HELIX RESOURCES LIMITED — Capital/Financing Update 2005

Oct 17, 2005

HELIX RESOURCES LIMITED

ABN 27 009 138 738

Prospectus

For a fully underwritten, pro-rata renounceable rights issue of 19,167,683 New Shares and 19,167,683 New Options on the basis of 1 New Share for every 4 Shares at an issue price of 10 cents per New Share (with each New Share having an attaching 1 free New Option to subscribe for a further share at 14 cents to be exercised no later than 31 March 2007) to raise \$1,916,768 (before costs)

This Issue is scheduled to close at 5:00 pm (WST) on 16 November 2005 (unless extended)

Lead Manager and Underwriter

Patersons Securities Limited ABN 69 008 896 311

IMPORTANT INFORMATION

This document is important and requires your immediate attention. Applicants should read this Prospectus in its entirety before deciding whether to apply for the New Shares and New Options. This Entitlement Issue is underwritten by Patersons Securities Limited. The Underwriting Agreement contains terms and conditions which may affect the obligations of the Underwriter, details of which are set out in Section 6.10 of this Prospectus. The New Shares and New Options offered by this Prospectus should be considered speculative.

CORPORATE DIRECTORY

Directors

Mr Robert W Mosig	Executive Chairman
Mr Riccardo Vittino	Chief Operating Officer
Mr John DenDryver	Non-Executive Director
Mr Greg Wheeler	Non-Executive Director

Company Secretary

Mr Riccardo EM Vittino

Corporate Head and Registered Office

9 Richardson Street West Perth WA 6005

Telephone:	$(618)$ 9321 2644
Facsimile:	$(618)$ 9321 3909
Email:	helix@helix.net.au
Website:	http://www.helix.net.au

Lead Manager and Underwriter

Patersons Securities Limited Exchange Plaza 2 The Esplanade PERTH WA 6000

Lawyers

Steinepreis Paganin Level 4, Next Building 16 Milligan Street PERTH WA 6000

Share Registry

Advanced Share Registry Services* 110 Stirling Highway NEDLANDS WA 6009

Auditors

Deloitte Touche Tohmatsu Level 14, Woodside Plaza 240 St Georges Terrace PERTH WA 6000

Stock Exchange

The Company's securities are quoted on the official list of Australian Stock Exchange Limited.

CODE: HLX and HLXOA

* These entities have not been involved in the preparation of this Prospectus and have not consented to being named in this Prospectus. Their names are included for information purposes only

Table of contents

	Letter to Shareholders	3
1	Important Information and Dates	4
2	Details of the Offer	5
3	Financial Information	9
4	Purpose and Effect of the Issue	12
5	Risk Factors	13
6	Additional Information	16
7	Glossary of Terms	26

No person is authorised to give any information or to make any representation regarding the Issue. Any information or representation in relation to the Issue, which is not contained in this Prospectus, may not be relied upon as having been authorised by the Company or its Directors. Defined terms and abbreviations used in this Prospectus are explained in section 7 of this Prospectus.

Page

HELIX RESOURCES LIMITED

A.C.N. 009 138 738 Incorporated in Western Australia

Dear Shareholder.

On behalf of the Directors of Helix Resources Limited, I have pleasure in inviting you to participate in this new issue of Shares. As outlined in the Prospectus, the Company proposes to make a pro-rata Renounceable Rights Issue of 19,167,683 New Shares and 19,167,683 New Options on the basis of one New Share for every four shares held, together with one free New Option for every New Share subscribed to raise initially, \$1,916,768 before costs. If all of the New Options are exercised by 31 March 2007, a further \$2,683,475 will be raised.

As a Renounceable Rights Issue, this Issue allows you the opportunity to maintain your percentage equity in the Company by purchasing more shares, or alternatively, trade some or all of your rights on the Australian Stock Exchange. The choice is yours.

The Issue is fully underwritten by Patersons Securities Limited.

The Company is planning to carry out important exploration activities at Mt Venn, the West Pilbara gold and base metals projects as well as further investigations at Glenburgh and Narracoota for gold. New project identification and evaluation will also feature significantly in 2006, and some of the funds from this Issue will be used towards these activities.

Should you be unclear about any aspects of this Issue, or about a Renounceable Rights Issue, I would strongly recommend you seek advice from a stockbroker or your financial adviser.

The Rights Issue has already received favourable review from many shareholders and I look forward to both your participation and reporting on our activities at our Annual General Meeting on the 28^th November 2005

Yours sincerely

Robert W Mosig Executive Chairman

$\blacktriangleleft$ Important Information and Dates

$1.1$ Important Information

This Prospectus is dated 18 October 2005 and a copy of this Prospectus was lodged with the ASIC and ASX on that date. Neither the ASIC nor ASX or any of their respective officers take any responsibility for the contents of this Prospectus.

Shareholders should read this document in its entirety and, if in doubt, should consult their professional advisers before deciding whether to accept their Entitlement.

In making the representations in this Prospectus, regard has been had to the fact that the Company is a "disclosing entity" for the purposes of the Corporations Act and certain matters may reasonably be expected to be known by investors and professional advisers whom potential investors may consult.

No person is authorised to give any information or to make any representation in connection with the Offer that is not contained in this Prospectus. Any information or representation not so contained may not be relied on as having been authorised by the Company in connection with this Prospectus.

$1.2$ Privacy Disclosure

The Company collects information about each Applicant provided on an Entitlement and Acceptance Form for the purposes of processing Entitlement and Acceptance Forms, and, if the Applicant is successful, to administer the Applicant's security holding in the Company.

By submitting an Entitlement and Acceptance Form, each applicant agrees that the Company may use the information provided on the Entitlement and Acceptance Form for the purposes set out in this privacy disclosure statement and may disclose it for those purposes to the Company's share registry, the Company's related bodies corporate, agents, contractors and third parties service providers, including mailing houses and professional advisers, and to ASX and regulatory authorities.

The Corporations Act requires the Company to include information about the security holder (including name, address and details of securities held) in its public register. The information contained in the Company's public register must remain there even if that person ceases to be a security holder of the Company. Information contained in the Company's registers is also used to facilitate distribution payments and corporate communication (including the Company's financial results, annual reports and other information that the Company may wish to communicate to its security holders) and compliance by the Company with legal and regulatory requirements.

If you do not provide the information on the Entitlement and Acceptance Form, the Company may not be able to accept or process your application.

An Applicant has a right to gain access to the information that the Company holds about that person subject to certain exemptions under law. A fee may be charged for access.

Access requested must be made in writing to the Conpany's registered office.

$1.3$ Electronic Prospectus

A copy of this Prospectus can be downloaded from the website at www.helix.net.au. Any person accessing the electronic version of the Prospectus from outside of Australia or New Zealand should note that this Prospectus does not constitute an offer of securities in any jurisdiction where, or to any person to whom, it would not be lawful to issue the Prospectus or make the offer. It is the responsibility of any investor outside Australia to ensure compliance with all laws of any country relevant to their application, and any such applicant should consult their professional advisers as to whether any government or other consents are required, or whether any formalities need to be observed to enable them to apply for and be allotted any securities.

The Corporations Act prohibits any person passing onto another person an Application Form unless it is attached to a hard copy of this Prospectus or it accompanies the complete and unaltered

version of this Prospectus. Any person may obtain a copy of this Prospectus free of charge by contacting the Company.

