VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug. 15, 2016) - Asanko Gold Inc. ("Asanko" or the "Company") (TSX:AKG)(NYSE MKT:AKG) reports its financial results for the three-month and six-month period ended June 30, 2016 ("Q2"). The Company released its production and revenue results for Q2 on July 20, 2016. All amounts are in US dollars unless otherwise stated.
Q2 2016 Highlights:
Commenting on the Company's performance, Peter Breese, President and CEO, said, "The Asanko Gold Mine delivered a solid set of results for its first quarter of commercial production. On the operational side, two of the main ore zones in the Nkran pit started to be encountered towards the end of the quarter and, after a number of operational improvements and de-bottlenecking on the plant, the operations are now running at steady state levels, with the processing plant producing over 17,000 ounces of gold in July.
"On the financial side, the operations are now generating positive cash flow. Whilst costs per ounce of gold produced were high, this was expected as the mine was still ramping up to steady-state levels. Importantly, the mining and processing unit costs are in line with our feasibility estimates and are expected to improve. With a substantial increase in gold production expected during the second half of the year, we expect costs to decrease towards our life of mine forecasts."
This news release should be read in conjunction with Asanko's Management Discussion and Analysis and the Consolidated Financial Statements for the quarter, which are available at www.asanko.com and filed on SEDAR. There are no comparative numbers for the period as commercial production was declared on April 1, 2016.
Key Operating and Financial Highlights | |||
Asanko Gold Mine, 100% basis | |||
Q2 2016 | |||
Waste Mined (Mt) | 5,816,173 | ||
Ore Mined (Mt) | 1,242,657 | ||
Strip Ratio (W:O) | 4.7:1 | ||
Mining Cost ($/t mined) | 3.74 | ||
Ore Processed (t) | 702,318 | ||
Gold Feed Grade (g/t Au) | 1.69 | ||
Recovery (%) | 92 | ||
Processing Cost ($/t milled) | 13.79 | ||
Gold Production (oz) | 36,337 | ||
Gold Sales (oz) | 35,074 | ||
Average Realised Gold Price ($/oz) | 1,231 | ||
Cash Operating Costs1 ($/oz) | 785 | ||
Total Cash Costs1 ($/oz) | 846 | ||
All in Sustaining Costs1 ($/oz) | 1,280 | ||
Revenue ($m) | 43.3 | ||
Production Costs, including Royalties ($m) | 30.0 | ||
Income from Mine Operations ($m) | 0.33 | ||
Net Loss ($m) | (12.5 | ) | |
Adjusted Net Loss ($m) | (11.8 | ) | |
Operating Cash Flow before Working Capital Changes ($m) | $11.6 | ||
Net Loss per Share | ($0.06 | ) | |
Adjusted Net Loss per Share | ($0.06 | ) | |
Operating Cash Flow per Share | $0.06 |
Q2 2016 Operational Results
Q2 2016 Financial Performance
Q2 2016 Liquidity and Capital Resources
2016 Outlook and Opportunities
The Company re-iterates its production guidance of 90,000 to 100,000 ounces of gold production for the second half of 2016. Cash operating costs and AISC are expected to improve in the second half of 2016 as steady state operations have been achieved and gold production is in line with the rates envisioned in the life-of-mine operating plan.
The Phase 2 Definitive Feasibility Study ("DFS") is expected to be published during Q3 2016. The DFS will contain the development plan for the staged Phase 2A and Phase 2B expansions. Restructuring of the Company's debt repayments has allowed the Company to plan on financing Phase 2A from cashflow from the current operations.
The DFS will contain production and cost guidance for the existing operations for 2017 and 2018 which is expected to include additional production from the near-mine satellite deposits as well as the Nkran pit.
1Non-GAAP Performance Measures
The Company has included certain non-GAAP performance measures in this press release, including cash operating costs, total cash costs and all-in sustaining costs per ounce of gold produced. 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.
Cash Operating Costs per ounce and Total Cash Costs per ounce
Cash operating cash costs are reflective of the cost of production, adjusted for share-based payments, by-product revenue and non-cash inventory movements. Total cash costs include production royalties of 5%.
All-in Sustaining Costs Per Gold Ounce
The Company has adopted the reporting of "all-in sustaining costs per gold ounce" ("ASIC") as per the World Gold Council's guidance. ASIC include total cash costs, corporate overhead expenses, sustaining capital expenditure, capitalized stripping costs and reclamation cost accretion.
About Asanko Gold Inc.
Asanko's vision is to become a mid-tier gold mining company that maximizes value for all its stakeholders. The Company's flagship project is the multi-million ounce Asanko Gold Mine located in Ghana, West Africa. The mine is being developed in phases. Phase 1 commenced gold production in January 2016 and declared commercial production on April 1, 2016. Ramp-up to steady state production of 190,000 ounces per annum was achieved in Q2 2016.
Asanko is managed by highly skilled and successful technical, operational and financial professionals. The Company is strongly committed to the highest standards for environmental management, social responsibility, and health and safety for its employees and neighbouring communities.
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 on the Company, Investors should review the Company's annual Form 20-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.
Cautionary Note to US Investors Regarding Mineral Reporting Standards:
Asanko has prepared its disclosure in accordance with the requirements of securities laws in effect in Canada, which differ from the requirements of US securities laws. Terms relating to mineral resources in this press release are defined in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects under the guidelines set out in the Canadian Institute of Mining, Metallurgy, and Petroleum Standards on Mineral Resources and Mineral Reserves. The Securities and Exchange Commission (the "SEC") permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. Asanko uses certain terms, such as, "measured mineral resources", "indicated mineral resources", "inferred mineral resources" and "probable mineral reserves", that the SEC does not recognize (these terms may be used in this press release and are included in the public filings of Asanko which have been filed with securities commissions or similar authorities in Canada).
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