Sparton Resources Inc.
TSX VENTURE : SRI

Sparton Resources Inc.

November 16, 2009 10:14 ET

Sparton Announces First Germanium Concentrate Sales and Initial Revenue From Huajun Operations

GROSS PROCEEDS OF USD$113,000 RECEIVED

TORONTO, ONTARIO--(Marketwire - Nov. 16, 2009) - Sparton Resources Inc. (TSX VENTURE:SRI) (the "Company"), announced today that it has completed the first sale of germanium ("Ge") concentrate from its 51% owned 306 Huajun Coal Co. Ltd. ("Huajun"), the company producing germanium concentrates and thermal coal in the Lincang area of Yunnan Province, China. (See news release dated September 21, 2009). The sale represents the first sale of germanium concentrate after takeover of control of the Huajun operations by the Company's 100% owned subsidiary Yunnan Blue Bay Mining ("YBB").

The sale represents production of concentrate for the period from September 9 – November 8, 2009 with approximately 50 working days involved. There were approximately 10 days of China National Holidays during the reporting period. A total of 11.98 tonnes of concentrate was sold containing approximately 220 kg of Germanium metal. The price received for the concentrate was 3500 RMB/Kg of contained germanium (USD$515/Kg). Total revenue was 764,648 RMB or about USD$113,000 (exchange rate of 6.8RMB = 1 USD). All of these funds will be for the benefit of YBB according to the terms of the Huajun share purchase agreement. The buyer for this sale was a semiconductor producer in Kunming City, Yunnan.

Huajun Operations

Huajun is currently operating at about 50% capacity, as are all other Ge producers in the Lincang area. This has been done to maintain current sales at prices similar to average 2008 Ge price levels. The price received for this concentrate sale represents about 60% of the current spot price for Ge metal on world markets. This is consistent with previous sales, and represents the price penalty paid for selling a Ge concentrate to a refiner instead of selling Ge metal or industrial Ge oxide or chloride.

The revenues received from future sales are expected to increase to over 90% of the value of the contained Ge once a small refinery has been completed by YBB to service the Huajun production. Final design and budgeting for construction of this facility is underway and subject to financing it is expected to be put in place during the first quarter of 2010. YBB has also initiated a western financial management system for the operations and is undertaking a review of all technical operating systems.

Discussion

This initial sale and revenue represent a milestone in Sparton's corporate history as it represents the first operating revenue for the Company as a commodity producer. Revenues are expected to increase once the refinery is completed and as demand for Ge returns to early 2008 levels as the world economy recovers. This demand increase is expected to be lead by increased use in new generation solar panels, LED's and aggressive programs by developing countries to continue replacing metal wire data transmission lines more efficient fibre optics systems.

Sparton's international exploration, development, production 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.

This press release contains "forward-looking statements" within the meaning of applicable Canadian securities legislation. Generally, forward-looking statements can be identified by the use of forward- looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "planned", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may" ,"could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, closing of transactions, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks related to exploration and development, the environment, local and foreign government regulation, currency fluctuation infrastructure, capital markets and additional funding requirements and the departure of key executives as well as those factors discussed in the Company's documents filed on SEDAR (www.sedar.com).

Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward-looking statements that are contained herein, except in accordance with applicable securities laws. Further information on Sparton Resources Inc. is available at www.sedar.com.

This news release and the information contained herein does not constitute an offer of securities for sale in the United States and securities may not be offered or sold in the United States absent registration or exemption from registration.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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 -8559-2276
    +86-13901197486 (FAX)
    Email: charlesge@vip.163.com
    Website: www.spartonres.ca