Category: Silver / Gold

Asanko Gold Reports Q2 2019 Results

VANCOUVER, British Columbia, Aug. 01, 2019 -- Asanko Gold Inc. (“Asanko” or the “Company”) (TSX, NYSE American: AKG)reports second quarter (“Q2”) 2019 operating and financial results for the Asanko Gold Mine (“AGM”), located in Ghana, West Africa. The AGM is a 50:50 joint venture (“JV”) with Gold Fields Ltd (JSE, NYSE: GFI), which is managed and operated by Asanko.  All amounts are in US dollars unless otherwise stated.
 
Q2 2019 Asanko Gold Mine Highlights (100% basis)
 
Record proceeds of $85.6 million generated from record gold sales of 66,337 ounces at an average realized price of $1,290 per ounce
 
Record gold production of 62,067 ounces, on track to meet 2019 production guidance
 
All-in sustaining cost1 (“AISC”) of $1,180/oz, with 2019 guidance of $1,040 – $1,060/oz maintained as AISC are expected to drop in Q4 2019 when the Nkran Cut 2 pushback has been substantially completed
 
Generated EBITDA1 of $35.2 million and operating cash flows before working capital changes of $35.3 million
 
Net income after tax of $13.6 million

Q2 2019 Quarterly Highlights for Asanko Gold Inc.

Commenting on the Q2 2019 performance, Greg McCunn, Chief Executive Officer, said: “This quarter has been the best performance for the Asanko Gold Mine to date, with record production, record sales and record gold proceeds which enabled the mine to generate EBITDA1 of $35.2million and net income after tax of $13.6 million, up from a loss of $14.1 million in Q1 2019.  

We are well positioned to meet 2019 production and cost guidance as we enter the second half of the year and focus on maximizing cash flow from the operations. With limited capital expenditure planned in the near term, we expect to see the benefits of the Cut 2 pushback at Nkran positively impact all-in sustaining costs during the last quarter in the year.

Looking forward, we have now aligned our development philosophy for the Asanko Gold Mine with our focus on near term free cash flow generation.  We are collaborating with our joint venture partner on an updated Mineral Reserve Estimate which we expect to publish in Q1 2020.  At this stage, we do not anticipate that the updated Mineral Reserve Estimate will be based on any major capital investments such as further processing plant expansions or Esaase ore transportation infrastructure. Future capital investments will be measured against their return on invested capital based on this updated plan.”

Summary of Q2 2019 Asanko Gold Mine Operational and Financial Results

AGM (100% Basis) Q2 2019 Q1 2019 Q2 2018
Waste mined (‘000t) 7,808 6,584 9,814
Ore mined (‘000t) 1,056 1,505 945
Strip ratio (W:O) 7.4 4.4 10.4
Average gold grade mined (g/t) 1.6 1.4 1.4
Mining costs ($/t mined) 4.36 4.48 3.65
Ore treated (‘000t) 1,375 1,224 1,374
Gold feed grade (g/t) 1.5 1.6 1.4
Gold recovery (%) 93 93 94
Processing costs ($/t treated) 10.60 11.93 9.95
Gold production (oz) 62,067 60,425 53,501

 

Gold sales (oz) 66,337 53,421 51,785
Average realized gold price ($/oz) 1,290 1,292 1,286
Operating cash costs1 ($/oz) 660 878 582
Total cash costs1 ($/oz) 724 943 646
All-in sustaining costs1 ($/oz) 1,180 1,123 1,068
All-in sustaining margin1 ($/oz) 110 169 218
All-in sustaining margin($m) 7.3 9.0 11.3
Revenue ($m) 85.7 67.0 66.8
Income (loss) from mine operations ($m) 20.8 (11.9) 16.1
Net income (loss) after tax ($m) 13.6 (14.1) 2.7
EBITDA1 35.2 10.1 27.5
Cash provided by operating activities 20.5 8.8 18.4

Key Operational Highlights of the AGM (on a 100% basis)

JV Financial Performance

Asanko Gold Inc. – Summary Q2 2019 Financial Results

Consolidated Q2 2019 Q1 2019 Q2 2018
Net income (loss) attributable to common shareholders ($m) 6.1 (5.3) (142.3)
Net income (loss) per share attributable to common shareholders $0.03 ($0.02) ($0.63)
Adjusted EBITDA($m) 12.4 3.1 28.6

2019 Outlook
The Asanko Gold Mine is on track to meet 2019 guidance of 225,000 – 245,000 ounces at AISC of $1,040 – $1,060/oz.

