AKG Asanko Gold Inc

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC   20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 or 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of November 2014

Commission File No. 001-33580

ASANKO GOLD INC.

(Translation of registrant’s name into English)

Suite 700, 1199 West Hastings Street, Vancouver, British Columbia, V6E 3T5

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under the cover Form 20-F or Form 40-F

Form 20-F o

 Form 40-F  x

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):   o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):   o

SUBMITTED HEREWITH

Exhibit No.

Document

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Three and nine months ended  September 30, 2014 and 2013

_______________________

ASANKO GOLD INC.

Condensed Interim Consolidated Statements of Financial Position (Unaudited)                                    Expressed in United States Dollars

Acquisition (note 3)

Commitments (note 14)

Contingencies (note 15)

Subsequent event (note 11(c))

SEE ACCOMPANYING NOTES

1

ASANKO GOLD INC.

Condensed Interim Consolidated Statements of Comprehensive Loss (Unaudited)                                  Expressed in United States Dollars

SEE ACCOMPANYING NOTES

2

ASANKO GOLD INC.

Condensed Interim Consolidated Statements of Changes in Equity (Unaudited)

Nine months ended September 30, 2014 and 2013                                                                                                                                                                      Expressed in United States Dollars

SEE ACCOMPANYING NOTES

3

ASANKO GOLD INC.

Condensed Interim Consolidated Statements of Cash Flows (Unaudited)                                          Expressed in United States Dollars

Supplemental cash flow information (note 17)

SEE ACCOMPANYING NOTES

4

ASANKO GOLD INC.

Notes to Condensed Interim Consolidated Financial Statements (Unaudited)

Three and nine months ended September 30, 2014 and 2013

Expressed in United States Dollars

1.

Nature of operations

Asanko Gold Inc. (“Asanko” or the “Company”), changed its name from Keegan Resources Inc. on March 1, 2013. The Company was incorporated on September 23, 1999 under the laws of British Columbia, Canada.  The Company is in the exploration and development stage and is focused on advancing its principal project, the Asanko Gold Mine Project (“the Project”), to commercial production. In addition to its principal project, the Company holds a portfolio of other Ghanaian gold concessions in various stages of exploration.

On February 6, 2014, the Company completed the acquisition of 100% of the issued and outstanding shares of PMI Gold Corporation (“PMI”). PMI is a resource exploration and development company which, through its subsidiaries, holds exploration and mining leases in the Ashanti and Asankrangwa Gold Belts of Ghana, Africa. PMI’s principal project is a gold development project known as the Obotan Gold Project which has been combined with Asanko’s principal project known as the Esaase Gold Project, to form the Project. PMI also holds other exploration projects in Ghana (note 3).

The head office, principal address and registered and records office of the Company are located at 1199 West Hastings Street, Suite 700, Vancouver, British Columbia, V6E 3T5, Canada.

Management has estimated that the Company will have adequate funds from existing working capital to meet corporate, development, administrative and property obligations for the coming year, including the completion of a definitive feasibility study, a pre-construction early works program and the commencement of construction of the Project. The Company will require additional financing from time to time, and while the Company has been successful in the past, there is no assurance that it will be able to obtain adequate financing in the future or that such financing will be available on acceptable terms.

2.

Basis of presentation

(a)

Statement of compliance

These unaudited condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard (“IAS”) 34, “Interim Financial Reporting” using accounting policies consistent with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and Interpretations issued by the International Financial Reporting Interpretations Committee (“IFRIC”). The accounting policies followed in these unaudited condensed interim consolidated financial statements are the same as those applied in the Company’s most recent audited consolidated financial statements for the year ended December 31, 2013, except as described in note 2(c). The unaudited condensed interim consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2013.

These unaudited condensed interim consolidated financial statements were authorized for issue and approved by the Board of Directors on November 6, 2014.

 (b)

Basis of presentation and consolidation

The financial statements have been prepared on the historical cost basis, with the exception of asset retirement provisions (note 9), foreign currency warrant liability (note 19 (b)(i)) and interest rate floor derivative liability (note 19(b)(ii)), which are measured at fair value.

5

ASANKO GOLD INC.

