Starry Ltd has bought a 41% interest in Sparton Resources (SRI) 80%-owned Yunnan Sparton Minerals Company (YSM).

Yunnan Sparton Minerals Company is a People's Republic of China registered foreign joint venture company, and is the owner of all the Luxi Gold Project exploration licences and other assets in Yunnan Province.

Sparton will retain a 39% interst in Yunnan Sparton Minerals Company. In the same agreement Sparton Resources partner in Yunnan Sparton Minerals Company, Yunnan Nuclear Exploration Team 201 (201) has also agreed to sell 10% of its YSM shares to Starry. The total purchase price for a 51% share interest in YSM is RMB 24,480,000 or approximately $Can3.497 million.

The new share interests in YSM will be 51% Starry, 39% SRI and 10% 201. As a consequence of the earlier agreements between SRI and 201, the 10% share interest in YSM held by 201 is now a carried interest and 201 will no longer be responsible for future costs of YSM exploration and operations.

In a separate agreement Starry agreed to repay YSM 51% of YSM's Luxi exploration costs incurred between May 1, and September 30, 2006. This amounted to RMB 344,504 or approximately $Can49,214 and these funds have now been received by YSM. Because SRI has been responsible for all of these costs this amount will be credited to SRI's account within YSM.

Starting October 1, 2006 it has been further agreed that further expenses for YSM will be paid as to 57% by Starry and 43% by SRI. The new cost sharing percentages are as a result of the 10% share interest held by 201 being a non contributing carried equity interest in YSM.

SRI says it was pleased to have completed this agreement with Starry, which is supported by one of China's largest integrated gold producers. Future exploration at Luxi, including further evaluation of the new Nongchiuba area, will be undertaken by a Joint Working Committee.