JOHANNESBURG (miningweekly.com) – The International Finance Corporation (IFC) has agreed to invest C$2,6-million in Canadian gold explorer Helio Resources Corporation in support of a Tanzanian gold exploration project.

Helio would use the investment for the advancement of the Saza Makongolosi gold project, in southwest Tanzania and for general corporate working capital. The IFC will also work with the company to ensure that exploration and any subsequent mine development is carried out in an environmentally and socially sustainable manner.

The investment of in Helio will result in IFC acquiring 11,5-million units issued by Helio.  The units comprise an aggregate of 11,5-million common shares and 5,57-million warrants, each of the warrants entitling the holder to purchase one common share of Helio at an exercise price of C$0,81 a share.

The financing would ultimately result in the IFC holding 14,8% of the issued and outstanding share capital of Helio, and up to 20,6% on a partially diluted basis, assuming the exercise of all warrants.

“Helio shares the IFC’s commitment to responsible mining exploration and engagement with local communities,” said William Bulmer, IFC global head for mining. 

“This project has the potential to set new environmental and social standards for mining in Tanzania, increase employment opportunities in the project area, and provide government revenues.”

IFC and Helio will evaluate the mining company’s potential participation in an IFC linkages programme in Tanzania that seeks to integrate local suppliers more fully into mining operations in the region.

The transaction is expected to close by the end of January 2010.