MARCH 2013 QUARTERLY REPORT - Helix · - Lodestone purchased remaining 50% of Olary ... 31st MARCH 2013 QUARTERLY REPORT . Helix Resources Limited ... Secure a significant ground

Helix Resources LimitedGold, Copper, Iron Ore in Australia and Chile

Helix Resources Limited (ASX:HLX) is a minerals exploration company focused on identification, acquisition anddevelopment of projects in Australia and Chile

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For Further Information please contact: Greg J Wheeler or Mick Wilson Suite 7 / 29 Ord Street, West Perth WA 6005 Telephone: +61 8 9321 2644 Fax: +61 9321 3909 Email: [email protected] Email: [email protected] www.helix.net.au

For Further Information please contact: Greg J Wheeler or Mick Wilson Suite 7 / 29 Ord Street, West Perth WA 6005 Telephone: +61 8 9321 2644 Fax: +61 9321 3909 Email: [email protected] Email: [email protected] www.helix.net.au

HIGHLIGHTSCHILE BLANCO Y NEGRO PROJECT – CHILE - 1st drilling program targeting high grade shear hosted mineralisation intersected 19.45m @ 2.0% Cu, 1.1g/t Au and 550ppm Mo from 85.85m in DDHHU-001 [ASX release 7 March 2013]

- Geophysics (Ground Magnetics & EM survey) and 2,000m RC/DDH drill program has commenced with targeted outcomes from the drilling campaign:-

Increase confidence by assessing extent of mineralisation within the 400m strike under historic artisanal workings

Test EM conductors and strike extensions of main shear zone (NW & SE of workings)

JOSHUA COPPER PROJECT - Helix let lapse MoU with Mitsubishi and continues discussions to secure well -funded JV partner with development skills. - Site visit by Cu porphyry Consultant confirms prospectivity - Targeted exploration program scheduled after Blanco Y Negro drilling.

AUSTRALIA RESTDOWN JV (AND REGIONAL PROJECTS) – NSW - Geological review of 3,000km² land holding to prioritise targets and determine prospects which provide greatest value uplift through discovery and development from this considerable tenement holding. - Planning and approvals process is well advanced to enable an RC drill program testing multiple advanced Cu & Au targets in 2Q13.

OLARY MAGNETITE - SA - Lodestone purchased remaining 50% of Olary Magnetite Pty Ltd for $4.75M and 1% FOB Royalty [ASX release 13 February 2013]

PROJECT PORTFOLIO - Ongoing review of portfolio to extract value from non-managed and non-core assets. - Strategic acquisition of tenements in Region IV Chile and NSW.

Capital Structure

ASX Ticker Code HLX

Share Price ±AU$0.05

Market Cap ±$10M

Fully Paid Shares 204M

September 2014 Options [ex $0.015] 36M

Directors and Management

Greg J Wheeler Executive Chairman/MD

Michael Wilson Executive Technical Director

John den Dryver Non-Executive Director

Gordon Dunbar Non-Executive Director

Craig Johnson Exploration Manager – Aust

Alamiro San Francisco Exploration Manager - Chile

Assets

Cash $3.7 Million

Restdown Gold JV (70%) 2.6Mt @ 1.2g/t Au (100%)

Canbelego Copper JV (51%) 1.5Mt @ 1.2% Cu (100%)

NSW – Lachlan Region +3,000 km2 Au/Cu exposure

Chile – Joshua Project Significant Cu porphyry

Chile – Huallillinga Project Blanco y Negro Cu/Au Project

Chile – Hado Project Large Cu/Au porphyry targets

31st MARCH 2013 QUARTERLY REPORT

mailto:[email protected]






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PROJECT ACTIVITIES

CHILE - COPPER AND GOLD PROJECTS

Chile Strategy

Acquire projects 100% through regional targeting to provide best value uplift through exploration and development.

