China Resources

[Tackler]

HRSh Helena Resources to formalize share exchange for RTO

2005-07-20 09:36 ET - News Release

Mr. Barrett Sleeman reports

HELENA RESOURCES LIMITED: UPDATE ON PROPOSE REVERSE TAKE-OVER TRANSACTION

Helena Resources Ltd. has released the following update in connection with the proposed reverse takeover of the company by West China Mining Resources Holdings Ltd. previously announced in Stockwatch May 19, 2005.

The company and West China are currently working toward finalizing a formal securities exchange agreement between the parties. As previously noted, the transaction will be an arm's-length transaction and constitutes a reverse takeover under the policies of the TSX Venture 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 the 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 Bin Zhu, of Shanghai, China (owning 32 per cent), and ADDA (Panama) Ltd. (owning 13 per cent). West China owns 100 per cent of Sichuan Dexin Mining Resources Co. Ltd. of Chengdu, Sichuan, China, which holds 100-per-cent ownership of an advanced exploration project in Sichuan province, China.

The project is an advanced exploration project located approximately 400 kilometres west of Chengdu in Sichuan province. The region is known to contain mineralization, with two operating mines existing within 15 kilometres of the property. The project has a number of demonstrated pegmatite veins that 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 metres. 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 1.3 million 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 20 cents. 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 execution of a formal agreement by the parties; completion of due diligence by the company and Dexin; the approval of the shareholders of the company; acceptance by the exchange of the transaction and the Dexin board nominees; the company being a reporting issuer in good standing in British Columbia and Alberta at the time of closing; 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 no material change having occurred in the business or operations of the company.