HELIX RESOURCES LIMITED — Interim / Quarterly Report 2004

Jul 29, 2004

HIGHLIGHTS

• 7,800 metres of Reverse Circulation drilling completed at the Tunkillia Prospect.
• New high grade gold intersections discovered at Area 223 South.
• Gradient Array Induced Polarization (IP) survey commenced over Tunkillia Anomaly.

SUMMARY

During the quarter the Company undertook a program of exploration and resource drilling at the Tunkillia Prospect in South Australia. 7,800 metres of Reverse Circulation drilling were completed

As previously reported, gold intersections at Area 223 South have included 3m at 17g/t and 15m at 7.7g/t in LRC 498, 5m at 15g/t in LRC 495 and 2m at 22g/t in LRC 496. These new results greatly enhance the potential to expand the Area 223 South resource. The drilling confirmed the continuity of higher grade $(>\frac{5g}{t})$ quartz vein hosted gold lodes in the hanging wall and showed that these periodically increase in width to over 10 metres wide at the higher grades. All of these hanging wall lodes remain open along strike to the south and at depth.

In addition new results from Area 223 North included 4m at 7.7g/t in LRC 468, 3m at 6.3g/t in LRC483 and 1m at 16g/t in LRC481.

The Study Team has now completed its review of the Area 223 resource database and has determined that a new resource calculation should be undertaken to more accurately assess dilution and other mining parameters. A new wire-frame and block-model will be compiled, which will include the latest drilling results as well as all previous drilling and geological data.

During the quarter a gradient array induced polarization (IP) survey was commenced over the Area 223 gold resource and selected parts of the Tunkillia Anomaly. The IP survey is expected to identify alteration zones associated with mineralisation and assist in planning future Resource Infill Drilling and the Regional Exploration Drilling.

During the Quarter Heron Resources Ltd completed first pass resource drilling at the Highway Nickel laterite deposit south of Menzies. Helix currently holds 49% of the project but are diluting as a result of this recent drilling.

LAKE EVERARD PROJECT - SOUTH AUSTRALIA

Helix Resources Limited 100% EL 2697

Introduction

Prior to May 2003 when Helix purchased AngloGold's 49% of the Lake Everard Project, AngloGold estimated that Area 223 contained approximately 220,000 oz of open cut mineable gold (at AUD\$550) gold price) grading $2.5g/t$ Au. In the second half of 2003 Helix conducted a 14,000 metre infill drilling program to enhance the resource. AMC Consultants then calculated the first JORC resource estimate for Area 223 of 10.5 Mt grading 2.2g/t Au containing 730,000 oz. Utilising this resource new optimisation studies suggested that the exploitable resource had increased to 390.000 oz of gold with a head grade of 2.4g/t within a AUD\$550 pit shell. The studies estimated cash costs of potential production was AUD\$375 per oz of Au at a stripping ratio of 7.5:1 resulting in an undiscounted pre tax cash flow of \$62million. Capital costs were estimated at \$25million with the project requiring a maximum negative cash flow of \$37 million taking into account the 50 metres of pre-strip required to access the gold mineralisation.

QUARTER Y REPORT 2

Reverse Circulation Drilling

In May 2004 a further 27 RC holes totalling 4,739 metres were drilled into the Area 223 resource. The main focuses of the program were the poorly drilled northern end of the resource and the higher grade Area 223 South Zone. These new results continued (figure 1) to show improvement in the resource.

Of particular significance was the confirmation of extensive zones of higher grade mineralisation $($ >5g/t Au) in and around Area 223 South. The better gold intersections from the program at Area 223 South have included 3m at 17g/t and 15m at 7.7g/t in LRC 498 (figure 2), 5m at 15g/t in LRC 495 and 2m at 22g/t in LRC 496. The drilling confirmed the continuity of higher grade $($ >5g/t) quartz vein hosted gold lodes in the hanging wall and showed that these periodically increase in width to over 10 metres wide at the higher grades. All of these hanging wall lodes remain open along strike to the south and at depth. These new results greatly enhance the potential to expand Area 223 South and future drilling will aim to outline a larger higher grade resource in this area.

In addition results from Area 223 North include 4m at 7.7g/t in LRC 468, 3m at 6.3g/t in LRC483 and 1m at 16g/t in LRC481. A full list of significant results from the program is included in Table 1.

Feasibility Study

Following the appointment of mining engineer John den Dryver as Study Manager and mining geologist Doug Mclean as Geological Manager for the Tunkillia feasibility study in May 2004 the team has been conducting a preliminary assessment of the mining characteristics of the Area 223 resource. The aim of this initial study is to re-optimize the resource incorporating the new drilling results and the mining methods which have been proposed. An important part of this study will be to identify areas where further drilling around the resource is likely to increase the amount of mineable gold at the current gold price. A number of areas requiring further drilling have already been identified, in addition to the potential southern extension of the resource. On completion of this work a new drilling program will be planned.

