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Sparton
Resources Inc. (TSX VENTURE:SRI)(the "Company") reported today
that it has signed an agreement to evaluate the extraction of uranium
from waste material produced from a germanium production plant
in the Lincang Area of Yunnan Province, PRC. The Lincang Area hosts
at least two large coal basins (Bangmai and Mengwang) which contain
highly anomalous amounts of uranium and germanium ("Ge"). Currently
these support seven germanium producing operations which are producing
large amounts of uranium bearing ash and waste. Historically uranium
was produced in the 1970's and early 1980's from coal ash from
these deposits but all production ceased with the collapse of uranium
markets about 1985. Germanium is an industrial metal currently
valued at approximately $USD1250 per kg., which is widely used
in many electronics applications such as semiconductors and transistors,
as well as catalysts, optical devices, and various medical applications.
Under
the terms of the Memorandum of Understanding with the Hua Jun Coal
Mine Co. Ltd. ("HJC") Sparton and its China partners ARCN,
the Remote Sensing and Research Branch of the China National
Nuclear Corporation, and Beijing John Hanseng Investment Consulting
Co. Ltd. (collectively "Sparton") will do uranium analyses and
leach tests on the coal and various types of waste material produced
from burning of coal produced on the 2.7 sq. km Mining Licence
owned by HJC, and if results are positive Sparton can purchase
up to an 85% share interest in the HJC company and all of its
assets including the coal mines and germanium production facilities,
based on a negotiated value.
URANIUM
CONTENT OF HJC COAL ASH WASTE
Previous
sampling of coal ash waste material by Sparton's team indicated
that bottom ash and fly ash samples taken from the area contain
between 253 and 804 ppm uranium which corresponds to grades of
about 0.03% to 0.09% U3O8, or roughly 0.66 to 2.0 pounds of U3O8
per metric tonne. The germanium content of this ash was not determined
in these samples but it is known that the lower limit for germanium
recovery from coal in the area is about 100 ppm Ge. During a
site visit during the week of November 5, 2007 Sparton's staff
determined that all waste material from the operations are anomalously
radioactive and representative samples were taken from all the
various types of waste for additional analyses and uranium leach
tests.
HJC
OPERATIONS
HJC
has been operating three underground coal mines on its Mining Licence
for approximately 5 years. The mines are developed using inclined
shaft access and have a total capacity currently of about 250 tonnes
per day. They include the #306 Wenhua Mine, the #306 Chuanzhong
Mine and the #307 Defu Mine. The #306 mines are joined underground
and exploit uranium and germanium bearing coal solely for use in
germanium extraction by coal burning and flue dust recovery. The
Defu Mine coal contains sections that contain less germanium and
also produces thermal coal for local sales. The deepest current
workings are approximately 60 metres below surface. Operating history
indicates that there have been no serious accidents since operations
started in 2002, and that the mines are free of methane
gas and dry. Both manual and mechanical methods are used
for mining the coal and the seams average about 2.5 metres in
thickness. Ash content of the coal varies from 40-50%.
Mine
technical staff from HJC reported that the two #306 Mines contain
a "historical
resource" (Non 43-101 compliant) using Chinese
Reporting Standards, of 92.34 tonnes of Ge contained in 521,600
tonnes of coal. An additional 500,000 tonnes of mixed domestic
and high Ge coal is reported for the Defu Mine from the same
data base. All of this information is based on results of approximately
18 drill holes completed within small 0.6 sq km area with in
the 2.5 sq. km Mining Licence area held by HJC. No data are
available for the uranium content of the coal and ash except
for the results from Sparton's limited sampling done early
in 2007 which are reported above.
HJC
is currently producing 10kg per day of high germanium flue dust
valued at 5300 RMB per kg ($USD700 / kg) from the burning about
100 tonnes of coal. New recovery bins are currently under construction
which will allow an increase in production capacity up to the limit
of currently available coal production (250 tonnes per day).
Profit margin after taxes and all costs
is reported to be 40 % of revenue.
Sparton
staff will be reviewing the detailed technical and financial information
for these data as part of the due diligence procedures
for this project and will conduct a comprehensive underground
sampling program of the coal seams, in parallel with the detailed
sampling of the waste ash material sites in the HJC area. These
are estimated to contain approximately 75,000 tonnes of ash and
clinker. Leaching tests for uranium recovery will be conducted
on the various materials as well. The initial analyses indicate
a low lime content for the waste material.
NEW
CHINESE GOVERNMENT FOREIGN INVESTMENT POLICIES
Under
the new recently announced Chinese Investment Directory for Foreign
Investment which will come into effect on December 1, 2007, the "comprehensive
use of coal ash for extraction of valuable minerals and other uses" (Paragraph
23.2) has been put into the "Encouraged" category
. Further, the use of new technological applications in the treatment
of various forms of mine waste and tailings for recovery of valuable
minerals and environmental restoration of waste sites is also
now in the "Encouraged" category. Both of these new policies
are highly positive for the ongoing programs of Sparton and its
partners in its secondary uranium recovery and waste cleanup
programs in China.
Elsewhere
waste ash sampling programs are underway in Hungary and southern
Africa, and the testing program continues on the Xiaolongtan waste
pile material in Yunnan PRC. New results will be reported as they
become available.
NEW
DIRECTOR JOINS SPARTON BOARD
The
Company is pleased to announce that W. Brian Carter, B.A,Sc., CA,
CFA has joined Sparton's Board of Directors. Mr. Carter is a senior
management investment professional with over 40 years experience
in the investment industry, specializing in the resource sector.
Following an early career as a mining engineer he entered the financial
services industry and
has held senior management and research positions with a number
of major financial management organizations including Clarkson
Gordon and Company (now Ernst and Young), Loewen, Onaadtje, McCutcheon & Company
Ltd. ("LOM"), Stuart Investment Management Ltd., Jones Heward
Investment Management Inc, and Legg Mason Canada Inc.
At
LOM he was Head of Research and Portfolio Strategy, leading a team
of analysts serving an international client base of financial
institutions, and involved in that organization's Corporate Finance
Department specializing in transactions in the precious metals
and resource industry.
Mr.
Carter is currently Senior Portfolio Manager for Sceptre Investment
Counsel Ltd.
Sparton's
other directors welcome him to the board and look forward to benefiting
from his experience as the Company moves forward with its various
programs. Mr. Carter has been granted 150,000 options to purchase
Sparton common shares of at a price of $0.36 for a period of five
years commencing on today's date.
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. |
