New Gold Mine Starts Production Next to SMP Gold Project
VANCOUVER, Feb. 25, 2013 /CNW/ - Helio Resource Corp (TSX-V: HRC) is pleased to report that it has completed the earn-in on the fifth and final licence that makes up the SMP Gold Project in Tanzania (see news release dated October 16, 2008). Completion of the earn-in required the issuance of 500,000 shares of Helio to Thorntree Minerals Limited. The Company now owns a 100% interest, subject to a 2% royalty, in a 238km2 area, adjacent to the recently commissioned New Luika gold mine, operated by Shanta Gold, an AIM-listed gold mining company.
The map found at http://Helio.SMP.Tanzania shows the extent of Helio's landholdings and the proximity to Shanta's gold mine, which is located within 2km of the SMP project boundary.
Helio's CEO, Richard Williams states; "We are very pleased to conclude the earn-in on this strategic licence, which covers the past producing New Saza Mine, and which is immediately south of Shanta's New Luika gold mine."
"The New Saza Mine, of which the two main shafts are located within our project area, produced approximately 270,000 ounces of gold at an average grade of 7.5g/t Au between 1939 and 1956, but only exploited ore to a depth of approximately 200m below surface. Drilling at our Porcupine Resource area (east of the New Saza Mine) has confirmed continuous mineralisation from surface to a vertical depth of 300m (the two deepest drill holes intersected 28m grading 5.1g/t Au and 53m grading 2.9g/t Au) and remains open to depth."
"The start up of the New Luika gold mine, only 5km from our Kenge resource, demonstrates the region's potential to host commercially mineable gold deposits."
The New Luika Mine
Shanta Gold has published a JORC compliant resource comprising 827,133 ounces grading 3.87g/t Au in the Indicated category, and 648,905 ounces grading 2.64g/t Au in the Inferred category.
Gold production commenced in Q3, 2012, and the company reported 7,665 ounces of gold production to yearend. Shanta's guidance for 2013 suggests production of 60,000 - 70,000 ounces of gold.
About the SMP Gold Project
In February 2012, SRK Consulting (Australia) Pty. Ltd. produced an independent NI 43-101 compliant Mineral Resource estimate for the SMP gold project. The estimate reports 1,020,000 ounces in the Measured and Indicated category (24.1Mt grading 1.32g/t Au), plus 240,000 ounces in the Inferred category (7.2Mt grading 1.05g/t Au).
In September 2012, SRK Consulting (Australia) Pty. Ltd delivered a positive Preliminary Economic Assessment on the SMP resource - see news release dated September 13, 2012.
Both the NI43-101 resource report and the PEA report can be found at http://Helio.Technical.Reports.
The PEA provided for two scenarios: a Base-Case and an Upside outcome (Upside case requires geotechnical drilling to confirm viability of an increased pit wall angle from 50 degrees to 55 degrees), allowing extraction of ~800,000 ounces), summarised below (in US$).
|Base Case||Upside Case|
|Gold Price (per ounce)||$1,450||$1,450|
|Total Gold Produced (ounces)||510,000||803,000|
|Life of Mine (years)||9||10|
|Processing Capacity (ore / year)||1.6Mt||2.4Mt|
|Cash Operating Cost1,2 (US$/t processed)||$34.64||$31.47|
|Cash Cost per ounce1||$734.16||$726.60|
|Royalty Payable per ounce||$72.50||$72.50|
|Total Cash Cost per ounce1,2||$806.66||$799.10|
|Note: mineral resources that are not mineral reserves do not have demonstrated economic viability|
|1 including 15% contingency|
|2 including royalty|
Chris MacKenzie, M.Sc., C.Geol., Helio's COO and a Qualified Person as designated by NI 43-101, supervises the exploration at the SMP project, including the sampling and quality assurance / quality control programmes, and has reviewed and approved the contents of this news release.
ON BEHALF OF THE BOARD OF DIRECTORS
|"Richard D. Williams"||"Chris MacKenzie"|
|Richard D. Williams, P.Geo||Christopher J. MacKenzie, C.Geol.|
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release
SOURCE: Helio Resource Corp.
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