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7/1/16

Naughty naughty Asanko Gold (AKG): Selective disclosure is illegal

IKN knows the Canadian regulatory authorities read this blog (OSC, IIROC etc) and this post, ladies and gentlemen of those offices, is for you. Canada Day or not, time for you guys to pick up the phone and ask Peter Breese and his merry band a few pertinent questions.

We noted earlier this week that an insto known as K2 Associates published a report on Asanko Gold (AKG) (AKG.to). We know that K2 are short AKG and we know their publication is one of those known as a "hit piece", providing the public with (what they say) is evidence that the stock is overvalued. Also for what it's worth, this desk has had a few exchanges with other houses and anal ysts since then and there are a range of view out there, from "it's a BS report" to "they have a point". Finally, I would like to make clear that I have no position or opinion on AKG, IKN is strictly neutral

But now for the reason for today's post: It has come to light that after the K2 report was published, AKG held a conference call for anal ysts. However, the ConfCall was not made public, it was invitation only, there is no record of the ConfCall happening and the company almost certainly gave this small and select band (let's call them "the friends of AKG") material information that has not yet been made public. That's the kind of cheap trick that calls into doubt the reputation of any company, not just a producing miner current under attack from people who accuse them of hiding facts from the public. It's also illegal, as Newcrest found out to its chagrin when it was fined for giving selective disclosure in 2014 (and in that case Newcrest could almost be called innocent and making a genuine mistake).

This latest twist potentially explains why AKG is down in New York trading today when just about anything else in the mining sector is up.