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Compass Gold Corp. (TSX-V:CVB): Exploring a Very Large Gold-Rich Region of Mali, Interview with Larry Phillips, President and CEO

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.

Larry Phillips – Pres. & CEO
T: +1 416‐648‐4767

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