QUARTER M'REPORT 2

Preliminary investigations into other important aspects of the feasibility study have also commenced including identification of a suitable water supply, special on-site infrastructure requirements, native title issues and development of a metallurgical testing program. It is planned that this work will make up the core aspects to a 'pre-feasibility' study which is timed to coincide with the completion of resource drilling in the last quarter of 2004.

Regional Exploration

Area 223 covers only a small portion of the Tunkillia gold-in-calcrete anomaly, less than one square kilometre of the total twenty square kilometre anomaly. Basement drilling outside of Area 223 is generally sparse with only a limited number of targets drilled to date. Of these a number have returned intersections of potentially economic grade $(>\overline{1}g/t A u)$ . Within the anomaly the north-westerly trending shear zone which hosts the Area 223 resource has only been drilled on 10 RC traverses over its remaining 7.5km length along strike from the resource.

During the Quarter 19 RC drill holes, for 3,100 meters, were completed at a further three regional targets within the Tunkillia Anomaly, Drilling at Area 191 located 4 km north east of Area 223 again produced some significant gold intersections including 5m at 2.6g/t, however the results from this limited program have not been able to confirm continuity to the mineralisation. While drilling at two other regional targets, a small gravity anomaly east of Area 223 and a structural target at Tunkillia North did not produce any significant results.

Additional exploration has also commenced with a gradient array IP survey which is currently being undertaken to determine if it can identify areas of sulphide and silica accumulation associated with mineralisation. This geophysical method is being employed to help identify drilling targets outside of Area 223.

Regionally Helix has a total of 3,250 sq km under tenure in the Lake Everard region, calcrete sampling has been completed over two thirds of the area but basement drilling is limited to the Tunkillia Anomaly only. Whilst not as extensive as the Tunkillia Anomaly, there are a number of additional targets which remain unexplored with in the Tenement package.

HIGHWAY NICKEL PROJECT - WESTERN AUSTRALIA

Helix Resources Limited 49% Diluting MLA 29/214

During the Quarter, 4,517 metres in 125 holes of reverse circulation drilling was completed, covering 6.5 kilometres of strike of Walter Williams Formation ultramafic. Extensive ferruginous lateritic ore was encountered. Significant intersections included, 12 metres at 1.63% Ni from 8 metres depth, 12 metres at 1.25% Ni 23 metres depth, 8 metres at 1.38% Ni 4 metres depth and 19 metres at 1.01% Ni 14 metres depth.

QUARTER MREPORT 2

Nickel laterite mineralisation has now been verified to exist in the Highway Project area over a strike length of some 6.5 kilometres and it has potential to make a contribution to the ore-feed for Heron Resources Kalgoorlie Nickel Project which is to be centred at Goongarrie, some 30 kilometres to the south.

ROBERT W MOSIG MANAGING DIRECTOR

ANTHONY R MARTIN DIRECTOR - EXPLORATION

This report is based on information compiled by full time employees of Helix Resources Limited, Messrs R W Mosig and A R Martin, who are competent persons as described by Listing Rule Appendix 5A. The report reflects the information compiled by them for the purposes of Listing Rules 5.10 and 5.12.

QUARTER LY REPORT 2

٦

HELIX RESOURCES LIMITED

r

Table 1. Significant gold results (>1g/t) from RC drilling.

Drillhole ID	Easting	Northing	From	Interval	Grade
	m	m	m	m	Au g/t
RESOURCE DRILLING
	Area 223 South Infill Drilling
LRC494	109840	110850	87	2	1.2
LRC495	109810	110850	115	1	1.9
		and	175	5 1	15.3
		inci.	177		72.7
LRC496	109780	110850	75	2	1.2
		and and	150 165	1 1	8.7 1.9
		and	210	2	21.6
LRC497	109750	110850	75	1	1.8
		and	198	2	1.7
		and	212	3	1,7
LRC498	109815	110700	93	1	2.9
		and	100	3	16.9
		and	120	15	7.7
		inci.	128	2	43.9
		and	172	1	12.6
LRC468	Area 223 North Infill Drilling 110030	112450	60	8	4.9
		incl.		4	7.7
LRC469	110000	112450	68	11	2.4
		and	85	2	2.9
		and	97	3	3.6
		and	108	2	1.8
		and	114	8	1.6
LRC 477	109970	112450	101	6	1.1
		and and	155 166	7 4	1.9 1.3
LRC478	109940	112450	100	1	4,4
LRC479	110030	112350	49	6	1.2
		and	56	9	1.5
LRC480	110000	112350	90	1	1.7
LRC481	109970	112350	126	1	16.2
LRC482	109940	112350	135	1	4.0
LRC483	110030	112250	63	3	6.3
LRC484	110000	112250	66	4	1.2
		and	100	6	1.2
LRC485	109970	and 112250	104 50	3 1	2.7 1.8
		and	119	1	1.6
		and	140	4	1.5
LRC486	109940	112250	39	2	2.6
		and	187	5	1,3