$1.4$ Key dates

Lodgement of Prospectus with ASIC and announcement to ASX	18 October 2005
"Ex Date" - Rights Trading Commences	21 October 2005
Record Date to determine entitlements	27 October 2005
Despatch Prospectus and Entitlement and Acceptance forms	2 November 2005
Rights Trading Ceases	9 November 2005
Closing Date of Entitlement Issue*	16 November 2005
Anticipated date for despatch of Holding Statements	24 November 2005

*The Directors may extend the Closing Date by giving at least 6 Business Days notice to ASX prior to the Closing Date. As such, the date the New Shares and Options are expected to commence trading on ASX may vary.

$\overline{2}$ Details of the Offer

$2.1$ The Offer

In this Prospectus, the Company will offer and issue 19,167,683* New Shares at 10 cents each and 19,167,683 New Options to persons registered as Shareholders at 5.00pm WST on 27 October 2005 on the basis of one (1) New Share for every four (4) Shares held, together with one (1) free New Option for every New Share subscribed for by way of a renounceable rights issue. Fractional entitlements to New Shares and Options will be rounded to the nearest whole number of New Shares and New Options.

*This assumes that no Existing Options will be exercised by the Record Date to be entitled to participate in the Issue.

$2.2$ Applications for Shares

Applications for Shares may only be made by completing the Entitlement and Acceptance Form accompanying this Prospectus.

Applications open at 9:00am WST on 2 November 2005 and will close as at the Closing Date or such other dates and times determined by the Directors.

$2.3$ Rights Trading

Entitlements to New Shares and New Options pursuant to this Issue are renounceable and accordingly rights will be traded on ASX. Details on how to sell your rights are set out below.

$2.4$ Action Required by Shareholders

This Prospectus offers Shareholders the opportunity to subscribe for New Shares and New Options under a renounceable rights issue.

This Issue may be accepted in whole or in part before 5.00pm (WST) on 16 November 2005. subject to the right of the Company and the Underwriter to extend the offer period.

Fractional entitlements or allocations (as the case may be) to Shares will be rounded to the nearest whole number.

Instructions for completion of the acceptance of your Entitlements are set out on the Entitlement and Acceptance Form which accompanies this Prospectus.

Shareholders wishing to apply for New Shares (and New Options) in addition to the Entitlement as shown on the Entitlement and Acceptance Form may purchase rights on the ASX or may complete the Shortfall Application Form.

In particular, Shareholders may take the following action:

Acceptance of Entitlement in Full

If you wish to take up all of your Entitlement under the Issue, please complete the Entitlement and Acceptance Form in accordance with the instructions set out on the reverse of that form. An application must not exceed your Entitlement as shown on the Entitlement and Acceptance Form. An application exceeding your Entitlement will be deemed to be for your maximum Entitlement and any surplus funds will be returned without interest.

You must forward the completed Entitlement and Acceptance Form, together with your cheque for the application monies drawn on an Australian Bank or bank draft made payable in Australian currency to "Helix Resources Limited" and crossed "Not Negotiable" to the Company at:

PO Box 1156 NEDLANDS WA 6909

by no later than 5:00pm WST on the Closing Date.

If you wish to take up all of your Entitlement and apply for additional New Shares

Shareholders who have taken up their Entitlement may apply for additional New Shares and New Options by completing the Shortfall Application Form which is attached to this Prospectus in accordance with the instructions on the Shortfall Application Form.

The completed Shortfall Application Form must be accompanied by a separate cheque or bank draft made payable to "Helix Resources Limited" and crossed "Not Negotiable" for the appropriate application monies to reach the Company at:

PO Box 1156 NEDLANDS WA 6909

by no later than 5.00pm WST on the Closing Date.

Partial Acceptance of Entitlement

If you wish to take up part of your Entitlement under the Issue and sell the balance, please complete the Entitlement and Acceptance Form in accordance with the instructions set out on the reverse of that form and insert the number of New Shares for which you wish to accept the Offer (being less than your Entitlement as specified on the Entitlement and Acceptance Form). You will also need to complete the panel headed "Instructions to your Stockbroker" on the back of the Entitlement and Acceptance Form and lodge that form with the stockbroker, instructing the stockbroker to sell the number of rights which you wish to renounce.

If you wish to do so you must instruct the stockbroker and the stockbroker must sell those rights before rights trading ceases. Your stockbroker must then ensure that your completed Entitlement and Acceptance Form specifying the Shares for which you wish to accept the Offer together with your cheque for the application monies drawn on an Australian Bank or bank draft made payable in Australian currency to "Helix Resources Limited" and crossed "Not Negotiable" is delivered to the Company at:

PO Box 1156 NEDLANDS WA 6909

by no later than 5:00pm WST on the Closing Date.

Sale of all of your Rights

To sell all of your rights in full you will need to instruct a stockbroker to sell the rights which you wish to renounce. If you wish to do so you must instruct your stockbroker by completing the panel headed "Instructions to your Stockbroker" on the back of the Entitlement and Acceptance Form and lodge that form with your stockbroker. Your stockbroker must sell those rights before rights trading ceases.

Transfer all or part of your rights to another person other than on ASX

If you wish to transfer all or part of your rights to another person other than on ASX you must forward a completed renunciation form (which you can obtain by contacting the Company) together with the Entitlement and Acceptance Form and the applicable transferee's cheque for the application monies drawn on an Australian Bank or bank draft made payable in Australian currency to "Helix Resources Limited" and crossed "Not Negotiable" to the Company at:

PO Box 1156 NEDLANDS WA 6909

by no later than 5:00pm (WST) on the Closing Date.

If the Company receives both the completed renunciation form and the Entitlement and Acceptance Form in respect of those rights, the renunciation will be given effect in priority to the acceptance.

Non-Acceptance of Entitlement

If you do not take up any part of your Entitlement under the Issue or trade your rights you will not receive any benefit.

$2.5$ Ouotation

An application for admission of the New Shares and New Options to quotation on the ASX will be made to ASX within 7 days of the date of this Prospectus.

If the New Shares and New Options are not admitted to quotation on ASX within 3 months after the date of this Prospectus, none of the New Shares or New Options offered under this Prospectus will be allotted and the Company will repay all Application monies within the time prescribed under the Corporations Act. without interest.

The fact that ASX may grant official quotation to the New Shares and New Options is not to be taken in any way as an indication of the merits of the Company or the New Shares and New Options now offered for subscription.

$2.6$ Allotment and issue

The Company expects to allot and issue the New Shares and New Options as soon as practicable after the Closing Date.

Pending the allotment and issue of the New Shares and New Options or payment of refunds pursuant to this Prospectus, the Company will hold all application monies in trust for the Applicants in a separate bank account as required by the Corporations Act. The Company, however, will be entitled to retain all interest that accrues on the bank account and each Applicant waives the right to claim interest.

$2.7$ Overseas Investors

Shareholders resident outside Australia or New Zealand should consult their professional advisers as to whether any governmental or other consent are required, or other formalities need to be observed to enable them to accept their Entitlements.

In accordance with the requirements of the Listing Rules, the Company has decided that it would be unreasonable to extend the Issue to Shareholders with registered addresses outside of Australia and New Zealand having regard to:

• $(a)$ the number of Shareholders with registered addresses outside Australia and New Zealand;
• the number and value of the Shares the shareholders with registered addresses outside $(h)$ Australia and New Zealand; and
• the cost of complying with legal requirements of regulatory authorities in those countries $(c)$ outside of Australia and New Zealand.

Accordingly, the Issue is not being extended to any Shareholders whose registered address is outside Australia or New Zealand.

The Company has appointed the Lead Manager to sell the rights which would otherwise accrue to the foreign shareholders. The proceeds of sale will be distributed to foreign shareholders for whose benefit the rights have been sold in proportion to their shareholdings (after deducting brokerage commission and other expenses). Neither the Company nor the Lead Manager will be liable for a failure to sell rights or to sell rights at any particular price.

