Mr. A. Lee Barker reports

SPARTON ANNOUNCES FINAL APPROVAL OF PRIVATE PLACEMENT OFFERING FOR ITS CRITICAL METALS EXPLORATION PROGRAMS

Sparton Resources Inc. has received final approval from the TSX Venture Exchange for the non-brokered private placement announced on Dec. 8, 2023.

This financing was fully closed effective Dec. 31, 2023, with conditional approval from the exchange.

Sparton has issued a total of 11.5 million flow-through share (FTS) units of the company at a price of five cents per FTS unit. Each FTS unit consists of one common share of the company and one-half non-flow-through share purchase warrant (SPW) for a total of 5.5 million full SPWs. These include the finder warrants mentioned as follows.

Each FTS will consist of one common share of the company to be issued as a critical metal flow-through share within the meaning of the Income Tax Act (Canada).

Each full SPW issued with the FTS units will entitle the holder thereof to purchase one common share of the company at a price of eight cents for a period of 24 months following the effective issue date, or Dec. 29, 2025.

The company has also issued 3.25 million non-flow-through share units (NFTSUs) at a price of four cents for each NFTSU for proceeds of C$130,000. Each NTFSU consists of one common share of the company and one-half SPW for a total of 1,625,000 full SPWs.

Each full SPW issued with the NFTSUs will entitle the holder thereof to purchase one common share of the company at a price of six cents for a period of 24 months following the effective issue date, or Dec. 29, 2025.

For the second closing announced on Jan. 2, 2024, a total of one million FTSUs were issued to an insider of the company, which participation constitutes a related party transaction for the purposes of Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions. The company is relying upon exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 in completing the offering with the insider on the basis that the fair market value of such participation is less than 25 per cent of Sparton's current market capitalization.

A total of 500,000 full finder warrants were issued for this financing in connection with the issuance of the FTSUs. These may be exercised on or before Dec. 29, 2025.

The company intends to use the proceeds of the offering for general corporate purposes and the exploration of the company's critical metal projects in Ontario and Quebec. These include the Pense-Montreuil polymetallic metal project east of Englehart, Ont., and straddling the Ontario-Quebec border, where historical work has identified zinc-copper-nickel mineralization with minor cobalt values and little work has been done for over 20 years. The Oakes gold and related copper mineralization project near Matachewan, Ont., has over five untested drill targets in close proximity to the former-producing Ryan Lake copper and molybdenum mine and the current Young-Davidson gold producer.

Work will consist of airborne electromagnetic surveys, follow-up ground truthing of anomalies and diamond core drilling. The Oakes project has a number of untested induced polarization zones outlined by the company that have never been tested and some of these are related to rock units similar to those hosting the nearby copper and molybdenum mineralization.

The gross proceeds from the issuance of the FT shares will be used to incur resource exploration expenses, which will constitute Canadian exploration expenses as defined in Subsection 66.1(6) of the Income Tax Act and flow-through mining expenditures as defined in Subsection 127(9) of the Income Tax Act, which will be renounced with an effective date no later than Dec. 31, 2023, to the purchasers of the FTS units in an aggregate amount not less than the gross proceeds raised from the issue of the FT shares. If the qualifying expenditures are reduced by the Canada Revenue Agency, the company will indemnify each subscriber of FTS units for any additional taxes payable by such subscriber as a result of the company's failure to renounce the qualifying expenditures.

The closing of the offering has now received all necessary regulatory approvals, including those from the TSX Venture Exchange.

The FT shares, NFT shares and warrant shares and any common shares of the company that are issuable from exercising any warrants will be subject to a hold period ending on the date that is four months plus one day following the issue date of Dec. 29, 2023, in accordance with applicable securities laws.

We seek Safe Harbor.