Ending $3 \quad 0$ $2004$ Q u a J u r t e $\mathsf{r}$ $\eta$ $\mathbf{e}$

QUARTERLY REPORT 2

HELIX RESOURCES LIMITED

Table 1. (Cont)

Drillhole ID
	Easting m	Northing m	From m	Interval m	Grade Au g/t
NEAR PIT EXPLORATION
Area 223 North Extensional Drilling
LRC455	110020	112600	75	1	2.3
LRC457	109960	112600	95	1	2.8
LRC466	109930	112600	157	1	1.6
LRC467	109900	112600	63	2	1.9
		and	75	2	1.9
		and	82	2	4.2
		and	94	1	1.7
		and	222	1	3.3
		and	244	1	2.1
LRC499	109870	112600	88	2	2.1
			131	1	3.2
			138	4	1.3
Hanging Wall Mineralisation Line 111000N
LRC458	109820	111000	269	7	1.7
LRC459	109760	111000	172	$\overline{2}$	2.0
Footwall Mineralisation Line 111200N 4 holes completed - no significant results
REGIONAL EXPLORATION
Arae 191
LRC470	112435	113265	72	2	1.8
		and	80	6	1.3
LRC471	112435	113295	63	5	2.6
		and	75	1	4.8
		and	102	1	2.0
LRC472	112435	113325	51	1	1.6
LRC473	112400	113425	51	2	1.7
		and	63	1	1.5
Gravity Anomaly	2 holes completed - no significant results
Tunkillia North - Western Demagnetised Zone
	4 holes completed - no significant results

Holes drilled at 60 degrees towards grid east except Area 191 which were drilled at 60 degrees towards grid south Assays by Aqua-Regia, AAS utilising 1 metre conical split samples.
Assays by Aqua-Regia, AAS utilising 1 metre conical split samples.
Assay intervals reported are >1g/t with a maximum of 3 consecutive metres of internal di

QUARTER YREPORT 20

HELIX RESOURCES LIMITED

Ending 3 $\Omega$ June $2\quad 0\quad 0$ $\overline{4}$ Q uarter

QUARTER M'REPORT 2

HELIX RESOURCES LIMITED

Corporate Directory

Directors

Michael Folie Robert W Mosia Anthony R Martin Ian K Macpherson Brvce E Wauchope

Non Executive Chairman Managing Director Executive Director Non Executive Director Non Executive Director

Company Secretary

Riccardo E Vittino

Australian Business Number

27 009 138 738

Head and Registered Office

Level 3, 24 Kings Park Road West Perth Western Australia 6005

P O Box 825 West Perth Western Australia 6872 Telephone +61 8 9321 2644 Facsimile +61 8 9321 3909 Email helix@helix.net.au Website http://helix.net.au

Share Registry

Advanced Share Registry Level 7, 200 Adelaide Terrace Perth Western Australia 6000

PO Box 6283 East Perth Western Australia 6892 Telephone

+61 8 9221 7288 Facsimile +61 8 9221 7869 QUARTER Y REPORT 2

HELIX RESOURCES LIMITED

Appendix 5B

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.

Name of entity

HELIX RESOURCES LIMITED

ABN

27 009 138 738

Consolidated statement of cash flows

	Cash flows related to operating activities	Current quarter \$A'000	Year to date $\left(\begin{array}{c} 0 \end{array}\right)$ months) \$A'000
1.1	Receipts from product sales and related debtors
1.2	Payments for (a) exploration and evaluation (b) development (c) production	(1,080)	(3,041)
	(d) administration	(413)	(1, 410)
1.3 1.4 1.5	Dividends received Interest and other items of a similar nature received Interest and other costs of finance paid	35	123
1.6	Income taxes paid
1.7	Other (provide details if material)	(157)	(157)
	Net Operating Cash Flows	(1,615)	(4,485)
1.8 1.9	Cash flows related to investing activities Payment for purchases of: (a)prospects (b) equity investments (c) other fixed assets Proceeds from sale of: (a)prospects (b) equity investments (c)other fixed assets	(500)	(1,500) (62) 1.909
1.10	Loans to other entities
1.11 1.12	Loans repaid by other entities Other (provide details if material)
	Net investing cash flows	(500)	347
1.13	Total operating and investing cash flows (carried forward)	(2,115)	(4,138)

Quarter ended ("current quarter")

