Compass Announces Completion of Fully Subscribed Convertible Debenture Offering
Compass Announces Completion of Fully
Subscribed Convertible Debenture Offering
Toronto, Ontario--(Newsfile Corp. - December 3, 2024) -
Compass Gold Corp. (TSXV: CVB)
("
Compass
" or the "
Company
") is pleased to announce the completion of its previously announced
private placement offering and has issued, on a non-brokered private placement basis, 610.5
convertible debenture units of the Company (the "
Debenture Units
"), at a price of $1,000 per
Debenture Unit, for aggregate gross proceeds of $610,500 (the "
Offering
").
The Offering closed on
December 2, 2024 (the "
Closing Date
").
The proceeds of the Offering will be used principally to fund the delineation of the mineralized zone
identified at Tarabala, located on the Company's Sikasso Property in Southern Mali and to further the
establishment and development of a small gold mining operation on high-grade near-surface gold
mineralization at the Tarabala Trend (the "
Tarabala Project.
")
Insiders of the Company purchased an aggregate of 30 Debenture Units under the Offering for
aggregate consideration of $30,000.
Such participation is considered a "related party transaction"
within the meaning of Multilateral Instrument 61-101 -
Protection of Minority Security Holders in Special
Transactions
("
MI 61-101
").
Participation by insiders in the Offering was exempt from (i) the valuation
requirements of MI 61-101 by virtue of the exemption contained in Section 5.5(b) of MI 61-101, as the
Company is listed only on the TSX Venture Exchange; and (ii) the minority shareholder approval
requirements of MI 61-101 by virtue of the exemption contained in Section 5.7(1)(a) of MI 61-101, as at
the time the Offering was agreed to, neither the fair market value of the subject matter, nor the fair market
value of the consideration for, the Offering, insofar as it involved interested parties, exceeded 25% of the
market capitalization of the Company.
Summary of the Offering
Each Debenture Unit issued pursuant to the Offering comprises: (i) one $1,000 principal amount
unsecured convertible debenture of the Company (a "
Convertible Debenture
"); and, (ii) 5,000 common
share purchase warrants of the Company (each, a "
Warrant
"), with each Warrant being exercisable to
acquire one additional common share of the Company at a price of $0.18 for a period of 12 months
following the Closing Date.
An aggregate of 3,052,500 Warrants were issued pursuant to the Offering.
The outstanding principal amount of each Convertible Debenture is convertible, at the option of the
holder thereof, at any time prior to maturity, into common shares of the Company at a conversion price of
$0.18 per common share (the "
Conversion Price
").
The Convertible Debentures will mature on June 30, 2025 (the "
Maturity Date
") and bear interest at a
rate of 10% per annum, payable in cash or common shares, at the option of the Company.
Interest will
accrue and be paid in arrears on the Maturity Date.
Any payment of interest pursuant to the issuance of
common shares will be subject to the prior approval of the TSX Venture Exchange (the "
TSX-V
") and the
issue price per common share will be at the then applicable market Price (as such term is defined in the
applicable policies of the TSX-V).
If at any time prior to the Maturity Date, the closing price of the common shares of the Company on the
TSX-V is greater than $0.36 per common share for the preceding 20 consecutive trading days, the
Company shall have the option to convert the principal amount of the Convertible Debentures then
outstanding into common shares at the Conversion Price.
The Convertible Debentures will include covenants and events of default that are typical for a transaction
of the nature of the Offering.
Among other covenants, so long as the Convertible Debentures are
outstanding, the Company will not be permitted to: (i) declare or pay any dividend or other distribution, in
cash, to the holders of its issued and outstanding common shares; (ii) incur any secured debt ranking
senior to the Convertible Debentures, other than secured debt incurred by the Company in connection
with theTarabala Project; or (iii) use any funds generated from the operations of the Tarabala Project for
the purpose of conducting further exploration activities in respect of the mineral properties of the
Company, such that any further exploration will only be conducted using funds raised through the
issuance of new equity of the Company for such purpose.
For additional details concerning the Debenture Units, please see Compass news release dated
November 19, 2024.
The completion of the Offering is subject to final approval of the TSX-V.
All securities issued pursuant to
the Offering are subject to a statutory four-month hold period expiring four months and one day after the
Closing Date. All dollar amounts referred to in this press release are expressed in Canadian dollars.
None of the securities issued in connection with the Offering will be registered under the United States
Securities Act of 1933, as amended (the "
1933 Act
"), and none of them may be offered or sold in the
United States absent registration or an applicable exemption from the registration requirements of the
1933 Act.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall
there be any sale of the securities in any state where such offer, solicitation, or sale would be unlawful.
SMAT Agreement
This latest financing initiative follows the Company's
October 28, 2024
announcement concerning its
plans to produce gold at the Massala prospect located along the 15 km Tarabala Trend, which is
contained within the Company's Sikasso Property in southern Mali. Compass reported that it had
reached an initial joint-production agreement for toll-treating Compass ore at the adjacent Small Mining
Facility owned by SMAT, a Malian business group. The agreement calls for Compass to obtain a Small
Mining permit utilizing a 'toll treating' agreement, and for SMAT to deliver and complete the installation of
updated processing components at their production facility during Q1 2025.
Funds generated from the Company's small mine gold production will be used for operating cash
requirements, to fund repayment obligations in respect of the Convertible Debentures and previously
issued convertible debentures (
see Compass news releases dated July 4, 17 and 22, 2024),
for those
holders who do not elect to convert their debentures into common shares in the Company, and finally, to
pursue opportunities to expand production activities along other sections of the Tarabala trend and
conduct additional exploration across the exploration permit areas retained by the Company.
About Compass Gold Corp.
Compass, a public company having been incorporated into Ontario, is a Tier 2 issuer on the TSX- V.
Through the 2017 acquisition of MGE and Malian subsidiaries, Compass holds gold exploration permits
located in Mali that comprise the Sikasso Property.
The exploration permits are located in four sites in
southern Mali with a combined land holding of 1,173 sq. km.
The Sikasso Property is located in the
same region as several multi-million-ounce gold projects, including Morila, Syama, Kalana and Komana.
The Company's Mali-based technical team, led in the field by Dr. Madani Diallo and under the
supervision of Dr. Sandy Archibald, P.Geo, is conducting the current exploration program. They are
examining numerous anomalies first noted in Dr. Archibald's August 2017 "National Instrument 43-101
Technical Report on the Sikasso Property, Southern Mali."
Forward-Looking Information
This news release contains "forward-looking information" within the meaning of applicable securities
laws, including statements regarding the proposed use of proceeds of the Offering, the repayment of
obligations in respect of the Convertible Debentures and the development and production of gold
from the Tarabala Project. Readers are cautioned not to place undue reliance on forward-looking
information. Actual results and developments may differ materially from those contemplated by such
information. The statements in this news release are made as of the date hereof. The Company
undertakes no obligation to update forward-looking information except as required by applicable law.
For further information please contact:
Compass Gold Corporation
Compass Gold Corporation
Larry Phillips – Pres. & CEO
Greg Taylor – Dir. Investor Relations &
Corporate Communications
T: +1 416-596-0996 X 302
T: +1 416-596-0996 X 301
Website:
www.compassgoldcorp.com
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS
THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/232218