Confirm Joshua copper porphyry potential; attract JV partner with porphyry development skills to assist in funding resource drilling and technical/economic studies to advance up ‘value curve’ into a development scenario.

Huallillinga Project – the most advanced prospect is the Blanco y Negro Mine area; confirm extent Cu/Au mineralisation with geophysics and drilling to define a maiden resource and consider development options; test for additional mineralisation associated with the regionally significant Los Mantos Fault.

Hado Project – exploration activities directed at specific geophysical, structure and alteration in large porphyry targets to confirm and advance overall prospectivity.

Acquire additional prospective ground as our knowledge base increases

Huallillinga Copper/Gold Project

Huallillinga Project is a 95km² area with significant potential for shear hosted copper and gold. The entire area is controlled by a significant regional fault system associated with the Los Mantos Fault, which hosts several significant copper and gold systems particularly to the south including the Punitaqui Mine (Glencore).

Blanco Y Negro Mine Prospect

The Blanco y Negro mine was purchased 1H12 to fast-track our goal of defining economically exploitable Cu/Au resources to advance into development in a region with operations and infrastructure.

Maiden diamond drill hole at the Blanco Y Negro Mine Prospect aimed at targeting mineralisation below artisanal workings intersected 19.45m @ 2.0% Cu, 1.1g/t Au and 550ppm Mo from 85.05m in DDHHU-001 [ASX release 7 March

2013]. The drilling confirms the presence of high grade copper and associated gold and molybdenum in a zone of brecciation and veining hosted in andesitic volcanics.

Figure 1: Half-core portion of massive sulphide material from ~104.5m in DDHHU001 at Blanco Y Negro Prospect (intercept returned

0.45m @ 10.4g/t Au, 17.2% Cu& 5300ppm Mo [ASX release 7 March 2013]

).



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A ground magnetic survey undertaken in late March 2013 was undertaken to assist in domaining the Prospects’ geology and to isolate potential structural controls for the mineralisation at Blanco y Negro. A total of 21 line kilometres of 50m line spaced ground mag was collected. Combined with field interpretations by consultant geologist, Mr Leigh Rankin, the primary NW structure and possible parallel repeats (east and west of the known workings) have been identified as the primary targets for mineralisation, with a series of secondary and slightly steeper N-S structures possibly providing linking features for additional mineralisation, particularly in the hanging wall of the main shear where pits have been dug on these features within the historic workings. An assessment of the DDHHU001 drill core has confirmed the massive sulphide intersected in that hole gives an excellent electrical response, with no response returned from the surrounding disseminated mineralisation, nor the host rock. As the host rock is dominated by andesites and intrusive breccias, we expect to see good contrast between potential massive sulphide accumulations and the surrounding material. The EM geophysics crew has commenced surveying the central strike of the prospect and is expected to have completed a downhole survey on DDHHU001 and several surface fixed loops shortly. The proposed drilling program may be modified to test any additional conductor targets identified.

Figure 2: Preliminary magnetic (1vd) image from recent ground-mag survey with mapped structures, artisanal pits and proposed drill collars for current drill program.



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Joshua Copper Porphyry Project [100%]

Helix’s most advanced project in Chile, Joshua is 100% owned and located ~40km SE of Teck’s Carmen de Andacollo porphyry deposit [400Mt @ 0.38% Cu Reserve *Teck Website] in Region IV Chile. The Project is 40km East of the township of Ovalle [Population 100,000], at low altitude (less than 1700m), with excellent nearby infrastructure. Since drilling 1st commenced mid-2011 [Best result: JS-005 from 0m- 243m @ 0.3% Cu, 0.1 g/t Au and 20ppm Mo] and subsequent 200m spaced pole-dipole IP and ground magnetics leading to a DD program 1H12 [Best result: DDH2 from 0m - 400m @ 0.3% Cu, 0.1g/t Au and 30ppm Mo], the Company has outlined potential for a large scale, bulk tonnage copper(+ gold) project likely to be amenable to open pit mining.

