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Asanko Gold Mine

Production

Located in Ghana, West Africa, the Asanko Gold Mine is a joint venture with Gold Fields Ltd (JSE, NYSE: GFI). Galiano and Gold Fields both have a 45% economic interest in the mine, with the Government of Ghana holding the remaining 10%. Galiano is the manager and operator.

The Asanko Gold Mine is a multi-deposit complex, with two main deposits, Nkran and Esaase, and multiple satellite deposits, situated on the Asankrangwa Gold Belt, and a 5Mtpa carbon-in-leach (CIL) processing plant. Gold production commenced in January 2016 and commercial production was declared on April 1, 2016.

In 2019, the mine exceeded the upper-end of guidance with record gold production of 251,044 gold ounces. In 2020 the mine is targeting 225,000 to 245,000 ounces of gold production at all-in sustaining costs of $1,000 to $1,100/oz (100% basis).

Approximately 2,400 people are employed at the mine. 99% of the total workforce are Ghanaians, of which around 41% are from our host communities.

The Asanko Gold Mine has a downstream tailing storage facility, further details are available here: Asanko TSF Disclosure

Geology

The Nkran deposit is located within the Kumasi Basin on the "Asankrangwa gold belt". The basin is bound to the south by the Ashanti Fault/Shear and the Bibiani shear to the north. The Asankrangwa gold belt expresses itself as a complex of northeast trending shear zones situated along the central axis of the Kumasi Basin. The Nkran deposit is located on a jog along the regional Nkran Shear, which is a zone of about 15 km in width and may be traced on a northeast to southwest trend for a distance of some 150 km. This is one of several major northeast trending shears/structures that bisect the Kumasi Basin/Asankrangwa Gold Belt.

The regional/local (Kumasi Basin) geological setting is heavily faulted and consists of an isoclinally folded sequence of metasediments, dominated by turbiditic sequences of greywackes and shales, intercolated with rare andesites and volcanoclastics, previously described as greywackes, phyllites, argillites and shales.

map

Exploration

The Asanko Gold Mine holds the largest land package with approximately 21,000 hectares on the highly prospective and under-explored Asankrangwa Gold Belt.

Gold-belts

Regional Geology 2020 Exploration Program Asumura Project, Sefwi-Bibiani Belt

Regional Geology

The Asankrangwa Belt is about 7 km wide and over 50 km long and the area is highly prospective with multiple geochemical anomalies aligning with the structures interpreted from the airborne VTEM and magnetic surveys completed by Galiano in 2015.

The geology of the Asankrangwa Belt comprises strongly deformed Birimian meta-sediments, with minor granitic intrusions and mafic igneous rocks. The lithological units are cut by steeply north-west dipping primary and secondary structures. It is this structural and geological architecture that have been important in the localization of gold mineralization, and provides the capacity for enhanced fluid flow forming major alteration systems in association with the gold bearing systems. The gold mineralization is linked to at least two separate deformation events and fluid emplacement, with certain similarities to the gold deposits on the Sefwi and Ashanti Greenstone Belts.

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2020 Exploration Program

For 2020 an exploration program has been initiated with five drill rigs planning to drill approximately 36,000 meters of diamond drilling (“DD”) and reverse circulation drilling (“RC”) during Q2 2020 (“Q2”) and Q3 2020 (“Q3”). Nine high priority targets will be tested including the highly prospective Miradani-Tontokrom trend on the Company’s South Camp mining concessions as well as the recently acquired Central West Camp concessions located immediately adjacent to the Company’s Obotan Mining Camp and the 5.4 million tonne per annum processing plant (Figure 1).

STRATEGY
NEAR TERM
The Company’s top priority is to replace depletion from mining activity in 2020 and 2021. Of those nine advanced targets five of them have the potential to replace depletion and include: Nkran South, Akwasiso, Abore, Midras South and Adubiaso. These will be drilled in Q2 and Q3 in order to allow results to be included into the AGM’s planned annual Mineral Reserve update as at December 31, 2020. The initial drill program consists of a planned 18,250 meters targeted at replacing depletion, split approximately one-third DD and two-thirds RC.

MEDIUM TERM
The Company’s medium term objective is to improve the business plan for 2023 to 2026 by delineating Mineral Reserves by the end of 2022 that have superior economics (return on invested capital) to Cut 3 at Nkran. Of the nine advanced targets four of them are in close proximity to the processing plant and are believed to be capable of being augmented into the mine plan from 2023 and will be drill tested in the initial program with approximately 18,000 meters of DD and RC drilling. Those targets include: Miradani Central, Kaniago West, Mepease and Tontokrom.

