Sparton Resources Inc.

Sparton Resources Inc.

September 14, 2005 09:00 ET

Sparton Reports Minimum Possible Mineral Deposit Of Up To 320,000 OZ Gold At Luxi

TORONTO, ONTARIO--(CCNMatthews - Sept. 14, 2005) -




Sparton Resources (TSX VENTURE:SRI)(the "Company") reported today, initial size estimates for the 'possible mineral deposit' indicated by the results of the first 34 drill holes and surface sampling completed to date, at its Luxi Gold Project in south western Yunnan Province, China. While the current database is not detailed enough to quantify gold resources as defined in National Instrument 43-101 Company management believes these results have identified the potential for the area to host a possible mineral deposit on which, with additional detailed exploration drilling, a NI 43-101 compliant resource estimate can be prepared. The mineralized target reported here is open for extension both along strike and at depth. There is a high probability that the size of the possible mineral deposit can be increased significantly by additional drilling.


A possible mineral deposit ranging in size from 4.2 to 7.6 million tonnes grading 1.5 to 1.2 g/t gold (1.0 g/t and 0.50 g/t cut-off grades respectively) has been estimated by Company staff, for an 800 metre section of the 3km long "Shangmanggyang-Mongmo Break ", which has been drill tested up to a depth of 100 metres below surface, in the immediate Guanlingpo Mine area.. Total gold content ranges from 210-320,000 ounces depending on cut-off grade used.

Over 1000 drill core assays from 34 drill holes, and over 200 surface chip sample assays were used in the estimates. The analytical database does not show any evidence of a 'nugget effect' which would bias the data, which is normal for this type of disseminated gold deposit. Widths of the zones range from 5 to over 30 metres. All this information has been reported previously, with the latest drill results presented in a news release dated September 12, 2005. These data and maps are available on the Company website The potential quantity and grade of the possible deposit given here is conceptual in nature in that there has been insufficient exploration data to define a NI 43-101 mineral resource, and it is uncertain if further exploration will result in the discovery of such a resource on the property


The majority of the mineralization is contained in oxide material that is similar in nature to the metallurgical samples from drill hole GU04-07 that returned over 80% gold recovery in simple bottle roll tests. All mineralization is located from bedrock surface to a maximum depth of 100 metres and would be amenable to open pit mining. A stripping ratio range of 1.4 to 3.0 to 1 was calculated for the zones reported here, using a hypothetical 50 degree slope pit wall.


Sparton's 80% owned Chinese Joint Venture Company, Yunnan Sparton Minerals Company Limited ("YSMCL"), (20% Yunnan Nuclear Geological Brigade 201 ("Brigade 201") has the right to earn a 75% interest in the 0.5 sq km Guanlingpo Mine Licence and in the deep Exploration Licence of the same size below the 1180 metre level by providing the Mine owners with a positive feasibility study for new mine development incorporating these licence areas. Approximately 80% of the tonnages reported here are within the Mining Licence or the deep Exploration Licence and the remainder are within an exploration licence held by 100% by YSMCL.


The possible mineral deposit reported here represents preliminary drilling evaluation of only about 25% of the 3km long zone extending from the northeast boundary of the Guanlingpo Mining Licence (230,000 ounces mined to date from residual oxide soil) southwest to the Mongmo oxide soil deposit.

Data from the exploration program completed along this section of "Shangmangyang-Mongmo Break" clearly indicates that there is potential to substantially increase the current size (upwards from 320,000 ounces gold) of the overall possible deposit target in the area. The chip assays in the Yangshishan Pit 3 (1.8 gm over 18 metres), coincident and continuous IP anomalies extending from the Guanlingpo Mine through Yangshishan to Mongmo, and the continuous basal soil / rock chip sample results (0.2-1.2g/t) from the auger drilling along this trend, all support the interpretation that the core drilling completed to date has tested only a small part of an extensive gold mineralized structural system.

The high proportion of oxidized mineralization found to depths in excess of 100 metres below surface indicates that it is likely that more drilling along the "Break' will locate significantly more oxidized mineralization that may be exploitable by low cost heap leach mining methods.


The current small scale heap leach gold recovery operations managed by Brigade 201 at Guanlingpo are economically very profitable and operate on an annual margin approaching 50% after all costs, royalties and taxes are paid. Production is from residual oxide soil overlying the primary rock hosted mineralization, which latter is the subject of Sparton's drill program. Current grades mined are in the range of 1-1.5 g/t gold and the cut off is about 0.75g/t. Production in 2004 was 157 kg of gold (5,050 oz.). No drilling, blasting or crushing is currently used. For comparison the average reported recovered grade for Barrick Gold Corporation's 2004 production at its Round Mountain Operations in Nevada USA was 0.02 ounces per tonne (0.70 g/t). Similarly the reported grades for gold reserves at Placer Dome's Cortez JV area and Bald Mountain deposits in Nevada are 1.8g/t and 1.0g/t respectively. Heap leach mining can be highly profitable even at grades significantly lower than indicated at Luxi.

The regional exploration data and historic production show the Luxi trend to be over 50km long (see maps on Company website), and it is possible similar deposits will be located at Mabozi, Hebianzhai, Guanming and Bajowa, the other priority project target areas.


A reverse circulation drill is being mobilized to the property and will begin work at Guanlingpo late this month to do infill drilling, provide metallurgical test samples and expand the gold resource target base there. Enough data will be accumulated for NI 43-101 resource estimates to be made by an independent consulting group. The Company owned core rig will begin to systematically test the mineralized zone from Yangshishan to Mongmo. An independent drilling contractor will likely be engaged to test the other target areas before year end.

Sparton's management is extremely encouraged by these results and believes the project has the potential for being developed by low cost heap leach methods into a medium scale gold producer in the short term with significant possibility for expansion as new resources are located.

Sparton's exploration program in China is 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.

Sparton Resources Inc. is a diversified mineral exploration company, which has been an active participant in the Canadian junior resource sector for over 20 years. It holds a portfolio of Chinese, Mexican, and Canadian mineral exploration properties focussing on base and precious metals. In the energy sector, the Company has an interest in 20 BCF (billion cubic feet) of proven and probable natural gas reserves in the undeveloped Chebucto gas field, offshore Nova Scotia.

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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