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Sparton Resources Inc.: Sparton Completes Acquisition of 51% Interest in China Germanium-Coal Operations; High Tungsten Values

^{Published on 2009-09-21 07:07:56 - Market Wire}
 

TORONTO, ONTARIO--(Marketwire - Sept. 21, 2009) - Sparton Resources Inc. (TSX VENTURE:SRI) (the "Company"), announced today that effective September 9, 2009 its wholly owned China subsidiary company Yunnan Blue Bay Mining Co. Ltd. ("YBB)" has completed the acquisition of a 51% share interest in 306 Huajun Coal Co. Ltd. ("Huajun"), the company producing germanium concentrates and thermal coal in the Lincang area of Yunnan Province, China. (See news release dated July 6, 2009). Effective September 9, 2009 YBB staff have assumed financial and technical control of the HJ business and are undertaking a complete technical assessment of the operations to develop a long term plan for upgrading and expanding the operations. All local staff have been retained on site and new marketing initiatives are being investigated for future germanium concentrate and thermal coal sales. YBB has also initiated a western financial management system for the operations. (See Sparton news release dated July 28, 2009)

Huajun Operations

Huajun currently has the installed capacity to produce up to 5 tonnes of germanium metal per year or about 5% of the world's current production. It is the fourth largest primary germanium producer in China and ranks approximately sixth in the world. As a primary germanium producing region, the Lincang area of China ranks first in the world with about 40% of total world production capacity from primary sources. The remaining 60% of world production is directly related to zinc output (mainly zinc refinery by-product) and this source has been suppressed in the current depressed base metal commodity cycle. Company objectives are to increase Huajun output by approximately 50% over the next 18 months and increase its share ownership in Huajun from 51% to 85%.

Tungsten and Rare Earths Found in Huajun Samples

Recent analyses completed on concentrate and coal ash samples from the Huajun operations have indicated that potentially commercial amounts of tungsten are present in these materials and further work is underway to ascertain if this valuable alloying metal can be economically extracted from these sources as a value enhancement to the operations.

The analyses indicate that Huajun concentrates contain up to 0.17% tungsten and 0.012% yttrium, a rare earth element. Coal samples, and samples from local surface exposures of host rocks from the three mines which comprise the Huajun operations were found to contain an average of about 0.04% tungsten ( with a high of 0.11%) and 40 parts per million yttrium.

Anomalous amounts of the rare earth elements cerium (up to 87 parts per million), and lanthanum (up to 39 parts per million) were also detected. A comprehensive sampling program will be undertaken in the mine area during the coming weeks to establish the distribution and average contents of these materials in the Huajun workings and local area.

All the analytical data reported above are from analyses done on coal, coal ash, rock samples and germanium concentrate by SGS Canada Inc. Mineral Services in Toronto, Ontario.

New Stock Options

Effective September 3, 2009, the Company has also issued a total of 350,000 new incentive options to consultants, one of which is an investor relations consultant of Sparton. These options will entitle the holders to purchase common shares of the company at a price of $0.10 per share and will expire on September 3, 2014. Vesting of the options will be in accordance with the Company Stock Option Plan.

Sparton's international exploration, development, 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.

Note: regarding the correction mentioned in Sparton's news release of September 1, 2009 the correct number of common shares to be issued as consideration for the Atikokan Ontario area properties is 505,000, not 500,500 as previously stated.

This press release contains "forward-looking statements" within the meaning of applicable Canadian securities legislation. Generally, forward-looking statements can be identified by the use of forward- looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "planned", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may" ,"could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, closing of transactions, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks related to exploration and development, the environment, local and foreign government regulation, currency fluctuation infrastructure, capital markets and additional funding requirements and the departure of key executives as well as those factors discussed in the Company's documents filed on SEDAR ([ www.sedar.com ]).

Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward-looking statements that are contained herein, except in accordance with applicable securities laws. Further information on Sparton Resources Inc. is available at [ www.sedar.com ].

This news release and the information contained herein does not constitute an offer of securities for sale in the United States and securities may not be offered or sold in the United States absent registration or exemption from registration.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.