(All dollar amounts are United
States dollars unless otherwise stated)
VANCOUVER, Jan. 16, 2020 /PRNewswire/ - Asanko Gold
Inc. ("Asanko" or the "Company") (TSX, NYSE American:
AKG) is pleased to announce results for the fourth quarter
("Q4") and full-year ("FY") 2019 from 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. The Company expects to release its full
financial and operational results before the market opens on
February 13, 2020.
AGM Q4 Highlights (100% basis):
- Record proceeds of $96.8 million
generated from gold sales of 66,095 ounces at an average realized
price of $1,465 per ounce
- Record gold production of 66,112 ounces
- Mined 1.41 million tonnes ("Mt") of ore, including 0.56Mt of
ore from Esaase
- Processed record 1.46Mt of ore with an average gold grade of
1.5 grams per tonne ("g/t")
- Preliminary all-in sustaining costs1 ("AISC") of
$969/oz
- One lost time injury recorded during the quarter
AGM FY Highlights (100% basis):
- Record proceeds of $342.4 million
generated from gold sales of 248,862 ounces at an average realized
price of $1,376 per ounce
- Record annual gold production of 251,044 ounces, exceeding
upper end of guidance of 225,000 - 245,000 ounces
- Preliminary AISC of $1,112/oz, 5%
above guidance of $1,040 -
$1,060/oz
- One lost time injury with a lost time injury frequency rate of
0.16 per million man-hours worked during the FY 2019
"2019 was a pivotal year for the Asanko Gold Mine as it
transitioned from a significant capital investment phase to
generating free cash flow in the latter part of the year,"
said Greg McCunn, Chief Executive
Officer. "The processing plant continued to operate very well with
record production from 5.5 million tonnes processed in 2019,
resulting in the AGM exceeding its production guidance for the year
with 251,044 ounces produced. Based on preliminary estimates,
all-in sustaining costs for the year are expected to be about 5%
above the upper end of our guidance as costs in Q4 were adversely
impacted by the processing of lower grade stockpiles. We expect to
provide 2020 production and cost guidance in mid-February along
with the results of the AGM updated Life of Mine plan.
"Over the second half of 2019, the Company's financial
position strengthened considerably with our corporate cash and
receivables balance increasing to over $35
million at year-end, an increase of over $27 million. The Company also has no
debt."
Health and Safety
There was one lost time injury ("LTI") and total recordable injury
("TRI") reported during Q4.
During the FY, there was one LTI and TRI reported, resulting in
a LTI frequency rate and a TRI frequency rate of 0.16 per million
man hours worked, respectively.
Production
In Q4, the AGM sourced ore from the Nkran and Esaase pits,
including the Esaase South pit, as well as run of mine stockpiles.
At Nkran, waste mining operations of the final stage of the western
portion of the Cut 2 pushback were concluded early in the quarter.
During the quarter, 2.62Mt of waste and 0.85Mt of ore at an average
gold grade of 1.9 g/t were mined from the Nkran pit. The Esaase
pits collectively delivered 0.56Mt of ore at an average gold grade
of 1.3 g/t with 2.34Mt of waste mined.
In Q4 an upper bench slippage in the western wall of the Nkran
pit resulted in a higher reliance on the processing of lower-grade
stockpiles than forecasted. With slope stability radar monitoring,
the event was anticipated and the pit was vacated in advance of the
slippage with no injuries or damage to equipment. Full mining
operations resumed in the Nkran pit three days after the slippage
with a focus on clean-up operations which resulted in lower grades
being mined from the Nkran pit adversely impacting AISC this
quarter. The slippage is not expected to materially affect 2020
production and its impact, if any, on the longer term mine plan
will be included in the updated Life of Mine plan, expected to be
completed in Q1 2020.
The processing plant milled a record 1.46Mt at a gold grade of
1.5 g/t during the quarter with metallurgical recovery averaging
94%. For FY 2019, the processing plant milled 5.5Mt at a gold
grade of 1.5 g/t with metallurgical recovery averaging 94%.
Preliminary Costs
Preliminary operating cost estimates
for the AGM during the quarter are provided below, with final
operating costs to be released in conjunction with the FY 2019
Consolidated Financial Statements and Management Discussion &
Analysis on February 13, 2020.
In Q4, preliminary operating cash costs per
ounce1 for Q4 were $790, preliminary total cash costs per
ounce1 were $863, and
preliminary AISC per ounce were $969. Costs were higher than expected as a
result of an upper bench slippage in the western wall of the Nkran
pit which resulted in a higher reliance on the processing of
lower-grade stockpiles during the quarter. This led to
lower-than-anticipated feed grade which translated to
higher-than-expected production cost on a per-ounce basis.