Guidance Q2 2019 (Actual) YTD 2019 (Actual) FY 2019 (Forecast)
Gold Production (oz) 62,067 122,492 225,000 – 245,000
AISC ($/oz) 1,180 1,155 1,040 – 1,060

Further to the agreed development philosophy for the Asanko Gold Mine, which is to focus on near term free cash flow generation and minimize capital investments, the JV partners are working on an updated Mineral Reserve Estimate, which is expected to be published in Q1 2020.  At this stage, it is anticipated that the updated Mineral Reserve Estimate will not be based on any major capital investments such as further processing plant expansions or Esaase ore transportation infrastructure in the near term.

Appointment of Lynette Gould as Senior Vice President, Investor Relations
The Company is pleased to announce that Lynette Gould has been appointed Senior Vice President of Investor Relations, effective immediately.  Lynette was most recently Vice President of Investor Relations at Alio Gold and before that, Director of Investor Relations at Goldcorp.  During her eight years at Goldcorp,  she played a critical role in positioning Goldcorp’s new business strategy under its new leadership.  Lynette has built robust IR strategies and developed deep relationships within the investment community. She brings a wealth of experience in interpreting financial and investment information, understanding the operations and delivering this information in a consistent message to external stakeholders. Lynette holds a Chartered Financial Analyst (CFA) designation and has a Bachelor of Business degree.  

This news release should be read in conjunction with Asanko’s Management’s Discussion and Analysis and the Condensed Consolidated Interim Financial Statements for the three and six months ended 
June 30, 2019, which are available at www.asanko.com and filed on SEDAR.

Notes:
1 Non-GAAP Performance Measures
The Company has included certain non-GAAP performance measures in this press release. These non-GAAP performance measures do not have any standardized meaning. Accordingly, these performance measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Refer to the Non-GAAP Measures section of Asanko’s Management Discussion and Analysis for an explanation of these measures and reconciliations to the Company’s reported financial results in accordance with IFRS.

Qualified Person Statement
Frederik Fourie (Pr.Eng), Asanko Senior Mining Engineer, is the Asanko Qualified Person, as defined by Canadian National Instrument 43-101 (Standards of Mineral Disclosure), who has approved the preparation of the technical contents of this news release.

About Asanko Gold Inc.
Asanko’s flagship project, located in Ghana, West Africa, is the jointly owned Asanko Gold Mine with Gold Fields Ltd, which Asanko manages and operates. The Company is strongly committed to the highest standards for environmental management, social responsibility, and health and safety for its employees and neighbouring communities. For more information, please visit www.asanko.com.

Forward-Looking and other Cautionary Information
This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address estimated resource quantities, grades and contained metals, possible future mining, exploration and development activities, are forward-looking statements. Although the Company believes the forward-looking statements are based on reasonable assumptions, such statements should not be in any way construed as guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices for metals, the conclusions of detailed feasibility and technical analyses, the timely renewal of key permits, lower than expected grades and quantities of resources, mining rates and recovery rates and the lack of availability of necessary capital, which may not be available to the Company on terms acceptable to it or at all. The Company is subject to the specific risks inherent in the mining business as well as general economic and business conditions. For more information, investors should review the Company's Annual Form 40-F filing with the United States Securities Commission and its home jurisdiction filings that are available at www.sedar.com.

Neither Toronto Stock Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.

Enquiries:

Lynette Gould – SVP Investor Relations
Toll-Free (N.America): 1-855-246-7341
Telephone: +1 778 729 0608
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.