$2.8$ No issue of Shares after the Prospectus expires

No New Shares or New Options will be issued on the basis of this Prospectus later than 13 months after the date of this Prospectus.

$2.9$ Jurisdiction

This Prospectus does not constitute an offer in any place in which or to any person to whom it would not be lawful to make such an offer.

$2.10$ Taxation

Shareholders should be aware that there might be taxation implications in taking up their entitlement to the New Shares and New Options and on exercise of those New Options. Shareholders should consult their own professional tax adviser to obtain taxation advice relevant to their own circumstances.

$2.11$ Underwriting

This Issue is underwritten by Patersons Securities Limited. The terms of the underwriting agreement are set out in section 6.

2.12 Shortfall

In the event that not all Shareholders apply for New Shares and New Options the subject of this Prospectus, the New Shares and New Options not accepted or applied for under this Prospectus will form part of the Shortfall. Shareholders may apply for the Shortfall by completing the Shortfall Application Form however they should note that the Shortfall will revert to the Underwriter in accordance with the Underwriting Agreement. The offer of the Shortfall is a separate offer pursuant to this Prospectus and shall be placed at the direction of the Underwriter, and the Underwriter reserves the right to allot to an applicant a lesser number of Shares than the number for which the applicant applies, or to reject an application, or to not proceed with placing the Shortfall (pursuant to the Underwriting Agreement).

$2.13 -$ Chess

The New Shares and New Options will participate in the Clearing House Electronic Sub-register System known as CHESS. ASX Settlement and Transfer Corporation Pty Ltd ACN 008 504 432, ("ASTC"), a wholly owned subsidiary of ASX, operates CHESS in accordance with the Listing Rules and the ASTC Settlement Rules.

Under CHESS, a Shareholder will not receive a certificate but will receive a statement of their holding in Helix Resources. If a Shareholder is broker sponsored, ASTC will send the Shareholder a CHESS statement. The CHESS statement will set out the number of Shares allotted to each Shareholder under this Prospectus provide details of the Shareholder's holder identification number and give the participant identification number of the sponsor.

If a Shareholder is registered on the issuer sponsored sub register, the Shareholder's statement will be dispatched by the Share Registry and will contain the number of Shares allotted to the Shareholder under this Prospectus and the Shareholder's security holder reference number.

A CHESS statement or issuer-sponsored statement will routinely be sent to Shareholders at the end of any calendar month during which the balance of their shareholding changes. A Shareholder may request a statement at any other time. However, a charge may be applied for additional statements.

$2.14$ Enquiries

If a Shareholder has any questions regarding this Prospectus, please contact Riccardo Vittino. Company Secretary and Chief Operating Officer for the Company on (+61 8) 9321 2644.

3 Financial Information

$3.1$ Full Year Report 2005

The Company's 2005 Full Year Report contains all financial information relevant to the Issue. The Full Year Report was lodged with ASX and ASIC. A copy of the Full Year Report is available upon request from the Company free of charge or from the Company's website at http://www.helix.net.au.

The following information and reports are contained in the Full Year Report for the year ended 30 June 2005:

• Corporate governance practices; $\bullet$
• the directors' report;
• the independence declaration from Deloitte Touche Tohmatsu:
• the independent audit report from Deloitte Touche Tohmatsu; ٠
• the directors' declaration:
• the statement of financial position; ۸
• the statement of financial performance;
• the statement of cashflows; and
• × the notes to the accounts

$3.2$ Pro-Forma Consolidated Statement of Financial Position

Set out below is a pro forma statement of financial position of the Company after taking into account the Issue. It is based on the consolidated statement of financial position of the Company as at 30 June 2005. The pro forma consolidated statement of financial position illustrates the effect as if the issue of all the New Shares under this Prospectus had occurred on 30 June 2005.

	Audited as at 30 June 2005 \$	Unaudited Proforma as at 30 June 2005 \$
Current Assets
Cash assets	1,635,873	3,552,641
Receivables	78,088	78,088
Other	306,410	306,410
Total Current Assets	2,020,371	3,936.874
Non-Current Assets
Investments	890	890
Property, plant & equipment	171,250	171,250
Mineral interests	11,201,564	11,201,564
Other	149,242	149,242
Total Non-Current Assets	11,522,946	11,522,946
Total Assets	13,543,317	15,459,820
Current Liabilities
Payables	214,856	214,856
Provisions	67,375	67,375
Total Current Liabilities	282, 231	282.231
Non Current Liabilities
Provisions	10,538	10,538
Total Non Current Liabilities	10,538	10,538
Total Liabilities	292,769	292.769
Net Assets	13,250,548	15,167,316
Equity
Contributed Equity	43,567,055	45,483,823
Accumulated Losses	(30,316,507)	(30,316,507)
Total Equity	13,250,548	15,167,316

Consolidated Statement of Financial Position as at 30 June 2005

$3.3$ Financial Reporting Standards

IMPACTS OF ADOPTING THE AUSTRALIAN EQUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING STANDARDS

The Australian Accounting Standards Board (AASB) has issued Australian equivalents to International Financial Reporting Standards ("A-IFRS") for application to reporting periods beginning on or after 1 January 2005. Helix Resources Limited has commenced reviewing the transition from its current policies to A-IFRS. The adoption of A-IFRS will be first reflected in the financial statements for the half-year ending 31 December 2005 and the year ending 30 June 2006.

Under AASB1 the Company and Consolidated Entity, in complying with A-IFRS for the first time is required to restate its comparative financial statements to amounts reflecting the application of A-IFRS to that comparative period. Most adjustments required on transition to A-IFRS will be made, retrospectively, against opening retained earnings as at 1 July 2004.

As at the date of this Prospectus, the Company and Consolidated Entity have substantially completed the assessment of accounting policy alternatives on transition to A-IFRS, and A-IFRS accounting policies that will be adopted from 1 July 2005. In addition, the Company and Consolidated Entity are in the process of completing its analysis of the likely impact on the results and financial position of the Company and Consolidated Entity.

Key areas where accounting policies are likely to change and may impact on the financial statements of the Company and Consolidated Entity include the following:

Capitalisation of Exploration and Evaluation Costs $(a)$

AASB 6 Exploration for and Evaluation of Mineral Resources permits the area of interest method of accounting to continue for exploration and evaluation expenditure and thus AASB 6 should provide outcomes consistent with those under the existing standard AASB 1022 Accounting for the Extractive Industries in accounting for the initial recognition of exploration and evaluation assets

In addition, AASB 6 requires an annual assessment of impairment for exploration and evaluation assets using four indicators of impairment. These indicators are consistent with the initial recognition criteria of the existing standard and thus it is not expected that there will be a significant impact on results arising from the impairment testing requirements.

Income Tax ЪY.

In accordance with Australian Standard AASB 112 Income Taxes, deferred tax balances are determined using the balance sheet method which calculates temporary differences based on the carrying amounts of the Company's and Consolidated Entity's assets and liabilities in the statement of financial position and their associated tax bases. This represents a fundamental change to the way the Company and Consolidated Entity currently calculates its tax balances, where deferred tax balances are determined using the income statement method. The Company is currently evaluating the impacts of AASB 112 on the financial statements of the company and the consolidated entity. The Company and Consolidated Entity have carried forward tax losses which have not been recognised as deferred tax assets in the 30 June 2005 financial statements as they do not satisfy the 'virtually certain' criteria under current Australian GAAP. Although the Company's evaluation of the impacts of AASB 112 is not complete, the Company believes that these losses will also not be recognised as deferred tax assets under A-IFRS because at this stage it is believed that they will not meet the 'probable' recognition criteria under A-IFRS. The Company and Consolidated Entity may also be required to recognised additional deferred tax liabilities on transition to A-IFRS, however the impacts, if any, is not yet determinable.

