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 Mon Sep 24, 2007
Helio Options Nine Namibian Licences to Desert Minerals (UK) Ltd.

 
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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