Asanko heads for upper end of 2019 guidance after record Q2 performance

Asanko Gold Mine, Ghana

ASANKO Gold produced record gold production in the second quarter of some 66,337 ounces from its Ghana operation Asanko Gold Mines (AGM) in which South Africa’s Gold Fields has a joint venture stake.

This means Asanko is on course for the upper end of its full year guidance which is between 225,000 to 245,000 oz after producing just over 120,000 oz year-to-date. Gold Fields bought a 50% stake in Asanko’s 90% share of subsidiary, AGM, for $202m.

Asanko also said it would post record second quarter revenue of some $85.6m after registering an average realised price of $1,290 per ounce for the period.

Asanko CEO, Greg McCunn, said the record production performance was “particularly impressive” as the company has in the final stages of waste mining at its Nkran pit. The pushback of the pit would be finished in the third quarter “… marking the end of our investment programme”. This would enable AGM to focus on cash generation, he said.

At the end of the quarter, the jont venture company held approximately $22.7m in unaudited cash of which $3m was restricted in favour of a gold hedging counterparty, $7.1m was in gold receivables and $2.4m in dore (with a market value of $3.7m).

The company held $6.8m in unaudited cash at the quarter end, and is scheduled to receive a further $20m in cash related to the joint venture transaction with Gold Fields on completion of Esaase development milestones. Esaase is Asanko’s main development project and was one of the main reasons Gold Fields invested in the company.

McGunn said in May that Asanko’s technical team was reviewing the current life of mine plan of AGM, including scenarios for the long-term development of the Esaase deposit. The partners were also assessing the exploration potential of the AGM’s land package, ” … particularly the highly prospective South Camp tenements”, he said.

“The joint venture partners are currently considering an optimal work plan and timing required to deliver an updated life of mine plan for the AGM and expect to update the market further in H2 2019,” said McCunn.