10:08:27 EDT Sun 03 Jul 2022
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Sparton Resources Inc
Symbol SRI
Shares Issued 146,941,537
Close 2021-08-26 C$ 0.105
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Sparton raises $600,000 from warrant, option exercise

2021-08-26 10:40 ET - News Release

Mr. Lee Barker reports

SPARTON RESOURCES INC. CORPORATE UPDATE

Sparton Resources Inc. has raised approximately $600,000 in new capital through the exercise of outstanding warrants and incentive stock options. Ninety-five per cent of the outstanding warrants from the 2020 company financing (see Sparton news release dated Aug. 3, 2020) were exercised, as well as 74 per cent of the outstanding incentive stock options. Funds will be used to support company exploration programs, to retire a portion of corporate debt and for general corporate purposes.

Exploration update

Exploration programs have continued during this field season despite local COVID-19 restrictions, manpower shortages and forest fire work bans in certain areas. At Bruell in Quebec, Eldorado Gold has completed mapping and soil geochemical surveys over the entire property and is in the process of compiling all of the results. Depending on equipment availability, drilling is planned for this coming fall.

At the Oakes and Matachewan area precious metal and copper properties, a surface trenching program has been laid out in the field and is expected to begin shortly, when local contractor equipment is available. In addition, initial planning is under way for a possible three-dimensional IP (induced polarization) survey covering part of the Oakes area using the 3-D distributed array system. This IP method reduces the necessity for line cutting on the property and will be used to interpret targets in conjunction with the detailed magnetic survey completed last season.

VRB Energy

VRB Energy continues working on final certification of its advanced Gen3 flow battery system and negotiations for new contracts. The initial 100-megawatt-hour phase of the Hubei gigafactory project has begun, with cell stack manufacturing under way at VRB Energy's Beijing area factory. The company anticipates a series of major announcements relating to program developments over the coming months.

Dr. Mynyr Hoxa joins advisory board

Sparton is delighted to welcome Dr. Mynyr Hoxa to its technical advisory board. Dr. Hoxha is a professional geoscientist with more than 30 years of mining and exploration industry experience. In 2004, he joined FNX Mining as senior geologist and, in 2008, was promoted to chief geologist. Since 2015, he served as chief geologist at the Young-Davidson gold mine for Alamos Gold. The Young-Davidson mine is located less than three kilometres from Sparton's Oakes property. Dr. Hoxha's experience at Young-Davidson will be very valuable to the company in its work in the Matachewan area. He is very familiar with Sparton's past work at the Oakes property and understands the geologic controls on mineralization in the area. He has a wealth of relevant experience and a noteworthy record of base metal and precious metal discoveries in this region.

Edcor Drilling Services -- new contracts

The company's subsidiary, Edcor Drilling, a diamond core drilling service organization, has recently executed contracts for 3,000 metres of new work and is expected to contribute revenue to Sparton in the coming months. Several other contacts are under negotiation and Edcor is expected to be operational at least through year-end. Currently, the drilling industry is confronted with a major shortage of skilled workers and equipment, and the demand has created new opportunities.

New stock options

The Sparton board has approved, effective Aug. 24, 2021, the issuance of a total of 2.7 million incentive stock options priced at 10 cents per common share to its directors, advisers, consultants and officers. Thirty per cent of the options will vest immediately, 30 per cent will vest on Aug. 24, 2022, and 40 per cent will vest on Aug. 24, 2023.

Discussion

"The company wishes to thank its stakeholders for their support in exercising the warrants from the 2020 financing as well as the exercise of most of the outstanding stock options. Sparton is looking forward to positive developments on all fronts in the coming months," stated Lee Barker, chief executive officer of Sparton.

We seek Safe Harbor.

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