Thanks, Jeff, we knew they were running a bit low on cash. Hopefully this will hold them over till production and the price of gold goes up sufficiently for their future financing.

Interesting, in my notes about Helio I have the following figures as of 1st June 2011:

Cash CA$8.2 million;
Burn rate of CA$1.2 million;
Quarterly loss: CA$0.2 million;
No debt.

Maybe my notes were wrong, but I was expecting them to be able to get through for a while without a refinancing.

doahh wrote:
Interesting, in my notes about Helio I have the following figures as of 1st June 2011:

Cash CA$8.2 million;
Burn rate of CA$1.2 million;
Quarterly loss: CA$0.2 million;
No debt.

Maybe my notes were wrong, but I was expecting them to be able to get through for a while without a refinancing.

Doahh, the management of these companies are PAID to look out into the future, to do their best to protect shareholder value (while advancing the company's operations). If I could presume to put myself in management's shoes, they took a look around and saw a very "unfriendly" climate at the moment from a financial standpoint, and considerable uncertainty in the future.

So while they obviously wouldn't have been THRILLED with the terms of this financing, they probably saw it as a way to bolster their cash position and give them a few more months of a "comfort zone" to wait for the market to turn higher - and for financing conditions to become more favorable.

If the market was to turn higher NOW (and never look back), management would have undeoubtedly wished (in hindsight) that they had not done this financing. However, IF the market turns lower, or simply stays in this choppy trading range for several more months, then suddenly shareholders (and management) would likely be extremely grateful for that extra cash on hand.

Generally speaking, these companies don't want to just "roll the dice" and HOPE for more favorable conditions - especially after going through the Crash of '08.

NI 43-101 received on Sedar

Measured and Indicated Mineral Resources of 1,020,000 ounces at 1.32g/t Au plus an Inferred Mineral Resource of 240,000 ounces at 1.05g/t Au at a cut-off grade of 0.5g/t. Compared to the maiden Mineral Resource estimate, these figures represent a 104% increase in metal in the Measured and Indicated category, and an 11% decrease in metal in the Inferred category.

The resource is open along strike and at depth in all targets.

The stock price has certainly taking a whack over recent months, down about 50% since the November 2011 peak.


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Hopefully we are at a low in this trading range for now.

On a slightly different topic, I was listening to Mickey Fulp on King World News and he was of the opinion that a junior mining company that did not either get a mine into operation or sell out within an 8 year period was unlikely to be successful. As Helio seem to have been around since at before 2001, does anyone have an opinion about the likelihood of success?

doahh wrote:
NI 43-101 received on Sedar

Measured and Indicated Mineral Resources of 1,020,000 ounces at 1.32g/t Au plus an Inferred Mineral Resource of 240,000 ounces at 1.05g/t Au at a cut-off grade of 0.5g/t. Compared to the maiden Mineral Resource estimate, these figures represent a 104% increase in metal in the Measured and Indicated category, and an 11% decrease in metal in the Inferred category.

The resource is open along strike and at depth in all targets.

The stock price has certainly taking a whack over recent months, down about 50% since the November 2011 peak.


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Hopefully we are at a low in this trading range for now.

On a slightly different topic, I was listening to Mickey Fulp on King World News and he was of the opinion that a junior mining company that did not either get a mine into operation or sell out within an 8 year period was unlikely to be successful. As Helio seem to have been around since at before 2001, does anyone have an opinion about the likelihood of success?

Doah I never like to hear generalizations like that - as they are HIGHLY misleading. The fact is that if a miner is SUCCESSFUL with exploration then naturally we expect some major development within that time frame.

However, just because a miner hasn't sold out or started production within 8 years does NOT mean they haven't been "successful" with their exploration. Indeed, Helio Resource Corp, Premium Resources, and other "prospect generators" that Brian has talked about HAVE been successful in their drilling.

The problem is that generalizations such as that made by Fulp TOTALLY IGNORE market conditions. In 2007 and 2008 it was virtually impossible for these miners to obtain cash - thus FREEZING development for the better part of two years. Now AGAIN beginning in 2011 and extending into this year it's very, very difficult to obtain financing on even REMOTELY fair terms - thus these companies are being "frozen" again.

Obviously companies like Helio don't CREATE these troughs in the sector, so pointing at management teams and calling them failures is both SIMPLISTIC and MISLEADING.

Even with the gold price having been driven down from its highs, pull out a calculator and figure out the value of 1.25 million ounces of gold. And with the deposit "open" in all directions it is obvious there is considerably more gold in this deposit - just waiting to be drilled out.