Notes to Condensed Interim Consolidated Financial Statements (Unaudited)

Three and nine months ended September 30, 2014 and 2013

Expressed in United States Dollars

All amounts are expressed in US dollars, unless otherwise stated, and the US dollar is the Company’s functional currency. References to C$ are to Canadian dollars.

2.

Basis of presentation (continued)

(b)

Basis of presentation and consolidation (continued)

These unaudited consolidated financial statements incorporate the financial statements of the Company and its controlled subsidiaries. Control exists when the Company has power, directly or indirectly, to govern the financial and operating policies of an entity as to obtain benefits from its activities. All significant intercompany amounts and transactions have been eliminated on consolidation.

The consolidated financial statements include the accounts of the Company and the following subsidiaries:

Effective August 15, 2014 the Company transferred control over its wholly-owned subsidiaries PMI Gold Kubi (Barbados) Inc. and Kubi Gold Company Limited (“Kubi Ghana”), pursuant to a dispute settlement agreement (note 15).

(c)

Adoption of new accounting standards, amendments to and interpretations of existing standards

(i)

Financial assets and financial liabilities

The amendment to IAS 32, Financial Instruments: Presentation (IAS 32) is effective for periods beginning on or after January 1, 2014 and is to be applied retrospectively. The amendment clarifies matters regarding offsetting financial assets and financial liabilities as well as related disclosure requirements. The adoption of the amendments to IAS 32 did not have an impact on these condensed interim consolidated financial statements.

(ii)

Levies

In May 2013, the IASB issued International Financial Reporting Interpretations Committee (IFRIC) 21, Levies. IFRIC 21 is effective for annual periods beginning on or after January 1, 2014 and is to be applied retrospectively. IFRIC 21 provides guidance on accounting for levies in accordance with IAS 37, Provisions, Contingent Liabilities and Contingent Assets. The interpretation defines a levy as an outflow from an entity imposed by a government in accordance with legislation and confirms that an entity recognizes a liability for a levy only when the triggering event specified in the legislation occurs. The adoption of IFRIC 21 did not have an impact on these condensed interim consolidated financial statements.

6

ASANKO GOLD INC.

Notes to Condensed Interim Consolidated Financial Statements (Unaudited)

Three and nine months ended September 30, 2014 and 2013

Expressed in United States Dollars

2.

Basis of presentation (continued)

(d)

Significant accounting judgments and estimates

The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes.  Actual results could differ from those estimates.  The unaudited condensed interim consolidated financial statements have, in management’s opinion, been properly prepared using careful judgment within the framework of the significant accounting policies summarized in note 3 of the audited consolidated financial statements for the year ended December 31, 2013. In addition, the following judgments and estimates are applicable to these unaudited condensed interim consolidated financial statements:

Critical judgments:

(i)

Purchase price allocation on the acquisition of PMI

Management has allocated the purchase price based on the fair values of the assets acquired and liabilities assumed. Management has reviewed a number of comparable projects and market value allocations to confirm the allocation.

(ii)

Functional currency

The functional currency for each of the Company’s subsidiaries is the currency of the primary economic environment in which the entity operates. On the acquisition of PMI management determined that the functional currency of PMI and its subsidiaries is the US dollar. Assessment of functional currency involves certain judgments to determine the primary economic environment and the Company reconsiders the functional currency of its entities if there is a change in the events and conditions, which determine the primary economic environment.

Estimates:

(iii)

Fair value of replacement equities issued on acquisition of PMI

Management determined the fair value of the replacement share-based options and warrants issued on the acquisition of PMI using the Black-Scholes option pricing model. Option pricing models require the input of highly subjective assumptions. Changes in the subjective assumption can materially affect the fair value estimate.

(iv)

Deferred income tax liability recognized on acquisition of PMI

The Company recognized its best estimate of the deferred income tax liability related to the Obotan Gold Project, arising due to the fair value allocated on acquisition exceeding the tax basis of the project.

(v)

Fair value of embedded derivative

The Company recognized embedded derivative liability relating to the interest rate floor of the long term loan (note 8). The Company used three month LIBOR forward curve rates and assumptions about the time value of the embedded derivative to estimate its fair value. Changes in these inputs can materially affect the fair value estimate.

