HELIX RESOURCES LIMITED — Capital/Financing Update 2004

Oct 25, 2004

HELIX RESOURCES LTD - 2005 STRATEGY, SHARE PURCHASE PLAN AND CORPORATE REVIEW

KEY POINTS

• New strategic direction for 2005 announced with decision to refocus on core strengths as a specialist exploration group in a buovant Gold and PGM market.
• Review of Tunkillia Project completed, resulting in decision to suspend sole funding $\bullet$ and seek suitable joint venture or other opportunities to advance the project.
• New capital raising initiative announced through Share Purchase Plan to raise up to $\bullet$ A\$1.5 million with Patersons Securities Limited acting as Lead Manager to support the new strategic direction.
• Corporate review completed resulting in cost reductions and changes to the Board.

Helix Resources Limited (ASX: HLX) today announced its corporate $\&$ exploration strategy moving forward into 2005 including a decision to refocus on its core strengths as an exploration company. The Company has completed a review of the Tunkillia Project in South Australia resulting in a decision to suspend sole funded expenditure and seek suitable joint venture or other opportunities to advance the Project in a way that adds further value for the Company's shareholders

In addition, Helix also today announced Board changes to reflect the Company's focus moving forward and a capital raising initiative to support its new strategic direction through a Share Purchase Plan ("SPP") for all eligible shareholders to raise up to \$1.5 million.

Tunkillia Project

The Company undertook a review of activities at the 100%-owned Tunkillia Gold Project in South Australia, following the undersubscribed rights issue to all shareholders earlier this year. The rights issue was designed to raise up to \$4.7 million to fund ongoing exploration activities and resource assessment program leading to a proposed Feasibility Study.

Helix's previous strategy was to focus its technical and financial resources at Tunkillia in order to advance this project to production as quickly possible. The Company achieved a number of key milestones in this regard during the year, including an upgraded 730,000-ounce JORC resource, the potential of the along-strike extensions of Area 223 and positive Scoping Study of a potential open pit development.

While the Tunkillia Project remains a material asset in Helix's portfolio, the inability to raise sufficient funds to support the targeted resource drilling has resulted in a decision to suspend activities.

In order to address the real potential of the Tunkillia Project, further estimated expenditure of around \$5 million would be required on exploration and resource drilling to advance the project before embarking on a Bankable Feasibility Study. Helix's current cash balance is approximately AUD\$1.3 million.

Following a review of potential funding alternatives, Helix has decided either to seek a suitable joint venture partner or to explore other third party development and funding arrangements as the most appropriate way to generate value from the Tunkillia Project.

Share Purchase Plan - New Strategic Focus

In conjunction with the decision to carry out activities away from Tunkillia, the Company will return to focus on its core skills as an explorer specialising in early-stage regional exploration, project generation and acquisition. As a result, the Board has implemented a cost-cutting program to significantly reduce corporate overheads which includes, ultimately, a reduction in the number of Board Members from 5 to 4. Wherever possible, exploration opportunities will now be pursued in joint venture with major mining houses that recognise Helix's skills and capabilities in exploration, enabling the Company to preserve its cash resources.

In order to support this strategy, the Board of Directors is pleased to provide an opportunity for eligible shareholders to participate in a capital raising initiative through a Share Purchase Plan ("SPP") to raise up to \$1.5 million. Under the SPP, eligible shareholders, irrespective of the size of their shareholding. can purchase additional shares in the Company up to the value of \$5,000. Patersons Securities Limited have agreed to act as Lead Manager for the issue Helix is also in discussions with Patersons regarding the possibility of underwriting the issue.

Helix intends to issue up to 10 million shares at a price of 15 cents under the SPP, representing a discount of 17% to the market, applying a volume weighted average share price in the 5 trading days before 26 October 2004. Full details regarding the SPP will be mailed to shareholders in the next week. The funds raised will provide additional working capital for the Company in pursuing its new exploration focus, including regional exploration activities within its existing project portfolio as well as new project generation and assessment.