Provision for Rehabilitation and Restoration $\left($ c $\right)$

In accordance with Australian Standard AASB 137 Provisions, Contingent Liabilities and Contingent Assets, the Company and Consolidated Entity will be required to fully provide, based on discounted future cash flows, for rehabilitation and restoration where there is a legal or constructive obligation. A corresponding asset, net of depreciation to the date of transition will be recognised and be depreciated together with development assets. The Company and Consolidated Entity will be required to recognise the unwinding of the discount in relation to the provision applied directly as an interest expense. As the Company performs restoration activity on a continuing basis, the impact of these changes are likely to be immaterial.

(d) Share Based Payments

Under Australian Standard AASB 2 Share-based Payment, the Conneany and Consolidated Entity will be required to determine the fair value of options issued to employees and recognise an expense in the Statement of Financial Performance. For options on issue on the application of AASB 2 an adjustment for their recognition will be made against opening retained earnings. The consolidated entity had 733,332 share options that were issued on 11 November 2003 and unvested as at 1 January 2005.

As a consequence share based payment expense will increase by \$30,690 (Consolidated Entity \$30,690) for the year ended 30 June 2005 and be recognised as an employee equity – settled benefit reserve. The increase in the opening accumulated loss at 1 July 2004 in respect of years prior to fiscal 2005 will be \$19,507.

The Company and Consolidated Entity will not be recognising share options issued on 11 November 2003 and vested prior to 1 January 2005 as permitted by AASB1.

$(e)$ Revenue

Although not impacting upon the profit of the Company and Consolidated Entity, the adoption of A-IFRS will result in a number of transactions being recorded on a "net" rather than "gross" basis. In addition the adoption of A-IFRS results in the reclassification of proceeds from the sale of non current assets from "revenue from ordinary activities" to "other income and expense" items in the statement of financial performance.

As a consequence, proceeds from the sale of investments will decrease by \$284,595 (Company \$284,595) and the written down value of investments disposed will decrease by \$108,000 (Company \$108,000). The difference is a gain on sale of non current assets of \$176,595 (Company \$176,595) which will be recognized for the financial year ended 30 June 2005 as part of "other income". This is a reclassification and will not impact upon the profit and loss of the Company and Consolidated Entity.

Financial Instruments

The Company and Consolidated Entity have elected not to retrospectively apply AASB132 and 139. Accordingly there are no financial impacts on the financial statements in relation to these two standards as at 30 June 2005.

Property, plant and equipment

On initial adoption of A-IFRS items of plant and equipment are measured at the A-IFRS cost. The directors have not elected to use fair value or revaluation as deemed cost to measure an item of property, plant and equipment.

4 Purpose and Effect of the Issue

$4.1$ Purpose of the Issue and funds raised

The purpose of the Issue is to raise \$1,916,768 (before expenses of the Issue). The proceeds from the Issue will be used to progress exploration at the Company's tenements in Western Australia. including follow up work at the Mt Venn Project, as well as for working capital and to meet the estimated costs of the Issue.

The estimated use of the funds raised will be applied against the following items of expenditure (in order of priority and application):

Item of Expenditure	Funds \$
Exploration Expenditure	1,350,000

USE OF FUNDS RAISED

Expenses of the Issue	155,835
Administration and Working Capital	410.933
Total Maximum Additional Funding	1,916,768

In the event that all of the New Options are subsequently exercised prior to their expiry date, an amount of \$2,683,475 will be raised by the Company. These funds are likely to be applied to exploration expenditure and general working capital.

4.2 Effect of the issue of the New Shares and New Options on the Company

Assuming all New Shares and New Options offered under this Prospectus are issued, the principal effect of the Issue will be to:

• increase cash reserves by approximately \$1.76M (after deducting estimated expenses of $(a)$ the Issue),
• $(b)$ increase the number of Listed Shares on issue from 76,670,730, as at the date of this Prospectus, to 95,838,413; and
• increase the number of Listed Options on issue from 16,437,863, as at the date of this $(c)$ Prospectus, to 35,605,546.

4.3 Capital structure

Since the date of the Full Year Report, the Company has not issued any additional securities.

The capital structure of the Company after the issue of the New Shares and New Options will be:

Share capital
Shares on issue	95,838,413

Unlisted options on issue
Employee share options	3.962,999
Listed Options
Listed Options currently on issue.	$*16,437,883$
New Options to be issued pursuant to this Prospectus	19,167,683
Total Listed Options	35.605,546

*Assumes no Listed Options are converted in order to participate in the Issue. The Listed Options have an exercise price of \$0.25 each and are due to expire on 30 November 2005.

5 Risk Factors

$5.1$ General

Ownership of Shares may involve certain risks; particularly risks associated with the resources and exploration industries. These industries are cyclical in nature and are affected by a number of factors beyond the control of the Directors, such as the general economic climate, exchange rates, interest rates and inflation, which may operate adversely on the financial position of the Company.

Investors should also be aware that there are risks associated with any investment in securities quoted on the stock market and that returns on such investment will depend, inter alia, on general

stock market returns, the performance and rating of companies within the stock market, the relative performance of alternative forms of investments, as well as the actual performance of the Company.

$5.2$ Risks

The New Shares and New Options offered by this Prospectus should be regarded as speculative due to the inherent risks associated with the Company's present and proposed activities in exploration, development and production. These risks may have material effect on the future operations and performance of the Company and the value of its securities.

The Directors of the Company strongly recommend that potential investors examine the contents of this Prospectus in its entirety, carefully review the Company's announcements to ASX as disclosed in Section 6 and consult licensed professional advisers before making an investment decision.

5.3 Factors expected to affect the value of Shares and Options

The price of the Company's securities may be subject to numerous influences (both domestic and international), which may affect both the broad trend in the share market and the security prices of individual companies.

The factors that may affect the value of the Company's Shares on ASX include:

• General economic factors such as interest rates, exchange rates and government regulation;
• Any future issue of securities by the Company;
• The financial performance of the Company;
• The market price for metals the Company explores for and develops;
• Commercial factors such as the loss of key staff and litigation; and ×
• Adverse international events that could inpact on Australia, the Company or the mining ۸ industry in general.

5.4 Company Specific Factors

Exploration, Mining, Development and Processing Risks

The business of mineral exploration, project development, mining and processing by its nature contains elements of risk. Ultimate and continuous success of these activities is dependent on many factors such as:

• The discovery and/or acquisition of economically recoverable ore reserves;
• Favourable weather conditions for exploration and mining activities;
• Successful conclusions to bankable feasibility studies;
• Access to adequate capital for project development;
• Design and construction of efficient mining and processing facilities within capital expenditure budgets;
• Obtaining continued access to processing facilities on favourable terms and conditions:
• Securing and maintaining title to tenements:
• Obtaining consents and approvals necessary for the conduct of exploration and mining: and

Access to competent operational management and prudent financial administration. including the availability and reliability of appropriately qualified, skilled and experienced employees, contractors and consultants.

Government Policy

Capacity to explore and mine, as well as industry profitability generally, can be affected by changes in government policy which may be beyond the control of the Company.

Native Title

Both the Native Title Act 1993 (Commonwealth), related State Native Title Legislation and aboriginal land rights and aboriginal heritage legislation may affect the Company's ability to gain access to prospective exploration areas or obtain production titles.

