Sparton Resources Inc.
TSX VENTURE : SRI

Sparton Resources Inc.

August 22, 2005 11:07 ET

Sparton Reports Second Quarter Results and Technical Update for Luxi Gold Project

TORONTO, ONTARIO--(CCNMatthews - Aug. 22, 2005) -

SURFACE SAMPLE HIGHLIGHTS INCLUDE:

- 1.8g/t OVER 18 METERS AT YANGSHISHAN

- 1.5g/t OVER 36 METERS AT GUANMING

- 2.5 g/t OVER 24 METERS AT BAJOWA

Sparton Resources Inc. (the "Company") (TSX VENTURE:SRI) reported today, second quarter (Q2) financial results for 2005, and also updated technical information for its 80% owned Luxi Gold Project in south western Yunnan Province, China. Complete Q2 results and the management discussion and analysis may be seen on the Company website and are posted on SEDAR.

FINANCIAL

As at June 30, 2005, Sparton had current assets of $955,830 comprised of cash, short-term investments and receivables, as well as liabilities of $32,883 comprised of accounts payable and accrued liabilities. There were no new financing activities during the quarter.

During the fiscal quarter ended June 30, 2005, total cash operating expenses for corporate administration, and investor relations were $90,474 as compared to $102,640 for the same period in 2004. Exploration and related cash costs for Q2, 2005 were $244,516 compared to $935,130 for Q2, 2004. This latter number is reflecting the higher start-up and capital equipment purchase costs for the Luxi Gold Project in China.

The net loss for the fiscal quarter ended June 30, 2005 was $90,641 ($0.00 per share) compared to $102,229 ($0.00 per share) in 2004. During Q2, 2005 exploration expenditures were related to geophysical and geochemical surveys completed on the Luxi China, and Sierra Rosario Mexico projects, as well as an extensive auger drilling program at Luxi.

LUXI EXPLORATION UPDATE

Results are now available for the chip sampling program completed in the Yangshishan Mabozi, Guanming, Hebienzhai and Bajowa areas. Chip sampling results for the Guanlingpo Mine area were reported previously (see news release dated October 25, 2004). Detailed geological mapping was also completed in all these areas, and auger drill sampling results from basal soil and bedrock rock chip sampling are now complete for the 2 km. long zone southwest of the Guanlingpo Mine extending to the Mongmo oxide soil gold deposit (see map on Company website www.spartonres.ca for locations). A final report was also received for the Induced Polarization (IP) survey work completed in all priority areas. These surveys, plus the sampling and mapping essentially represent the completion of detail coverage of the five highest priority areas previously identified within the 250 sq km exploration licences held by Sparton's 80% owned subsidiary, Yunnan Sparton Minerals Company (YSMCL).

All analyses of bedrock samples were completed in the local Luxi Project laboratory, and the auger drill samples of basal soil and bedrock chips were analysed at the Yunnan Provincial Laboratories in Kunming, the provincial capital. A quality control program including duplicate sample analyses, random blanks, and multiple reanalyses of sample splits, as recommended by SGS Laboratories of Lakefield, Canada ("SGS") has been used for all of this work. Duplicates are analysed by SGS.

SAMPLING RESULTS

Over 1250 chip and channel samples averaging 2 meters in length were taken across all outcrop exposures in the various areas. As reported previously (see news release dated July 11, 2005), well defined IP chargeability and resistivity anomalies were also located in each of the five areas surveyed (Guanlingpo Mine-Yangshishan-Mongmo, Mabozi, Bajowa, and Hebianzhai -Guanming), (see map on website). These IP anomalies and the sampled areas are all associated with strong hydrothermal alteration in Permian carbonate and Jurassic clastic sediment host rocks, including silicification, sulphidation, clay alteration, decalcification, and breccation.

At Yangshishan, immediately southwest of Guanlingpo, where a small oxide gold deposit was previously mined, chip sampling across an 18 metre wide bedrock zone averaged 1.8g/t gold. A strong IP anomaly is coincident with this zone. An altered and mineralized lamprophyre dyke is also exposed in one of these pits and grab samples from this unit contained up to 2.5 g/t gold. The presence of this rock type indicates that very deep seated structures are associated with the gold mineralization in the area.