Drilling to date has been confined to the only access track developed to the SE flank of the Target 1 system testing approximately 0.2km² of Target 1 approximate 1.5km² area, the porphyry system now is interpreted to exceed 10km2 with evidence that Target 4 is an extension to Target 1 and part of the larger system.

Helix signed a Memorandum of Understanding [MoU] with Mitsubishi Materials Corporation (MMC) in October 2012 covering the Joshua Copper Project, Helix let the MOU lapse in March 2013 on the basis Mitsubishi was unable to complete its due diligence procedures and sign the Binding Agreement within the agreed timetable.

A recent site visit by consultant structural geologist Mr Leigh Rankin has confirmed prospectivity and assisted in refining the 2013 field program for Joshua. A program directed at specific geophysical, structural and alteration targets within this very large system in coming months will greatly assist in advancing the project. The focus remains to attract a well-funded partner with porphyry development skills to assist in this project.

Hado Project

The Hado Project (~100km²) targets the same geological domain as the Joshua Project(Cretaceous volcanics intruded by Paleocene-Eocene intrusives) and is situated 25km S of Joshua and 18km by road from the township of Monte Patria. The main Porphyry target covers an area exceeding 5km² and is semi-circular in shape, with historic artisanal workings identified in Qtz (+Au & Cu) veins striking N-S and NNW throughout the system.

Exploration activities will continue 2H13 directed at specific geophysical, structure and alteration targets to confirm and advance overall prospectivity.

New Projects

Helix has applied for an additional ~100km² of exploration concessions in several locations (nearby to our current tenure) with similar geological and structural settings to the Blanco y Negro style of mineralisation. The company also continues to review privately owned prospects in the region, assessing opportunities as they arise.



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COPPER & GOLD PROJECTS - NSW

Strategy Secure a significant ground holding [+3,000km²] prospective for Cu and Au with excellent nearby

infrastructure [including copper and gold processing plants, some with excess capacity] Use geophysics, geochemistry and drilling to advance multiple targets identified in this under-explored region Grow resources from current 100,000oz Au and 18,000t Cu to establish development opportunities in either

stand-alone projects or toll treat scenarios with incumbent producers.

RESTDOWN JV & MURIEL TANK JV PROJECTS

EL 6140, EL6501& EL6739:- Helix Resources 70% - Glencore International AG 30% (Contributing)

Restdown Gold Project (Incl. HLX’s 100% owned Koree and Little Boppy South Project)

The Restdown Project is located ~25km SW of the historic Mt Boppy Gold Mine (produced ~500,000 oz at +10g/t Au, now owned by Polymetals) and ~35km N of YTC’s Nymagee and Hera development projects. In 3Q11 Helix defined an inferred resource at the Sunrise and Good Friday prospects of 2.6Mt @ 1.2g/t Au for 100,000oz which remains open in all directions (refer to ASX release 17th August 2011).

Helix has identified considerable scope for repeat deposits based on the presence of similar host lithologies, hydrothermal alteration and controlling structures within a number of large geochemical footprints. A regional regional RC drill program completed by Helix in 3Q12 provided an initial test of several target areas.

The drilling at the Boundary Prospect, located ~1.4km east of the Sunrise and Good Friday prospects, returned an intercept of 70m @ 1.1g/t Au from 23m in HRRC091, with individual metre results returning up to 12.7g/t Au. The adjacent holes, HRRC090 & 092, returned gold mineralisation (0.1 - 0.5g/t Au) over +40m widths with associated arsenic/antimony anomalism. This result is consistent with the mineralisation halo at the known gold deposits in the goldfield. The discovery of such gold grades in new greenfield discoveries in this area indicates scope for a rapid increase in resource inventory.

