May 19, 2005 15:44 ET

Helena Resources Limited to Acquire Chinese Lithium Property

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - May 19, 2005) - Helena Resources Limited (NEX:HRS.H) (the "Company") is pleased to announce that on May 4, 2005 it entered into a letter of intent dated as of April 6, 2005 with Sichuan Dexin Mining Resources Co. Ltd. of Chengdu, Sichuan, P.R. China ("Dexin") to acquire 100% ownership of an advanced exploration project in Sichuan Province, China (the "Project"). Dexin is a wholly owned subsidiary of West China Mining Resources Holdings Limited, a company incorporated in the British Virgin Islands and privately owned by approximately a dozen shareholders, the largest of whom are Mr. Bin Zhu, of Shanghai, China (owning 32%) and ADDA (Panama) Ltd. (owning 13%). The final structure of the acquisition will be determined by a formal agreement between the parties. The acquisition will be an arms length transaction and constitutes a reverse takeover under the policies of the TSX Venture Exchange (the "Exchange").

The Project is an advanced exploration project located approximately 400km west of Chengdu in the Sichuan Province, China. The region is known to contain mineralization, with two operating mines existing within 15 kilometers of the property. The Project has a number of demonstrated pegmatite veins which could be mined primarily for lithium, but which also have tantalum and niobium and possibly beryllium. The altitude of the lower of two adits is approximately 4,000 meters. Lithium is used in a variety of products including rechargeable batteries, ceramics, glass and grease.

Watts Griffis & McOuat have been retained to prepare a report on the property in accordance with National Instrument 43-101. The completed report is expected in mid to late May 2005.

In consideration of the acquisition the Company will issue approximately 33,056,681 common shares to the Dexin shareholders. An additional 1,300,000 common shares will be issued as a finder's fee. The parties also plan to raise a minimum of $500,000 by way of a private placement to cover working capital needs until completion of the Dexin transaction.

The Company has also agreed to settle approximately $105,000 in outstanding debt through the issue of common shares at a deemed price per common share of $0.20. This debt settlement will be completed prior to or concurrently with closing of the acquisition.

Upon completion of the acquisition, the current board of directors of the Company will resign and be replaced by Dexin nominees. Dexin may request that certain directors of the Company remain on the board, to provide continuity in management, after completion of the acquisition.

Completion of the acquisition is subject to:

execution of a formal agreement by the parties;

completion of due diligence by the Company and Dexin;

the approval of the shareholders of the Company;

acceptance by the Exchange of the transaction and the Dexin board nominees;

the Company being a reporting issuer in good standing in British Columbia at the time of closing;

the Company having no more than 2,874,494 common shares outstanding, excluding shares issued pursuant to the proposed shares for debt transaction, the proposed private placement, or the exercise of any existing options; and

no material change having occurred in the business or operations of the Company.

The Company has not yet engaged a sponsor for this transaction.

Closing of the transaction is expected to occur on or before August 31, 2005. Concurrent with closing, the Company will make application to graduate from NEX to the TSX Venture Exchange as a Tier 2 Mining Issuer.

A meeting of shareholders of the Company is expected to be convened in August of 2005 to seek shareholder approval of the transaction. Completion of the acquisition is subject to a number of conditions, including but not limited to, Exchange acceptance and disinterested shareholder approval. The acquisition cannot close until the required disinterested shareholder approval is obtained. There can be no assurance that the acquisition will be completed as proposed or at all.

Investors are cautioned that except as disclosed in the management information circular to be prepared in connection with the acquisition, any information released or received with respect to the acquisition may not be accurate or complete and should not be relied upon. Trading in the securities of the Company should be considered highly speculative.

At the direction of the NEX, the Company's shares will remain halted until further notice.

For further information contact Barrett Sleeman, CEO, at 360-945-1886, or by mail at 1699 Benson Road Pt. Roberts WA. 98281.

On Behalf of the Board

Barrett Sleeman P.Eng., CEO & Director


The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved or disapproved the contents of this press release.