Compass Gold Corp. reported to shareholders on the progress the Company has made since announcing the encouraging assay results from the initial trenches completed at Massala in September, which intercepted 20 m at 4.13 grams per tonne (g/t) gold (Au), including 4 m @ 19.19 g/t Au in Trench MATR001. Field Work: Nine new trenches have been excavated at 25-metre intervals at Massala, which is part of a 14- km long zone of mineralization that follows the Tarabala Fault, including three trenches to the north of MATR001 and six to the south.

More than 2,000 channel samples are being collected from these new trenches and are being prepared for assaying in accordance with the protocols established by an independent Canadian resource geologist who would be responsible for performing an NI 43-101-compliant resource estimation. This initial resource estimation and accompanying technical report is required for the formal application for a Small Mine Exploitation Permit under the pending new Malian Mining Code Decree. The cost to complete the sample collection, assay results, and resource estimate, inclusive of overhead costs, is approximately CDN$300,000.

Compass is planning to complete these tasks by the end of April 2024. Once these tasks are completed, subject to financing, Compass will finalize the mining equipment to be purchased and activate the related civil work and planning for the development of the small mine operations. As previously reported, four earlier trenches were dug along a total trend length of more than 3.5 kilometres to show that near-surface mineralization is consistent with the previous drilling results along the Tarabala Trend at the Tarabala and Massala prospects, and extend to depths of at least 80 to 100 metres.

To identify the strongest mineralized zones, these initial four trenches were dug more than 400 metres apart. To improve confidence in the continuity of the mineralization for the resource estimation, additional trenches at 25-metre spacings are required. The high-grade results from trench MATR001, averaging 4.13 g/t Au over a length of 20 metres, led to a focus on a strike length of 200 metres adjacent to this trench as the target of an initial resource.

Economic Modelling: In addition to the trenching and sampling work completed and ongoing in the field, the Company's technical team is incorporating data and third-party estimates into a comprehensive model, which validates the robust economics of a Small Mine scenario at Massala and Tarabala. Preliminary modelling indicates: Modest all-in capital cost of approximately USD 4.5 Million. Repayment of capital expected to be completed in less than one year.

Accelerated time for building, delivering and commissioning all plant and mine site facilities within approximately eight months of initial capital advances. Operating costs on a cash basis range from USD 725 (worst case) to USD 400 (best case) per ounce, depending on production cost assumptions. Free cash flow in year one after repayment of all capital and interest.

Total projected after-tax cash flow from the first four years of operation=USD 19.5 Million, which includes repayment of capita costs. Favourable tax deductions and exemptions (e.g. exploration expenses, accelerated depreciation on capital). New Malian Mining Code: Following the formation of a new government in Mali in 2020, a new Mining Code was adopted in August 2023, replacing the previous regulations, which had been in effect since 2019.

An amendment is being proposed to the recently adopted code, which is expected to delineate the precise terms and provisions applicable to a Small Mining permit in Mali and publicly issued as an official Decree. The terms of the Small Mining Decree are being finalized by the Mines Ministry in consultation with representatives of the Mining Industry. A final Decree is expected to be issued in the coming months, which will allow for formal applications, including by the Company, to be submitted.

The remaining assay work and other materials for submitting the Company's Small Mine Exploitation permit application are scheduled to be completed over the next three months and costs to complete it are projected to be approximately CAD 300,000, which covers corporate and Malian overhead over this period.