For FY 2019 preliminary operating cash costs per ounce were
$776, preliminary total cash costs
per ounce were $845, and preliminary
AISC per ounce were $1,112.
AISC were 5% higher than the annual cost guidance of $1,040 - $1,060/oz.
AGM Key Production
Statistics
(100% basis)
|
Units
|
Q4
2019
|
Q3
2019
|
Q2
2019
|
Q1
2019
|
Q4
2018
|
Total Tonnes
Mined
|
000 t
|
6,362
|
7,477
|
8,864
|
8,088
|
9,740
|
Waste Tonnes
Mined
|
000 t
|
4,956
|
6,372
|
7,808
|
6,584
|
8,370
|
Ore Tonnes
Mined
|
000 t
|
1,405
|
1,105
|
1,056
|
1,505
|
1,370
|
Strip
Ratio
|
W:O
|
3.5:1
|
5.8:1
|
7.4:1
|
4.4:1
|
6.1:1
|
Average Gold Grade
Mined
|
g/t
|
1.6
|
1.5
|
1.6
|
1.4
|
1.5
|
Ore
Treated
|
000 t
|
1,460
|
1,439
|
1,375
|
1,224
|
1,238
|
Gold Feed
Grade
|
g/t
|
1.5
|
1.4
|
1.5
|
1.6
|
1.6
|
Gold
Recovery
|
%
|
94
|
94
|
93
|
93
|
95
|
Gold
Produced
|
oz
|
66,112
|
62,440
|
62,067
|
60,425
|
59,823
|
Sales and Liquidity
Gold production for the quarter totalled 66,112 ounces with gold
sales of 66,095 ounces at an average realized price of US$1,465 per ounce, generating record gold sales
proceeds of $96.8 million for the JV.
At the end of the year, the JV held approximately $43.8 million in unaudited cash ($3.0 million of which was restricted in favour of
a gold hedging counterparty and released on January 3, 2020), $9.1
million in gold receivables and $2.8
million in dore. The JV's $30
million revolving line of credit remained undrawn at
year-end.
The Company held $35.5 million in unaudited cash and
receivables at the year-end and has no debt.
Qualified Person Statement
The technical contents in
this news release have been approved by Mike Begg, Pr.Sci.Nat., Senior Vice President
Technical Services of Asanko Gold Inc., who is a "Qualified Person"
as defined by Canadian National Instrument 43-101 (Standards of
Mineral Disclosure).
Notes:
1Non-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. For a description of the methodology used to calculate
these non-GAAP performance measures, see the Non-GAAP Measures
section of Asanko's previously filed Q3 2019 Management Discussion
and Analysis; reconciliations of these measures to the Company's
financial results will be reported in accordance with IFRS in the
FY2019 MD&A to be filed in the coming weeks.
- Operating Cash Costs per ounce and Total Cash Costs per
ounce
Operating cash costs are reflective of the cost of
production, adjusted for share-based payments and by-product
revenue per ounce of gold sold. Total cash costs include
production royalties of 5%.
- All-in Sustaining Costs Per Gold Ounce
The Company
has adopted the reporting of AISC as per the World Gold Council's
guidance. AISC include total cash costs, corporate overhead
expenses, sustaining capital expenditure, capitalized stripping
costs and reclamation cost accretion per ounce of gold sold.
About Asanko Gold Inc.
Asanko is focused on building a
low-cost, mid-tier gold mining company through organic production
growth, exploration and disciplined deployment of its financial
resources. The company currently operates and manages the Asanko
Gold Mine, located in Ghana,
West Africa which is jointly owned
with Gold Fields Ltd. 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
Certain statements and information contained
in this news release constitute "forward-looking statements" within
the meaning of applicable U.S. securities laws and "forward-looking
information" within the meaning of applicable Canadian securities
laws, which we refer to collectively as "forward-looking
statements". Forward-looking statements are statements and
information regarding possible events, conditions or results of
operations that are based upon assumptions about future conditions
and courses of action. All statements and information other than
statements of historical fact may be forward looking statements. In
some cases, forward-looking statements can be identified by the use
of words such as "seek", "expect", "anticipate", "budget", "plan",
"estimate", "continue", "forecast", "intend", "believe", "predict",
"potential", "target", "may", "could", "would", "might", "will" and
similar words or phrases (including negative variations) suggesting
future outcomes or statements regarding an outlook.