Compensatory obligations may be necessary in settling native title claims if lodged over any tenements acquired by the Company. The existence of outstanding registered native title claims means that the grant of a tenement in respect of a particular tenement application may be significantly delayed or thwarted pending resolution of future act procedures in the Native Title Act. The level of impact of these matters will depend, in part, on the location and status of the tenements acquired by the Company. At this stage, it is not possible to quantify the impact (if any) which these developments may have on the operations of the Company.

Commodity Price Risk

The Company's revenues are dependant, in part, on the price received for its gold and other metals sales. Metal prices, and in particular gold prices. fluctuate and are affected by factors predominantly outside the control of the Company.

The relationship between the global supply and demand of gold, the level of forward selling by producers, the cost of production, general economic conditions, inflation levels, interest rates and exchange rates are some of the factors that influence gold and metals prices. These factors may have an adverse effect on the Company's ability to fund operations, exploration, evaluation and development activities.

Environmental Risk

The Company's projects and operations are subject to State and Federal laws and regulation regarding environmental hazards and discharge of hazardous waste and materials. Mining is an industry which has become subject to environmental responsibility and liability. The Company intends to conduct its business activities in an environmentally responsible manner, in accordance with applicable laws and regulations but the potential for liability is ever present.

Occupational Health and Safety Risk

The Company is committed to providing a healthy and safe environment for its personnel, contractors and visitors. Mining activities have inherent risks and hazards. The Company provides appropriate instructions, equipment, preventative measures, first aid information and training to all stakeholders through its Occupational Health & Safety Management Systems.

Share Market Risk

The market price of the Company's securities can be expected to rise and fall in accordance with general market conditions and factors specifically affecting the Australian resources sector and exploration and producer companies in particular.

Neither the Company nor its Directors warrant the future performance of the Company or any return on investment.

Future Capital Needs and Additional Funding

The future capital requirements of the Company will depend on many factors. The Company believes its cash, receivables and net proceeds of this Issue are adequate to fund continued exploration and resource development of the Company's projects, acquisitions and operations. Operations are continuing to ramp up and there can be no guarantee future performance will meet the designed schedule.

Should the Company require additional funding, there can be no assurance that additional financing will be available on acceptable terms, or at all. Any inability to obtain additional finance,

if required, would have a material adverse effect on the Company's business and its financial condition and performance.

6 Additional Information

$6.1$ Continuous disclosure obligations

The Company is a "disclosing entity" (as defined in Section 111AC of the Corporations Act) for the purposes of Section 713 of the Corporations Act and, as such, is subject to regular reporting and disclosure obligations. Specifically, like all listed companies, the Company is required to continuously disclose any information it has to the market which a reasonable person would expect to have a material effect on the price or the value of the Company's securities. The New Shares that will be issued pursuant to this Prospectus are in the same class of Shares that have been quoted on the official list of ASX during the 12 months prior to the issue of this Prospectus.

In general terms "transaction specific prospectuses" are only required to contain information in relation to the effect of the issue of securities on the Company and the rights attaching to the securities. It is not necessary to include general information in relation to all of the assets and liabilities, financial position, profits and losses or prospects of the issuing company unless such information has not previously been disclosed to ASX.

Having taken such precautions and having made such enquiries as are reasonable, the Company believes that it has complied with the general and specific requirements of ASX as applicable from time to time throughout the 12 months before the issue of this Prospectus which required the Company to notify ASX of information about specified events or matters as they arise for the purpose of ASX making that information available to the stock market conducted by ASX.

Information that is already in the public domain has not been reported in this Prospectus other than that which is considered necessary to make this Prospectus complete.

The Company, as a disclosing entity under the Corporations Act, states that:

• $(a)$ it is subject to regular reporting and disclosure obligations;
• $(b)$ copies of documents lodged with the ASIC in relation to the Company (not being documents referred to in section $1274(2)(a)$ of the Corporations Act) may be obtained from, or inspected at, the offices of the ASIC; and
• it will provide a copy of each of the following documents, free of charge, to any person $(c)$ on request between the date of issue of this Prospectus and the Closing Date:
• the annual financial report most recently lodged by the Company with the ASIC; $(i)$
• (ii) any half year financial report lodged with the ASIC by the Company after the lodgement of the annual financial report referred to in (i) and before the lodgement of this Prospectus with the ASIC; and
• (iii) any continuous disclosure notices given by the Company after the lodgement of the annual financial report referred to in (i) and before lodgement of this Prospectus.

Copies of all documents lodged with the ASIC in relation to the Company can be inspected at the registered office of the Company during normal office hours.

For details of documents lodged with ASX since the date of lodgement of the Company's latest yearly financial report refer to the table set out below.

Date Lodged	Notice
08/09/2005	Shareholding Information
03/10/2005	Head Office Address
04/10/2005	Trading Halt
05/10/2005	1 for 4 Renounceable Rights Issue

6.2 Full Year Report

The 2005 Full Year for Helix Resources has been lodged with ASIC and ASX. That document contains a review of the operations of Helix Resources, the directors' report, the financial report and an independent audit report by Deloitte Touche Tohmatsu for the year ended 30 June 2005. A copy of the Full Year Report is available from the Company free of charge. A Shareholder can call the Company on $(+618)$ 9321 2644 and a copy will be sent to the Shareholder. Alternatively. the Full Year Report is available on the Company's website at http://www.helix.net.au.

$6.3$ Rights attaching to New Shares issued and on the exercise of the Options

The New Shares issued and allotted under this Prospectus will rank pari passu in all respects with existing Shares. Full details of the rights attaching to Shares are set out in Helix Resources' constitution (Constitution), a copy of which can be inspected at the Company's registered office during normal business hours.

A broad summary (although not an exhaustive or definitive statement) of the rights attaching to Shares is outlined below:

General Meetings and Voting Rights

Subject to the Constitution and to the rights or restrictions attached to any Shares, each Shareholder is entitled to notice of a general meeting of the Company setting out the business to be transacted at that meeting.

Subject to the Constitution and to any rights or restrictions attached to any Shares, at a general meeting, each Shareholder entitled to vote may attend and vote in person or by proxy, attorney or representative.

Every Shareholder present in person or by proxy, attorney or representative has one vote on a show of hands and every Shareholder present has one vote for each Share held on a poll.

A Shareholder is not entitled to vote in respect of Shares unless all calls and other sums presently pavable to the Company have been paid.

Dividend Rights

Subject to any rights or restrictions attached to any Shares, the Directors may determine to distribute profits of Helix Resources, by way of dividend. If the Directors make such a determination, the profits of Helix Resources will be apportioned and paid on all Shares proportionately to the number of Shares held by Shareholders but where Shares are partly paid all dividends must be apportioned and paid proportionately to the amounts paid (not credited) on the Shares.

A transfer of Shares does not pass the right to a dividend declared on those Shares before registration of that transfer.

Subject to any rights or restrictions attached to any Shares, the Directors may capitalise and distribute, among the Shareholders entitled to receive dividends, and in the same proportions, any amount:

• forming part of the undivided profits of the Company; ٠
• representing profits arising from an ascertained accretion to capital or from a revaluation of the assets of the Company:
• arising from the realisation of any assets of the Company; or
• otherwise available for distribution as a dividend. $\bullet$

Subject to the Constitution, the Directors may set aside, out of the profits of the Company, such reserves or provisions for such purposes as they think fit.

The Directors may carry forward so much of the profits remaining as they consider ought not be distributed as dividends or capitalised without transferring those profits to a reserve or provision.

Future Issues

Without prejudice to any special rights conferred on the holders of any Shares but subject to the Constitution and the Listing Rules, the Directors may issue further securities in Helix Resources on such terms and conditions as they see fit.

Transfer of Shares

Subject to the Constitution and to the rights or restrictions attached to any Shares (at present there are none), a Shareholder may transfer their Shares by a proper SCH transfer or an instrument in writing in any usual form or other form approved by the Board.

