- Quarterly gold production of 49,293 ounces and gold sales of 50,241 ounces, on track to meet 2017 revised production guidance of 205,000–225,000 ounces
- US$63.6 million in gold revenue at an average realized price of US$1,265 per ounce
- Nkran reconciliation confirming the Mineral Resource and Reserve Estimates
- Industry-leading safety record maintained with a rolling 12 month LTIFR of 0.19
Peter Breese, Asanko's president and CEO, said, "Overall, our quarterly production performance for Q3 was very encouraging, with positive results in a number of key areas: reconciliations confirming the Nkran resource model, management of ore losses and dilution and the plant achieving milling rates in excess of 13,500 tonnes on a per day campaign basis. Although July and August production was impacted by the three mill motor outages, which equated to in excess of 5,000 ounces of lost gold production, the quarter still produced a very respectable 49,293 ounces. Looking ahead to the final quarter of the year, we maintain our revised guidance of 205,000–225,000 ounces."
In an Oct. 19 company brief, Raymond James analyst Chris Thompson stated that although production was impacted by three mill motor outages, Asanko Gold was able to maintain "its revised production guidance of 205–225 koz." He pointed out that Raymond James anticipates "higher production in 4Q17, ramping up further in 2018 with the addition of production from the Dynamite Hill satellite deposit." He highlighted that "1,180k tonnes at a grade of 1.8g/t Au were mined during the quarter, compared with [their] estimates of 1,058k tonnes at a grade of 1.66g/t Au."
Raymond James rates Asanko Gold Outperform with a target price of CA$3.50.
In an Oct. 19 company update, Canaccord Genuity analyst Rahul Paul stated that "processing rates achieved 13,500 tpd during the quarter, but averaged 9,370 tpd due to three mill motor outages during the quarter resulting in 11 total days of lost milling time. Despite the downtime, we are encouraged by recovery rates that exceed our forecasts (94% actual vs our estimates of 93%)." He explained that Canaccord "expects that the company will need to consistently deliver on stated targets going forward to regain investor confidence and to fully address prevailing concerns regarding Nkran."
Canaccord rates Asanko Gold as a Buy with a target price of CA$2.50.
Andrew Breichmanas, an analyst with BMO Capital Markets, stated in an Oct 19 report that Asanko's "plant processed 862kt at 1.9g/t compared to our estimate of 800kt at 1.8g/t with recoveries continuing to exceed design levels at 94%." He noted that "the mine continues to generate cash with operations expected to improve further as Dynamite Hill becomes operational in Q4/17."
Breichmanas also highlighted that "delivering on near-term cash generation targets is critical to demonstrate performance of current operations, clarify timing of growth plans, and determine longer-term financing requirements."
BMO Capital Market rated Asanko Gold as a Market Perform with a target price of CA$2.00.
Asanko is currently trading at CA$1.23.
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1) Melissa Farley compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She owns, or members of her immediate household or family own, securities of the following companies mentioned in this article: None. She is, or members of her immediate household or family are, paid by the following companies mentioned in this article: None.
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Disclosures from Raymond James, Asanko Gold Inc., Company Brief, Oct. 19, 2017
ANALYST INFORMATION: Analyst Compensation: Equity research analysts and associates at Raymond James are compensated on a salary and bonus system. Several factors enter into the compensation determination for an analyst, including i) research quality and overall productivity, including success in rating stocks on an absolute basis and relative to the local exchange composite Index and/or a sector index, ii) recognition from institutional investors, iii) support effectiveness to the institutional and retail sales forces and traders, iv) commissions generated in stocks under coverage that are attributable to the analyst’s efforts, v) net revenues of the overall Equity Capital Markets Group, and vi) compensation levels for analysts at competing investment dealers.
The views expressed in this report accurately reflect the personal views of the analyst(s) covering the subject securities. No part of said person's compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in this research report. In addition, said analyst has not received compensation from any subject company in the last 12 months.
Raymond James Ltd. or its affiliates expects to receive or intends to seek compensation for investment banking services from all companies under research coverage within the next three months.
Raymond James Ltd-the analyst and/or associate has viewed the material operations of AKG.
Additional Risk and Disclosure information, as well as more information on the Raymond James rating system and suitability categories, is available for Raymond James at rjcapitalmarkets.com/Disclosures/index and for Raymond James Limited at www.raymondjames.ca/researchdisclosures.
Disclosures from Canaccord Genuity, Asanko Gold Inc., Flash Update, Oct. 19, 2017
Analyst Certification: Each authoring analyst of Canaccord Genuity whose name appears on the front page of this research hereby certifies that (i) the recommendations and opinions expressed in this research accurately reflect the authoring analyst’s personal, independent and objective views about any and all of the designated investments or relevant issuers discussed herein that are within such authoring analyst’s coverage universe and (ii) no part of the authoring analyst’s compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the authoring analyst in the research.
Analysts employed outside the US are not registered as research analysts with FINRA. These analysts may not be associated persons of Canaccord Genuity Inc. and therefore may not be subject to the FINRA Rule 2241 and NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.
Canaccord Genuity or one or more of its affiliated companies is a market maker or liquidity provider in the securities of Asanko Gold Inc. or in any related derivatives.
In the past 12 months, Canaccord Genuity or its affiliated companies have received compensation for Investment Banking services from Pretium Resources Inc.
Canaccord Genuity or one or more of its affiliated companies intend to seek or expect to receive compensation for Investment Banking services from Asanko Gold Inc. in the next three months.
An analyst has visited the material operations of Asanko Gold Inc. Partial payment was received for the related travel costs.
Up-to-date disclosures may be obtained here.
Disclosures from BMO Capital Markets, Asanko Gold, Oct. 19, 2017
Analyst's Certification: I, Andrew Breichmanas,, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and their affiliates, which includes the overall profitability of investment banking services. Compensation for research is based on effectiveness in generating new ideas and in communication of ideas to clients, performance of recommendations, accuracy of earnings estimates, and service to clients.
Analysts employed by BMO Nesbitt Burns Inc. and/or BMO Capital Markets Limited are not registered as research analysts with FINRA. These analysts may not be associated persons of BMO Capital Markets Corp. and therefore may not be subject to the FINRA Rule 2241 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.
Company Specific Disclosures:
Disclosure 8A: BMO Capital Markets or an affiliate has a financial interest in 1% or more of any class of the equity securities of Asanko Gold.
Disclosure 8C: BMO Capital Markets or an affiliate has a financial interest in 0.5% or more in the issued share capital of Asanko Gold.
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