Exploration company Helio Resources has reached an agreement with Canadian exploration and development company Damara Gold, whereby the two companies will transfer their respective interests in two Namibian exploration licences through wholly owned subsi- diaries, the EPL 3738 (Wilhelmstal) and EPL 3739 (Otjimbojo), into Osino Resources, a privately held British Columbia corporation in return for shares in Osino.

The Otjimbojo and Wilhelmstal prospecting licences form part of the Damara gold project. They are located in Central Namibia, in the same geological terrain of the Navachab gold mine, which was sold by gold miner AngloGold Ashanti to private equity firm QKR for a reported $110-million in 2014.

In March 2014, Helio announced an agreement with Damara, whereby Damara had the option to earn up to 60% interest in the property. To date, Damara has spent $300 000 on the projects and issued 500 000 common shares to Helio as part of the earn-in.

Under the terms of the arm’s-length agreement between Osino, Damara and Helio will transfer the shares of its wholly owned subsidiary that holds the licences to Osino. Damara will forgo its rights under the earn-in agreement with Helio for an interest in Osino. Osino currently owns four Namibian exploration licences, all of which will remain in Osino.

Following the consolidation, Helio will own 60.5% of the shares of Osino and Damara will own 22% of the shares of Osino. Each party will appoint two directors to the board of Osino.

Closing of the transaction is subject to several conditions, including Osino concluding a financing on terms acceptable to Helio and Damara, applicable regulatory approvals and completion by Osino of its due diligence investigations regarding Damara’s and Helio’s Namibian licences.

Helio believes that this transaction represents the best opportunity for its Otjimbojo and Wilhelmstal projects to advance quickly under difficult market conditions, Helio CEO Richard Williams said in a company statement.

“[Helio’s] focus has been, and continues to be, the development of the SMP gold project, in Tanzania. The initial plan is for Osino to remain a private company with a focus on spending any money raised in the ground, and only returning to the public markets when conditions are supportive”.

Helio’s focus includes advancing the 100% owned SMP gold project, in Tanzania, to a production decision. The SMP gold project covers a 238 km2 area in the Lupa goldfield, while gold mineralisation has been identified in 30 targets within the area.

The company reported in March 2015 that it had received an updated National Instrument 43-101-compliant mineral resource estimate for the SMP gold project from consultancy Snowden Mining Industry Consultants.

The total indicated resource was reported to be 7.5-million tonnes grading 2.4 g/t gold for 590 000 oz gold contained.