Compass Signs Letter of Intent and Appoints Independent Committee to Considers Disposition of Malian Assets

SYDNEY, AUSTRALIA--(Marketwired - Jul 30, 2013) - Compass Gold Corp. (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:

1. Subject to certain conditions precedent, as outlined below, Compass agrees to sell all of the shares held in Compass BVI Mali to Oklo, and Oklo agrees to purchase all of such shares from Compass for an aggregate price of A$4,000,000 ("Purchase Price") plus the provision of the working capital facility (see below) plus the payment of transaction costs (see below) (collectively, the "Consideration").
   
2. The Purchase Price will be satisfied by the issuance to the Company by Oklo of an aggregate of 800,000,000 fully paid shares (the "Consideration Shares") in the capital of Oklo.
   
3. Oklo will provide a working capital facility of up to A$250,000 to be advanced during the period between the date of the Definitive Agreement and Closing on normal commercial terms including security arrangements ("Working Capital Facility"). At Closing, the Working Capital Facility will cease and the balance outstanding will form part of the Consideration.
   
4. Oklo agrees to fund reasonable transaction costs incurred by Compass or Compass BVI Mali in connection with the Disposition, up to a maximum of A$200,000 incurred from the date of this Letter Agreement, but none of which will be paid by Oklo until after the parties have entered into the Definitive Agreement ("Transaction Costs").

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:

1. the Special Committee recommending approval of the Disposition by the Board and the Company entering into a Definitive Agreement within 40 days of the date of the Letter Agreement;
   
2. the completion of due diligence investigations by Compass in respect of Oklo, and Oklo in respect of Compass, to their sole and absolute satisfactions, including the receipt of a 43-101 report acceptable to the TSXV;
   
3. Oklo having either completing on or before the closing of the Disposition a minimum A$600,000 private placement or secured an unconditional underwriting for a minimum A$600,000 private placement which must be closed within 60 days of the closing date of the Disposition;
   
4. Compass having assigned full rights to the Net Smelter Royalty Option Agreement between Compass and Africa Mining SARL dated December 3, 2009 to Compass BVI Mali;
   
5. all consents being obtained from all third parties that are necessary to complete the Disposition, including without limitation, receiving all necessary Oklo shareholder approvals, Compass shareholder approvals, and regulatory approvals (including the TSXV) and the requirement for any independent report or independent valuations and the ASX confirming in writing that Listing Rule 11.1.3 will not apply to the Transaction; and
   
6. no material adverse changes in the financial condition, assets or liabilities (contingent or otherwise) of either Compass, Compass BVI Mali or Oklo.

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:

1. if the Disposition is not completed as a result of the actions of Compass shareholders or the inability of Compass to satisfy the relevant conditions precedent, then:
   1. the Working Capital Facility will become due and payable. Compass will have a period of 120 days from the date of termination in order to repay the loan in full with interest;
   2. any Transaction Costs paid by Oklo will need to be repaid to Oklo within 60 days of the Termination Date; and
   3. Compass will be required to pay a break fee of A$150,000 within 60 days from the date of termination.
      
2. If the Disposition is not completed as a result of the actions of Oklo shareholders or the inability of Oklo to satisfy the relevant conditions precedent, then:
   1. the Working Capital Facility will be converted into a non-interest bearing loan and for a period of 6 months following the Termination Date, after which time the loan will become due and payable, or, at Oklo's option, may be converted into Shares in Compass; and
   2. any Transaction Costs paid by Oklo will be on account of Oklo and Oklo will have no recourse to Compass.

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 Corp., 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 www.compassgoldcorp.com.

Compass Gold Corp.ORATION

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 www.sedar.com 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.