LONG TERM
In parallel to the near- and medium-term drilling programs, work will also advance on exploration targets with +1-million-ounce potential with the goal of these conceptual targets being in production by 2027 to replace Esaase. The current conceptual targets are on prospecting licenses and will require extensive work including soil sampling, ground geophysics and drilling.

Figure 1


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Asumura Project, Sefwi-Bibiani Belt

The Asumura Project is located on the western boundary of the Sefwi-Bibiani Belt, which is one of three major gold producing belts in southwest Ghana. The project is located 65 km southwest of Newmont’s Ahafo deposits. The targets at Asumura are disseminated open pit gold deposits.

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Mineral Resource Estimate as at 31 December 2019

Mineral Resource Estimate as at 31 December 2019

Deposit Measured Indicated Measured & Indicated Total Inferred
Tonnes
(Mt)		 Au Grade
(g/t)		 Au Content
(koz)		 Tonnes
(Mt)		 Au Grade
(g/t)		 Au Content
(koz)		 Tonnes
(Mt)		 Au Grade
(g/t)		 Au Content
(koz)		 Tonnes
(Mt)		 Au Grade
(g/t)		 Au Contained
(koz)
Nkran 8.5 2.14 586 8.5 2.14 586 - - -
Esaase 43.2 1.69 2,348 43.2 1.69 2,348 5.4 1.54 269
Akwasiso 2.8 1.82 165 2.8 1.82 165 0.4 2.16 29
Abore 4.7 1.46 221 4.7 1.46 221 0.9 1.69 48
Asuadai 1.3 1.32 55 1.3 1.32 55 0.0 1.24 2
Adubiaso 1.2 1.88 71 1.2 1.88 71 0.2 1.43 9
Stockpiles 2.3 0.76 57 2.3 0.76 57
Total 2.3 0.76 57 61.7 1.74 3,447 64.1 1.70 3,504 7.0 1.59 357

Notes:

  • Mineral Resources are reported at a cut-off grade of 0.5 g/t gold and assuming a gold price of US$1,500/oz.
  • Figures are rounded to the appropriate level of precision for the reporting of Mineral Resources.
  • Due to rounding, some columns or rows may not compute as shown.
  • he Mineral Resource is stated as in situ dry metric tonnes.
  • The Mineral Resource is reported inclusive of Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio- political, marketing, or other relevant issues including but not limited to those noted under Cautionary Note Regarding Forward-Looking Statements.
  • The Nkran, Esaase and Akwasiso MREs have been prepared by CSA Global who are independent of Asanko Gold. The Abore, Asuadai and Adubiaso MREs have been prepared by the JV technical team and reviewed and accepted by CSA Global.

Mineral Reserve Estimate as at 31 December 2019

Deposit Proven Probable Proven and Probable Total
Tonnes
(Mt)		 Au Grade
(g/t)		 Au Content
(koz)		 Tonnes
(Mt)		 Au Grade
(g/t)		 Au Content
(koz)		 Tonnes
(Mt)		 Au Grade
(g/t)		 Au Content
(koz)
Nkran 10.9 1.64 577 10.9 1.64 577
Esaase Main 29.1 1.33 1,245 29.1 1.33 1,245
Esaase South 4.5 1.44 210 4.5 1.44 210
Akwasiso 1.9 1.43 87 1.9 1.43 87
Abore 2.8 1.42 127 2.8 1.42 127
Adubiaso 0.8 1.51 38 0.8 1.51 38.0
Asuadai 1.0 1.12 37 1.0 1.12 37
Stockpiles 2.3 0.76 57 2.3 0.76 57
Total 2.3 0.76 57 51.1 1.41 2,320 53.4 1.38 2,377

Notes:

  • Mineral Reserves are reported assuming a gold price of US$1,300/oz.
  • Mineral Reserves are defined within pit designs guided by pit shells derived from Whittle Four-X™ software (Whittle).
    Mineral Reserves are reported based on the maximum of: (a) the calculated marginal cut-off grades for each of the pits ranging between (0.38 - 0.71) g/t gold, and (b) 0.50 g/t gold.
  • Figures are rounded to the appropriate level of precision for the reporting of Mineral Reserves. Due to rounding, some columns or rows may not compute as shown.
  • The Mineral Reserve is stated as in situ dry metric tonnes.
  • The mine plan underpinning the Mineral Reserves has been prepared by Snowden and reviewed and accepted by CSA Global. Both Snowden and CSA Global are independent of Asanko.
  • No Mineral Reserves have been estimated using Inferred Mineral Resources.
  • The estimate of Mineral Reserves may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues including but not limited to those noted under Cautionary Note Regarding Forward-Looking Statements.