The Board may decline to register a transfer in several circumstances including where a transfer is not in a registrable form.

Shareholder Liability and Calls on Shares

Subject to the Listing Rules, and the terms upon which any Shares may be issued the Board may make calls upon the Shareholders in respect of any money unpaid on their shares which is not, by the terms of issue of those shares, made payable at fixed times.

Rights on Winding Up

Subject to the rights and restrictions attached to any Shares. Shareholders will be entitled, in a winding up, to any surplus assets of the Company in proportion to the number of Shares held by them, irrespective of the amounts paid or credited as paid on the Shares.

$6.4$ Terms of New Options

The terms and conditions of the New Options are set out below:

• $(a)$ The Options will expire at 5.00pm on the Expiry Date. Any Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.
• $(b)$ Each Option gives the Option holder the right to subscribe for one Share. To obtain the right given by each Option, the Option holder must exercise the Options in accordance with the terms and conditions of the Options.
• $(c)$ The exercise price payable upon exercise of each Option will be \$0.14 (Exercise Price).
• $(d)$ All or part of the Options may be exercised at any time prior to the Expiry Date, from time to time.
• $(e)$ An Option holder may exercise their Options by lodging with the Company, before the Expiry Date:
• $(i)$ a written notice of exercise of Options specifying the number of Options being exercised: and
• a cheque or electronic funds transfer for the Exercise Price for the number of $(ii)$ Options being exercised:

(Exercise Notice)

An Exercise Notice is only effective when Helix Resources has received the full amount of the Exercise Price in cleared funds.

• $(f)$ Within 5 Business Days of receipt of the Exercise Notice accompanied by the Exercise Price. Helix Resources will allot the number of Shares required under these terms and conditions in respect of the number of Options specified in the Exercise Notice.
• $(g)$ All Shares allotted upon the exercise of Options will upon allotment rank pari passu in all respects with other Shares.
• (h) Helix Resources will apply for Official Quotation by ASX of the Options.

• $(i)$ Helix Resources will also apply for Official Quotation by ASX of all Shares allotted pursuant to the exercise of Options within 10 Business Days after the date of allotment of those Shares.

• $(i)$ An Option does not confer on the Option holder the right to participate in any pro-rata entitlements issue (whether by way of bonus issue or other offer of securities pro rata to the existing entitlements of Shareholders), which are offered by Helix Resources to its Shareholders. To participate in any pro rata entitlements issue in respect of an Option, the Option holder must exercise the Option.

• $(k)$ In the event of any reorganisation (including consolidation, sub-division, reduction or return) of the issued capital of the Company before the expiry of any Options, the number of Options to which an Option holder is entitled or the Exercise Price of the Options or both will be reconstructed (as appropriate) in accordance with the Listing Rules.
• $($ $)$ The Options will not give any right to participate in dividends until Shares are allotted pursuant to the exercise of the relevant Options.
• $(m)$ These terms and conditions may be amended from time to time by special resolution of Helix Resources in a general meeting in accordance with the Listing Rules and with the consent of the Option holder.

6.5 Litigation

The Company is not involved in any legal or arbitration proceedings that may have a significant affect on the Company's financial position nor are any such proceedings pending or threatened against the Company or any of its subsidiaries.

$6.6$ Trading History of Shares

The Company is a disclosing entity for the purposes of the Corporations Act and its Shares are enhanced disclosure securities quoted on ASX.

The highest, lowest and last market sale prices of the Company's Shares on ASX during the three months immediately preceding the date of this Prospectus with the ASIC and the respective dates of those sales were:

Highest:	20.5c on 18 July 2005
Lowest:	13.0c on 14 September 2005
Last:	13.0c on 18 October 2005

6.7 Directors' interests and remuneration

Other than as set out below or elsewhere in this Prospectus:

• $(a)$ no Director or proposed Director holds at the date of this Prospectus, or held at any time during the last 2 years, any interest in:
• $(i)$ the formation or promotion of the Company; or
• $(ii)$ property acquired or proposed to be acquired by the Company in connection with its formation or promotion, or the Issue; and
• $(b)$ no amounts have been paid or agreed to be paid by any person and no benefits have been given or agreed to be given by any person:
• $(i)$ to a Director or proposed Director to induce him to become, or to qualify as, a Director; or
• $(ii)$ for services provided by a Director or proposed Director or professional or promoter of the Company or stockbroker or the underwriter to the Issue in connection with the formation or promotion of the Company or the Issue.

As at the date of this Prospectus, the Directors are legally or beneficially entitled to the following Shares and options:

Director	No of Shares Held	Employee Options Held (29/03/09 Expiry Date)	Listed Options
Mr Mosig	2,484,846	1,600.000	857,516
Mr Vittino	900,000	900,000	614,271
Mr DenDryver	$\overline{\phantom{a}}$	w	$\overline{\phantom{a}}$
Mr Wheeler	753,880	÷	$\overline{\phantom{a}}$

The Directors will receive the same entitlement to the New Shares and New Options as all other Shareholders under the Issue in respect of Shares in which they hold an interest.

The Constitution provides that the Directors are entitled to remuneration as determined by the Directors. The remuneration of the non-executive Directors may not exceed, in any year, the amount fixed by Helix Resources for that purpose, being an amount of \$150,000.

In the past 2 years the Directors have received the following fees from the Company.

Mr Mosig	2005: \$168,750 - 2004: \$298,558
Mr Vittino	2005: \$127,180 - 2004: \$Nil
Mr DenDryver	2005: \$18,826 - 2004: \$Nil
Mr Wheeler	2005: \$19,267 - 2004: \$Nil

The Directors currently receive the following fees from the Company:

Mr Mosig	\$150,000
Mr Vittino	\$125,000
Mr DenDryver	\$30,000
Mr Wheeler	\$30,000

Greg Wheeler Consulting Pty Ltd, a Company with which Mr Wheeler is connected, provides corporate consulting services to the Company from time to time. Amounts billed are based on normal market rates for such services and are due and payable under normal payment terms. During the 2004/05 financial year, Greg Wheeler Consulting provided professional services to the value of \$10,000 and in the period from 1 July 2005 to the date of this Prospectus, \$2,550.

$6.8$ Director and Officer Liability Insurance

The Company has paid insurance premiums in respect of liability for the Directors, Officers and any related body corporate. The Directors' and Officers' Liability insurance provides cover against all costs and expenses that may be incurred in defending civil or criminal proceedings that fall within the scope of the indemnity and that may be brought against the Officers in their capacity as Officers of the Company or a related body corporate.

6.9 Interests of people involved with the Issue

Other than as set out below or elsewhere in this Prospectus:

• No professional adviser or promoter of the Company or stockbroker holds at the date of $(a)$ this Prospectus, or held at any time during the last 2 years, any interest in:

• $(i)$ the formation or promotion of the Company; or

• $(ii)$ property acquired or proposed to be acquired by the Company in connection with its formation or promotion: or

• $(iii)$ the Issue.
• $(b)$ No amounts have been paid or agreed to be paid by any person and no benefits have been given or agreed to be given by any person for services provided by a professional adviser or promoter of the Company or stockbroker or underwriter to the Issue in connection with the formation or promotion of the Company or the Issue.

Patersons Securities Limited has acted as Lead Manager and Underwriter to the Issue and will receive the fees set out in Section 6.10. During the 24 months preceding lodgement of this Prospectus with the ASIC. Patersons Securities Limited has received \$96.525 from the Company.

