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Thursday, 24th November 2005 (4262 views)

Canadian gold mining outfit Sparton Resources is set to sell an equity stake in its advanced stage gold project in China to Zhao Jin Gold Group (ZJ) – China's biggest gold producer.

The duo have signed a letter of intent giving ZJ the right to a full evaluation of its Luxi project in Yunnan, with a view to ZJ taking a 50 per cent equity stake.

It is the first time a Chinese mining outfit has evaluated a mineral resource project in China with majority foreign ownership.

ZJ – which boasts an annual production exceeding 285,000 ounces – has been hunting lucrative new projects for a while and selected the Luxi site out of "several dozen" options.

Sparton has invested C$3.5 million in Luxi so far and owns an 80 per cent stake in the project.

Located in northeastern China, the Luxi location shows raw potential with primary gold mineralsation discovered to date bearing similarities to deposits found in the illustrious Carlin zone in Nevada.

ZJ – which is also China's top gold refining company - has 60 days to give Luxi the once over before deciding whether to splash its cash.

 

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