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1/18/18

With Asanko (AKG), the devil's always in the details

In 4q17 Asanko Gold managed to just make the bottom end of its downward revised guidance by producing 205,047oz gold (bottom end of range 205k oz). Here's how that was accurately predicted by IKN in November 2017:
"....it's a fair guess they're going to come in around 205,000 oz to 210,000 oz...AKG will squeeze into the bottom end of the 205koz to 225koz range they revised downwards after the 2q17 earnings."
So far so mediocre. But if you look a little further down today's NR, AKG has left a massive clue as to how bad things really are in this short segment of script:
At December 31, 2017 the Company's balance sheet had approximately US$49.3 million in unaudited cash, US$2.1 million in gold receivables and US$4.1 million in dore (with a market value of US$5.9 million).
Any thought on that owly?

Yeah, that's what I thought too because if you check the financials as at 3q17:
  • Cash was U$60.8m, it's now U$49.3m (11.5m down)
  • Receivables were U$2.3m, they're now U$2.1m (0.2m down)
  • Gold Doré was U$2.2m it's now U$4.1m (1.9m up)

Now for sure that isn't the be-all-and-end-all of the financials, but if you can't take the hint that U$9.8m in real moolah seems to have disappeared from the company in the last quarter, a company burdened with massive financial debt obligations you will surely remember, then I wish you the very greatest of luck with your financial investments. Because you're gonna need it.

UPDATE: It would also seem that Asanko is a proponent of Bistromathics as in its own NR today:
  • AKG states it ran 1,087,000 tonnes of treated ore
  • AKG states the gold feed grade was 1.5g/t
  • AKG states that its recovery rate was 94%

If you do the math on that you get production of 49,282 oz gold but somehow they claim to have produced 51,550 oz  (and oh how convenient, juuuust make guidance).