Steinepreis Paganin have acted as the solicitors to the Company in relation to the Issue. The Company estimates it will pay Steinepreis Paganin \$10,000 (exclusive of GST) for these services. During the 24 months preceding lodgement of this Prospectus with the ASIC, Steinepreis Paganin has received \$6.796.59 from the Company for other services.

$6.10$ Underwriting Agreement

Pursuant to an underwriting agreement dated 18 October 2005 between the Company and the Underwriter, the Underwriter has agreed to act as Lead Manager of the Issue and to underwrite the Issue subject to satisfaction of the following conditions precedent:

• (Due diligence): the Underwriter being satisfied with the Due Diligence Investigations $(a)$ and the Due Diligence Results by the Lodgement Date;
• (Underwriter's consent to be named): the Underwriter being satisfied with the form of $(b)$ the Prospectus (in its absolute discretion) and having given its consent to be named in the Prospectus by the Lodgement Date as evidence thereof;
• $(c)$ (Legal sign off): a legal sign off letter being provided to the Due Diligence Committee by the Company's solicitors to the satisfaction of the Underwriter and addressed to be for the benefit of the Underwriter as a member of the Due Diligence Committee, by the Lodgement Date:
• $(d)$ (Prospectus): the Prospectus being lodged with the ASIC prior to 5.00 pm on the Lodgement Date: and
• $(e)$ (Sub-Underwriting): the Underwriter entering into sub-underwriting agreements with sub-underwriters on terms and conditions satisfactory to the Underwriter (in its absolute discretion) for the entire Issue.

The Company must pay the Underwriter an underwriting fee of 5% of the funds raised under the Prospectus plus a management fee of \$45,000 (exclusive of GST).

The Company is providing standard representations and warranties for agreements of this nature and a breach of any of these representations or warranties is a termination event under the Underwriting Agreement. The Company is also providing indemnities to the Underwriter which are customary for agreements of this nature.

The Underwriter may, by notice to the Company, terminate its underwriting liability under the Underwriting Agreement, if certain events occur before the Company notifies the Underwriter of the number of Shares in respect of which valid Entitlement and Acceptance Forms have been received. These events include:

• $(f)$ (Indices): any of the S&P ASX 200 Index or the S&P ASX 200 Materials Index as published by ASX being at any time after the date of this Agreement 7.5% or more below its respective levels as at the close of business on the Business Day prior to the date of this Agreement; or

• (Prospectus): the Company does not lodge the Prospectus on the Lodgement Date or the $(g)$ Prospectus or the Offer is withdrawn by the Company; or

• $(h)$ (Copies of Prospectus): the Company fails to comply with the requirement to give the Underwriter the number of copies of the prospectus as required and such failure is not remedied within 2 days; or

• (No Official Quotation): Official Quotation has not been granted by the Shortfall Notice $(i)$ Deadline Date or, having been granted, is subsequently withdrawn, withheld or qualified; or
• $(i)$ (Supplementary prospectus):
• $(i)$ the Underwriter, having elected not to exercise its right to terminate its obligations under this Agreement as a result of an occurrence as described in clause $6.10(u)(vii)$ , forms the view on reasonable grounds that a supplementary or replacement prospectus should be lodged with ASIC for any of the reasons referred to in section 719 of the Corporations Act and the Company fails to lodge a supplementary or replacement prospectus in such form and content and within such time as the Underwriter may reasonably require; or
• $(ii)$ the Company lodges a supplementary or replacement prospectus without the prior written agreement of the Underwriter; or
• $(k)$ (Misleading Prospectus): it transpires that there is a statement in the Prospectus that is misleading or deceptive or likely to mislead or deceive, or that there is an omission from the Prospectus (having regard to the provisions of section 713 of the Corporations Act) or if any statement in the Prospectus becomes or misleading or deceptive or likely to mislead or deceive or if the issue of the Prospectus is or becomes misleading or deceptive or likely to mislead or deceive; or
• $(1)$ (Non-compliance with disclosure requirements): it transpires that the Prospectus does not contain all the information required by section 713 of the Corporations Act; or
• $(m)$ (Restriction on allotment): the Company is prevented from allotting the Rights Securities within the time required by this Agreement, the Corporations Act, the Listing Rules, any statute, regulation or order of a court of competent jurisdiction by ASIC, ASX or any court of competent jurisdiction or any governmental or semi-governmental agency or authority: or
• $(n)$ (Withdrawal of consent to Prospectus): any person (other than the Underwriter) who has previously consented to the inclusion of its, his or her name in the Prospectus or to be named in the Prospectus, withdraws that consent; or
• $(0)$ (ASIC application): an application is made by ASIC for an order under section 1324B or any other provision of the Corporations Act in relation to the Prospectus, the Shortfall Notice Deadline Date has arrived, and that application has not been dismissed or withdrawn: or
• (ASIC hearing): ASIC gives notice of its intention to hold a hearing under section 739 or $(p)$ any other provision of the Corporations Act in relation to the Prospectus to determine if it should make a stop order in relation to the Prospectus or the ASIC makes an interim or final stop order in relation to the Prospectus under section 739 or any other provision of the Corporations Act; or
• (Takeovers Panel): the Takeovers Panel makes a declaration that circumstances in $(q)$ relation to the affairs of the Company are unacceptable circumstances under Pt 6.10 of the Corporations Act, or an application for such a declaration is made to the Takeovers Panel: or
• (Authorisation) any authorisation which is material to anything referred to in the $(r)$ Prospectus is repealed, revoked or terminated or expires, or is modified or amended in a manner unacceptable to the Underwriter; or

• $(s)$ (Sub-underwriters): any of the Company Sub-Underwriters that are introduced by the Company (as detailed in Schedule 3 attached) do not comply with its obligations under the sub-underwriting agreements or threaten to not comply with its respective obligations under the sub-underwriting agreements; or

• $(t)$ (FIRB Approval) any of the Company Sub-underwriters that are introduced by the Company and are required to obtain FIRB approval do not receive such approval by the Closing Date: or

• $(u)$ (Termination Events): subject always to clause 13.2 (which is set out below), any of the following events occurs:
• $(i)$ (Default): default or breach by the Company under this Agreement of any terms, condition, covenant or undertaking; or
• $(ii)$ (Incorrect or untrue representation): any representation, warranty or undertaking given by the Company in this Agreement is or becomes untrue or incorrect; or
• $(iii)$ (Contravention of constitution or Act): a contravention by a Relevant Company of any provision of its constitution, the Corporations Act, the Listing Rules or any other applicable legislation or any policy or requirement of ASIC or ASX: or
• $(iv)$ (Adverse change): an event occurs which gives rise to a Material Adverse Effect or any adverse change or any development including a prospective adverse change after the date of this Agreement in the assets, liabilities, financial position, trading results, profits, forecasts, losses, prospects, business or operations of any Relevant Company including, without limitation, if any forecast in the Prospectus becomes incapable of being met or in the Underwriter's reasonable opinion, unlikely to be met in the projected time; or
• $(v)$ (Hostilities): there is an outbreak of hostilities or a material escalation of hostilities (whether or not war has been declared) after the date of this agreement involving one or more of Australia, New Zealand, Indonesia, Japan, Russia, the United Kingdom, the United States of America, India, Pakistan, or the Peoples Republic of China. Israel or any member of the European Union, or a terrorist act is perpetrated on any of those countries or any diplomatic military, commercial or political establishment of any of those countries anywhere in the world: or
• $(v_i)$ (Error in Due Diligence Results): it transpires that any of the Due Diligence Results or any part of the Verification Material was false, misleading or deceptive or that there was an omission from them: or
• $(vii)$ (Significant change): $a$ "new circumstance" as referred to in section 719(1) of the Corporations Act arises that is materially adverse from the point of view of an investor tor
• $(viii)$ (Public statements): without the prior approval of the Underwriter a public statement is made by the Company in relation to the Offer, the Issue or the Prospectus; or
• $(ix)$ (Misleading information): any information supplied at any time by the Company or any person on its behalf to the Underwriter in respect of any aspect of the Offer or the Issue or the affairs of any Relevant Company is or becomes misleading or deceptive or likely to mislead or deceive and having been brought to the attention of the Company, this information has not been corrected by the company within a reasonable period of time; or
• $(x)$ (Official Quotation qualified): the Official Quotation is qualified or conditional other than as set out in the definition of "Official Quotation"; or
• $(x_i)$ (Change in Act or policy): there is introduced, or there is a public announcement of a proposal to introduce, into the Parliament of Australia or any of its States or Territories any Act or prospective Act or budget or the Reserve Bank of Australia or any Commonwealth or State authority adopts or announces a proposal to adopt any new, or any major change in, existing, monetary, taxation, exchange or fiscal policy; or

