Compass Gold Corp. (TSX-V:CVB): Exploring a Very Large Gold-Rich Region of Mali, Interview with Larry Phillips, President and CEO
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By Dr. Allen Alper, PhD Economic Geology and Petrology, Columbia University, NYC, US
on 1/17/2018
We learned from Larry Phillips, President and CEO of Compass Gold Corp. (TSX-V:CVB) that they
are essentially a relaunched company on the Toronto stock exchange. Through the recent acquisition
of Mali Gold Exploration Pty Ltd (MGE) and its Malian subsidiaries, Compass Gold holds five gold
exploration permits, located in three sites in southern Mali with a combined land holding of 1,179
km that comprise the Sikasso Property. The Sikasso Property is located in the same region as
several other multi‐million ounce gold projects, including Morila, Syama, Kalana and Kodieran. The
company's exploration program began on the first of December and will run through the coming year,
involving a budget of about 4.5 million dollars. Mr. Phillips is quite excited about the 35 drill
targets, identified by the pre-existing work. According to Mr. Phillips, Mali is the third largest
gold producer in Africa and the fastest growing gold producer on the continent.
Compass Gold Corp
Dr. Allen Alper: This is Dr. Allen Alper, Editor-in-Chief of Metals News, interviewing
Larry Phillips, President and CEO, of Compass Gold. Larry, could you give our readers/investors an
overview of your company, your focus and current activities?
Mr. Larry Phillips: Yes, thank you, Allen. Compass Gold is essentially a relaunched
company on the Toronto stock exchange. We're exploring for gold in a prolific region of southern
Mali. Our program began on the first of December and will run through the coming year, involving a
budget of about 4.5 million dollars. We're quite excited about the 35 drill targets that the pre-
existing work has identified. It's approximately 1,200 square kilometers of exploration permit
area that we're going to be exploring.
Dr. Allen Alper: That sounds very good. Could you tell us a little bit more about why Mali
is so important, and why you feel your properties in that region are so important for rather
significant quantities of gold?
Mr. Larry Phillips: To give you a general overview of the country, Mali is the third
largest gold producer in Africa, but the fastest growing gold producer on that continent and,
indeed, the region. It's bringing on resources and reserves through to production at a rate unlike
anywhere else in the world. Our Compass Gold group, consists of an experienced team of directors
and management, all of whom have decades of experience in Mali. I and two of my colleagues started
IAMGOLD with the exploration and discovery of the Sadiola gold mine in Western Mali. We're looking
to bring together some of that expertise into Compass Gold, along with Dr. Madani Diallo, our
director, who is heading up the exploration team in Mali.
That country has a track record in this part of the world that's unmatched. We're in three
specific green stone belts in southern Mali. Our properties, which have been worked on for almost
six years, are a privately held set of properties right in the midst of several large world class
deposits including producing gold mines that are presently in operation, through some of the
largest mining companies in the world. We're in the right district. These properties, structurally
and based on the data that we have, represent a great opportunity to discover and develop similar
resources to those of our neighbors.
Dr. Allen Alper: Sounds very good! Could you give our readers/investors some more
information about your background, and the other members of the board and the team?
Mr. Larry Phillips: Yes, thank you. I was one of the founders of IAMGOLD, back in
1989. Personally, my background is as a lawyer, but my dealings for the company are related to all
our partnership structures and negotiations, working with our host governments in the development
of these properties, mineral rights, and financing of the projects over the years. Bill Pugliese,
who is on our board of directors, and I were two of the founders of the company. Joe Conway, who's
joined us as a member of our board of directors, was CEO of IAMGOLD for a ten-year period that saw
the company grow from a market capital of about two billion to almost 8 billion. We had very
prolific growth within West Africa, as well as in South America and North America. A lot of
building, exploration, and development experience.
We also have Madani Diallo as a director, one of our largest shareholders, and the person
who was responsible for ushering these properties through to the initial stages of exploration. He
brought them to the point where they were ready to be brought into a public vehicle for actual
drilling and identifying the resources around 35 targets that he and his team have already
identified. So, a lot of experience. Jamie Henderson, our chairman, from the “old” Compass, and
his Transocean group are responsible for funding and bringing forward several successful
companies. One, an Australian company, has had success in exploration properties in this
particular region of southern Mali. A lot of good, practical experience in the area, but also
working with each other, so it's going to be, I believe, an effective and cohesive team moving
this strategy of exploration on our properties forward over the next 12 months.
The Sikasso Property, Republic of Mali
Dr. Allen Alper: Well, that sounds like you have an extremely strong background and
extremely strong board and team. That's great. Could you tell us and our readers/investors, a bit
about your share structure?
Mr. Larry Phillips: The completion of our financing was concurrent with the
acquisition of the five gold exploration permits on three sites, about 1,200 square kilometers in
total. The acquisition of those five properties was in return for twelve million shares of Compass
at 50 cents a share. Then we in turn raised 6 million of capital for the exploration budget and
operation of the company through a private placement, also at 50 cents a share. The participants
in that private placement received a share as well as a full-share warrant, for a 75 cent purchase
price, good for the next three years. That's essentially the structure. The vendors of the
properties did not receive cash. They received shares and therefore they are significant
shareholders and will be holding those shares over the course of three years, when they will come
out of escrow. So they are here working towards the long term success of the Compass shareholders
as a group, and we think that's a positive step.
