Sparton Resources Inc.
TSX VENTURE : SRI

Sparton Resources Inc.

June 23, 2010 09:44 ET

Sparton in Financing Discussions With Dundee Resources Limited

TORONTO, ONTARIO--(Marketwire - June 23, 2010) - Sparton Resources Inc. (TSX VENTURE:SRI) (the "Company" or "Sparton") announced today that it has entered into discussions with Dundee Resources Limited ("Dundee") related to a possible re-financing package for Sparton's subsidiary, Sparton Energy Inc. ("SEI"). SEI's interests, all of which are in China, include (i) the secondary uranium production joint venture with the China National Nuclear Corporation, (ii) the Guojiaping vanadium- uranium project and (iii) the Huajun germanium operations.

FINANCING

The initial stage of this re-financing would contemplate an injection of new working capital into SEI and ultimately a consolidation of SEI's current debt by the issue of Redeemable Convertible Preference Shares ("RCPS") of SEI. Dundee would acquire the current debt and the related security currently held by Quam Ventures (BVI) Limited and a private investor totalling approximately US$3.2 million and Dundee would convert the debt into redeemable RCPS as part of a re-financing totalling up to US$12 million. The private investor has been offered the opportunity to similarly convert its portion of the debt and the response has been positive. If Dundee acquires the current SEI debt, the debt security provisions would be the same as with the current lenders and would be guaranteed by the Company and all its assets. When the Preference Share financing is completed, the Company would be released from its guarantee and the related security.

Discussions are being held with Dundee to inject additional working capital into SEI at this time, in an amount to be determined, and the working capital funds to be so raised would be used (i), to complete the bulk testing and feasibility study for uranium production from Lincang area waste ash, (ii) to complete a feasibility level evaluation of the Guojiaping vanadium - uranium deposits and (iii) to upgrade and increase SEI's interest in the Huajun germanium operations to 85%.

Finalizing of this financing package with Dundee, would provide Sparton with a focussed program for developing SEI's China assets. This would be a significant step toward ultimately turning SEI into a stand-alone uranium/vanadium/germanium producer in China with the objective of providing Sparton shareholders with a direct participation in SEI's assets and business through an initial public offering or business combination with another company in a parallel business.

THE COMPANY

Sparton is currently rationalizing its global portfolio of projects. Consideration has been given to both international commodity and capital market conditions. The Company, through SEI, has developed a unique portfolio of resource opportunities in China in the three commodities, uranium, vanadium and germanium which all have very strong domestic and international market fundamentals.

SEI's primary focus in China is (i) to advance the secondary uranium recovery program at Lincang through finishing a bulk sample test and completion of a final feasibility study, (ii) to complete the evaluation of the Guojiaping exploration license which contains a large, shale-hosted vanadium deposit with associated uranium mineralization and (iii) to improve cash-flow at the producing Huajun germanium operations.

In Canada, Sparton continues to explore its Marmion Gold Project with a summer exploration program that has produced initial positive results from early prospecting work. The Company claim groups are contiguous to the claim holdings of Brett Resources Inc. which owns a major gold deposit currently under development, and is located approximately 25 km north of the town of Atikokan in northwestern Ontario.

SPARTON RESOURCES INC. 
Listed: TSX Venture Exchange
Trading Symbol: SRI

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.

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