Toronto, Ontario – November 4, 2019 – Compass Gold Corp. (TSX-V: CVB) (“Compass” or the “Company”) announced today that SEMAFO Inc. (“SEMAFO”) has agreed to participate in a private placement, pursuant to which the Company intends to issue, on a non-brokered private placement basis, up to 14,286,000 common shares of the Company, at a price of $0.35 per share, for aggregate gross proceeds of up to $5.0 million (the “Offering”).
SEMAFO is the lead participant in the Offering and will be subscribing for $2 million. Assuming a fully subscribed Offering, SEMAFO will own approximately 10.8% of the outstanding common shares of Compass upon completion of the Offering. SEMAFO is a Canadian-based intermediate gold producer with over 20 years’ experience building and operating mines in West Africa. SEMAFO operates two mines, the Boungou and Mana mines in Burkina Faso. SEMAFO is committed to building value through responsible mining of its quality assets and leveraging its development pipeline.
The remainder of the Offering is expected to be subscribed primarily by existing shareholders who participated in the prior private placement of the Company completed in April 2019.
The proceeds of the Offering will be used to further advance the Company’s ongoing exploration efforts at its Sikasso Property in southern Mali, including the Farabakoura high-grade mineralized zone. The currently planned exploration drilling at Farabakoura and other high priority targets is set to commence later this month. That program is fully funded through to the end of December. The additional proceeds from the Offering will allow for the extension and expansion of drilling and exploration work through to the end of 2020, as well as for general corporate purposes.
Larry Phillips, Compass Gold’s President and CEO, said, “The addition of SEMAFO to our group of core investors is a major strategic step for Compass Gold. Our management team and Board of Directors are especially familiar with the growth and impressive accomplishments of SEMAFO in West Africa over the past several years, and we welcome the opportunity to build a strong, long term relationship that will benefit the development of gold discoveries at Sikasso. SEMAFO’s investment represents a strong endorsement of our early results at Farabakoura, the potential for new discoveries in the coming year, and the quality of our management and technical team. Further, SEMAFO’s extensive experience in West African exploration and development is expected to provide us with valuable access to people and mine sites, which will only enhance the abilities of our own team.” Mr. Phillips added, “The completion of this financing and strategic investment will strengthen our company and provide a clear path to continuing our exploration work through to the end of 2020, without any requirement to pause and access more capital. We are committed to expanding our drilling at Farabakoura, which we believe can bring us to an initial resource at this first of at least 20 drilling targets. We will also proceed to drilling at our highly prospective targets at our Boumban, Tarabala, Sodala, and Samangouela prospects, which reflects the scale of opportunity present across our 867 sq.km Sikasso Property.”
Benoit Desormeaux, SEMAFO’s President and CEO, said, “We are very pleased to become a shareholder of Compass Gold. This financing fits our strategy of investing in exciting exploration companies to complement our internal development. Compass Gold has excellent exploration potential and is located in a known mining jurisdiction with a seasoned management team. The future is bright for Compass Gold, and we are excited to become a shareholder at this stage of its development.”