(vi)

Effective interest rate

Management estimated the effective interest rate (“EIR”) of the first tranche of long term debt based on three-months LIBOR and the assumption that the repayment amounts and dates will be as per the current long-term agreement. Changes in the three-months LIBOR rates and/or changes in the repayment schedule of the loan can affect the EIR. As the three-month LIBOR rates fluctuate, the EIR is estimated at each balance sheet date.

7

ASANKO GOLD INC.

Notes to Condensed Interim Consolidated Financial Statements (Unaudited)

Three and nine months ended September 30, 2014 and 2013

Expressed in United States Dollars

3.

Acquisition of PMI

On December 17, 2013, the Company and PMI entered into a definitive agreement whereby Asanko agreed to acquire all of the common shares on PMI (“Plan of Arrangement”). On February 6, 2014, Asanko completed the acquisition of PMI pursuant to the terms of the Plan of Arrangement. Under the terms of the Plan of Arrangement, former PMI shareholders received 0.21 of an Asanko common share for each PMI share held. The Company issued 87,149,919 of its common shares to acquire 100% of the issued and outstanding shares of PMI.

The acquisition of PMI has created a flag ship project in Ghana by combining PMI’s Obotan gold project with the Company’s Esaase gold project as well as providing significant exploration potential for future project development on the consolidated 1,000 sq. km land package. With the acquisition of PMI, the Company acquired interest in certain mineral resource concessions described in note 6 as the Obotan Gold Project (note 6 (a)), Kubi (note 6 (b)), and the Diaso concessions (note 6 (b)).

A preliminary allocation of the purchase price, subject to final adjustments, is as follows:

Preliminary purchase price:

8

ASANKO GOLD INC.

Notes to Condensed Interim Consolidated Financial Statements (Unaudited)

Three and nine months ended September 30, 2014 and 2013

Expressed in United States Dollars

3.

Acquisition of PMI (continued)

The fair value of the Company’s common shares, replacement options, replacement warrants and equity settled performance rights issued for the acquisition of PMI was determined using the closing market price of the Company’s shares at February 5, 2014 of C$2.12 and a foreign exchange rate of 1 CAD = 0.9025 USD at the same date, which were the final closing variables before the transaction completion.  The fair value of the replacement options and replacement warrants was calculated using the Black-Scholes option pricing model using the following weighted average assumptions:

The Company commenced consolidating PMI’s financial position and results of operations effective February 6, 2014. The Company recognized $472,393 interest income and $8,259,862 net loss related to PMI for the period from February 6, 2014 to September 30, 2014.  Had PMI been consolidated from January 1, 2014, the nine months ended September 30, 2014 pro-forma consolidated statement of operations would include additional interest revenue of  $96,261 and net loss of $978,838.

As at September 30, 2014, the aggregate transactions costs related to the acquisition of PMI are approximately $4.3 million, of which $0.25 million had been included in the net loss of the Company for the year ended December 31, 2013.

The information disclosed in this note is preliminary and may change upon the final calculation of the purchase price as a result of further evaluation of the fair value of assets acquired and tax pools in Ghana.

4.

Restricted cash

During the nine months ended September 30, 2014, bank guarantees related to equipment delivery and an office lease (note 3) were cancelled, resulting in a removal of the restrictions on the withdrawal of underlying cash and cash equivalents of $1.2 million.

9

ASANKO GOLD INC.

Notes to Condensed Interim Consolidated Financial Statements (Unaudited)

Three and nine months ended September 30, 2014 and 2013

Expressed in United States Dollars

5.    Property, plant and equipment

6.

Mineral interests and development assets

(a)

Asanko Gold Mine Project

The Company’s principal mineral project is the Asanko Gold Mine Project (“the Project”), which consists of two neighbouring gold projects the Obotan Gold Project (note 3) and the Esaase Gold Project, both located in the Republic of Ghana (“Ghana”), West Africa.