Exploration Activities & Projects Update

Helix has a well-maintained and diversified exploration portfolio across Australia, including a substantial resource inventory as outlined below:

Project	Commodity	Equity	Grade and Tonnage	Contained Metal
Lake Everard (Tunkillia)	Au	100%	10.5Mt at 2.2g/t Au	730,000 oz
Munni Munni	PGM	100%	24.0Mt at 2.9g/t PGM + Au	2,240,000 oz
Glenburgh	Au	100%	1.4Mt at 1.9g/t Au	90.000 oz
Fifield	PGM	100%	10.2Mt at 0.6g/t Pt 2.0Mt at 0.18% Co & 0.35%	200,000 oz
	Ni Co	100%	Ni	3600t Co. 7000t Ni
Menzies	Ni Co	40%	6.0Mt at 1.4% Ni & 0.11% Co.	84,000t Ni, 6,600t Co

Helix's other exploration projects, all in WA, include the Narracoota Gold Project, the Isolated Hill Project in WA, the Mt Venn Nickel-PGM project, the Highway Nickel Laterite Project (joint venture with Heron Resources Ltd) and the West Pilbara diamond exploration joint venture (with De Beers).

At the Munni Munni Project, Helix is continuing to investigate the possibility of selectively mining the higher-grade PGM shoots within the resource. These higher-grade zones contain over 1.4 million ounces of PGM and gold at a grade of 3.3 $g/t$ , with widths in places in excess of 5 metres. Regional exploration activities are planned for the Narracoota Gold Project (located in the Peak Hill gold field near Meekatharra in WA), Isolated Hill and Mt Venn. In addition, the Company has identified a number of new project generation opportunities which will be pursued in the coming months.

As part of its new corporate focus, Helix will seek to joint venture or sell non-core assets including the Menzies Nickel Project (6 million tonnes at 1.4% nickel and 0.11% cobalt for 84,000 tonnes of contained nickel), the Menzies Gold Project and the Loongana nickel-copper-PGM prospect in the Nullarbor region of Western Australia.

Corporate Review

Helix today also announced a number of immediate and proposed Board changes to reflect the Company's new strategic direction...

First, Dr Michael Folie, who was appointed as Chairman in May this year, has advised that he will not seek shareholder ratification of his appointment at the Company's AGM in November 2004 and has today retired. The Board has accepted Dr Folie's decision with regret and acknowledges his thorough and valuable contribution over the past six months, particularly in relation to strategic direction for the Company and technical issues, especially pertaining to the Tunkillia Project.

Secondly, long-standing non-executive director Mr Ian Macpherson (a non-executive director for 19 years) will retire at the conclusion of the Company's Annual General Meeting to be held on the $30^th$ November 2004. Mr Bryce Wauchope (a non-executive director for 11 years) has decided not to seek reelection at the AGM. Both Mr Macpherson and Mr Wauchope have worked throughout their term diligently and tirelessly serving the interests of shareholders.

Finally. Mr Tony Martin, Helix's Exploration Director, has confirmed his decision to step down from the Board at the AGM; however, he will remain in the key position of Manager - Exploration with responsibility for Helix's exploration activities – a role he has performed admirably for the past $8$ years.

Following these changes, Mr Rob Mosig, Helix's Managing Director, has today been appointed as Executive Chairman. The Company's Chief Financial Officer, Mr Riccardo Vittino, has been appointed as Chief Operating Officer and executive director from today.

Additionally two new non-executive Board appointments have been made. Mr John Den Dryver and Mr Greg Wheeler have joined the Board from today and will be proposed for shareholder approval at the AGM. The new independent appointments will bring significant depth and expertise to Helix's Board. Mr Den Dryver is a mining engineer with 30 years experience in operational and corporate management, as well as extensive experience in mining project studies and implementation. He was previously Executive General Manager – Technical for Normandy Mining Ltd and Executive Director – Operations and later Managing Director of North Flinders Mines. Mr Wheeler is a Chartered Accountant who was previously a Partner with Deloitte Touche Tohmatsu and Grant Thornton., and who now has his own consulting practice and is a director of Pitcher Partners.

Mr Mosig said the new 4-person Board composition represented an appropriate balance of technical and corporate experience to propel the Company forward as a focused exploration company.

"While the past 12 months has not been without its challenges, Helix is moving forward positively to add value to its project portfolio and prudently and efficiently manage its assets," he said. "The Company's strategy will encompass joint ventures and the rationalisation of non-core assets in parallel with innovative exploration at project areas within our extensive Australian portfolio and elsewhere on new generative targets.

"In this regard, we will be refocusing on our core competencies as a successful exploration company with a track record spanning over 19 years, highly leveraged to exploration success in emerging and established mineral provinces."

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Released by: Jan Hope / Nicholas Read Jan Hope & Partners Telephone: (+61-8) 9388-1474

On behalf of: Mr Rob Mosig Executive Chaiman Helix Resources Limited Telephone: (+61-8) 9321-2644