Asanko Gold Mine receives approval

Asanko Gold Inc. has announced that the Board of Directors has made a positive financial investment decision to proceed with the construction of Phase 1 of its Asanko Gold Mine in Ghana.

Phase 1 is based on the construction of the Obotan Gold Project which was acquired during the takeover of PMI Gold Corporation ("PMI Gold") in February 2014. Phase 2 anticipates the inclusion of the adjacent Esaase deposit. Early works at the project site has been underway since April in preparation for a positive investment decision with progress on schedule. Project construction will commence shortly, with ground breaking expected within the next month. First gold is targeted in the first quarter of 2016, with steady stage production anticipated in second quarter of that year.

Asanko's President and CEO, Peter Breese, said: "The Board's approval of Phase 1 of the Asanko Gold Mine is the first step towards achieving our vision of becoming a mid-tier gold producer. Our detailed engineering work to-date has confirmed the robustness of the Project, with the CBE in-line with PMI Gold's 2012 DFS. Now that we have approved the Project, we are targeting steady state production of approximately 200,000 ounces per year in Q2 2016.

“With the Project fully permitted, financed and a team of experienced mine builders and operators in place, we will, in parallel with construction, continue with our growth strategy. In particular we have begun to evaluate the optimal way to implement Phase 2 in order to bring to account the additional 2.2 million ounces of Mineral Reserves4 at Esaase, while capturing the synergies we forecast when we acquired PMI Gold and created the Asanko Gold Mine."

The Phase 1 of the Asanko Gold Mine is based on PMI Gold's DFS for the Obotan Project, published in September 2012. The DFS targeted approximately 2.25 million ounces of gold production over an 11.5 year LoM via an open pit contractor mining operation and a 3Mtpa carbon-in-leach ("CIL") processing plant. The primary source of feed material for the CIL plant was the Nkran pit with satellite pits at Adubiaso, Abore and Asuadai being mined later in the mine life. The DFS estimated capital costs of US$296.6 million, cash operating costs of US$626/oz (US$722/oz including royalty and refining costs) and projected robust economic returns at US$1,300/oz gold.

Since acquiring PMI Gold earlier this year, the Company has updated the capital cost estimate to a higher level of accuracy suitable for use as a project CBE. The recently completed CBE estimates a capital cost of US$295 million including contingency for estimating inaccuracy and owner's contingency (see table below). The capital estimate is generally considered accurate to /- 5%.

The CBE was designed on a modular basis to cater for the possible inclusion of Phase 2 of the AGM on the same site. Phase 1 has incorporated sufficient plant terracing and designed the plant layout and infrastructure to cater for the potential of Phase 2.

Asanko is currently finalizing the updated MRE for the Nkran, Adubiaso, Abore and Asuadai deposits and does not anticipate that the MRE will be materially different to the current disclosure. Based on the revised MRE, a preliminary mine plan has been prepared. The Definitive Project Plan is not expected to be materially different to the DFS mining plan of 2.25 million ounces of gold produced over an 11.5 year LoM.

The Company is continuing to work on detailed mine planning and pit sequencing optimizations, including a mine plan for the recently discovered near-mine deposit Dynamite Hill. This detailed mine plan will be included in the Definitive Project Plan, along with updated operating costs and economic return calculations. The results of the Definitive Project Plan are expected to be published by Q4 2014 in a revised NI 43-101 report for the Project.