HELIX RESOURCES LIMITED — Capital/Financing Update 2004

Jan 27, 2004

HELIX UNVEILS NEW TUNKILLIA GOLD RESOURCE

40% INCREASE IN CONTAINED GOLD COULD LAY FOUNDATION FOR FEASIBILITY STUDY

Helix Resources Limited (ASX: HLX) has moved another step toward its planned emergence as a mid-tier Australian gold producer, today announcing a major resource upgrade for its 100%-owned Area 223 Gold Project at Tunkillia in South Australia's Gawler Craton.

The new resource – the first-ever JORC-compliant resource for the project – has been estimated by AMC Consultants Pty Ltd (to a depth of 250 metres) at 7.30 million tonnes grading 2.64 g/t gold (using a 1 $g/t$ lower cut-off) for 620,000 contained ounces. The JORC resource lies within a global envelope of 10.1 million tonnes grading 2.6g/t gold containing 850,000 ounces.

The new global estimate represents a 40% increase in contained gold and a significant enhancement in grade from the previous resource estimate of 8.5 million tonnes grading 2.3 $g/t$ for approximately 600,000 ounces. The mineralised strike length has also been extended from 1.6 to 2 kilometres.

Helix's Managing Director, Mr Rob Mosig, said the Company was awaiting a Scoping Report currently being prepared by AMC Consultants. "We are hoping that the Scoping Report will demonstrate that the resource could be extracted using conventional open pit mining techniques with a favourable reserve conversion ratio."

Mr Mosig said the resource announcement marked a key turning point for Helix, establishing Tunkillia as a significant, long-term gold project and positioning the Company to accelerate development plans and launch an expanded exploration-drilling program commencing in March this year.

"The work completed to date suggests that Tunkillia is potentially a very attractive development opportunity, that could establish Helix as the second stand-alone South Australian gold producer with annual production in the 70-80,000 ounces range." he added.

"The increase in grade with the new resource estimate is particularly pleasing, while the drilling has also confirmed that there is significant potential to further extend the resource," he added.

On receipt of a favourable Scoping Study from AMC, Helix will:

• make the final deferred payment of A\$500,000 to the previous owner of the Tunkillia Project, $\bullet$ AngloGold, completing the A\$1.5 million acquisition of the project (A\$1.25 million in cash and the balance in shares and options);
• fully review the AMC Scoping Report, which is due for completion by February 2004, and $\bullet$ commit to a Feasibility Study. The Study, which will include in-fill and resource drilling to upgrade the resource to the Measured category will be targeted for completion by October 2004;
• commence a A\$1 million exploration drilling program at Tunkillia targeting extensions to the $\bullet$ resource along strike and down dip (where it remains open) and to test other generative targets within a 1 kilometre radius of the main Tunkillia resource with a view to further building the global resource inventory; and

implement funding arrangements to cover the cost of the Feasibility Study phase of the project $\bullet$ and regional exploration in 2004, supplementing current cash reserves of A\$2.3 million.

Mr Mosig said Helix was confident that further exploration had the potential to increase the global resource inventory at Tunkillia to in excess of 1 million ounces, with a dual focus on highly prospective extensions to the existing resource and regional targets.

"We have also identified the potential at depth for high-grade plunging lodes similar to those encountered at Dominion Mining's Challenger Project $-$ a scenario which so far has not been tested at Tunkillia." he added.

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Released by: Jan Hope / Nicholas Read Jan Hope & Partners Telephone: (+61-8) 9388-1474 Mobile: (0419) 929 046

On behalf of: Mr Rob Mosia Managing Director Helix Resources Limited Telephone: (+61-8) 9321-2644