Understand that CRUSHING the juniors en masse in this manner KILLS the supply chain for the entire precious metals sector. Over 90% of all mineral discoveries are made by the juniors. Kill the juniors and you kill supply. Kill supply and you destroy inventories. Destroy inventories and the price EXPLODES higher...and when the price explodes higher, everyone suddenly wants to BUY shares in the miners again - and their share prices soar (like in 2009).

The fact that Helio has been around since 2001 should not be seen as a "negative" by investors, but rather that management has the EXPERIENCE of having been through (and survived) several of these cycles before.

;)

Thanks for the detailed riposte.

Maybe Mickey's comment is a generalisation and Helio is an exception. From what I have heard through places like KWN and Frisby's Bulls And Bears, many of the juniors either fail; or the attractive PE ratios they have in the early days vanish as the move towards production due to capex, share dilution etc, and hence they represent a relatively larger risk for a lower than expected return. My guess is that many of the prospect generators do not find the deposits that they hoping for, and that leads them into terminal decline. Hence Fulp may be correct at the general level. Of course, generalisations are always dangerous and each company should be treated on it's own merits.

My problem is in knowing all of the possible caveats involved in investing. I did find the 104% increase in the M&I category encouraging, but due to my inexperience, it is always worthwhile for me to get a range of opinions from the more knowledgeable posters.

doahh wrote:
Thanks for the detailed riposte.

Maybe Mickey's comment is a generalisation and Helio is an exception. From what I have heard through places like KWN and Frisby's Bulls And Bears, many of the juniors either fail; or the attractive PE ratios they have in the early days vanish as the move towards production due to capex, share dilution etc, and hence they represent a relatively larger risk for a lower than expected return. My guess is that many of the prospect generators do not find the deposits that they hoping for, and that leads them into terminal decline. Hence Fulp may be correct at the general level. Of course, generalisations are always dangerous and each company should be treated on it's own merits.

My problem is in knowing all of the possible caveats involved in investing. I did find the 104% increase in the M&I category encouraging, but due to my inexperience, it is always worthwhile for me to get a range of opinions from the more knowledgeable posters.

Doahh, it's VERY important in this analysis to distinguish between the junior EXPLORERS and junior PRODUCERS - as the current dynamics are very much different.

Understand with ALL explorers that in order to be able to prosper they need to be able to continually generate new capital. But understand this is NOT like the "Ponzi financing" of our governments, financial systems, and MANY large corporations.

These miners are essentially SELLING equity in their companies AGAINST the metal they are finding. Helio has ALREADY found roughly $2 BILLION in gold - and that's at TODAY'S absurdly manipulated price. This NOT like one of the (infinite) fly-by-night tech companies of the Dot-com bubble. These are REAL companies.

They rarely "fail". Instead, either they regularly find, develop, and SELL the properties they explore; OR (as we're seeing in the present, bankster-created trough) they get CANNIBALIZED one way or another through some merger or take-over.

The number of true "failures" is small, so I find it VERY annoying when people (like Fulp) who SHOULD know better continue to parrot these dubious/misleading "statistics".

As for the PRODUCERS, with most reporting "record profits" again there are very few outright "failures". The occasional company will encounter some severe operations setback, or over-extend themselves (financially) and then get SQUEEZED (like the explorers) when a sudden/unexpected crunch hits the sector. However AGAIN the vast majority will get CANNIBALIZED - and not simply go belly-up.

Contrast this to our (supposedly "safe") bond market: holders of Greek bonds just took a PERMANENT 75% loss - and the talk is that MORE write-offs are on the way.

So if you're a RECKLESS GAMBLER looking for something "highly speculative" in which to put your money, don't buy junior gold and silver miners - because BONDS would be the right place for YOU!!

That seems like a great reply to me. It is nice to hear a positive opinion about Helio as they don't seem to be discussed at all on the boards that I visit. I do like the fact that they give regular news updates, but it can be difficult to interpret the information in the wider context of junior mining without a wealth of relevant experience.

Helio is efficiently going about their exploration business. They have two very large land packages, and are doing a reasonable amount of drilling to outline the ore bodies. How they go about raising capital in this evironment without undue dilution will be key.

doahh wrote:
That seems like a great reply to me. It is nice to hear a positive opinion about Helio as they don't seem to be discussed at all on the boards that I visit. I do like the fact that they give regular news updates, but it can be difficult to interpret the information in the wider context of junior mining without a wealth of relevant experience.

Doah, both Brian and I have spoken with their management and they are QUITE conservative in their approach to business.

When times are GOOD, sometimes that conservative approach can annoy investors - as they would like to see the company move in a more aggressive direction. BUT at times like the present (where we're going through another extended assault on the sector) that "conservative" approach is precisely what will help companies weather such periods as the current one.