Sparton Resources Inc.

Sparton Resources Inc.

August 13, 2007 11:09 ET

Sparton Confirms Zhaojin Mining's Direct Participation in Luxi Gold Project


TORONTO, ONTARIO--(Marketwire - Aug. 13, 2007) - Sparton Resources Inc. (TSX VENTURE:SRI) (the "Company"), reported today that Zhaojin Mining Industry Co. Ltd., a Hong Kong Stock Exchange listed company ("Zhaojin") has now assumed management and operational responsibility for Yunnan Sparton Minerals Company Ltd. ("YSM") and the Luxi Gold Project in Yunnan PRC.

In a recent transaction Zhaojin, through its 100% owned Hong Kong subsidiary Sparky International Trade Company Limited "(Sparky"), acquired all of the 51% share interest in YSM which was held by Starry Limited ("Starry"). Starry was the original vehicle used for the YSM share interest acquisition (for details please see Company news release dated July 18, 2007).

The new share interests in YSM are now Zhaojin (Sparky) 51%, Sparton 39% and Yunnan Nuclear Exploration Team 201 ("201") 10% (non contributing). Future costs of operating YSM and the Luxi Project will be paid as to 57% by Zhaojin and 43% by Sparton. The YSM new board of directors will have seven members, four from Zhaojin, two from Sparton, and one from 201. Lee Barker, Sparton's President and CEO will remain as Deputy Chairman of YSM and a technical advisor.


Zhaojin in China is the largest integrated gold producer and refiner and received its Hong Kong Stock Exchange listing in December 2006, following a successful IPO which raised over USD$240 million dollars. This was up to that time, the largest mining industry related IPO completed in Hong Kong. The YSM transaction is the first new acquisition made by Zhaojin since its IPO. As an international gold producer Zhaojin plans to expand into other exploration areas outside of China, including other parts of Asia and North America.


Going forward, the new YSM management team are planning a new exploration program including 3000 metres of drilling to accelerate the identification of primary and oxide gold resources in the Luxi area with the objective of early production. The YSM head office for administration and operations will be moved from Kunming to Luxi-Mangshe in order to have a stronger presence locally in the working area and develop stronger ties to the local community there. The transition is expected to be complete by the end of August, 2007. Additional drilling equipment and staff will be mobilized to the work area.


The closing of this transaction and direct involvement by Zhaojin will enable major time and cost savings in the future development at Luxi. Having the program and company managed by a major Chinese gold producer will enable most local issues to be dealt with much easier and the move of YSM directly into the Luxi area will demonstrate a strong project commitment to the local government, as well as effect significant cost savings. There will be no changes in the original YSM Joint Venture Agreement and the Sparton's financial and commercial interests under the contract continue to be fully protected as before.

This transaction is without precedent in China. A majority interest in a China based project, developed by a foreign company has been sold to a major domestic mineral producer. It is expected that Sparton and Zhaojin will become strong strategic partners in future, and work together on new gold related projects outside of China.

Sparton's international exploration 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.

The TSX Venture Exchange has not reviewed and does not accept responsibility for adequacy or accuracy of the content of the information contained herein.

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