Updated on December 11, 2017

Short Report Shareholder Information

Asanko advises shareholders to disregard the incorrect and misguided claims made within short reports issued by Muddy Waters LLC on May 31, 2017 and K2 & Associates Investment Management Inc. in June 2016. These reports have no merit, are factually inaccurate and written for the sole benefit of the authors.

The Asanko Gold Mine is a large scale, multi-pit, long-life quality gold asset in Ghana, a stable West African jurisdiction. The Company has a viable and robust growth plan that is overseen by an Executive Management Team and Board with decades of experience and significant shareholdings in the Company.

Asanko recommends shareholders consult the detailed information on its current operations and growth plans recently published, including:

Investors who read the short reports should consider the following facts:

  • Defense of the Class Action Complaint
    • On December 11, 2017 Asanko announced the dismissal of a putative class action securities lawsuit against Asanko and several executives.
    • No payment or any other consideration was paid by or on behalf of Asanko or its executives in connection with the lawsuit’s dismissal, which was volunteered without prejudice by the lead plaintiff on November 21, 2017.
    • From the outset, Asanko and the individual defendants believed there was no merit to the lawsuit, which alleged that Asanko made misstatements or omissions in a technical report and a press release relating to the Company’s mineral resource estates. The case was filed in the United States District Court for the Eastern District of New York on May 31, 2017, the same day that Muddy Waters issued its short report.
  • 2017 Performance
    • On May 4, 2017, or 27 days before the Muddy Waters report, Asanko publicly disclosed a partial failure on the western wall of the Nkran pit. Asanko’s onsite monitoring systems predicted this well in advance and there was no impact on either production or safety. 
    • The Muddy Waters report falsely claimed Asanko will need between US$75-$115 million to rectify a partial wall collapse in the Nkran pit. In fact, we have largely rectified the collapse at a cost of US$3-$4 million. 
    • The Muddy Waters report falsely claimed that the fix would require Asanko to remove 37 million tonnes of waste rock and that this would take a full year. In fact, we removed 1.1 million tonnes in the slump area and it took only a few weeks. 
    • The design and pushbacks for the Nkran pit are planned appropriately for long term mining, based on the expertise of our team, including our independent consultants and identified Qualified Persons. The four planned pushbacks will see production in the Nkran pit through to the end of 2025 (see slide 14 of the June 5, 2017 presentation).
    • Asanko has published production guidance for 2017 of 205,000 – 225,000 ounces at a AISC of US$920 – US$960/oz, which delivers sustainable margins of approximately US$300/ounce with gold in the recent price range of US$1,220 to US$1,260/oz.
    • Cash provided by operating activities totalled $31.7 million, before working capital changes, in the third quarter of 2017.
    • The Company had cash balances of ~US$64.3 million, as at September 30, 2017.
    • Asanko has a very supportive debt financing partner, Red Kite, and has the option to defer the principal repayment of the US$150 million debt facility by one year to July 2019, for more information refer to page 22 of the Q3 2017 MD&A.
  • Reserves and Resources
    • Asanko relies on highly regarded, Tier 1 industry service providers and Qualified Persons, as defined by Canada’s National Instrument 43-101, who have signed off on the Mineral Resource Estimate for the Asanko Gold Mine.
    • Separate teams of experts have estimated a resource base of 6.6 Moz and a reserve base of 5.1 Moz.
    • As is the case with all mines, key drivers in valuation are reserves combined with the ability to exploit these reserves and to meet planned production targets. Asanko’s mineral reserves are calculated using US$1,300/ounce of gold, which is just below consensus long term forecasts of US$1,350/ounce of gold.