TRANSACTION CLOSINGS

Sparton Resources Inc. (TSXV.SRI) (“Sparton” or the “Company”) is pleased to report that the two transactions approved by the Corporation’s shareholders on November 3, 2016 that relate to the purchase of a group of vanadium battery companies have now closed effective as of December 15, 2016. See Sparton news releases dated September 27, and November 7, 2016 for further background.

Transaction Closings

With shareholder approvals received, the Company and its 89.8% owned subsidiary, VanSpar Mining Inc. (”VMI”) have now completed the closing of both the Share Purchase Agreement (“SPA”) to acquire a 100% interest in JD Holding Inc, and the Share Acquisition Agreement (“SAA”) funding transaction. The closings of the SPA and SAA took place concurrently.

Under the previously announced SAA, HPX TechCo Inc. a North American private investment company has directly funded the acquisition by VMI of 100% of the shares of JD Holding Inc. (“JDH”) for US$3.3 million. The required payments to be made to the JDH eligible shareholders have been expedited according to the terms of the SPA.

At the closing, VMI caused 82% of the JDH shares to be transferred to the North American private investor, with the remaining 18% of JDH shares being retained by VMI.

Further, the North American private investor is required to contribute US$2.0 million of working capital to JDH within 20 days of the closing date. JDH is the parent company to an international group of vanadium battery manufacturing and distribution companies.

The required transaction payment of US$605,000 from the North American private investment company to VMI has been received.

JDH Investment

Sparton and VMI look forward to the success of JDH under its new ownership and operation. The reactivation of JDH’s Prudent Energy vanadium flow battery (“VRB”) manufacturing businesses present a strong opportunity in the energy storage sector. The success of the 8 megawatt hour VRB installation at the Zhangbei Project in China, which was constructed by Prudent Energy and commissioned by staff engaged by VMI, has successfully operated now for over 11 months since commissioning, and is clearly a showpiece for large scale energy storage systems and the recognition of VRB electricity technology applications in an international arena.

VRB is the ideal solution to increase renewable energy power generation efficiencies through electricity storage and has multiple other applications. Prudent has installed batteries in 12 different countries and has over 800,000 hours of testing and quality assurance development already completed. It has a large portfolio of intellectual property registrations supporting its existing and new technology development.

As a minority investor in JDH the Company and its subsidiaries are confident that its investment in JDH will provide significant value appreciation for the Company’s stakeholders going forward.
Successfully installed batteries in 12 different countries, most recently the company installed a battery at the Zhangbei Project in China.