Sparton Resources Inc.
TSX VENTURE : SRI

Sparton Resources Inc.

November 12, 2007 09:18 ET

Sparton Acquires Rights to Test and Acquire High Uranium Coal Deposit and Germanium Production Operations in Yunnan China

INITIAL SAMPLING INDICATES ASH CONTENT OF 253-804 PPM URANIUM (0.03-0.09% U3O8) NEW CHINA MINERAL FOREIGN INVESTMENT POLICY FAVORABLE TO SPARTON W. BRIAN CARTER, JOINS BOARD OF DIRECTORS

TORONTO, ONTARIO--(Marketwire - Nov. 12, 2007) - Sparton Resources Inc. (TSX VENTURE:SRI) (the "Company") reported today that it has signed an agreement to evaluate the extraction of uranium from waste material produced from a germanium production plant in the Lincang Area of Yunnan Province, PRC. The Lincang Area hosts at least two large coal basins (Bangmai and Mengwang) which contain highly anomalous amounts of uranium and germanium ("Ge"). Currently these support seven germanium producing operations which are producing large amounts of uranium bearing ash and waste. Historically uranium was produced in the 1970's and early 1980's from coal ash from these deposits but all production ceased with the collapse of uranium markets about 1985. Germanium is an industrial metal currently valued at approximately $USD1250 per kg., which is widely used in many electronics applications such as semiconductors and transistors, as well as catalysts, optical devices, and various medical applications.

Under the terms of the Memorandum of Understanding with the Hua Jun Coal Mine Co. Ltd. ("HJC") Sparton and its China partners ARCN, the Remote Sensing and Research Branch of the China National Nuclear Corporation, and Beijing John Hanseng Investment Consulting Co. Ltd. (collectively "Sparton") will do uranium analyses and leach tests on the coal and various types of waste material produced from burning of coal produced on the 2.7 sq. km Mining Licence owned by HJC, and if results are positive Sparton can purchase up to an 85% share interest in the HJC company and all of its assets including the coal mines and germanium production facilities, based on a negotiated value.

URANIUM CONTENT OF HJC COAL ASH WASTE

Previous sampling of coal ash waste material by Sparton's team indicated that bottom ash and fly ash samples taken from the area contain between 253 and 804 ppm uranium which corresponds to grades of about 0.03% to 0.09% U3O8, or roughly 0.66 to 2.0 pounds of U3O8 per metric tonne. The germanium content of this ash was not determined in these samples but it is known that the lower limit for germanium recovery from coal in the area is about 100 ppm Ge. During a site visit during the week of November 5, 2007 Sparton's staff determined that all waste material from the operations are anomalously radioactive and representative samples were taken from all the various types of waste for additional analyses and uranium leach tests.

HJC OPERATIONS

HJC has been operating three underground coal mines on its Mining Licence for approximately 5 years. The mines are developed using inclined shaft access and have a total capacity currently of about 250 tonnes per day. They include the #306 Wenhua Mine, the #306 Chuanzhong Mine and the #307 Defu Mine. The #306 mines are joined underground and exploit uranium and germanium bearing coal solely for use in germanium extraction by coal burning and flue dust recovery. The Defu Mine coal contains sections that contain less germanium and also produces thermal coal for local sales. The deepest current workings are approximately 60 metres below surface. Operating history indicates that there have been no serious accidents since operations started in 2002, and that the mines are free of methane gas and dry. Both manual and mechanical methods are used for mining the coal and the seams average about 2.5 metres in thickness. Ash content of the coal varies from 40-50%.

Mine technical staff from HJC reported that the two #306 Mines contain a "historical resource" (Non 43-101 compliant) using Chinese Reporting Standards, of 92.34 tonnes of Ge contained in 521,600 tonnes of coal. An additional 500,000 tonnes of mixed domestic and high Ge coal is reported for the Defu Mine from the same data base. All of this information is based on results of approximately 18 drill holes completed within small 0.6 sq km area with in the 2.5 sq. km Mining Licence area held by HJC. No data are available for the uranium content of the coal and ash except for the results from Sparton's limited sampling done early in 2007 which are reported above.

HJC is currently producing 10kg per day of high germanium flue dust valued at 5300 RMB per kg ($USD700 / kg) from the burning about 100 tonnes of coal. New recovery bins are currently under construction which will allow an increase in production capacity up to the limit of currently available coal production (250 tonnes per day). Profit margin after taxes and all costs is reported to be 40 % of revenue.

Sparton staff will be reviewing the detailed technical and financial information for these data as part of the due diligence procedures for this project and will conduct a comprehensive underground sampling program of the coal seams, in parallel with the detailed sampling of the waste ash material sites in the HJC area. These are estimated to contain approximately 75,000 tonnes of ash and clinker. Leaching tests for uranium recovery will be conducted on the various materials as well. The initial analyses indicate a low lime content for the waste material.

NEW CHINESE GOVERNMENT FOREIGN INVESTMENT POLICIES

Under the new recently announced Chinese Investment Directory for Foreign Investment which will come into effect on December 1, 2007, the "comprehensive use of coal ash for extraction of valuable minerals and other uses" (Paragraph 23.2) has been put into the "Encouraged" category . Further, the use of new technological applications in the treatment of various forms of mine waste and tailings for recovery of valuable minerals and environmental restoration of waste sites is also now in the "Encouraged" category. Both of these new policies are highly positive for the ongoing programs of Sparton and its partners in its secondary uranium recovery and waste cleanup programs in China.

Elsewhere waste ash sampling programs are underway in Hungary and southern Africa, and the testing program continues on the Xiaolongtan waste pile material in Yunnan PRC. New results will be reported as they become available.

NEW DIRECTOR JOINS SPARTON BOARD

The Company is pleased to announce that W. Brian Carter, B.A,Sc., CA, CFA has joined Sparton's Board of Directors. Mr. Carter is a senior management investment professional with over 40 years experience in the investment industry, specializing in the resource sector. Following an early career as a mining engineer he entered the financial services industry and has held senior management and research positions with a number of major financial management organizations including Clarkson Gordon and Company (now Ernst and Young), Loewen, Onaadtje, McCutcheon & Company Ltd. ("LOM"), Stuart Investment Management Ltd., Jones Heward Investment Management Inc, and Legg Mason Canada Inc.

At LOM he was Head of Research and Portfolio Strategy, leading a team of analysts serving an international client base of financial institutions, and involved in that organization's Corporate Finance Department specializing in transactions in the precious metals and resource industry.

Mr. Carter is currently Senior Portfolio Manager for Sceptre Investment Counsel Ltd.

Sparton's other directors welcome him to the board and look forward to benefiting from his experience as the Company moves forward with its various programs. Mr. Carter has been granted 150,000 options to purchase Sparton common shares of at a price of $0.36 for a period of five years commencing on today's date.

Sparton's international exploration and evaluation programs are being carried out under the direct supervision of A. Lee Barker, P. Eng., P Geol., the Company's President and CEO who is a Qualified Person under National Instrument 43-101.

The TSX Venture Exchange has not reviewed and does not accept responsibility for adequacy or accuracy of the content of the information contained herein.

Contact Information

  • Sparton Resources Inc.
    A. Lee Barker
    President and CEO
    (416) 366-3551 or Mobile; (416) 716-5762
    (416) 366-7421 (FAX)
    Email: info@spartonres.ca
    or
    Sparton Resources Inc.
    Charles Ge
    Director
    int'l +86 10 8559 0034
    int'l +86 10 8559 0034 (FAX)
    Email: Charlesge@vip.163.com