Adansi Ghana owns 100% of the Obotan Gold Project. Obotan lies in the Amansie District of the Ashanti Region of Ghana, approximately 250 km northwest of the capital Accra. The Obotan Gold Project consists of the Abore, Abirem and Adubea concessions, all of which have been granted mining leases and cover an area of approximately 88.98 km². These concessions contain five deposits: Nkran, Abore, Adubiaso Asuadai and Dynamite Hill. The Adubea concession is subject to a net smelter return royalty (“NSR”) of 0.5% payable to a third party. During the nine months ended September 30, 2014, the Company settled a dispute with Goknet Mining Company Limited (“Goknet”) and thereby eliminated Goknet’s claim of a 2% NSR over these three concessions (note 15).

10

ASANKO GOLD INC.

Notes to Condensed Interim Consolidated Financial Statements (Unaudited)

Three and nine months ended September 30, 2014 and 2013

Expressed in United States Dollars

6.

Mineral interests and development assets (continued)

(a)

Asanko Gold Mine Project (continued)

Asanko Ghana owns a 100% interest in the Esaase Gold Project. Like Obotan, Esaase is located in the Amansie West District of Ghana. The property consists of several mining concessions of which the three largest are the Esaase Concession, Jeni River Concession and Sky Gold Concession (“SGM”).  The Esaase Concession covers an area of approximately 42.32 km².  

Esaase and Jeni River concessions are subject to a 0.5% royalty payable to the Bonte Liquidation Committee.

The SGM is subject to a 2% NSR payable to Sky Gold Mines Limited. Asanko Ghana acquired 100% ownership in SGM by making staged payments totaling $400,000, and causing a total of 50,000 shares of Asanko Gold Inc. be issued to SGM in stages over 4 years.

Asanko Ghana owns a 100% interest in the Asuowin Concession situated contiguous to and directly south of the Esaase Gold property and a 100% interest in the Dawohodo prospecting concession adjacent to the Esaase Gold property.

During November 2012, Asanko Ghana completed the acquisition of 10.3 km² of the Small Scale Mining Reserve (“SSMR”) located immediately to the southwest of the Esaase main zone in exchange for  a 12.5 km² portion of its Jeni River Concession mining lease. The SSMR area acquired by the Company was previously reserved by the Government of Ghana exclusively for small scale mining activity and is now part of the Jeni River Concession mining lease. 

Free carried interest to the Ghanaian government

The Government of Ghana retains the right to a 10% free carried interest in the Project under Section 8 of the Ghanaian Mining Act. This entitles the Ghanaian government to 10% of declared dividends from the net profit of the Company’s respective subsidiaries as at the end of a financial year. As the free carried interest does not result in an obligation on behalf of the Ghanaian government to contribute to the capital nor share in the entity’s losses, a non-controlling interest is not recognized while the respective subsidiaries of the Company are in a net liability position.

The Company’s concessions are also subject to a 5.0% royalty on gold production payable to the Government of Ghana.

(b)

Exploration projects

Asanko Ghana owns a 100% interest in the Asumura Reconnaissance Concession (“Asumura property”) located in Ghana. The Asumura property is subject to a 3.5% NSR royalty payable to GTE Ventures Limited. (“GTE”), 50% of which may be purchased for $2,000,000 from GTE and the remaining 50% may be purchased for an additional $4,000,000.

Adansi Ghana owns 100% interest in the Datano, Kaniago, New Obuasi, Gyagyastreso, and Afiefiso concessions located within the Asankrangwa Gold Belt.

11

ASANKO GOLD INC.

Notes to Condensed Interim Consolidated Financial Statements (Unaudited)

Three and nine months ended September 30, 2014 and 2013

Expressed in United States Dollars

6.

Mineral interests and development assets (continued)

(b)

Exploration projects (continued)

If any of the exploration properties are converted to a Mining License, in accordance with Ghanaian law, it will become subject to a 5% gross revenue royalty and a 10% free carried interest to the Ghanaian government.

Pursuant to the Goknet settlement the Company transferred Adansi Ghana’s Diaso concessions (Nkronua Atifi, Diaso, Amuabaka, Juabo, Manhia and Agyaka Manso) and Kubi Ghana, which holds a 100% interest in the Kubi mining leases to Goknet (note 15).  

(c)

Mineral interests and development costs

12

ASANKO GOLD INC.

