Sparton Resources’ subsidiary corporation Sparton Energy has executed a Memorandum of Understanding (MoU) with Voltaix LLC, a leading US specialty materials producer, for the sale of all germanium production from the Huajun Mine in Yunnan Province. The MoU contemplates an investment by Voltaix of about $US4.2 million dollars in a series of advances related to milestones in the development of the Huajun operations.
The agreement covers deliveries of germanium dioxide by Huajun to Voltaix over the life of the strategic supply agreement (SSA). The advances are to be recouped through deliveries of germanium dioxide pursuant to the SSA.
The price for this product is based on a blended formula related to actual processing and refining costs and local market pricing for germanium dioxide. The advances are to be used for several purposes, including additional safety upgrades and efficiency improvements that will increase production rates.
The Huajun Mine is in the final stages of having a new mining licence issued. At full capacity, the mine employs about 400 people. The mine has completed all necessary safety and security upgrades to meet new Chinese regulatory requirements and reactivation of the operations will begin immediately after the new mining licence is received. The mine has a seven year history of no major lost time accidents.