Helio reports initial resource estimate for SMP gold project

Vancouver – Helio Resource (HRC-V) has released an initial resource estimate for its SMP gold project in Tanzania following a season of concentrated drilling on the Porcupine target.

The resource includes both the Porcupine and the Kenge targets at the SMP project, located on a 238-sq.-km land package in the southwest region of the country.

Using a restrained estimate, which limits the influence of some high grade intercepts, and a 0.5 gram gold cut-off, the project hosts 10.8 million measured and indicated tonnes grading 1.43 grams gold for roughly 497,000 contained oz. gold, and a further 7.1 million inferred tonnes grading 1.19 gram gold for about 273,000 contained oz. gold.

Unrestrained, the resource increases to 10.8 million measured and indicated tonnes grading 1.65 grams gold for 575,000 oz., and the inferred category increases to 7.5 million tonnes grading 1.32 grams gold for 321,000 oz.

The company describes gold mineralization as being associated with brittle fracture zones and ductile shear zones that cut through intrusive rocks of Lower Proterozoic age.

The majority of the resources, and the entire measured resource, are held in the Porcupine Main zone, with 7.7 million measured and indicated tonnes grading 1.41 grams gold restrained. The company notes that the recently discovered Footwall and Quill zones could significantly expand the Porcupine resource.

Metallurgical testing for the Porcupine target shows gravity separation recovery at 22%, whole ore flotation at 95% while heap leach recoveries are not yet determined. The Kenge target, roughly 12 km west of Porcupine, has 34.7% gravity recovery, 96% whole ore flotation recovery and 70% heap leach recovery.

Along with the company’s Tanzanian project, the company also holds claims in Namibia. Helio concentrated exploration in Tanzania this year but is planning a work program for its Damara gold project next year.

A 2011 Exploration program in both countries is dependent on further market financing. The last financing Helio did was a $6.21 million, 11.5-million-unit private placement at 54¢ with the International Finance Corporation. Following the financing the IFC had roughly 15% of issued and outstanding shares of the company.

In April the Tanzanian government passed a law that increased royalties on the gross value of metallic minerals from 3% to 4%.

 Helio’s share price dropped 7¢ or 11.1% to close at 56¢ on the day on 500,000 shares traded. The company has a 52-week share price range between 30¢ and 75¢ and 79 million shares outstanding.