Sparton Resources has increased its interest in a secondary uranium recovery project in China.

Sparton and its China-based partner Beijing John Hanseng Investment Consulting (BJH) have signed a Memorandum of Understanding (MOU) with ARCN, the Airborne Remote Sensing Institute branch of the China National Nuclear Corporation (CNNC), to increase their joint interest in the program from 60% to 80%.

Under the original agreement Sparton had agreed to invest a minimum of Can$100,000 in the initial research program to identify and do initial field sampling of prospective waste ash and phosphate rock deposits or products in China. The company has now exceeded this obligation and with the advanced testing program under way on ash from the Xiaolontang power station in Yunnan, a much higher level of expenditure is anticipated, leading to bulk sampling and pre-feasibility level activities.

ARCN has indicated it does not wish to participate financially in this phase of the program but will continue to support the work with infrastructure, staff, and coordinated support from CNNC. As a consequence, ARCN has agreed to reduce its future commercial interest in the program from 40% to 20%.

After completion of the bulk sampling phase and ongoing program activities, and commissioning of a bankable feasibility study (phase 2) ARCN will, however, have the option to regain the diluted 20% interest by paying Sparton 2.5 times its total expenditure incurred in phase 2 or remain a 20% interest holder. It is estimated that the phase 2 program will cost about US$500,000 and will be completed before the end of the year.

All signatories to the MOU further agreed to allow Sparton to assign its joint 80% interest with BJH to its British Virgin Islands registered subsidiary, Sparton Resources International.