Sparton Arranges $1.51 Million Financing; Strategic Investor Acquires Interest in China Vanadium Projects

TORONTO, ONTARIO--(Marketwire - March 10, 2011) - Sparton Resources Inc. (TSX VENTURE:SRI) (the "Company"), announced today that it has entered into an agreement ("the Agreement ") for the sale of an 18.8% interest in VanSpar Mining Inc. ("Vanspar") for gross proceeds of USD$1,514,383.56.

VanSpar is a newly incorporated British Virgin Island ("BVI") subsidiary company that holds Sparton's various vanadium project rights and assets in People's Republic of China, including the Guojiaping and the Rentian Projects in Jiangxi Province, southern China. See Sparton news release dated December 2, 2010.

There are currently 32,250,000 shares of VanSpar issued, of which 93% are owned by the Company through its 100% owned BVI subsidiary, Sparton International Holdings Inc. and the remaining 7 % by officers, directors, and employees of the Company and its subsidiaries.

Sparton International Holdings is selling 6,057,534 shares of its VanSpar shares to Alpha Prime Investments Ltd. ("Alpha Prime"), at USD$0.25 per share.

The purchaser, Alpha Prime an arm's length, private BVI registered company, that is focussed on resource investments in Asia.

Terms of the share sale agreement include a Conversion Option ("the Option"), subject to regulatory approval, granted to Alpha Prime to convert its VanSpar shares into Sparton Resources Inc. shares if for any reason whatsoever, VanSpar's interests in the mineral properties located in Jiangxi Province, are cancelled, not granted, cannot be acquired or are lost to or removed from VanSpar, or, if within 18 months from March ---, 2011 , or a "Liquidity Event" such as an Initial Public Offering ("IPO"), Reverse Takeover ("RTO") or similar transaction has not taken place, or is not substantially in the process of being organized, where under VanSpar shares would become traded on a stock exchange or other public market. 

If the Option is exercised, the number of Sparton Resources Inc. common shares to be issued in exchange for the 6,057,534 VanSpar shares shall be the lesser of:

(a) CAD$1,514,383.56 divided by the average closing price of Sparton Resources Inc. common shares on the TSX Venture Exchange (or such other exchange or public market on which such shares are then traded) for the five (5) trading days prior to the date that Alpha Prime elects to exercise the Option,

(b) Or 12,619,863 common shares of Sparton Resources Inc. at a deemed conversion price of CAD$0.12 per share. The conversion Option will expire 20 months from March 8, 2011.

The certain anti dilution provisions are also incorporated into the Agreement where Alpha Prime will maintain its 18.8% ownership in VanSpar up until the time of a Liquidity Event taking place.

The proceeds from this financing are being used for debt reduction and general corporate purposes including expenditures to advance the vanadium projects. Alpha Prime, together with Sparton management, will begin further funding initiatives for advanced exploration and development of the vanadium properties and will investigate the possibility of a public listing for VanSpar.

Statements in this release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed under the heading "Risk Factors" in the Company's filings with Canadian securities regulators. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. The Company does not assume any obligation to update any forward-looking statements, save and except as may be required by applicable securities laws.

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.

We Seek Safe Harbour.