Notes to Condensed Interim Consolidated Financial Statements (Unaudited)

Three and nine months ended September 30, 2014 and 2013

Expressed in United States Dollars

6.

Mineral interests and development assets (continued)

(c)

 Mineral interests and development costs (continued)

13

ASANKO GOLD INC.

Notes to Condensed Interim Consolidated Financial Statements (Unaudited)

Three and nine months ended September 30, 2014 and 2013

Expressed in United States Dollars

7.

Exploration and evaluation expenditures

Exploration and evaluation expenditures are comprised of expenditures incurred on mineral interests in areas where the technical  feasibility and economic recoverability has not yet been established.

Summary of  exploration and evaluation expenditures

8.

Long term debt

On July 16, 2014 the Company entered into an amended Definitive Senior Facilities Agreement (“DSFA”) with a special purpose vehicle of RK Mine Finance Trust I ("Red Kite"). The debt provided under the amended DSFA will be utilized for developing Phase 1 of the Asanko Gold Mine Project instead of the Esaase Project as previously envisaged.

The DSFA provides for two term loan facilities: a $130 million term loan facility (the "Project Facility") and a $20 million cost overrun facility (the "Overrun Facility"). Performance under the amended agreement is fully secured by the assets of the Company’s Ghanaian subsidiaries and is guaranteed by the Company until Project completion.

Details of the individual facilities include the following:

Project Facility Details ($130 million):

·

Interest rate of LIBOR + 6% with a one percent minimum LIBOR rate;

·

1.5% fee payable on drawdowns, with the fee associated with the expected second tranche paid in advance as a deduction to the first tranche;

·

The Company is required to drawdown an aggregate of $60.0 million by December 22, 2014;

·

First repayment date (principal and interest) is expected to be July 1, 2016 and each of the four subsequent quarterly loan repayment dates shall be 4% of the total Project Facility plus accrued interest. The following ten quarterly loan repayments shall each be 8% of the total Project Facility plus accrued interest;

·

Three and a half year quarterly repayment schedule or early repayment at any time without penalty; and

·

Conditions precedent to drawdown over $60.0 million that are outstanding principally are:

-

completion of the Phase 1 Definitive Project Plan with material outcomes substantially the same as the September 2012 Obotan Definitive Feasibility Study ("DFS");

-

evidence that the Company has acquired or will acquire all appropriate surface access rights to the mining area defined in the project plan;

-

approval by Ghanaian regulatory bodies of the creation of security over the mining leases;

-

formal declaration by the Company, with the approval of Ghana Minerals Commission, of the area which will be used for its active mining operations as a mining area in accordance with the applicable regulations.

14

ASANKO GOLD INC.

Notes to Condensed Interim Consolidated Financial Statements (Unaudited)

Three and nine months ended September 30, 2014 and 2013

Expressed in United States Dollars

8.

Long term debt (continued)

Overrun Facility Details ($20 million):

·

Interest rate of LIBOR +10% with a one percentage minimum LIBOR rate;

·

3% fee payable on drawdowns;

·

Three year quarterly repayment schedule and early repayment at any time without penalty; and

·

Conditions precedent to drawdown are confirmation that the Company has sufficient funds with the Overrun Facility to complete the Project, that the Project Facility is fully drawn and that 4,000,000 Asanko share warrants have been issued to Red Kite. The warrants would be priced at a 25% premium to the 20 day volume weighted average price of Asanko at that time and have a 2.5 year term to expiry.

The first tranche of the loan for gross proceeds of $20.0 million and net cash proceeds of $19.7 million was drawn on July 18, 2014 and is to be repaid by the end of the first quarter of 2020 with the first repayment date of July 1, 2016. Interest is calculated on a quarterly basis and payable in advance on the first date of each quarter. Interest accrued on a quarterly basis before the first repayment date is added to the loan principal amount. The loan is carried at amortized costs on the statement of financial position.

As at September 30, 2014 the Company had incurred a total of $6.0 million in deferred debt financing costs. This includes $0.6 million in deferred draw down fees, which are to be applied to the second tranche of the loan. Deferred financing costs are initially deferred and subsequently reclassified as part of the loan on a pro-rata basis of the loan amount drawn and amortized over the life of the DSFA using the effective interest rate method.

