Compass GOLD Signs Letter of Intent to Acquire Sikasso GOLD Assets IN Mali
Suite 1430 - 800 West Pender Street
Vancouver, BC
V6C 2V6
COMPASS GOLD SIGNS LETTER OF INTENT TO
ACQUIRE SIKASSO GOLD ASSETS IN MALI
Vancouver, BC and Sydney, Australia, July 13, 2017 – Compass Gold Corp. (NEX:CVB.H)
(“Compass” or the “Company”) and Mali Gold Exploration Pty Ltd (“MGE”) are pleased to
announce that they have entered into a binding letter of intent (the " Letter Agreement ") dated
July 13, 2017 (as signed by the two companies and M GE's principal shareholders), setting out
the terms and conditions for Compass to acquire all of the issued and outstanding shares of
MGE (the " MGE Shares ") in exchange for the issuance of Post-Consolidati on Shares (as defined
below) of Compass to the shareholders of MGE. It i s expected the acquisition of MGE (the
"Acquisition ") will constitute a Reactivation and a Reverse Tak eover of Compass as such terms
are defined in the policies of the TSX Venture Exchange (“TSXV” or the "Exchange ").
HIGHLIGHTS:
• MGE holds the Sikasso Property comprising five (5) gold exploration licenses in Mali,
West Arica covering a total area of 1,129 km 2
• Proposed Board renewal with former IAMGold founders to join board and management
of Compass following the Acquisition
• Existing and proposed Compass Board and Management have substantial experience in
managing gold exploration projects in Mali
Compass and MGE have common directors and sharehold ers (as outlined further below) and
therefore the Acquisition will not be an arm's leng th transaction under the policies of the TSXV.
Consequently, the board of directors of the Company (the " Board ") has formed a special
committee of independent directors (the " Special Committee ") to consider the Acquisition and
advise the Board whether the transaction would be i n the best interests of the Company and its
shareholders and to approve, if appropriate, the te rms of a definitive agreement in respect of
the Acquisition (“ Definitive Agreement ”). Compass will be required to obtain shareholder
approval for the Acquisition. Trading in the common shares of the Company is halted at present.
It is expected that the Company's common shares wil l resume trading, subject to Exchange
acceptance, among other things.
The Acquisition is not an arm's-length transaction as insiders of Compass are insiders of MGE
and directly or indirectly own both MGE Shares and shares in Compass. In particular James
Henderson and Madani Diallo are directors and share holders of both Compass and MGE and
Larry Phillips is a director of Compass and shareholder of both Compass and MGE.
Terms of the Acquisition
As part of the Acquisition, the Company will comple te a 5:1 consolidation of its shares (each
new share referred to herein as a " Post‐Consolidation Share ") and the Company will seek the
required approvals to be continued into Ontario.
Pursuant to the terms of the Letter Agreement, subj ect to satisfaction of certain conditions,
Compass will acquire the all the MGE Shares from the MGE shareholders on a 0.6:1 basis, which
would result in the issuance of an aggregate of 12, 000,000 Post-Consolidation Shares based on
the current number of outstanding MGE Shares. MGE currently has no other securities
outstanding. Compass has also agreed to pay up to $50,000 in transaction costs incurred by
MGE or MGE Shareholders in connection with the Acquisition.
The Post-Consolidation Shares to be issued to the M GE shareholders under the Acquisition will
be subject to any restrictions on resale, including escrow restrictions, imposed by applicable
laws and the Exchange.
Conditions Precedent
The parties’ obligations are subject to the satisfa ction of the usual conditions precedent to a
transaction such as the Acquisition, including:
1. the Special Committee recommending approval of the Acquisition by the Board and the
Company entering into a Definitive Agreement within 14 days of the date of the Letter
Agreement;
2. the completion of due diligence investigations by C ompass in respect of MGE, and MGE in
respect of Compass, to their sole and absolute satisfactions;
3. Compass having either closed a minimum C$5,000,000 private placement (up to a maximum
C$6,000,000) or secured an unconditional underwriti ng for a minimum C$5,000,000 private
placement, to be closed concurrently with the closing of the Acquisition;
4. consents being obtained from all third parties that are necessary to complete the Acquisition,
including without limitation, receiving all necessa ry approvals from Compass shareholders, the
TSXV, and MGE Shareholders to the Transaction (incl uding the requirement for any
independent report, independent valuations or the Special Committee) ; and
5. no material adverse changes in the financial condit ion, assets or liabilities (contingent or
otherwise) of either Compass or MGE.
Proposed Board and Management Changes
On the completion of the Acquisition, it is propose d that Malcom Carson and Lara Iacusso
resign from the Board of Compass and Bill Pugliese and Joe Conway be appointed. It is also
proposed that Larry Phillips will be appointed as P resident and Chief Executive Officer of
Compass.
Larry Phillips, Joe Conway and Bill Pugliese were t he founders and members of the senior
management team of IAMGold Corporation, an internat ional gold mining, development and
exploration company with operating mines across thr ee continents, including in Mali and
Burkina Faso, West Africa. Collectively this team directed international investments, joint
ventures, government relationships and operations f or IAMGold Corporation, growing the
company from a $50 million joint venture company to a $6 billion leading intermediate gold
producer, listed on the TSX and NYSE.
With existing directors James Henderson and Madani Diallo, Compass will have a leading board
and management team with substantial experience in finding and developing resources in Mali
and West Africa.
Concurrent Private Placement
It is a condition to completion of the Acquisition that Compass completes a concurrent private
placement of at least C$5,000,000 (up to a maximum of C$6,000,000). Compass expects to
provide further information regarding this concurre nt private placement if the Company enters
into the Definitive Agreement.
Completion of the Acquisition is subject to a numbe r of conditions precedent, including but
not limited to TSXV acceptance. The Acquisition can not close until the required shareholder
and Exchange approvals are obtained. There can be no assurance that the Acquisition will be
completed as proposed or at all.
About MGE
MGE is a private Australia company with gold explor ation permits located Mali. MGE owns the
Sikasso Project located in three sites in Southern Mali with a combined land holding of
1,129km 2. The Sikasso Project is located in the same regio n as several other multi-million
ounce gold projects in Mali.
The Company expects to provide further information regarding MGE and the Sikasso Project if
the Company enters into the Definitive Agreement.
About Compass
Compass is a public company organized under the law s of British Columbia. Compass is
currently listed on the NEX board of the Exchange.
ON BEHALF OF THE BOARDS
COMPASS GOLD CORP. MALI GOLD EXPLORATION PTY LTD
SIGNED: “Lara Iacusso ” SIGNED: “ James Henderson ”
Lara Iacusso, Director James Henderson, Director
Forward‐Looking Information
This news release contains "forward-looking informa tion" within the meaning of applicable
securities laws relating to the proposal to complete the Acquisition and associated transactions,
including statements regarding the terms and condit ions of such transactions. Readers are
cautioned not to place undue reliance on forward-lo oking information. Actual results and
developments may differ materially from those conte mplated by such information depending
on, among other things, the risks that the parties will not proceed with the Acquisition and
associated transactions, that the ultimate terms of the Acquisition and associated transactions
will differ from those that currently are contempla ted, and that the Acquisition and associated
transactions will not be successfully completed for any reason (including the failure to obtain
the required approvals from regulatory authorities) . 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.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in
the policies of the TSX Venture Exchange) accepts r esponsibility for the adequacy or accuracy of
this release, and the TSX Venture Exchange has in n o way passed upon the merits of the
proposed Transaction.
For further information please contact:
Compass Gold Corporation.,
Attention: James Henderson
Tel: +61 403 603 377
Website: www.compassgoldcorp.com