Sparton Resources Inc.
TSX VENTURE : SRI

Sparton Resources Inc.

November 23, 2009 09:43 ET

Sparton Signs Preliminary Agreement for the Evaluation of Large Vanadium Deposit in China

TORONTO, ONTARIO--(Marketwire - Nov. 23, 2009) -

NOT FOR DISSEMINATION TO UNITED STATES NEWSWIRES OR FOR DISSEMINATION IN THE UNITED STATES

Sparton Resources Inc. (TSX VENTURE:SRI)(the "Company") is pleased to announce that its 70% controlled PRC subsidiary Yunnan Sparton New Environ-Tech Co. Ltd. (SNET), has signed a Preliminary Agreement (the "Agreement") for the evaluation of a significant vanadium – uranium deposit in southern China. SNET is a Sino-foreign joint venture company which is 30% owned by a subsidiary of the China National Nuclear Corporation.

The Agreement, made with Team 267 of the Exploration Bureau of the Jiangxi Nuclear Industry ("267") is for the evaluation of the Guojiaping Exploration Licence in Xiushui County, Jiangxi province, China. This licence contains a large shale hosted vanadium deposit with associated uranium mineralization which has been extensively explored by 267 since May, 2007.

The exploration license covers an area of 9.02 sq. km. and past exploration work includes in total, 7,760 meters of core drilling (in 131 holes), 3,528 cubic metres of trenching, several shallow shafts , and related geological mapping, sampling, and analyses. 

Based on the results of 42 drill holes covering a 5.5 km sq. area within the Guojiaping Licence the deposit is reported by 267 to contain approximately 100,000 tonnes (220,000,000 pounds) of vanadium pentoxide (V2O5) classified as "Chinese 333, inferred, intrinsically-economic resources" at a grade averaging 0.91% V2O5. The mineralized horizon is 3-10 metres thick and shallow dipping. It outcrops at surface and has been explored by a combination of trenching and core drilling.

The associated uranium deposit identified in the same dri1ling program and analytical database is estimated by 267 to contain 1000 tonnes of uranium metal (2,200,000 pounds) at a grade averaging 0.172% U and is also classified as a "Chinese 333 inferred, intrinsically economic resource".

CAUTIONARY STATEMENT

Sparton's Management cautions that the above information is not National Instrument 43-101 compliant and should be considered as a "Historical Resource". It is subject to verification and validation and confirmation to National Instrument 43 -101 standards Verification to those standards will likely require additional drilling and analyses. Sparton's technical staff have reviewed the 267 data and believe that, based on the information presented there is a commercial opportunity for Sparton in this project. Further, the Company has commissioned an independent technical review of all information related to the exploration licence. This will include a review of plans, sections, and re-sampling of a statistically significant amount of drill core for analyses by an internationally accredited laboratory. Metallurgical testing will also be initiated. 

COMMERCIAL TERMS

Under the Agreement, SNET will have an exclusive option, subject to a positive due diligence ("DD") study of the property, to acquire a 65% interest in the Exploration Licence and contained mineral reserves (approved by the relevant Chinese authority) for the sum of RMB 45 million. This acquisition would be done according to all applicable PRC regulations. The Agreement also provides that Team 267 and SNET will set up a joint venture to carry on further exploration and development work on the licence outside of the area covered by the approved mineral reserves. SNET shall contribute the initial RMB 10 million of registered capital into the new joint venture and will have a 65% of the interest in the joint venture company. The Agreement is subject to the approvals of the Team 267 supervisory authority and the SNET and Company board of directors.

A more comprehensive final agreement reflecting all of the fundamental terms and conditions of this initial Agreement will be negotiated between SNET and 267 upon positive completion of the due diligence program.

ABOUT VANADIUM

Vanadium is a specialty metal most well know for its alloying qualities and use in making specialty steels. However it is now seeing increasing uses in technology applications, especially in new generation high capacity storage batteries used in hybrid autos and solar and wind energy applications. It is sold most commonly as V205 and recent pricing is in the range of USD$17-19 per kilogram (USD$ 8-9 per pound).

DISCUSSION

Sparton's management is delighted to have the opportunity to work with new Chinese partners on this unique project. As a current specialty metal producer in PRC (germanium production in Yunnan) the vanadium project fits well with the Company's initiatives to identify and develop new opportunities in the specialty metals and rare earth fields. The potential to extract uranium from this non conventional source is also a significant step for Sparton's already established uranium extraction program from various forms of waste material.

Sparton's international exploration, development, 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.

SPARTON RESOURCES INC. Company website: www.spartonres.ca

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.

Listed: TSX Venture Exchange

Trading Symbol: SRI

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.

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