During the three and nine months ended September 30, 2014,  $0.8 million of the  deferred debt financing costs were recognized as part of the first tranche of the loan and $0.3 million of accrued interest was capitalized to deferred development costs at an effective interest rate of approximately 9.3%.

An embedded derivative liability has been recognized for the loan in relation to the interest rate floor. The fair value of the embedded derivative was estimated to be $220,007 on the date of the first tranche draw (note 19 (b)(ii)). The embedded derivative liability was revalued at September 30, 2014 with the change in fair value recognized in the statement of operations.

At September 30, 2014 the face value of the loan plus accrued interest was $20.2 million.

In addition to the DSFA the Company entered into an Offtake Agreement with Red Kite with the following details:

·

100% of the future gold production from Phase 1 to a maximum of 2.2 million ounces;

·

Red Kite to pay for 100% of the value of the gold ten business days after shipment;

·

A provisional payment of 90% of the estimated value will be made one business day after delivery;

·

The gold sale price will be a spot price selected during a nine day quotational period following shipment;

·

Should the Company wish to terminate the Offtake Agreement, a termination fee will be payable according to a schedule dependent upon the total funds drawn under the Project and Overrun Facility as well as the amount of gold delivered under the Offtake Agreement at the time of termination, and  

15

ASANKO GOLD INC.

Notes to Condensed Interim Consolidated Financial Statements (Unaudited)

Three and nine months ended September 30, 2014 and 2013

Expressed in United States Dollars

8.

Long term debt (continued)

·

Prior to removal of the conditions precedent for the Project Facility, the Company can terminate the Offtake Agreement with Red Kite by repaying the loan and paying an Offtake termination fee which is fixed at $3 million while $20 million is drawn (before December 31, 2014) and $6 million after the additional $40 million is drawn.

9.

Asset retirement provision

The asset retirement provisions relate to current and historical disturbance caused to the mineral concessions within the area of interest of Esaase. On the acquisition of PMI, the Company assumed the asset retirement liability related to Kubi with a fair value of $1.4 million at February 6, 2014. Effective August 15, 2014, the Company derecognized the asset retirement provision related to Kubi as it transferred these concessions pursuant to a dispute settlement agreement (note 15).

The present value of this obligation has been recorded as a non-current provision.

The following is a continuity of the asset retirement provision at Esaase:

10.

Share capital

(a)

Authorized

Unlimited common shares without par value; and

Unlimited preferred shares without par value

(b)

Issued and outstanding common shares

16

ASANKO GOLD INC.

Notes to Condensed Interim Consolidated Financial Statements (Unaudited)

Three and nine months ended September 30, 2014 and 2013

Expressed in United States Dollars

10.

Share capital (continued)

(b)

Issued and outstanding common shares (continued)

On February 6, 2014, the Company issued 87,149,919 of its common shares at a price of C$2.12 per share to acquire 100% of the issued and outstanding shares of PMI (note 3). The fair value of the shares issued was determined using the closing share price of the Company’s shares on the Toronto Stock Exchange on February 5, 2014 and an exchange rate of 1 CAD = 0.9025 USD at the same date, which were the final closing variables before the transaction completion (note 3). The Company incurred share issuance costs of $197,694 in regulatory fees.

On August 19, 2014, the Company issued 1,000,000 of its common shares to a group of companies at a price of C$2.60 per share, pursuant to a settlement agreement (note 15). The fair value of the shares issued was determined using the closing share price of the Company’s shares on the Toronto Stock Exchange on August 19, 2014 and an exchange rate of 1 CAD = 0.9138 USD at the same date. The Company incurred share issuance costs of $28,729 in regulatory fees.

During the nine months ended September 30, 3014, the Company issued 871,350 common shares for gross proceeds of $1.75 million on exercise of options. In addition, the estimated fair value of these options of $401,004 was reclassified from equity reserves to share capital.

Year ended December 31, 2013

The Company issued 20,000 shares to SGM pursuant to an agreement on a concession adjacent to the Esaase concession (note 6(a)). The fair value of the shares was estimated to be $47,052 or $2.35 (C$2.45) per share which was the closing market price of the Company’s shares at July 15, 2013 when the shares were issued.

