Asanko Gold (TSX: AKG; NYSE-AM: AKG) has closed a deal to sell half of its 90% stake in the Asanko gold mine in Ghana to Johannesburg-based Gold Fields (JSE: GFI) for US$185 million. Asanko Gold will remain the operator of the Asanko mine, though an operating committee composed of representatives from both companies will be created to oversee the operation.
Asanko will use the cash from the deal to repay its US$164 million debt to Red Kite, though Red Kite’s gold offtake agreement remains in effect.
The deal follows Gold Fields’ purchase of a 9.9% stake in Asanko Gold at US79¢ per share through a private placement on April 4.
The deal prompted a reassessment of the Asanko mine’s fair value, resulting in a US$188 million pre-tax writedown for the company’s flagship asset. That drove a US$139 million net loss in the first half of 2018, a US$148 million decrease from the first half of 2017.
Revenue increased $1.5 million to $131 million. Gold production fell 2,473 oz. to 101,731 gold oz., still exceeding the company’s first-half guidance of 90,000 to 100,000 gold ounces. All-in sustaining costs rose US$200 to US$1,145.
Asanko expects gold production and average gold grade to increase in the second half of this year as the Eastern portion of Nkran Cut 2 is used for ore production. (Nkran is one of the two main deposits of the Asanko gold mine, the other being Esaase.)
Shares of Asanko are currently valued at $1.33 a piece with a 52-week range of $1.71 to 58¢. The company has a $355 million market capitalization.
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