China's Largest Integrated Gold Producer To Acquire Interest In Sparton's Luxi Gold Project; Historical Agreement For Acquisition Of Chinese Resource Project Controlled By Foreign Investor.

TORONTO -- Sparton Resources Inc. (TSX VENTURE:SRI) (the "Company") reported today, it has signed a Letter Agreement ("LA") with the Zhao Jin Mining Industry Company Ltd. ("ZJ") of Shandong Province, China for the sale of a 41% interest in the Luxi Gold Project ("Luxi") in Yunnan Province. In the same agreement, Sparton's Luxi partner, Yunnan Nuclear Geological Exploration Brigade 201 ("201"), will sell a 10% interest to ZJ. After closing, the new Luxi Project interests will be ZJ-51%, Sparton-39%, and 201-10%.

E[acute accent]$C2.8 MILLION CASH PAYMENT TO SPARTON

E[acute accent]Under the terms of the LA the Company on closing, through its wholly owned subsidiary Sparton International Resources, will receive a cash payment 19,680,000 Renminbi (RMB) or approximately $2.8 million Canadian dollars. 201 will receive a cash payment on closing of 4,800,000 RMB. The Sparton and 201 interests in Luxi are held as interests in the Chinese registered foreign joint venture company Yunnan Sparton Minerals Company Limited ("YSM"). In the transaction ZJ will acquire a 51% interest in YSM.

E[acute accent]PROJECT VALUATION 48,000,000 RMB ($C6.86 million)

E[acute accent]On November 22, 2005 Sparton granted ZJ an exclusive 60 day period to conduct a full evaluation of all technical and commercial aspects of the Luxi Gold Project. This was subsequently extended to accommodate the Chinese and Canadian holidays. Following extensive negotiations between ZJ, Sparton, and 201, and a review of valuation reports by ZJ independent consultants, a Luxi Project value of 48,000,000 RMB was agreed to as of the date of the LA for the purposes of this transaction.

E[acute accent]CLOSING DATE MAY 25, 2006

E[acute accent]Final terms of the transaction will be set out in Comprehensive Formal Legal Contract to be executed by ZJ, Sparton and 201 on or before May 25, 2006. Final Closing will be subject to the approval of the boards of directors of ZJ, the Company and 201, and approvals required from any regulatory authorities.

E[acute accent]HISTORICAL AGREEMENT

E[acute accent]ZJ is China's largest fully integrated gold producer and precious metals refiner, with 13 operating gold mines and an extensive refining operation which supplies precious metals to the industrial and investment community. Over 15% of the refined gold traded on the Shanghai Gold Exchange is produced by ZJ. It is China's leading company in the processing of complex and refractory gold ores and concentrates. This agreement with ZJ represents the first time a major Chinese mining corporation has acquired an interest in a mineral project inside China that is controlled by a foreign investor. Sparton's advanced stage Luxi Gold Project was selected by ZJ as its primary target for acquisition after a review of several dozen gold exploration projects in China, owned by both domestic and foreign companies. ZJ is in the process of becoming an internationally traded public stock company, and is organizing an Initial Public Offering ("IPO") on the Hong Kong Stock Exchange which is scheduled to be completed later this year. Cazenove Asia, J. P. Morgan, and UBS Securities Asia Limited are acting for ZJ in this transaction.

E[acute accent]THE LUXI PROJECT GOING FORWARD

E[acute accent]Sparton's exploration at Luxi began in early 2004. Over 5000 metres of core drilling has been completed mainly in the area of the Luxi Gold Mine with positive results. The ongoing exploration program in the approximately 250 sq. km. exploration licence area has identified at least five other high priority target areas that will be drill tested later this year. Sparton will continue as operator of the project exploration for the foreseeable future and ZJ will assign technical staff to monitor and advise on various activities. YSM will be restructured to accommodate ZJ's new interest in the joint venture company. Sparton's total investment at Luxi is approximately $C3.7 million, and includes about $1.3M in capital assets represented by drilling equipment, vehicles and analytical service infrastructure supporting the project. Primary gold mineralization discovered to date at Luxi has many similarities to the gold deposits hosted in a similar geological environment in Nevada USA, including those in the famous Carlin area. The geologic potential of the Luxi Gold Belt, and exploration success by Sparton has been fully recognized by ZJ, and its involvement as the majority partner in Luxi provides the project with a technically competent, financially strong, and politically influential organization that will ensure the success of the project going forward. The synergies of Sparton's and 201's exploration experience and competence with ZJ's development and production experience provide the Luxi Project with a complete balance of skills necessary for success.

E[acute accent]Sparton's management is delighted that Zhao Jin has elected to join the Luxi Project. "Our relations with ZJ's corporate executives, advisors, and technical staff have been completely courteous, mutually respectful, and professional. Each party has received full cooperation from the others in the evaluation and negotiations leading to this agreement." Stated Lee Barker, President and CEO of Sparton. "We look forward to a long term and successful association with ZJ both at Luxi and elsewhere in international project exploration and development as ZJ evolves into a world wide resource company."

E[acute accent]Sparton Resources Inc. is a diversified mineral exploration company, which has been an active participant in the Canadian junior resource sector for over 20 years. The Company holds a portfolio of Chinese, Mexican, and Canadian mineral exploration properties focussing on base and precious metals. It is actively evaluating a number of exciting gold projects in Nevada, USA. In the energy sector it holds an interest in an undeveloped natural gas field in offshore Nova Scotia, Canada, and a royalty interest in the Blizzard uranium deposit in British Columbia, Canada.

E[acute accent] E[acute accent]NOTE : Chinese to Canadian currency conversion : 7 RMB equals approx. $C 1.00

E[acute accent]The TSX Venture Exchange has not reviewed and does not accept resp onsibility for adequacy or accuracy of the content of the information contained herein.

E[acute accent]Sparton Resources Inc. (TSX VENTURE:SRI)