Helena Resources Limited
NEX BOARD : HRS.H

July 20, 2005 09:02 ET

Helena Resources Limited: Update on Propose Reverse Take-Over Transaction

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - July 20, 2005) - Helena Resources Limited (NEX:HRS.H) (the "Company") reports the following update in connection with the proposed reverse take-over of the Company by West China Mining Resources Holdings Limited ("West China") previously announced in its press release dated May 19, 2005 (see "The Transaction" below for further details).

The Company and West China are currently working towards finalizing a formal securities exchange agreement between the parties. As previously noted, the transaction will be an arms length transaction and constitutes a reverse takeover under the policies of the TSX Venture Exchange (the "Exchange").

The Company and West China are also currently working toward engaging a sponsor for this transaction.

Closing of the transaction is now expected to occur during the last quarter of 2005. Concurrent with closing, the Company will make application to graduate from NEX to the TSX Venture Exchange as a Tier 2 Mining Issuer. A meeting of shareholders of the Company is expected to be convened during the last quarter of 2005 to seek shareholder approval of the transaction.

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and disinterested shareholder approval. The transaction cannot close until the various approvals are obtained. There can be no assurance that the transaction will be completed as proposed or at all. It is anticipated that it will take several months to obtain the approvals and complete the transaction.

Investors are cautioned that, except as disclosed in the Management Information Circular to be prepared for an upcoming shareholders meeting to be held in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of the Company may remain halted pending review of the transaction by the Exchange and closing of the transaction. Trading in the securities of the Company should be considered highly speculative.

At the direction of the NEX, the Company's shares will remain halted until further notice.

About West China and Dexin

West China is a company incorporated in the British Virgin Islands and privately owned by approximately a dozen shareholders, the largest of whom are Mr. Bin Zhu, of Shanghai, China (owning 32%) and ADDA (Panama) Ltd. (owning 13%). West China owns 100% of Sichuan Dexin Mining Resources Co. Ltd. of Chengdu, Sichuan, P.R. China ("Dexin") which holds 100% ownership of an advanced exploration project in Sichuan Province, China (the "Project").

The Project is an advanced exploration project located approximately 400km west of Chengdu in the Sichuan Province, China. The region is known to contain mineralization, with two operating mines existing within 15 kilometers of the property. The Project has a number of demonstrated pegmatite veins which could be mined primarily for lithium, but which also have tantalum and niobium and possibly beryllium. The altitude of the lower of two adits is approximately 4,000 meters. Lithium is used in a variety of products including rechargeable batteries, ceramics, glass and grease.

Watts Griffis & McOuat have been retained to prepare a report on the property in accordance with National Instrument 43-101. The completed report is expected in July 2005.

About the Transaction

In consideration of the acquisition of ownership of West China and indirect ownership of Dexin, the Company will issue approximately 31,756,647 common shares to the owners of West China. An additional 1,300,000 common shares will be issued as a finder's fee. The parties also plan to raise a minimum of $500,000 by way of a private placement to cover working capital needs until completion of the transaction.

The Company has also agreed to settle approximately $105,000 in outstanding debt through the issue of 525,000 common shares at a deemed price per common share of $0.20. This debt settlement will be completed prior to or concurrently with closing of the transaction.

Upon completion of the transaction, the current board of directors of the Company will resign and be replaced by Dexin nominees. Dexin may request that certain directors of the Company remain on the board, to provide continuity in management, after completion of the transaction.

Completion of the transaction remains subject to: (a) execution of a formal agreement by the parties; (b) completion of due diligence by the Company and Dexin; (c) the approval of the shareholders of the Company; (d) acceptance by the Exchange of the transaction and the Dexin board nominees; (e) the Company being a reporting issuer in good standing in British Columbia and Alberta at the time of closing; (f) the Company having no more than 2,874,494 common shares outstanding, excluding shares issued pursuant to the proposed shares for debt transaction, the proposed private placement, or the exercise of any existing options; and (g) no material change having occurred in the business or operations of the Company.

For further information contact Barrett Sleeman, CEO, at 360-945-1886, or by mail at 1699 Benson Road Pt. Roberts WA. 98281.

On Behalf of the Board

Barrett Sleeman P.Eng., CEO & Director

The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved or disapproved the contents of this press release.

Contact Information

  • Helena Resources Limited
    Barrett Sleeman
    CEO
    (360) 945-1886