Forward-looking statements in this news release include, but
are not limited to: statements in respect of AGM's generation of
free cash flow and statements in respect of the future strength of
Asanko's balance sheet. Such forward-looking statements are based
on a number of material factors and assumptions, including, but not
limited to: the accuracy of reserve and resource, grade, mine life,
cash cost, net present value, internal rate of return and
production and processing estimates and other assumptions,
projections and estimates made in the technical reports for the AGM
or in respect of AGM; the successful completion of development and
exploration projects, planned expansions or other projects within
the timelines anticipated and at anticipated production levels;
that mineral resources can be developed as planned; that the
Company's relationship with joint venture partners will continue to
be positive and beneficial to the Company; interest and exchange
rates; that required financing and permits will be obtained;
general economic conditions; that labour disputes or disruptions,
flooding, ground instability, geotechnical failure, fire, failure
of plant, equipment or processes to operate are as anticipated and
other risks of the mining industry will not be encountered; that
contracted parties provide goods or services in a timely manner;
that there is no material adverse change in the price of gold or
other metals; competitive conditions in the mining industry; title
to mineral properties; costs; taxes; the retention of the Company's
key personnel; and changes in laws, rules and regulations
applicable to Asanko.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause actual results,
performance or achievements to differ materially from those
anticipated in such forward-looking statements. The Company
believes the expectations reflected in such forward-looking
statements are reasonable, but no assurance can be given that these
expectations will prove to be correct and you are cautioned not to
place undue reliance on forward-looking statements contained
herein. Some of the risks and other factors which could cause
actual results to differ materially from those expressed in the
forward-looking statements contained in this news release, include,
but are not limited to: mineral reserve and resource
estimates may change and may prove to be inaccurate; life of mine
estimates are based on a number of factors and assumptions and may
prove to be incorrect; AGM has a limited operating history and is
subject to risks associated with establishing new mining
operations; sustained increases in costs, or decreases in the
availability, of commodities consumed or otherwise used by the
Company may adversely affect the Company; actual production, costs,
returns and other economic and financial performance may vary from
the Company's estimates in response to a variety of factors, many
of which are not within the Company's control; adverse geotechnical
and geological conditions (including geotechnical failures) may
result in operating delays and lower throughput or recovery,
closures or damage to mine infrastructure; the ability of the
Company to treat the number of tonnes planned, recover valuable
materials, remove deleterious materials and process ore,
concentrate and tailings as planned is dependent on a number of
factors and assumptions which may not be present or occur as
expected; the Company's operations may encounter delays in or
losses of production due to equipment delays or the availability of
equipment; the Company's operations are subject to continuously
evolving legislation, compliance with which may be difficult,
uneconomic or require significant expenditures; the Company may be
unsuccessful in attracting and retaining key personnel; labour
disruptions could adversely affect the Company's operations; the
Company's business is subject to risks associated with operating in
a foreign country; risks related to the Company's use of
contractors; the hazards and risks normally encountered in the
exploration, development and production of gold; the Company's
operations are subject to environmental hazards and compliance with
applicable environmental laws and regulations; the Company's
operations and workforce are exposed to health and safety risks;
unexpected costs and delays related to, or the failure of the
Company to obtain, necessary permits could impede the Company's
operations; the Company's title to exploration, development and
mining interests can be uncertain and may be contested; the
Company's properties may be subject to claims by various community
stakeholders; risks related to limited access to infrastructure and
water; the Company's exploration programs may not successfully
expand its current mineral reserves or replace them with new
reserves; the Company's common shares may experience price and
trading volume volatility; the Company's revenues are dependent on
the market prices for gold, which have experienced significant
recent fluctuations; the Company may not be able to secure
additional financing when needed or on acceptable terms; Company
shareholders may be subject to future dilution; risks related to
changes in interest rates and foreign currency exchange rates;
changes to taxation laws applicable to the Company may affect the
Company's profitability and ability to repatriate funds; the
Company's primary asset is held through a joint venture, which
exposes the Company to risks inherent to joint ventures, including
disagreements with joint venture partners and similar risks; risks
related to the Company's internal controls over financial reporting
and compliance with applicable accounting regulations and
securities laws; the carrying value of the Company's assets may
change and these assets may be subject to impairment charges; the
Company may be liable for uninsured or partially insured losses;
the Company may be subject to litigation; the Company may be
unsuccessful in identifying targets for acquisition or completing
suitable corporate transactions, and any such transactions may not
be beneficial to the Company or its shareholders; the Company must
compete with other mining companies and individuals for mining
interests; and risks related to information systems security
threats.
Although the Company has attempted to identify important
factors that could cause actual results or events to differ
materially from those described in the forward-looking statements,
you are cautioned that this list is not exhaustive and there may be
other factors that the Company has not identified. Furthermore, the
Company undertakes no obligation to update or revise any
forward-looking statements included in, or incorporated by
reference in, this news release if these beliefs, estimates and
opinions or other circumstances should change, except as otherwise
required by applicable law.
Neither Toronto Stock Exchange nor the Investment Industry
Regulatory Organization of Canada
accepts responsibility for the adequacy or accuracy of this
release.
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SOURCE Asanko Gold Inc.