30 June 2004

$3 \quad 0$ Quarter Ending June $2004$

QUARTER WREPORT

HELIX RESOURCES LIMITED

1.13	Total operating and investing eash flows (brought forward)	(2,115)	(4,138)
1.14 1.15 1.16 1.17 1.18	Cash flows related to financing activities Proceeds from issues of shares, options, etc. Proceeds from sale of forfeited shares Proceeds from borrowings Repayment of borrowings Dividends paid	1,376	2,453
1.19	Other (provide details if material) Net financing cash flows	1,376	100 2,553
	Net increase (decrease) in cash held	(739)	(1,585)
1.20 1.21	Cash at beginning of quarter/year to date Exchange rate adjustments to item 1.20	2,876	3,722
1.22	Cash at end of quarter	2,137	2,137

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

		Current quarter \$A'000
1.23	Aggregate amount of payments to the parties included in item 1.2
1.24	Aggregate amount of loans to the parties included in item 1.10

1.25 Explanation necessary for an understanding of the transactions

Non-cash financing and investing activities

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

$2.2$ Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

Financing facilities available

Add notes as necessary for an understanding of the position.

$E \cap$ 3 $\overline{0}$ 1 $2 \quad 0 \quad 0$ $\overline{4}$ $\circ$ $\boldsymbol{\rho}$ $\mathsf{r}$ đ j. $\mathbf{r}$ $\mathbf G$ $\mathbf{H}$ $\mathbf n$ $\boldsymbol{\rho}$

QUARTER LY REPORT 2

HELIX RESOURCES LIMITED

		Amount available \$A'000	Amount used \$A'000
3.1	Loan facilities
3.2	Credit standby arrangements

Estimated cash outflows for next quarter

	Total	500
$-4.2$	Development
4.1	Exploration and evaluation	500
		\$A'000

Reconciliation of cash

	Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter SA'000	Previous quarter SA'000
5.1	Cash on hand and at bank	$\theta$	0
5.2	Deposits at call	1.773	2,512
5.3	Bank overdraft
5.4	Other (provide details)	364	364
	Total: cash at end of quarter (item 1.22)	2.137	2.876

QUARTER LY REPORT 20

HELIX RESOURCES LIMITED

Changes in interests in mining tenements

		Tenement reference	Nature of interest (note (2))	Interest at beginning of quarter	Interest at end of quarter
6.1	Interests in mining tenements relinquished, reduced or lapsed	E2968 E80/2933 E80/2934 E80/3122	Licence surrendered Application surrendered Application surrendered Application surrendered	100% $0\%$ $0\%$ $0\%$	$0\%$ $0\%$ $0\%$ $0\%$
6.2	Interests in mining tenements acquired or increased	Nil	Nil

QUARTERIYREPORT 2

HELIX RESOURCES LIMITED

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

7.1	Preference + securities	Total number	Number quoted	price Issue per security (see note 3) (cents)	Amount paid up per security (see note $3$ ) (cents)
	(description)
7.2	Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs, redemptions
7.3	+ Ordinary securities	62,866,808	56, 938, 958
7.4	Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs	5,504,169	5,504,169	25 cents	25 cents
7.5	+ Convertible debt securities (description)
7.6	Changes during quarter (a) Increases through issues (b) Decreases through securities matured. converted
7.7	Options (description			Exercise	Expiry date
	and conversion factor)	3,962,999 16,437,863	Nil 16,437,863	price Various 25 cents	29 March 2009 30 November 2005
7.8	Issued during quarter	2,752,243	2,752,243	25 cents	30 November 2005
7.9	Exercised during quarter	423,681	423,681	25 cents
7.10	Expired during quarter
7.11	Debentures (totals only)
7.12	Unsecured notes (totals only)

Endin $3 \quad 0$ $2004$ $Q - U$ $\mathbf{J}$ $\overline{a}$ $\mathsf{r}$ −ŧ. e. $\mathsf{r}$ $\overline{g}$ $\mathbf{u}$ $\eta$ $\mathbf{e}$

Compliance statement

$\mathbf{1}$ This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).

QUARTER Y REPORT

$\overline{2}$ This statement does give a true and fair view of the matters disclosed.

Sign here:

. . . . . . . . . . . . . . . . . . . . Company secretary

Date: 30^th July 2004.

Riccardo Vittino. Print name:

Notes

The quarterly report provides a basis for informing the market how the entity's activities have been $\mathbf{1}$ financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

The "Nature of interest" (items 6.1 and 6.2) includes options in respect of interests in mining tenements $\overline{2}$ acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

$\mathcal{R}$ Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities.

The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: $\overline{4}$ Statement of Cash Flows apply to this report.

Accounting Standards ASX will accept, for example, the use of International Accounting Standards 5 for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

$=$ $=$ $=$ $=$ $=$ $=$

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