specializes in innovative new-project generation. Helio is actively developing 11 prospective gold, copper and diamond properties in Namibia, Botswana and Tanzania. As part of its strategic approach to project development, Helio has forged partnerships with firms such as Teck Cominco, Indicator Minerals, Yale Resources, Boulder Mining and Springbok Resources to advance a number of its projects.

For additional information, please contact either Richard Williams at richard@helioresource.com or Irene Dorsman at irene@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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