Effective September 24, 2009, Savoy Resources Corp. (“Savoy”) entered into two Memorandums of Understanding (the “MOU’s”), one with Ingonyama Platinum (Pty) Limited (“Ingonyama”) and the other with Cahow Consulting Limited (“Cahow”). Ingonyama is a closely-held, women-owned, junior exploration company that owns a 70% interest in two lucrative platinum (and other mineral) assets located in Republic of South Africa (“RSA”) and Cahow owns the right to develop, mine, manage and produce Ingonyama’s mineral resources in partnership with Ingonyama’s Black Economic Empowerment (“BEE”) partners and the right to 80% of the profits from Ingonyama’s 70% interest in these assets. The MOU’s provide for Savoy to acquire Ingonyama and purchase Cahow’s rights and interests such that, following the acquisition, Savoy owns 100% of Ingonyama’s 70% interest in the mineral assets, all rights to develop, mine, manage, produce and market these mineral assets in partnership with Ingonyama’s BEE partners and the right to 100% of the revenues/profits from Ingonyama’s 70% interest. As a result of the business combination, Cahow will own 500 million outstanding shares of common stock, and all outstanding shares of preferred stock, of Savoy and Ingonyama will become a wholly-owned subsidiary of Savoy. Management of Savoy immediately following the business combination is expected to be Ms. Anne-Marie Meadon, director of Ingonyama, serving in the positions of Chief Executive Officer/director, Mr. Sean Meadon, consulting geologist to Ingonyama, serving as Chief Operating Officer/director, and Mr. Arthur V. Johnson, sole director and executive officer of Savoy, serving as Chief Financial Officer/director. Conditions precedent to consummation of the business combination include Savoy’s ability to raise $5 million, of which $2.5 million has been allocated for the acquisition of Ingonyama, and Savoy’s reorganization to eliminate its outstanding indebtedness and reduce the number of shares of common stock issuable pursuant to existing contracts and upon conversion of outstanding convertible notes and exercise of outstanding warrants to not more than 100 million shares. Of the balance of $2.5 million, $1.5 million has been allocated for mining start-up costs, $500,000 is to be applied to reduce Savoy’s outstanding indebtedness and $500,000 is to be used for professional fees and regulatory compliance, general and administrative expenses, investor relations and working capital. Mining start-up costs includes plant construction (including associated steelwork), the purchase of equipment, mining and mine security set-up costs and working capital for the initial 90 days of operation (lead time prior to receipt of the initial payment from the Twyfelaar Tailings Retreatment Project), with the balance of funds to be used for the Twyfelaar Pipe Project and the TML Platinum Project.?
Ingonyama owns platinum/other mineral assets located in RSA in two distinct areas, the Farm Twyfelaar 119KT, which is located on the eastern limb of the Bushveld Igneous Complex approximately 30 kilometers (19 miles) north of the town of Steelpoort, RSA (the “Twyfelaar Platinum Project”), and five entire farms that encompass a platinum-hosted, bifurcating, vein complex with 20 kilometers (12.5 miles) of strike-length of mineralized zones located on the Thabazimbi-Murchisson Lineament approximately 120 kilometers (75 miles) north of Pretoria, RSA (the “TML Platinum Project”). The prospecting rights granted to Ingonyama by the Department of Minerals and Energy of RSA are for PGM (“platinum group metals,” including platinum, palladium, rhodium, ruthenium, iridium and gold) and other metals on the Twyfelaar Farm for a period of five years through November 12, 2012 and for PGM, other metals and diamonds on the TLM Platinum Project area for a period of five years through April of 2013. Ingonyama’s assets are valued conservatively on its financial statements at $55,894,296 (ZAR (South African Rands) 419,207,220), which is the value of the immediately mineable, tailings deposits that comprise only one of four components of the Twyfelaar Platinum Project. No value is attributed to the other three components of the Twyfelaar Platinum Project or the TML Platinum Project in the financial statements because these projects are in an early exploratory stage.?
The four components of the Twyfelaar Platinum Project include the LG6 (Lower Group 6) tailings dams and the LG6 chromite waste rock dumps (together, the “Twyfelaar Tailings Retreatment Project”), the hortonolite-dunite pipe deposit (the “Twyfelaar Pipe Project”) and the LG6 remnant mining pillars (the “Twyfelaar Underground Pillar Project”), which are described below:
