Sparton Resources Inc.
TSX VENTURE : SRI

Sparton Resources Inc.

March 20, 2007 09:33 ET

Sparton to Begin Drill Program at SBD Property in Battle Mountain Area of Nevada USA

FLOW THROUGH FINANCING ARRANGED NEW INVESTOR RELATIONS INITIATIVE UNDERWAY

TORONTO, ONTARIO--(CCNMatthews - March 20, 2007) - Sparton Resources Inc. (TSX VENTURE:SRI) (the "Company") announced today that it plans to begin drill testing its 100% owned SBD Gold Property in the Battle Mountain area of Nevada during the last week of March, 2007. A drilling permit has been received from the Nevada Bureau of Land Management and a contract signed with Diversified Drilling LLC of Missoula, Montana for a minimum of 1300 metres of reverse circulation drilling to begin on or about March 28, 2007. The Company has also arranged a new financing through the sale of flow through shares for expenditures on its new "Whiskey" copper-uranium project in eastern Canada and entered into an agreement with an investor relations firm to enhance investor awareness about Sparton's portfolio of energy and precious metals projects.

SBD DRILL PROGRAM

As reported in earlier news releases (Jan 5, 2007, March 22, and July 11, 2006 etc.) the recently completed geophysical program has highlighted strong structures hosting the three known gold zones at SBD as well as outlining four new zones which have never been drill tested. Previous drilling located wide intersections of 1.0 -1.5 g/t gold with local higher grade zones up to 5-9 g/t gold and the older exploration work emphasized a stratigraphic model (favourable rock types) as the hosts for the known gold mineralization without testing the structural zones and related intrusive rocks which are now known to be the dominant hosts for much of the gold in the Battle Mountain Area. SBD is centrally located in an area hosting nearly 15 million ounces of past, present, and planned gold production which is dominantly controlled by Newmont Mining.

Seven to ten holes are planned from four or five separate locations to test the North, West, and South Gold Zones. These will be located to both verify the past results and test for extensions of these zones. A comprehensive follow up drill program will be organized after the completion of the present work and compilation of all results. All past drill data has now been entered into a digital database to allow for more rapid interpretation of the information. Time permitting, this drilling program will also test at least one of the new geophysical targets.

Maps of the target areas and compiled geophysical results are available on the Company Website, www.spartonres.ca.

The drilling program is expected to take about three weeks to complete and results may be available within thirty days of completion subject to laboratory work loads.

SBD is an under explored area in the context of modern concepts of gold emplacement in this part of Nevada. This initial drill program will serve to confirm earlier exploration data and begin testing the exciting new targets located by the geophysical program.

FLOW THROUGH FINANCING

Sparton has entered into a subscription agreement with Mineralfields Group ("Mineralfields", the "Subscriber") wherein the Company will sell to Mineral fields up to $500,000 in Flow-Through Units (the "Units") at a price of $0.25 per Unit. Each Unit will consist of one common share and one-half (1/2) share purchase warrant with a term of 24 months exercisable at a price of $0.35 for the first 12 months and $0.50 in the second 12 months after closing. The warrant would contain a provision whereby the warrant will expire ( if unexercised) within 15 business days after Mineral fields has received written notice that Sparton's share price has traded and closed for 20 consecutive trading days at $0.50 or higher for the first 12 months and $0.70 or higher in the second 12 months after closing.

Limited Market Dealer Inc. will obtain a (cash) 7 % Finders Fee and Finders Fee Options equal to 5% of the number of Units subscribed for at an exercise price of $0.20 per unit.

Mineralfields Group (a division of Pathway Asset Management) is a Toronto-based mining fund with significant assets under administration. It offers super flow-through limited partnerships to investors in Canada and hard dollar resource limited partnerships to domestic and international investors. Information is available at www.mineralfields.com . This is the second financing arranged by Mineralfields on behalf of the Company. Final closing is subject to certain terms and conditions including a due diligence review on the part of the Subscriber and is anticipated to take place on or before March 30, 2007. Proceeds will be used to fund Sparton's exciting new "Whiskey" copper-uranium project in New Brunswick, where geophysical surveys are planned to begin shortly.

INVESTOR RELATIONS PROGRAM

Additionally, Sparton has finalized an arrangement with the Toronto based firm "Bay Street Connect" ("BSC") to provide investor relations ("IR") services to the Company. This organization specializes in providing communication services to publicly listed, resource sector organizations. The contract has an initial term of four months and may be extended monthly by Sparton or terminated on 30 days notice. The Company will pay a monthly fee of $5000 to BSC and grant BSC options to purchase 200,000 common shares of Sparton at a price of $0.215 per share. These options will vest in increments of 50,000 shares quarterly in arrears and a further 100,000 options will be granted if Sparton maintains the consulting agreement in effect beyond the initial four month period. All vested options will expire if not exercised within 30 days of termination of the service agreement. The Company looks forward to an enhanced investor awareness of Sparton's current projects in the coming weeks and months.

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

Contact Information

  • Sparton Resources Inc.
    A. Lee Barker
    President and CEO
    (416) 366-3551 or Mobile: (416) 716-5762
    (416) 366-7421 (FAX)
    Email: info@spartonres.ca
    or
    Sparton Resources Inc.
    Edward G. Thompson
    Director
    (416) 366-6083
    (416) 366-2713 (FAX)
    Email: egt@interlog.com
    Website: www.spartonres.ca