SYDNEY, AUSTRALIA — (Marketwired) — 07/30/13 — Compass Gold Corporation (TSX VENTURE: CVB) („Compass“ or the „Company“) which is focused on gold exploration on six properties in Mali, Africa-s third largest gold producer, announces that it has entered into a non-binding letter of intent („Letter Agreement“) dated July 30, 2013 with Oklo Resources Limited („Oklo“) for Oklo to acquire 100% of the issued shares (the „Shares“) of Compass- wholly-owned subsidiary Compass Gold (BVI) Mali Corp („Compass BVI Mali“) („the Disposition“), which would constitute the sale of substantially all of the assets of the Company.
Compass BVI Mali owns 100% of the Company-s gold projects which are the Yanfolila, Dandoko, Moussala, Kolondieba, Solabougouda and Sirakourou gold exploration permits located in Mali, West Africa.
Oklo (ASX: OKU) is listed on the Australian Stock Exchange („ASX“). Oklo-s primary assets are two advanced gold projects located in the key gold producing region of Western Mali. These projects are located near to established infrastructure and close to the Mali-Senegal-Mauretania borders and north of the regional gold mining centre of Kayes. The projects are located within the important greenstone belt geology system and are in the same mineralized corridor that hosts the Sadiola (14m oz. ), Loulo (11m oz.) and Yatela (2.5m oz.) mines.
Mr. Henderson, the Chairman of the Company, is also Chairman of Oklo and consequently the proposed disposition to Oklo is a non-arm-s length transaction under the policies of the TSX Venture Exchange („TSXV“ or „the Exchange“). Consequently, the board of directors of the Company (the „Board“) has formed a special committee of independent directors (the „Special Committee“) to consider the Disposition and advise the Board whether the transaction would be in the best interests of the Company and its shareholders and to approve, if appropriate, the terms of a definitive agreement in respect of the Disposition („Definitive Agreement“). The Disposition would be subject to minority shareholder approval under the policies of the Exchange as well as approval by special resolution of all shareholders of Compass pursuant to the Business Corporations Act (British Columbia).
Proposed Disposition
Pursuant to the Letter Agreement the key terms of the Disposition are:
At the conclusion of the Disposition, Compass proposes to undertake a return of capital to Compass shareholders on the basis of approximately five (5) Oklo shares for every one (1) Compass share held („Return of Capital“). The exact Return of Capital ratio will be calculated after any remaining Compass debts have been dealt with, including any required debt settlement. On completion of the Return of Capital, Compass shareholders are expected to own approximately 60% of Oklo.
Conditions Precedent
The parties- obligations are subject to the satisfaction of the usual conditions precedent to a transaction such as the Disposition, including:
General
The Letter Agreement is not binding on Compass, other than clauses relating to termination and the covenants made by Compass and Compass BVI Mali, until the Special Committee has completed its investigations and recommended approval of the Disposition. The covenants include the specific requirement to form a Special Committee and the non-solicitation of further proposals by Compass.
The Letter Agreement contains a number of termination clauses in the event the Disposition is not completed by November 30, 2013, or such later date as agreed by the parties. In particular:
Completion of the Disposition is subject to a number of conditions precedent, including but not limited to TSXV acceptance. The Disposition cannot close until the required shareholder and Exchange approvals are obtained. There can be no assurance that the Disposition will be completed as proposed or at all.
Further information regarding the Disposition will be disclosed in the information circular to be prepared in connection with the Disposition.
The Board expects the work of the Special Committee to take several weeks, however all parties are working on finalising a Definitive Agreement as soon as practical.
About Compass Gold
Compass Gold Corporation, a Tier 2 mining issuer listed on the TSX Venture Exchange, is focused on gold exploration in Mali, Africa-s third largest producer of gold. Compass, through its wholly owned subsidiary, Africa Mining SARL, owns a 100% interest in six gold exploration permits (Yanfolila, Dandoko, Moussala, Kolondieba, Solabougouda and Sirakourou), covering an aggregate of 1,138 sq kms in key gold-producing regions in southwest Mali, West Africa. Further information is available at .
COMPASS GOLD CORPORATION
Ian Spence, President & CEO
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 NEWS RELEASE.
Forward-Looking Information
This news release may include „forward-looking statements“ or „forward-looking information“ as defined in applicable Canadian securities laws. Forward-looking statements include, but are not limited to, the timing of the work of the Special Committee, the timing of entering into a Definitive Agreement and regulatory and shareholder approvals, many of which are beyond the control of Compass. Forward-looking statements are based on a number of factors or assumptions including, but not limited to, the ability of the Special Committee to complete its review of the Disposition on a timely basis, obtaining regulatory and shareholder approvals on a timely basis and the parties being able to enter into the Definitive Agreement. Forward-looking statements are subject to various known and unknown risks and uncertainties, including, but not limited to: the risk that the Disposition will not be approved by the Special Committee, the shareholders of Compass or Oklo or regulatory authorities; risks related to the Disposition not being completed in the event that the conditions precedent are not satisfied; unanticipated costs and expenses; regulatory restrictions; and other risks and uncertainties. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. Such forward-looking information represents management-s best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Additional risks and uncertainties about Compass- business are more fully discussed in the Company-s disclosure materials, including its MD&A, filed with the securities regulatory authorities in Canada and available at and readers are urged to read these materials. Compass does not undertake any obligation to update any forward-looking statement, except as required by applicable law.
Contacts: Compass Gold Corporation James Henderson Chairman +61 2 88 233 100
Compass Gold Corporation Ian Spence President & CEO +61 2 88 233 100
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