Recent work has concentrated on defining targets for drilling from the broad geochemical anomalies at Amity’s Reward and Boundary Prospects. Further rockchip sample assays continue to return very encouraging results with two rock chips collected at Amity’s Reward returning 9.56g/t Au and 39.6g/t Au now representing a total of four +9g/t Au rock chips collected over approximately 1.4km of strike. Close spaced auger soils are being used to define drill targets within these priority Prospects. Planning and approvals to complete an RC drill program are advancing. CANBELEGO JV – NSW [Helix Resources 51%, moving to 70% - Straits 49% (Diluting)]

A geological review of the resource area, including structural modelling (1.5Mt @ 1.2% Cu for 18,000t Inferred) at the Canbelego Mine Prospect has highlighted several untested high-grade plunge targets below and along strike. This is supported by recent fixed loop EM survey results. High grade pipe like plunging lodes are typical of the Cobar district with other recent successes in the district at Avoca Tank [SRQ], Nymagee [YTC] and Mallee Bull [PEX]. Planning and approvals to complete an RC drill program are well advanced with commencement expected in 2Q13.



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Figure 3: Long section on Canbelego Mine Prospect showing high grade plunge target zones and associated Fixed Loop EM plate.

OTHER NSW PROJECTS – (LITTLE BOPPY– QUANDA – FIVEWAYS) [Helix 100%]

Regional mapping and geochemical surveys are continuing on the remaining NSW Cu/Au projects. Regional scale inversion modelling of detailed magnetic data, along with prospect scale forward modelling has advanced a number of discreet magnetic targets within the broader magnetic domains representative of the priority lithological belts on the Quanda and Fiveways Projects. These targets along with structural targets within the priority lithological belts are being prioritised for infill auger soil sampling with electrical geophysical surveys also being considered to accelerate these targets toward the drilling stage. Selected geophysical/geochemical targets will be considered for testing during the 2Q13 drill program.



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OLARY MAGNETITE PROJECT – (SALE COMPLETED)

Strategy

Divest by attracting JV partner to fund Resource and technical/economic studies; Sell remaining interest.

Second Share Subscription Agreement Executed

Helix sold the remaining 50% interest in the Olary Magnetite Project for $4.75M and 1% FOB Royalty [ASX release 13

February 2013]. In consideration for securing the remaining 50% equity in Olary Magnetite Pty Ltd:-

1. Lodestone deposited $2M cash on signing the Sale Agreement

2. Lodestone must deposit $1.75M cash on or before 31 March 2014

3. Lodestone must deposit $1M cash on or before 31 March 2015

4. Helix will receive a 1% FOB Royalty upon sale of Iron Ore Product from the Olary Magnetite Project.

The sale of the Olary Project in South Australia:- crystallises unlocked value in one of Helix’s non-core assets; provides exploration funding through 2013, allowing the technical team to focus on our copper and gold projects in NSW and Chile.

NON MANAGED JOINT VENTURES

TUNKILLIA GOLD PROJECT JV - SA

Strategy

Dilute our JV interest to ±20% at Decision to Mine [assumes MUX spends $6M in 2012 for PFS and $8M for BFS] and then sell de-risked project (JV agreement requires 100% participant approval to move to mine development).

MUX continues completion of the PFS.

YALLEEN IRON ORE PROJECT – WA

Strategy

Negotiate acceptable JV agreement with API; await WPIOP infrastructure solution and access terms then re-assess Project viability; sell tenements/JV interest or Royalty.

Helix decided 1H12 to dilute from its current 30% JV interest as API’s overall WPIOP has been unable to obtain 3rd party transport solution or necessary Government approvals and funding to develop the required rail & port infrastructure (+$7B); API shareholders are in dispute regarding the work program funding for WPIOP; the volatility in Fe pricing has impacted on Project viability.



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Resource Inventory

Commodity Category Project Interest Resource

Iron Ore

Indicated Inferred

Yalleen JV, WA

30% (Diluting)

47.9Mt @ 57.3% Fe (Channel Iron)* 36.4Mt @ 57.1% Fe (Channel Iron)*

Joint ventured with API Management Pty Ltd (50% Aquila Resources, 50% AMCI) and forms part of their West Pilbara Iron Ore Project [WPIOP] which comprises multiple JV’s.

