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Sparton
Resources Inc. (TSX VENTURE:SRI) (the "Company") reported today
that Zhaojin Mining Industry Co. Ltd., a Hong
Kong Stock Exchange listed company ("Zhaojin") has now assumed
management and operational responsibility for Yunnan Sparton
Minerals Company Ltd. ("YSM") and the Luxi Gold Project in Yunnan
PRC.
In
a recent transaction Zhaojin, through its 100% owned Hong Kong
subsidiary Sparky International Trade Company
Limited "(Sparky"), acquired all of the 51% share interest in
YSM which was held by Starry Limited ("Starry"). Starry was the
original vehicle used for the YSM share interest acquisition
(for details please see Company news
release dated July 18, 2007).
The
new share interests in YSM are now Zhaojin (Sparky) 51%, Sparton
39% and Yunnan Nuclear Exploration Team 201 ("201") 10%
(non contributing). Future costs of operating YSM and the Luxi
Project will be paid as to 57% by Zhaojin and 43% by Sparton.
The YSM new board
of directors will have seven members, four from Zhaojin,
two from Sparton, and one from 201. Lee Barker, Sparton's President
and CEO will remain as Deputy Chairman of YSM and a technical
advisor.
ZHAOJIN
Zhaojin
in China is the largest integrated gold producer and refiner and
received its Hong Kong Stock Exchange listing
in December 2006, following a successful IPO which raised over
USD$240 million dollars. This was up to that time, the largest
mining industry related IPO completed in Hong Kong. The YSM transaction
is the first new acquisition made by Zhaojin since its IPO. As
an international gold producer Zhaojin plans to expand into other
exploration areas outside of China, including other parts of
Asia and North America.
NEW
PROGRAM
Going
forward, the new YSM management team are planning a new exploration
program including 3000 metres of drilling to accelerate the identification
of primary and oxide gold resources in the Luxi area with the objective
of early production. The YSM head office for administration and
operations will be moved from Kunming to Luxi-Mangshe in order
to have a stronger presence locally in the working area and develop
stronger ties to the local community there. The transition is expected
to be complete by the end of August, 2007. Additional drilling
equipment and staff will be mobilized to the work area.
DISCUSSION
The
closing of this transaction and direct involvement by Zhaojin
will enable major time and cost savings in the future development
at Luxi. Having the program and company managed by a major Chinese
gold producer will enable most local issues to be dealt with
much easier and the move of YSM directly into the Luxi area will
demonstrate a strong project commitment to the local government,
as well as effect significant cost savings. There will be no changes
in the original YSM Joint Venture Agreement and
the Sparton's financial and commercial interests under the contract
continue to be fully protected as before.
This
transaction is without precedent in China. A majority interest
in a China based project, developed by a foreign company has been
sold to a major domestic mineral producer. It is expected that
Sparton and Zhaojin will become strong strategic partners in future,
and work together on new gold related projects outside of China.
Sparton's
international exploration 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.
FOR
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