Cautionary Note to United States Investors Concerning Estimates of Measured, Indicated and Inferred Resources:

The terms "mineral resource", "measured mineral resource", "indicated mineral resource", "inferred mineral resource" used herein are Canadian mining terms used in accordance with NI 43-101 under the guidelines set out in the Canadian Institute of Mining and Metallurgy and Petroleum (the "CIM") Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as may be amended from time to time. These definitions differ from the definitions in the United States Securities & Exchange Commission ("SEC") Industry Guide 7. In the United States, a mineral reserve is defined as a part of a mineral deposit which could be economically and legally extracted or produced at the time the mineral reserve determination is made.

While the terms "mineral resource", "measured mineral resource," "indicated mineral resource", and "inferred mineral resource" are recognized and required by Canadian regulations, they are not defined terms under standards in the United States and normally are not permitted to be used in reports and registration statements filed with the SEC. As such, information contained herein concerning descriptions of mineralization and resources under Canadian standards may not be comparable to similar information made public by U.S. companies in SEC filings.

Mineral resources which are not mineral reserves do not have demonstrated economic viability. With respect to "indicated mineral resource" and "inferred mineral resource", there is a great amount of uncertainty as to their existence and a great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of a "measured mineral resource", "indicated mineral resource" or "inferred mineral resource" will ever be upgraded to a higher category.

Accordingly, information herein containing descriptions of our mineral deposits may not be comparable to similar information made public by US companies subject to the reporting and disclosure requirements under US federal securities laws and the rules and regulations thereunder.

Technical Report

Ghana

Ghana is the oldest, democratic independent state in Africa, south of the Sahara. The country achieved independence in March 1957 and it has a stable and functioning constitutional democracy. The most recent parliamentary and Presidential elections took place in December 2016. The country has a free press.

The country is the 2nd largest producer of cocoa in the world and is also well endowed with natural resources, including bauxite, manganese ore, industrial diamonds, timber, solar salt and major offshore oil reserves.

Ghana is Africa's largest gold producer. It has a long history of large scale gold mining, with four prolific greenstone belts that have yielded +120Moz of gold in past production. There are a number of gold mining companies operating in the country, including AngloGold Ashanti, Newmont, Gold Fields and Golden Star. It is a respected mining jurisdiction. The mining tenure, royalty and tax laws are stable and well legislated. The country has a highly trained and skilled mining workforce at all levels of operation.

The climate is tropical with seasonal rains. It has a population of approximately 29 million and an educational level from primary to tertiary across country.

Ghana

Asanko Gold Ghana Management Team

Charles Amoah, Executive General Manager, the Asanko Gold Mine
Portrait

Mr Amoah is a Ghanaian national and a metallurgist with over 22 years of experience. He was promoted to General Manager, Asanko Gold Mine in early 2015, prior to this he was Manager - Processing. He has held a number of senior management positions in the Ghanaian gold mining industry, including General Manager of PMI Gold Corporation’s Obotan Project, as well as Acting General Manager and Metallurgical Manager of the Damang Mine, which is 90% owned by Goldfields. He holds a Certificate in Management Development and a Master’s degree in mineral processing.
Frederick Attakumah, EVP and Managing Director of Asanko Gold Ghana
Portrait

Mr Attakumah has over twenty five years experience. During his career, Fred has held a number of senior management roles including Senior Vice President – Corporate Affairs and Sustainability at Asanko Gold Ghana, Managing Director of AngloGold Ashanti (Ghana), Vice President – Sustainability of AngloGold Ashanti’s operations in Ghana and General Manager – Engineering Services, among others. His management experience spans operations, projects and sustainability. He has served as a First Vice President of the Ghana Chamber of Mines and was also a member of the Governing Council of the Private Enterprise Federation of Ghana. Fred holds an Honours Bachelor degree in Electrical and Electronic engineering as well as a Masters degree in Business Administration.