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Savoy Resources Corp. Agrees to Sell Interest in China Joint Venture; Enters Final Negotiations for Acquisition of Yukon Gold Property Monday May 1, 11:04 am ET
DENVER, May 1 /PRNewswire-FirstCall/ -- Savoy Resources Corp. (OTC Bulletin Board: SVYRE - News), a precious metals and mineral exploration and mining company, announced today that it has agreed to sell its 40% interest in Heilongjiang Savoy Minerals Co., Ltd., the joint venture with the First Institute of Geological Exploration of Heilongjiang Province, China, organized in June 2004, to Black Dragon Resources Ltd., an unrelated Mauritius GBC2 company. To date, Savoy Resources has contributed to the joint venture US$1 million of a total of US$3.5 million in capital contributions required through December 31, 2006, under the joint venture agreement with the First Institute. Savoy Resources has received the initial US$50,000 payment under the agreement with Black Dragon Resources and will receive an additional US$200,000 at closing. Savoy Resources anticipates that the sale will close sometime in the next two weeks. ADVERTISEMENT
Savoy Resources is using the funds received to date from the sale of its interest in the joint venture to complete and file with the U.S. Securities and Exchange Commission its annual report on Form 10-KSB for the fiscal year ended December 31, 2005, and its quarterly report on Form 10-QSB for the quarter ended March 31, 2006. When the annual report is filed, assuming that the quarterly report is filed by the prescribed due date or within five days thereafter, the "e" will be removed from Savoy Resources' trading symbol. Mr. Arthur Johnson, President/CEO of Savoy Resources, stated that "Savoy Resources has finally received the funding needed to complete the reports required to be filed with the SEC in order to satisfy its reporting obligations. Management is working closely with its professionals and advisors to complete these reports and file them with the SEC as expeditiously as possible."
Management made the strategic decision to sell Savoy Resources' interest in the China joint venture primarily because of the significant amount of additional investment capital required prior to the realization of any return from the joint venture. Mr. Johnson stated, "We ultimately determined that, as a result of a visit to the site, it would not be possible to sink a decline shaft to extract the gold at the Sishan Forest Farm site, our initial target prospect in Heilongjiang Province. The terrain would require a conventional vertical shaft, which would be costly and delay operations for a further year." Further, based upon more intensive investigation of various of the joint venture's target sites in Heilongjiang Province, it became apparent to management that Savoy Resources could only realize revenue from Sipingshun Mountains and other sites by negotiating a small carried interest with a joint venture partner having the resources far greater than those of Savoy Resources with which to develop the properties and commence production. In this regard, Mr. Johnson said that "While our joint venture with the First Institute was prestigious and believed to be the first of its kind, management came to the realization that we could not translate these positive attributes into revenues and income for Savoy Resources in a timeframe that made sense for our stockholders."
Since negotiating the agreement to sell its interest in the China joint venture to Black Dragon Resources, management has focused its efforts upon other mineral prospects, including a Canadian gold prospect, the copper and cobalt leaching prospect in South Africa reported earlier and other potential gold and other mineral prospects in China. Management is in advanced negotiations with a closely-held, Canadian company for the acquisition of a property with proven gold reserves located in the Yukon Territory in northwestern Canada. Savoy Resources expects to consummate the purchase, which would not involve any cash outlay, prior to July 31, 2006. With regard to this proposed acquisition, Mr. Johnson stated, "We are excited by the prospect of owning a gold property with proven placer reserves on which it would be possible to commence production of gold as early as this fall because of the existence of a certain amount of infrastructure. With the acquisition of the Yukon gold property, Savoy Resources could finally accomplish its transition to a gold mining company. We expect this proposed acquisition to jumpstart our program for acquisitions of mining properties in Canada, the United States, South Africa and China and to enable us to obtain the financing necessary to commence production of gold or other minerals on these properties. In this regard, we are presently in discussions with a prospective funding partner."
From our President/CEO, Mr. Arthur Johnson -- "Many thanks to our investors for their patience in recent months while we have undergone the shift in our business plan described above."
Actual results may differ materially from any forward-looking statement, whether expressed or implied, in this news release. Statements that include verbiage of "expects, anticipates" or words of similar import, in addition to company plans, objectives or goals, are all considered as forward-looking statements that are based on reasonable assumptions, but are subject to risks and uncertainties that would create a different outcome. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating such forward-looking statements, which are made herein only as of the date of this press release. Savoy Resources does not undertake any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.
Contact Information: Arthur Johnson Savoy Resources Corp. 011-27-11-807-1446
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