Compass Gold Corporation

Compass Gold Corporation

July 04, 2013 09:00 ET

Compass Gold Corp.: CEO Letter to Shareholders

SYDNEY, AUSTRALIA--(Marketwired - July 4, 2013) - Compass Gold Corporation (TSX VENTURE:CVB) ("Compass" or the "Company"), which is focused on gold exploration on six properties in Mali, Africa's third largest gold producer issued the following letter:

Dear fellow Compass shareholders,

I would like to take this opportunity to firstly start by warmly thanking you for your continuing support in what is currently a very difficult operating environment in terms of market sentiment and gold price. Whilst we are unable to see what is ahead of us in terms of the future of the gold sector as a whole, Compass remains very positive in its outlook moving forward.

In the short time since my appointment as CEO, the Company has been very active on both the corporate and technical fronts and managed to continue to operate on a very low capital base. Ensuring the Company has sufficient funds to meet its listing and tenement commitments and keeping our Mali based technical team together have been, and remains, our highest priority.

Despite these very difficult conditions we have made significant inroads on a number of fronts as follows:

Current Status on Merger & Acquisition Process

As discussed in the Company's announcement of 3rd October 2012 Compass has been very active in investigating the potential of attaining exposure to the Australian Stock Exchange (the "ASX") through either i) a Initial Public Offering on the ASX, ii) a merger with an existing ASX listed entity; or iii) a transaction which would see the sale of the Compass Gold asset portfolio to an ASX listed company and a return of capital to Compass shareholders in the form of the ASX listed entity's shares.

In a backdrop of continuing negligible market support and no indication of access to capital from TSXV investors currently, it remains the unanimous view of the Compass board of directors that exposure to the ASX to provide access to new capital and a new market which we note has recognised and rewarded recent Mali gold exploration successes will be beneficial for the Company and its shareholders.

I can now report to you that these investigative activities, which have been ongoing for approximately 6 months, will, in the Company's reasonable expectation shortly be coming to a conclusion. We have over several weeks had a number of parties undertaking due diligence on the Company and its assets with a view to a business combination with Compass. Resulting from that exercise we are now down to the last groups and a decision will be made shortly which group we will choose to undertake to announce a proposed transaction with, the details of which management of the Company reasonably anticipates to be announced shortly and which will be subject to a number of conditions precedent including but not limited to shareholder and regulatory approval and financing. The reader should note that there is no assurance that such a proposed transaction will in fact be announced or if announced be concluded.

Joint Venture Opportunities

In addition to investigating the possibility of a transaction to gain exposure to the ASX, Compass has also been active in seeking, and in some cases accepting approaches from established mining houses looking at the potential of joint venturing on one or all of the properties within the Compass exploration project portfolio. Initial feedback from due diligence undertaken by one of these groups, following a Bamako office and site visit from senior technical members of that group was very positive. Whilst it needs to made clear that there is no guarantee that a commercial joint venture agreement will eventuate from the activities of these groups, we do however, anticipate further discussion around commercial terms with that particular group regarding the possibility of a joint venture on one or more of the projects over the next 4 to 6 weeks.

Compass has viewed it as critical that during and after any potential M&A activities involving the Compass assets that the resultant structure relating to a transaction, what ever form it is in, allows, without hindrance, the opportunity for a larger established mining entity with funding on hand, to propose and if attractive, undertake a joint venture on any of the Compass exploration permits. We view interest in joint venturing with the Company on its permits very favourably, particularly in these difficult market conditions where raising equity capital results in significant dilution to existing shareholders.

Technical Progress - Target Generation A Priority

Despite a very low capital base to work from, we have managed to retain the professional services of the Mali based technical team, which we regard very highly. During the last 6 months the team has been very active in a number of areas on all of the Company's gold exploration permits. Whilst technical work has had to be restricted to low capital-intensive activities (effectively non-drilling activities), office based data processing and interpretation activities in addition to low cost fieldwork including mapping and sampling has resulted in some significant advances in knowledge on all of the Company's permits.

The group has now had the opportunity to re-interpret all of the current aeromagnetic and geochemical data gathered over the past 4 years in addition to combining this with historical data over all of the Compass properties. With this newly re-interpreted information the team has narrowed down areas of prime interest and within those areas generated and refined specific targets ready for drill testing when capital becomes available.

Of primary importance has been the prioritisation and ranking of these drill targets which, tying into my site visit to Mali in February 2013 will allow us the opportunity to be able to deploy capital when available, very efficiently and effectively to drill test these now refined targets.

In closing I again on behalf of myself and the board & management of Compass Gold thank you for your continuing support for the Company and I look forward to be able to present to you further details of a proposed transaction in the very near term.

Ian Spence, President & CEO

About Compass Gold

Compass Gold Corporation, a Tier 2 mining issuer listed on the TSX Venture Exchange, is focused on gold exploration in Mali, Africa's third largest producer of gold. Compass, through its wholly owned subsidiary, Africa Mining SARL, owns a 100% interest in six gold exploration permits (Yanfolila, Dandoko, Moussala, Kolondieba, Solabougouda and Sirakourou), covering an aggregate of 1,138 sq kms in key gold-producing regions in southwest Mali, West Africa. Further information is available at


Forward-Looking Information

This news release may include "forward-looking statements" including forecasts, estimates, expectations, and objectives for future operations including but not limited to its ability to conclude a business combination with a third party, sale of assets, return of capital or initial public offering and a secondary listing on the ASX as a result of aforementioned and its ability to fund the exploration of its assets through the raising of equity or debt capital or through funding by a joint venture partner that are subject to a number of assumptions, risks, and uncertainties, many of which are beyond the control of Compass Gold Corporation including but not limited to capital markets and commodities risks and continued exploration success on its exploration permits. There can be and are no actual or implied guarantees that any of the above activities will be completed or completed on terms acceptable to the Company and its shareholders or approved by any regulatory authority having jurisdiction. Such forward-looking information represents management's best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Risks and uncertainties about Compass Gold's business are more fully discussed in the company's disclosure materials, including its MD&A, filed with the securities regulatory authorities in Canada and available at and readers are urged to read these materials. Compass Gold does not assume the obligation to update any forward-looking statement, except as required by applicable law.


Ian Spence, President & CEO

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