TORONTO, ONTARIO--(Marketwire - Jan. 28, 2013) - Sparton Resources Inc. (TSX VENTURE:SRI) (the "Company") announced today that its 85% owned subsidiary company, Lincang Linxiang 306 Huajun Coal Industry Co. Ltd. ("Huajun"), has executed an agreement for the sale of all of its germanium production assets in the Lincang area of China.
The purchaser is the Yunnan Lincang Xinyuan Germanium Industry Stock Co. ("Xinyuan") a PRC registered company listed on the Shenzen Stock Exchange. Xinyuan is China's largest germanium producer and is also based in the Lincang area.
The transaction will be effected by the Company selling to Xinyuan all of Huajun's germanium related production assets including its mining licence and infrastructure.
The agreement provides for Xinyuan to pay a total of RMB13.6 million (approximately C$2.16 million) for the Huajun assets.
60% of the purchase price or RMB8.16 million (approximately C$1.3 million) is to be paid within 7 days of Xinyuan's board of directors approving the transaction, and the remaining 40% or RMB5.44 million (approximately C$0.86 million) is to be paid within 7 days of finalization of the transfers of the Huajun mining licence and related operating permits from Huajun to Xinyuan.
The imposed sale of the Huajun germanium production assets is a consequence of China Central Government policy changes mandating the consolidating of small coal mining operations into the control of larger operators and has been ongoing in PRC for approximately 2 years. Implementation of this policy has been the responsibility of various provincial and local governments where small coal mining operations exist, and although Huajun produces germanium concentrates it is operated as a small coal mine with a coal mining licence and related coal mine safety protocols.
The sale of the Huajun assets to Xinyuan was mandated by the Lincang Local Government and Xinyuan was designated by the Lincang Local Government as the sole buyer. Upon completion of the transaction Xinyuan will have purchased all of the smaller coal (germanium) operations in the Lincang area and the consolidation program in that area will be completed.
We Seek Safe Harbour
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.