TORONTO (CP) -- SpartonResources Inc. has struck a deal that could give China's largest gold producer a stake in the Toronto company's advanced stage gold project in China.
The Canadian junior miner (TSXV:SRI) said Wednesday it had signed a letter of intent with the Zhao Jin Gold Group under which the Chinese company has been granted exclusive rights to evaluate the Luxi project in Yunnan province and take an equity stake in the development.
Under terms of the deal, Sparton has granted Zhao Jin the exclusive right for a 60 day period to fully evaluate all technical and commercial aspects of the Luxi project.
Should the results of the evaluation be positive to Zhao, the company willl have the further right to acquire up to 50% in the Luxi project for a price still to be negotiated.
Sparton currently holds an 80% in the Luxi project through its interest in Yunnan Sparton Minerals Co., the Chinese foreign investment joint venture company set up to explore the Luxi area.
Spartan's total investment in Luxi so far is about C$3.5 million.
Zhao Jin, based in Shandong province in northeastern China, is currently the country's largest gold producer and refiner with annual production of more than 285,000 ounces. The company employs more than 11,000 employees and operates nine underground mines.
SpartonResources (TSXV:SRI) is a junior miner with base netals and gold operations in Canada, China and Mexico.
(c) The Canadian Press 2005