New Mining Licence Received for China Germanium Operations Positive Drill Results from Mexico Royalty Property
Positive Drill Results from Mexico Royalty Property
TORONTO, ONTARIO -- (Marketwire) -- 09/10/12 -- SPARTON RESOURCES INC. (TSX VENTURE: SRI), (the "Company') is pleased to announce that the Huajun 306 Germanium Coal Mine ("Huajun") has received its new coal mining licence from the Yunnan Provincial Government authorities, in China. The new mining licence is valid for nine years and five months. The Huajun Mine is 85% owned by Sparton, subject to certain payments triggered by the delivery of the licence.
Receipt of the licence allows for the resumption of operations and for production of germanium concentrates to be re-established. Huajun has been on standby and maintained in good condition since the summer of 2011, when stockpiled coal, mined within the old mining licence area, had been processed.
The licensing process had been ongoing for more than two years due to various delays caused by changes in PRC coal mining regulations. The most recent and final filings were the Rehabilitation and Safety Plans, and the payment of the resource tax, which have been accepted and approved.
The new mining licence covers an area of approximately 0.82 square kilometres and extends approximately 225 metres vertically below the lowest level previously developed in the mining area. It represents the consolidation of three separate mines on the property, Chuang Zhong, 306, and Defu, which will now be operated as one mine under Huajun's management. Both internal and independent calculations (NI 43 -101 non-compliant) of the germanium contained in coal in the new mining Licence Area indicate that there are over 40 tonnes of Ge metal available for extraction. Management is confident that this can be further expanded through exploration and development. It is estimated that new production from Huajun can commence in about 8 weeks time, after rehabilitation of underground infrastructure is completed.
During the period Jan 1-June 30, 2012, new PRC guidelines for the consolidation of small coal mines under larger operators, designated Huajun as an operation that was required to be consolidated with a larger, local operator. Negotiations are currently underway for the purchase and sale of the Huajun assets. The Company is seeking fair compensation for the sale of Huajun in the context of the local market value. Management believes that the receipt of the mining licence enhances the value of the assets and may increase the options open to the Company in its negotiations. The fact that Huajun has itself acted as a consolidator in the area may also be a factor in these negotiations.
PRECIOUS METALS PROJECTS
At the Sierra Rosario silver-gold project in Mexico, American Consolidated Minerals Corporation ("AJC") and its 50% partner, International Northair Mines Ltd., completed a comprehensive surface geophysics and soil sampling program and six core holes on the property during Q2, 2012. Results were positive. The most significant drill results were obtained in Hole SR-003 where a 7.5 metre interval returned 179.3 g/t silver and 0.287g/t gold and a 4.9 metre interval yielded 66.7 g/t silver and 0.614g/t gold. In Hole SR-005, located approximately 400 metres to the southeast of Hole SR-003, a 3.35 metre interval returned 84.1 g/t silver, 0.102 g/t gold and 1.59% lead. Further work is being planned to follow up these results and test several other target areas on the claims. Sparton holds production royalties on base and precious metals from AJC's interest in the property.
In Nevada, Waseco Resources Ltd. ("WRI") is continuing core drilling on the Company's SBD claims in the prolific Battle Mountain Gold Area. Waseco may earn a 75% interest in the property by spending $900,000 in exploration on the property. Results are expected once the initial drill program is completed.
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.
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
416-366-3551 or Mobile: 416-716-5762
Sparton Resources Inc.
Edward G. Thompson