Sparton Announces Replacement of Private Placement With Receipt of $1 Million Advance to Subsidiary
TORONTO, ONTARIO -- (Marketwire) -- 11/29/11 -- SPARTON RESOURCES INC. (TSX VENTURE: SRI), (the 'Company') is pleased to announce that an agreement has been made with Osisko Hammond Reef Gold Ltd., the operating subsidiary of Osisko Mining Corporation, ('Osisko'), (TSX: OSK)(FRANKFURT: EWX) to cancel the previously announced November 10th, 2011, $500,000 private placement by Osisko (related to the Osisko - Sparton Option Agreement for Sparton's exploration properties in the Atikokan area of northern Ontario (see Sparton's News Release dated March 21st, 2011). The above-mentioned cancelled private placement has been replaced with an advance payment by Osisko for drilling services which will allow Sparton to avoid the share dilution which would have been associated with the financing.
Osisko has agreed to provide an advance of $1 million dollars to Edcor Drilling Services ('Edcor'), a wholly owned subsidiary of Sparton, which is carrying out a major diamond drilling contract at Osisko's Hammond Gold Project near Atikokan Ontario. Edcor currently has two drills working on the project. The advance will be repaid by crediting Osisko on ongoing drilling invoices over the life of the drilling contract.
Company President Lee Barker commented: 'We are very grateful that Osisko has agreed to complete these financial transactions. Cancellation of the share subscription will avoid significant dilution given our current share price and we are pleased to have obtained the advance, which will enable the Company meet and discharge its financial commitments.'
Sparton Resources Inc. is a Canadian mining and exploration company focused on gold exploration in Canada. It is also presently operating (through its subsidiaries) a producing germanium mine in China, and developing secondary uranium recovery businesses there from radioactive waste such as coal ash, mine waste and tailings, and other types of material. As well, it is developing a world class vanadium opportunity in Jiangxi southern China.
Statements in this release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed under the heading 'Risk Factors' in the Company's filings with Canadian securities regulators. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. The Company does not assume any obligation to update any forward-looking statements, save and except as may be required by applicable securities laws.
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.
We Seek Safe Harbour.
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.
Sparton Resources Inc.
A. Lee Barker, President and CEO
Sparton Resources Inc.
Edward G. Thompson