Copper Inferred Canbelego JV, NSW

51% (Moving to

70%)

1.5Mt @ 1.2% Cu for 18,000t* Contained Cu (at 0.3% Cu Cut-off)

Joint venture with Straits Resources

Gold Inferred Restdown JV 70% (Glencore

Contributing 30%)

2.6Mt @ 1.2g/t Au for 100,000oz (0.3 g/t Au cut off)

Gold

Measured Indicated Inferred TOTAL* Measured Indicated Inferred TOTAL*

Tunkillia JV, SA

30%# (Diluting)

4.9Mt @ 1.32 g/t – 209,000 oz Au 16.5Mt @ 1 g/t – 512,000 oz Au 5.6Mt @ 1 g/t – 173,000 oz Au 27.0Mt @ 1 g/t – 894,000 oz Au 4.9Mt @ 3.7 g/t – 563,000 oz Ag 16.5Mt @ 2.7 g/t – 1,412,000 oz Ag 5.6Mt @ 3.0 g/t – 545,000 oz Ag 27.0Mt @ 2.9 g/t – 2,543,000 oz Au

Mungana Goldmines Ltd JV Manager and ±70% JV participant. Mungana has stated it wants the Project to be production ready 2014 with initial scope for a conventional open-pit operation and 1.5/2Mtpa CIP plant. Helix has elected to dilute, with our equity position around 30% as well as owning Tenements 100%. # subject to audit of MUX expenditure

*Details of the assumptions underlying the above estimations are contained in previous ASX releases or at

www.helix.net.au

Competent Persons Statement The information in this announcement that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr M Wilson who is a full time employee of Helix Resources Limited and a Member of The Australasian Institute of Mining and Metallurgy. Mr M Wilson has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr M Wilson consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Details of the assumptions underlying any Resource estimations are contained in previous ASX releases or at www.helix.net.au Exploration Target References to exploration target size and target mineralisation in this announcement are conceptual in nature and should not be construed as indicating the existence of a JORC Code compliant mineral resource. Target mineralisation is based on projections of established grade ranges over appropriate widths and strike lengths having regard for geological considerations including mineralisation style, specific gravity and expected mineralisation continuity as determined by qualified geological assessment. There is insufficient information to establish whether further exploration will result in the determination of a mineral resource within the meaning of the JORC Code

Appendix 5B Mining exploration entity quarterly report

+ See chapter 19 for defined terms. 17/12/2010 Appendix 5B Page 1

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10

Name of entity

Helix Resources Limited

ABN Quarter ended (“current quarter”)

27 009 138 738 31 March 2013

Consolidated statement of cash flows

Cash flows related to operating activities

Current quarter $A’000

Year to date (9 months)

$A’000

1.1 Receipts from product sales and related debtors

1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration

(470)

(131)

(2,006)

(414)

1.3 Dividends received

1.4 Interest and other items of a similar nature received

34 74

1.5 Interest and other costs of finance paid

1.6 Income taxes paid

1.7 Other - includes 3rd

party payments for EED (1,112) (984)

Net Operating Cash Flows

(1,679) (3,330)

Cash flows related to investing activities

1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets

1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets

1,457

2,194

1.10 Loans to other entities

1.11 Loans repaid by other entities

1.12 Other - Lodestone Equities Ltd payment for Olary costs

2,900

Net investing cash flows

1,457 5,094

1.13 Total operating and investing cash flows (carried forward)

(222) 1,764


+ See chapter 19 for defined terms. Appendix 5B Page 2 17/12/2010

1.13 Total operating and investing cash flows (brought forward)

(222) 1,764

Cash flows related to financing activities

1.14 Proceeds from issues of shares, options, etc. 1 920

1.15 Proceeds from sale of forfeited shares

1.16 Proceeds from borrowings

1.17 Repayment of borrowings

1.18 Dividends paid

1.19 Other (provide details if material)

Net financing cash flows 1 920

Net increase (decrease) in cash held

(221)