Our shareholder group in the private placement ranged from individual shareholders to some
of the most well-known and most experienced mining investors in the Canadian and Australian
markets, investors who took up significant portions of that private placement. In addition to our
strong management team, we have strong support from the group of founding shareholders we've
attracted into Compass.
Dr. Allen Alper: That sounds excellent. Could you tell our readers/investors your primary
objectives for 2018?
Mr. Larry Phillips: We've set up a very specific drilling program to leverage the
extensive exploration that’s been completed over the past six years. It's all detailed in the NI
43-101 technical report that was filed last fall and described in our company materials leading up
to the acquisition and financing transaction. Essentially, we will conduct a drilling program
across all 35 targets that had been identified by Madani and his team. These range from areas of 6
to 10 square kilometers up to 40-50 square kilometers. Each of these targets is large enough to
contain a significant commercial resource. The bedrock layer, of the structure we're targeting,
appears to be at a relatively shallow depth of 15 to 20 meters. So we're going to be able to
access that rock through auger drilling, which will allow us to cover-drill quickly into all 35
targets over the next 12 months.
Before the end of the 12 months, we hope to identify more promising targets from that initial
work. Our plan will be to commence deeper reverse circulation drilling into those targets. Roughly
400,000 dollars of our budget will be deployed once we identify those most prospective targets.
It'll be a busy year for our team. We closed at the end of November, but drilling has commenced
and we expect to receive initial results for review before the end of January. Soon after that,
with our independent qualified technical advisor, Dr. Sandy Archibald, we’ll be in a position to
send a proper updated report on results to our shareholders in the market. It's an aggressive,
ambitious program, but we have the team and the experience to get it done. We're off to a very
good start for the New Year. All of that is looking good.
Dr. Allen Alper: Sounds like you have a great, exciting year planned ahead for you and your
investors. It'll be very interesting for all of us to follow your progress during the year and
your reports on your drilling. What are the primary reasons our high-net-worth readers/investors
should consider investing in Compass Gold Corp.?
Mr. Larry Phillips: Well, as an investor myself, I guess I could speak to that
question from my own perspective. First of all, we know we have an area prolific in large
commercial deposits of gold. The opportunity to find economic gold in this area has been
demonstrated by several of our neighbors. These are companies we know well, and they know us and
our group well. That's the first basis of confidence.
Secondly, our team has been working on this set of properties for almost six years. Madani
Diallo and his group have held it since 2011. I have a high degree of confidence in him, his track
record and the work he's already done. 4.5 million dollars has been spent over those six years, to
bring us to this stage.
The pyrite-bearing silica zone that ran 2.7 g/t
Au over a 1 m chip sampled interval
Importantly, because of the shallow nature of our target structure, we are going to be able to
advance our work quickly. By this time next year, we will have a lot of valuable information to
determine the importance of these targets and their potential value. Our expense is relatively
small, compared to other exploration from our IAMGOLD days in other countries.
To be able to test 35 targets for about 4.5 million dollars in total, compares very
favorably to some of the deeper drilling scenarios where you have to spend upwards of 50 or 75
thousand dollars on a single hole, and then go back and wait 2-3 weeks while the results are
reviewed to decide where to drill the next hole. That's an expensive, tedious, and challenging
form of exploration that we avoid entirely with our projects here.
Because of the shallow nature of our target structure, we can get answers quickly. If we
find something attractive and valuable, we have a lot of options given there are so many mines
right on our doorstep. Whether we go through the time and expense of building our own mine, or
perhaps bring the resources and gold that we find into the existing operations in our vicinity and
realize our return for our shareholders that much sooner, given this optionality. That's an
advantage of our location and our properties that just doesn't exist in so many other of the
thousands of resource companies exploring now.
Dr. Allen Alper: Sounds like very strong reasons to consider investing in your company. Is
there anything else you'd like to add, Larry?
Mr. Larry Phillips: Well, at this point, the key work is going to be happening in Mali
to determine what the drills and the rocks tell us, and getting that information out to our
shareholders. Most of our shareholders are currently under a four-month escrow period, because of
the private placement conditions, so there's not a lot of significant trading to be done, or
shares to be had. Nevertheless, we're going to spend some time getting out to see some existing
and potential shareholders, explaining more about the company and its properties and why people
should be paying attention as the results come out over the next few months and as the shares from
our private placement become tradable at the end of March. We have a few months to go through that
information process and look forward to meeting existing and new shareholders over that time to
get them ready for the first trading activity in Compass, towards the end of the first quarter of
next year.
Dr. Allen Alper: That sounds very good.
http://compassgoldcorp.com/
Larry Phillips – Pres. & CEO
lphillips@compassgoldcorp.com
T: +1 416‐648‐4767
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