Compass Gold Corp. provided an update on the recently completed deep bedrock drilling on four prospects on the new Moribala permit, located on the Company's Sikasso Property in Southern Mali. Ten reverse circulation (RC) holes (833 m) were drilled in late June on four prospects (Dafaraba, Ngolokouna, Million-ki, and Dakoun) on the Moribala permit.

These areas had been previously drilled by air core (AC) drilling, and two prospects (Dafaraba and Dakoun) had encountered encouraging results. The Ngolokouna and Million-ki prospects did not identify gold mineralization in the AC program. However, the abundance of active artisanal mining operations and a clear correlation with ground geophysics and remote sensing studies suggested that the shallow AC drilling might have drilled through areas that had been mined out.

It was therefore decided that a single deep RC hole should be drilled on each prospect in an area of artisanal workings The best mineralization encountered during the RC drilling was reported from the Dakoun prospect where the previous twenty-hole AC program had intercepted several short intervals of mineralization, including 2 m at 1.12 g/t Au (from 21 m). MORC07 intercepted 7 m at 2.85 g/t Au (from 70 m), including 6 m at 3.29 g/t Au (from 70 m), and MORC08 intercepted shallow low-grade mineralization of 4 m at 0.25 g/t (from 34 m). MORC08 was designed to test deeper mineralization, but had to be stopped before the target structure was reached due to poor ground conditions.

Holes MORC09 and MORC010 were drilled 220 m to the NE to test the strike potential of the structure identified from ground geophysics. MORC09 was barren, but MORC10 contained three mineralized intervals over a length of 11 m, which included 1 m at 2.30 g/t Au (from 56 m). This indicates the structure is present, and the gold content is highly variable.

Four holes (totalling 347 m) were drilled at Dafaraban, the northwest of the Moribala permit over the interpreted Moribala Fault. Previous drilling in the area had identified a wide zone of shallow gold mineralization returning 21 at 0.50 g/t Au (from 1 m), including 7 m at 1.01 g/t Au (from 1 m). The purpose of MORC01 and MORC02 was to intercept this mineralization at depth to determine the down-dip continuity.

Neither hole encountered mineralization, with the gold content being 0.17 g/t Au in MORC01. It is very likely that the drilling missed the structure due to the angle of the hole (that is, the mineralization is associated with a cross fault on the Moribala fault.) Two additional holes were drilled 280 m to the southwest over the interpreted location of the Moribala fault. These holes returned narrow mineralized intervals of 1 m at 0.92 g/t Au (from 26 m; MORC03) and 1 m at 0.28 g/t Au (from 14 m; MORC04).

None of the holes were associated with artisanal workings, the closest workings being 200 m to the northwest of MORC01. At Nglokouna, a prospect characterized by abundant active artisanal workings, a shallow soil sample collected at its edge contained 43.6 g/t Au. This prospect covers an area of 0.5 sq.

km and follows the interpreted Tarabala fault over a distance of 1.9 km. Despite the clear evidence of gold being recovered in the vicinity, air core drilling returned only weak mineralization (grades less than 0.6 g/t Au over 1 m) and the single deep RC hole there (MORC05 for 54 m) recorded a maximum gold content of 67 ppb Au. Similar results were obtained at the Million-ki prospect, where drilling beneath workings that follow a fault parallel to the Moribala and Tarabala fault returned only 25 ppb Au.

The results of the drilling at the Nglokouna and Million-ki are clearly at odds with the evidence of gold recovery by the local artisanal miners. All four of the main prospects at Moribala are associated with surficial mining, and all four have returned variable AC and RC drilling results. There is clear support for surficial enrichment due to weathering, and artisanal miners have recovered coarse-grained gold.

Similar gold variability is seen at depth from the drilling at Dakoun and Dafaraba, and was investigated by a preliminary study where the course field rejects from the RC program were washed and sieved to separate the quartz vein material from the weathered wall rock and friable vein material (now clays). MORC01, MORC03, and MORC04 (all from Dafaraba) show elevated gold values in the quartz vein fraction (up to 7.47 g/t Au) compared to the original assay (47 ppb or 0.047 g/t Au). MORC04 also contains an unrecognized mineralized zone of 15 m at 0.22 g/t Au, which corresponds to the Moribala fault that the drilling targeted.

At Dakoun, reassaying of MORC07 showed the original assay results to be higher than the two fractions (2,584 ppb Au versus 1,277 ppb Au for the quartz fraction and 1,826 ppb Au for the clay fraction). In drill hole MORC08, an interval with 4 m at 0.25 g/t Au was increased to 4 m at 2.35 g/t Au (by using the quartz fraction), which was part of a much wider intercept of 11 m at 1.56 g/t Au. Caution must be taken with these results since they represent fractions of the rock material over the stated interval.

However, they clearly demonstrated that there is a variability of gold grade within the mineralized target zone, and the variability is likely caused by coarse-grained ("nuggety") gold associated with the quartz veins. Additional sampling and assaying of the surface workings and RC drill cuttings at Moribala, Massala West and Tarabala have been started to determine the degree of the nugget effect in these areas. Results are pending.

Due to the variable gold grades encountered during the AC and RC drilling programs at Moribala it is necessary to determine the true concentration of gold associated with the artisanal workings on the Moribala and Tarabala faults. This has been done through a series of large representative samples (10-20 kg) collected from the workings to increase the likelihood of detecting coarse grained gold a representative sample. RC chip samples from earlier drilling at Tarabala and Massala West have been collected, washed, sieved and assayed to determine if unrecognized mineralized zones are present at these showing, similar to those noted at Moribala.

Results from both of these studies are pending. If the results are positive, the Company plans to recover and process large samples (5,000 to 10,000 kg) from the workings to determine the presence of coarse gold, and investigate the possibility of recoverable gold in the weathered rock (laterite) associated with the Moribala and Tarabala faults. Preparations are being made to start this work in mid-October.