• $(xii)$ (Prescribed Occurrence): a Prescribed Occurrence occurs; or

• $(xiii)$ (Suspension of debt payments): the Company suspends payment of its debts generally: or

• $(xiv)$ (Event of Insolvency): an Event of Insolvency occurs in respect of a Relevant Company ;or
• $(xy)$ (Judgment against a Relevant Company): a judgment in an amount exceeding \$25,000 is obtained against a Relevant Company and is not set aside or satisfied within 7 days; or
• $(xvi)$ (Litigation): litigation, arbitration, administrative or industrial proceedings are after the date of this Agreement commenced or threatened against any Relevant Company, other than any claims foreshadowed in the Prospectus; or
• $(xvii)$ (Board and senior management composition): there is a change in the composition of the Board before Completion without the prior written consent of the Underwriter: or
• (XVIII) (Indictable offence): a director or senior manager of a Relevant Company is charged with an indictable offence; or
• $(xix)$ (Change in shareholdings): there is a material change in the major or controlling shareholdings of a Relevant Company or a takeover offer or scheme of arrangement pursuant to Chapter 5 or 6 of the Corporations Act is publicly announced in relation to a Relevant Company; or
• $(xx)$ (Timetable): there is a delay in any specified date in the Timetable which is greater than 3 Business Days; or
• (Force Majeure): a Force Majeure affecting the Company's business or any $(xxi)$ obligation under the Agreement lasting in excess of 7 days occurs; or
• (XXII) (Certain resolutions passed): a Relevant Company passes or takes any steps to pass a resolution under section 254N, section 257A or section 260B of the Corporations Act or a resolution to amend its constitution without the prior written consent of the Underwriter; or
• (XXIII) (Capital Structure): any Relevant Company alters its capital structure in any manner not contemplated by the Prospectus; or
• (xxiv) (Investigation): any person is appointed under any legislation in respect of companies to investigate the affairs of a Related Company; or
• $(xxv)$ (Market Conditions): a suspension or material limitation in trading generally on ASX occurs or any material adverse change or disruption occurs in the existing financial markets, political or economic conditions of Australia, Japan, the United Kingdom, the United States of America or other international financial markets; or
• (XXVI) (Suspension): the Company is removed from the Official List or any quoted securities become suspended from Official Ouotation and that suspension is not lifted within 24 hours following such suspension.

The Underwriter may not exercise its rights set out in paragraph $(p)$ above unless, in the reasonable opinion of the Underwriter reached in good faith, the occurrence of the termination event has or is likely to have, or two or more termination events together have or are likely to have:

• $(a)$ a material adverse effect; or
• $(b)$ could give rise to a liability of the Underwriter under the Corporations Act or otherwise

6.11 Expenses of the Issue

The expenses connected with the Issue, including, printing and other miscellaneous expenses, will be approximately \$155,835 and are payable by the Company.

6.12 Responsibility statements / consents

The following firms have given and have not at the date of this Prospectus withdrawn their written consent to being named in this Prospectus and any electronic version of this Prospectus and to the inclusion of the following information in the form and context in which it is included. None of the following firms and companies have caused or authorised the issue of this Prospectus and each does not make the offer of securities under this Prospectus. The offer of securities under this Prospectus is made by Helix Resources.

Deloitte Touche Tohmatsu has given its consent to be named as the Auditor to the Company in this Prospectus and to the inclusion in this Prospectus of the auditors report of the Company for the year ended 30 June 2005, and has not withdrawn such consent before lodgement of this Prospectus with ASIC. Deloitte Touche Tohmatsu has not been involved in the preparation of any part of this Prospectus other than this paragraph and the references in this Prospectus to its name and to its audit report, and specifically disclaims liability to any person in respect of any misleading or deceptive statement in, or omission from, any part of this Prospectus.

Patersons Securities Limited has given its written consent to being named as Underwriter and Lead Manager of the Issue and has not withdrawn its consent prior to lodgement of this Prospectus with the ASIC.

Steinepreis Paganin have given their written consent to being named as the solicitors to the Company in this Prospectus and have not withdrawn their consent prior to the lodgement of this Prospectus with the ASIC.

Copies of these consents are available for inspection, without charge, at the registered office of Helix Resources.

6.13 Directors' statement

Each Director of Helix Resources has given and has not, at the date of this Prospectus, withdrawn his consent to the lodgement with the ASIC of this Prospectus.

This Prospectus is issued by Helix Resources. Its issue was authorised by a resolution of the Directors and is signed by a Director on behalf of all Directors.

Dated 18 October 2005

Riccardo Vittino Director

$\overline{7}$ Glossary of Terms

AS or S means Australian dollars, unless otherwise stated:

Application Form means the application form for New Shares and Options accompanying this Prospectus:

ASIC means Australian Securities and Investments Commission:

ASTC means ASX Settlement and Transfer Corporation Pty Ltd;

ASX means Australian Stock Exchange Limited;

Board means the board of Directors:

Business Day means a day that is not a Saturday, a Sunday or a public holiday or bank holiday in Western Australia:

CHESS means Clearing House Electronic Sub-register System;

Closing Date means 16 November 2005 or such further date as extended;

Company or Helix Resources means Helix Resources Limited ABN 27 009 138 738, 9 Richardson Street, West Perth, Western Australia 6005;

Corporations Act means the Corporations Act 2001:

Directors mean directors of the Company unless the context indicates otherwise;

Entitlements means the number of New Shares and Options you are entitled to accept under this Prospectus, as noted on the Application Form;

Expiry Date means the date the Options expire, being 31 March 2007;

Full Year Report means the Annual Report of Helix Resources for 2005 lodged with ASX and ASIC:

Issue means the offer and issue of New Shares and New Options pursuant to this Prospectus;

Listing Rules means the official listing rules of the ASX;

New Options means the free options offered under this Prospectus with an expiry date of 31 March 2007 and an exercise price of 14 cents;

New Shares mean the Shares offered under this Prospectus, a summary of the terms and conditions of which is set out in section 8 of this Prospectus:

Prospectus means this prospectus relating to the Issue;

Record Date means 27 October 2005;

Share means a fully paid ordinary share on issue in the capital of the Company:

Shareholder means a holder of Shares; and

Share Registry means Advanced Share Registry Services, 110 Stirling Highway, Nedlands, Western Australia. 6009.

Shortfall means the number of New Shares and New Options comprising the difference between the New Shares, the subject of the Issue, and the number of New Shares (and free attaching New Options) for which valid applications have been received and accepted by the Company by the Closing Date.

Shortfall Closing Date means the date that is 6 business days after the Closing Date (unless extended or closed early by the Board in consultation with the Underwriter).

Shortfall Offer means the offer of the Shortfall.