2,684

1.20 Cash at beginning of quarter/year to date 3,981 1,076

1.21 Exchange rate adjustments to item 1.20

1.22 Cash at end of quarter

3,760

3,760

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

Current quarter $A'000

1.23

Aggregate amount of payments to the parties included in item 1.2 147

1.24

Aggregate amount of loans to the parties included in item 1.10

1.25

Explanation necessary for an understanding of the transactions

Non-cash financing and investing activities

2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

2.2 Details of outlays made by other entities to establish or increase their share in projects in

which the reporting entity has an interest

Olary Magnetite Pty Ltd was sold to Lodestone Equities Limited per ASX release 13 February 2013. Up until the sale date Lodestone funded all exploration activities for the Olary project.

Financing facilities available Add notes as necessary for an understanding of the position.



Amount available $A’000

Amount used $A’000

3.1 Loan facilities

3.2 Credit standby arrangements

Estimated cash outflows for next quarter

$A’000

4.1 Exploration and evaluation

600

4.2 Development

4.3 Production

4.4 Administration

150

Total

750

Reconciliation of cash

Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.

Current quarter $A’000

Previous quarter $A’000

5.1 Cash on hand and at bank 12 10

5.2 Deposits at call

3,748

3,971

5.3 Bank overdraft

5.4 Other (provide details)

Total: cash at end of quarter (item 1.22)

3,760

3,981

Changes in interests in mining tenements Tenement

reference Nature of interest (note (2))

Interest at beginning of quarter

Interest at end of quarter

6.1 Interests in mining tenements relinquished, reduced or lapsed

EPM18373 EPM18374

Relinquished Relinquished

100% 100%

0% 0%

6.2 Interests in mining tenements acquired or increased


+ See chapter 19 for defined terms. Appendix 5B Page 4 17/12/2010

Issued and quoted securities at end of current quarter Description includes rate of interest and any redemption or conversion rights together with prices and dates.

Total number Number quoted Issue price per security (see note 3) (cents)

Amount paid up per security (see note 3) (cents)

7.1 Preference +securities (description)

7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs, redemptions

7.3 +Ordinary securities

204,706,589

204,706,589

7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs

57,517

57,517

7.5 +Convertible debt securities (description)

7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted

7.7 Options (description and conversion factor)

36,697,605

36,697,605

Exercise price

$0.015

Expiry date 30 Sept 2014

7.8 Issued during quarter

7.9 Exercised during quarter

57,517 57,517 $0.015 30 Sept 2014

7.10 Expired during quarter

2,500,000* 2,500,000*

Nil Nil

$0.125 $0.175

31 March 2014 31 March 2014

* Refer ASX announcement 28 March 2012 for vesting conditions



7.11 Debentures (totals only)

7.12 Unsecured notes (totals only)

Compliance statement 1 This statement has been prepared under accounting policies which comply with

accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 5).

2 This statement does give a true and fair view of the matters disclosed.

19 April 2013

Sign here: ............................................................ Date: ............................ (Company secretary)

Joneen McNamara Print name: .........................................................

Notes 1 The quarterly report provides a basis for informing the market how the entity’s

activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of

interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

3 Issued and quoted securities The issue price and amount paid up is not

required in items 7.1 and 7.3 for fully paid securities.

4 The definitions in, and provisions of, AASB 6: Exploration for and Evaluation of

Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. 5 Accounting Standards ASX will accept, for example, the use of International

Financial Reporting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

Documents

MARCH 2013 QUARTERLY REPORT - Helix · - Lodestone purchased remaining 50% of Olary ... 31st MARCH 2013 QUARTERLY REPORT . Helix Resources Limited ... Secure a significant ground