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Sparton
Resources Inc. (TSX VENTURE:SRI) (the "Company")announced today
that it has received the second payment of 11.972 million RMB (C$1.67
million dollars) from Starry Ltd. for the purchase of a 41% share
interest in SRI's 80% owned Yunnan Sparton Minerals Company Limited
("YSM"). Please see Company news release dated
November 21, 2006 for details of the terms of the transaction.
YSM
is the owner of all the Luxi Gold Project Exploration Licences
and project assets in Yunnan Province. SRI will retain 39% of the
shares in YSM. In the same agreement SRI's partner in YSM, Yunnan
Nuclear Exploration Team 201 ("201") has also received a second
payment of RMB 2.92 million (C$407,591) for the sale of 10% of
its YSM shares to Starry. The total purchase price for a 51%
share interest in YSM to be paid by Starry is RMB 24,480,000
or approximately $C3.5 million dollars.
The
total amount payable to SRI for 41% of the shares is RMB 19,680,000
or approximately $C2.9 million dollars and the amount payable to
201 is RMB 4,800,000 or approximately $C690,000 dollars. The currency
of the transaction is in Chinese RMB and the dollar amount of funds
received is calculated based on currency rates on the dates of
bank transfers.
The
amount received in this payment represents the completion of the
second and third parts of the transaction, namely the approval
of the YSM share transfer to Starry by the Yunnan Government and
the transfer of the Deep Exploration Licence (the "DEL") under
the Guanlingpo Mine to YSM.
SRI
received the first payment of RMB 3,772,000 or approximately $C540,000
dollars in late November, 2006.
The
remaining payment of RMB 3,396,000 (approximately $C485,140) owed
to SRI will be made within 7 days of cancellation of the 25% participation
right (see News Release dated June 10 , 2004) held by the Luxi
Gold Mine in the DEL, or a new agreement satisfactory to all YSM
shareholders is made with the holder of the Luxi Gold Mine Mining
Licence for the disposition of this 25% participation right.
Operating
expenses for YSM are now paid as to 57% by Starry and 43% by
SRI. The new cost sharing percentages are as a result of the 10%
share interest held by 201 being a non-contributing, carried interest
in YSM.
It
is important to note that all funds received by Sparton in this
transaction have been paid directly into the Company's Canadian
bank account and are available for its working capital.
"We
are very pleased to have successfully advanced this agreement with
Starry," stated A. Lee Barker Sparton's President and CEO. "Starry
is fully supported by one of China's largest integrated gold
producers and ongoing exploration at Luxi, including further
evaluation of the various new targets in the area will be organized
and executed by a Joint Working Committee with representatives
of all the Luxi stakeholders. Once again we have shown our ability
to operate successfully in China having repatriated over 60%
of our investment in Luxi to the Company treasury, while retaining
a 39% equity interest and a strong technical participation in
the project," Barker concluded.
(i)
Note currency exchanges used are: RMB 7.621 equals US $1.0 : C
$1.0 equals US $0.94
FOR FURTHER INFORMATION PLEASE CONTACT:
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