Sparton Resources Inc.

Sparton Resources Inc.

July 18, 2007 09:32 ET

Sparton Receives Second Payment for Sale of Share Interest in Luxi Gold Project; $1.67 Million Dollars Added to Working Capital

TORONTO, ONTARIO--(Marketwire - July 18, 2007) - Sparton Resources Inc. (TSX VENTURE:SRI) (the "Company") announced today that it has received the second payment of 11.972 million RMB (C$1.67 million dollars) from Starry Ltd. for the purchase of a 41% share interest in SRI's 80% owned Yunnan Sparton Minerals Company Limited ("YSM"). Please see Company news release dated November 21, 2006 for details of the terms of the transaction.

YSM is the owner of all the Luxi Gold Project Exploration Licences and project assets in Yunnan Province. SRI will retain 39% of the shares in YSM. In the same agreement SRI's partner in YSM, Yunnan Nuclear Exploration Team 201 ("201") has also received a second payment of RMB 2.92 million (C$407,591) for the sale of 10% of its YSM shares to Starry. The total purchase price for a 51% share interest in YSM to be paid by Starry is RMB 24,480,000 or approximately $C3.5 million dollars.

The total amount payable to SRI for 41% of the shares is RMB 19,680,000 or approximately $C2.9 million dollars and the amount payable to 201 is RMB 4,800,000 or approximately $C690,000 dollars. The currency of the transaction is in Chinese RMB and the dollar amount of funds received is calculated based on currency rates on the dates of bank transfers.

The amount received in this payment represents the completion of the second and third parts of the transaction, namely the approval of the YSM share transfer to Starry by the Yunnan Government and the transfer of the Deep Exploration Licence (the "DEL") under the Guanlingpo Mine to YSM.

SRI received the first payment of RMB 3,772,000 or approximately $C540,000 dollars in late November, 2006.

The remaining payment of RMB 3,396,000 (approximately $C485,140) owed to SRI will be made within 7 days of cancellation of the 25% participation right (see News Release dated June 10 , 2004) held by the Luxi Gold Mine in the DEL, or a new agreement satisfactory to all YSM shareholders is made with the holder of the Luxi Gold Mine Mining Licence for the disposition of this 25% participation right.

Operating expenses for YSM are now paid as to 57% by Starry and 43% by SRI. The new cost sharing percentages are as a result of the 10% share interest held by 201 being a non-contributing, carried interest in YSM.

It is important to note that all funds received by Sparton in this transaction have been paid directly into the Company's Canadian bank account and are available for its working capital.

"We are very pleased to have successfully advanced this agreement with Starry," stated A. Lee Barker Sparton's President and CEO. "Starry is fully supported by one of China's largest integrated gold producers and ongoing exploration at Luxi, including further evaluation of the various new targets in the area will be organized and executed by a Joint Working Committee with representatives of all the Luxi stakeholders. Once again we have shown our ability to operate successfully in China having repatriated over 60% of our investment in Luxi to the Company treasury, while retaining a 39% equity interest and a strong technical participation in the project," Barker concluded.

(i) Note currency exchanges used are: RMB 7.621 equals US $1.0
: C $1.0 equals US $0.94

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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