Asanko fires back after allegations from K2 Investment
MATTHEW KEEVIL, 20 July 2016
Asanko Gold (TSX: AKG; NYSE-MKT: AKG) has reported its inaugural production quarter at its Asanko gold mine in Ghana, but it is also busy countering criticism about its technical reporting from Toronto-based hedge fund K2 & Associates Investment Management. Asanko hit commercial production at its namesake operation in early April after completing the US$295-million development ahead of schedule. Asanko’s first phase of mining will focus on the Obotan project, which includes the Nkran pit and four satellite deposits.
This first phase of production is expected to total 2.34 million oz. over a 12.4-year mine life based on reserves of 2.5 million oz. gold hosted within 36.7 million tonnes grading 2.15 grams gold per tonne. Asanko is scheduled to produce 190,000 oz. gold annually.
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Asanko Gold’s (TSE:AKG) Q2 Results Will Be One to Watch
SmallCapPower, 19 July 2016
Asanko Gold Inc. (TSE:AKG) is a gold junior that seemed to have been doing everything right. Yet, a Toronto-based hedge fund recently questioned the calculation of the Ghana gold miner’s resource. Asanko has yet to issue any news in response to these claims, so the release of its second-quarter production and conference call on Wednesday, July 20, 2016, should be an event of great interest to its shareholders.
On June 29, 2016, the Financial Post reported that K2 & Associates Investment Management alleged that Asanko’s gold resources “don’t add up” and appear to be over-inflated by a factor of two. It must be noted that K2 has a short position in Asanko and, thus, has much to gain if the Company’s stock price were to fall.
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Hedge fund claims 90% downside potential at Asanko Gold
Peter Koven, 29 June 2016
Gold miner Asanko Gold Inc. has come under attack from a Toronto-based hedge fund that claims its stock price could plunge 90 per cent. The main allegation from K2 & Associates Investment Management Inc. is that Asanko’s gold resources “don’t add up” and appear to be over-inflated by a factor of two. K2 has a short position in Asanko, and in the grand tradition of short sellers, the hedge fund published its report on the company on a public website, allowing anyone to download it.
The strategy is reminiscent of previous short-seller attacks on Chinese-Canadian firms Sino-Forest Corp. and Silvercorp Metals Inc., which were highly effective in driving down the stock prices of the targets. However, this short report only had a minor impact. Asanko shares dropped five per cent on Wednesday, closing at $5.17 on the Toronto Stock Exchange.
“We thought it was important for our work and opinions to be entered into the public conversation,” K2 founder Shawn Kimel said in an emailed response to questions. He noted at least nine other groups are publishing opinions on Asanko and that it is the largest short position in K2’s precious metals portfolio.
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