Sparton Resources Inc. ("Sparton" or the "Company") is pleased to
announce that the final phase of commissioning for the Zhangbei Project's 8
megawatt hour vanadium flow battery is expected to begin on or about January 8, 2016. (Please see Sparton News Releases dated September 10,
November 12 and November 23, 2015).
Commissioning Work
The State Grid North China Company Limited's ("State Grid") "863" comprehensive testing program was completed satisfactorily on January 5,
2016. This test involved integrated full power charging and discharging of
all of the energy storage units currently installed at Zhangbei including
the 8 megawatt hour vanadium flow battery. These performance tests were
monitored by engineers and technicians from State Grid to ensure that the
battery meets design protocols. Following successful completion of the 863
testing procedures, State Grid has given permission to begin the continuous
240-hour operations test that will be the final phase of the 8 megawatt
hour vanadium flow battery commissioning program.
Both State Grid and VanSpar's technicians will monitor the battery
operation during this test period and will prepare comprehensive reports on
the test procedures and results. These will be submitted to State Grid for
acceptance.
Funding Through Subsidiaries
Funding for this commissioning project has been carried out by VanSpar
Mining Inc. ("VanSpar"), a 90.4% owned Sparton subsidiary. In the past two
months, VanSpar has raised Cdn$183,000 in convertible debt which could, if
the conversion feature is exercised by all of the current debt holders,
reduce Sparton's ownership in VanSpar to approximately 85% fully diluted.
Funds raised by VanSpar have been advanced to Jiujiang Sparton Vanadium
Trade and Tech Co. Ltd. ("JJSP"), a Sino Foreign Chinese joint venture
company 90% owned by VanSpar. JJSP has the commissioning contract with the
builder of the battery. Additional financing efforts by VanSpar are
continuing concurrently with the commissioning process.
Once the test period is successfully completed, and the performance
and acceptance reports are submitted to State Grid's satisfaction, a
payment, which is expected to be up to RMB 16.44 million (approximately
US$2.64 million), will become payable by State Grid to JJSP's client, the
battery builder, under a court-supervised payment process. After certain
deductions are approved by the court for payment, which are expected to be
in the range of RMB10.56 million (approximately US$1.70 million), the
balance will be available for payment to JJSP by its client and JJSP will
then repay VanSpar. The amounts payable at each step of this process are
undetermined at this time, as the timing for each step is not fixed. The
commissioning contract further provides for JJSP to continue the service
obligations of its client for this battery by providing 3 years of
maintenance on the installation. For this ongoing program, JJSP is to
receive from its client annual payments of RMB5.5 million (approximately US
$880,000) that are required to be paid by State Grid to JJSP's client.
About the Zhangbei Project
The Zhangbei Project, jointly launched in May 2010 by the Ministry of
Finance, the Ministry of Science and Technology, and the National Energy
Bureau is operated by State Grid. Located approximately 180 km north of
downtown Beijing near Zhangjiakou, in Hebei Province, it integrates wind
power, solar power, energy storage, and smart grid transmission
technologies. Clean power generated by this project supplies a portion of
north China's energy needs. The energy storage equipment currently
installed and being tested on site includes the 8 megawatt hour vanadium
flow battery being commissioned by VanSpar as well as smaller capacity
lithium and lead-acid storage batteries and capacitors. |
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Zhangbei is China's largest wind and solar energy electricity
generation and storage installation. It supports the storage and release of clean electricity into the power grid in an efficient and controlled
manner.
The project is a key component of China's Golden Sun Photovoltaic
Solar Pilot Project.
It currently includes 500 megawatts of wind power and 100 megawatts of
solar power, with 110 megawatts of energy storage capacity, and covers a
total land area of 200 square kilometres. Expansion plans for both
electricity generation from wind and solar sources, and additional energy
storage capacity have been recently announced.
With a total investment of 12 billion RMB (approximately US$1.8
billion), upon completion, it will be China's largest grid integration
photovoltaic solar power generation station and its largest land-based wind
farm in unit capacity, as well as the world's largest chemical energy
storage station.
The project represents state of art installations for all its various
components and will integrate a large number of different operational
technologies in a single new energy project. |