At Mabozi, to the south of Guanlingpo, over 600 chip samples were taken across the high level epithermal alteration system exposed here, and indicate an area approximately 100 meters wide by over 600 meters long containing 0.1 to 0.6 g/t gold. Excellent IP chargeability anomalies are coincident with the depth extensions of this surface mineralization (see example on website).

At Guanming over 30 km to the southwest, a trench cut in bedrock under a gold in soil anomaly returned 36 metres of 1..5g/t gold. A strong IP anomaly, several hundred metres long, is associated with this zone.

At Hebienzhai 2 km southwest of Guanming about 400 samples were collected and numerous scattered outcrops and large boulders of heavily altered and brecciated carbonate rocks yielded values greater than 1g/t gold. Once again the IP results show strong chargeability responses associated with the altered rock units in this area.

At Bajowa, over 35km southwest of Guanlingpo, where over 200 kg (7000 oz.) of gold was produced from oxide soil in two pits, chip samples taken across exposures in one pit returned 24 metres averaging 2.4 g/t gold. Again this zone is directly associated with a strong IP chargeability anomaly over 600 metres long. While bedrock exposures are limited in all these areas, auger drill profiles have been completed to trace the mineralized zones along strike through overburden cover. These results will be reported when available.

AUGER DRILL SAMPLE RESULTS YANGSHISHAN TO MONGMO

The auger-drilling program has completed over 400 holes to date in all areas, averaging approximately 10 metres in depth, and results reported here involve 11 profiles (over 250 holes) across a 1.8km long portion of the favourable Shangmangyang Fault structure, taken between the southwest end of the Guanlingpo mine area and the Mongmo gold in soil anomaly and oxide gold deposit. (see map on Company website). The results show a continuous zone of anomalous bedrock gold mineralization with anomalous gold values ranging from 0.20 - 1.20 g/t gold in basal soil and rock chips in samples taken 20 meters apart. Background values are typically 0.02-0.05 g/t gold long this zone The IP surveying results also show continuous chargeability anomalies directly associated with these anomalous gold values along the same 1.8 km zone. These results have extended the zone of continuous bedrock gold mineralization and associated IP chargeability anomalies to nearly 3km in strike length, and core drilling to date has tested less than one third of this trend.

DRILLING PROGRAM

Core drilling is currently underway with Company owned equipment in the Guanlingpo Pit area to extend primary gold mineralization located earlier, and test the IP targets identified by the survey. Six holes have now been completed to test the northeast and down dip extension of the breccia mineralization in the South Zone. Assay results form the initial holes are expected shortly and will be reported when quality control check assays have been completed. A reverse circulation drill, provided by a local drill contractor, is expected to begin work in the Guanlingpo Mine in September to more rapidly develop the database for definition of NP 43-101 compliant resources and provide additional sample material for metallurgical testing. The objective of this work will be to define a heap leachable gold resource in the general Guanlingpo-Yangshishan trend. The core drill will be then used to test the Yangshishan - Mongmo area IP and bedrock gold anomalies, and then will move into the other target areas at Mabozi, Hebienzhai, Guanming and Bajowa.

Auger drilling is also continuing to test overburden covered zones associated with the IP anomalies.

DISCUSSION

Sparton's Management believes these new data now confirm the continuity of anomalous gold mineralization for at least 3 kilometres along the Shangmangyang fault structure, and the presence of extensive bedrock gold mineralization beneath the oxide gold deposits previously located at Guanming and mined at Bajowa, a full 35 km long strike from the historical and current production area at Guanlingpo. Unexplored areas with extensive overburden cover that lie between these zones offer a high potential for new discovery along the Luxi Gold Belt. The coincident IP and gold in bedrock anomalies identified to date have located excellent drill targets that will be tested in the coming months.

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 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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