11.

Equity reserves

(a)

Share-based options

The Company maintains a rolling share-based option plan providing for the issuance of share-based options for up to 10% of the Company’s issued and outstanding common shares. The Company may grant options from time to time to its directors, officers, employees and other service providers. The options vest 25% on the date of the grant and 12 ½ % every three months thereafter for a total vesting period of 18 months.

17

ASANKO GOLD INC.

Notes to Condensed Interim Consolidated Financial Statements (Unaudited)

Three and nine months ended September 30, 2014 and 2013

Expressed in United States Dollars

11.

Equity reserves (continued)

(a)

Share-based options (continued)

The following table summarizes the share-based options outstanding and exercisable at September 30, 2014:

During the three months ended September 30, 2014, $0.6 million (three months ended September 30, 2013 - $0.4 million) in share-based payments were recorded in the statement of comprehensive loss, which includes $nil included in exploration and evaluation expenses (three months ended September 30, 2013 – a reversal due to forfeitures of $0.03 million). In addition, during the three months ended September 30, 2014,  share-based payments of $0.3 million were included in mineral interests and development costs (three months ended September 30, 2013 –  a reversal due to forfeitures of $0.03 million).

During the nine months ended September 30, 2014, $2.2 million (nine months ended September 30, 2013 - $2.0 million) in share-based payments were recorded in the statement of comprehensive loss, which includes $nil included in exploration and evaluation expenses (nine months ended September 30, 2013 –$0.03 million). In addition, during the nine months ended September 30, 2014,  share-based payments of $1.9 million were included in mineral interests and development costs (nine months ended September 30, 2013 –  $0.9 million).

The fair value of the share-based options granted during the three and nine months ended September 30, 2014 used to calculate compensation expense, has been estimated using the Black-Scholes option pricing model with the following weighted average assumptions:

18

ASANKO GOLD INC.

Notes to Condensed Interim Consolidated Financial Statements (Unaudited)

Three and nine months ended September 30, 2014 and 2013

Expressed in United States Dollars

11.

Equity reserves (continued)

(b)

Performance rights

In connection with the acquisition of PMI (note 3), the Company entered into an agreement with  employees of PMI, who held PMI performance rights, to issue an aggregate of 117,158 common shares of the Company upon vesting of the performance rights. In April 2014, the performance rights had not vested and were cancelled due to termination of the employment agreements of the performance rights holders.

(c)

Warrants

The continuity of share purchase warrants for the nine months ended  September 30, 2014 is as follows:

During the nine months ended September 30, 2014, the Company issued 126,000 replacement warrants pursuant to the acquisition of PMI (note 3).

Subsequent to September 30, 2014, 9,443,500 warrants with an exercise price of C$4.00 expired.

The continuity of share purchase warrants for the year ended December 31, 2013 is as follows:

12.

Restructuring costs

During the three months ended September 30, 2014, the Company incurred and/or accrued restructuring charges of $0.02 million (three months ended September 30, 2013 - $nil), related to vendor contracts termination costs post the acquisition of PMI.

During the nine months ended September 30, 2014, the Company incurred and/or accrued restructuring charges of $3.0 million (nine months ended September 30, 2013 - $nil). The restructuring charges relate to the closure of the PMI corporate offices in Canada and Australia as well as employee terminations due to redundancy post the acquisition of PMI. The restructuring was completed during April 2014.

The following table provides a summary of the restructuring charges for the three and nine months ended September 30, 2014:

19

ASANKO GOLD INC.

Notes to Condensed Interim Consolidated Financial Statements (Unaudited)

Three and nine months ended September 30, 2014 and 2013

Expressed in United States Dollars

13.

Related party balances and transactions

All transactions with related parties have occurred in the normal course of operations and are measured at the exchange amount agreed to by the parties. All amounts are unsecured, non-interest bearing and have no specific terms of settlement.

(a)

Key management compensation

Transactions with key management personnel were as follows:

Key management personnel consist of directors and officers of the Company.

(b)

Other related parties balances and transactions

Related party transactions (recoveries):

Related party balances receivable (payable):

(i)

UMS is a private company with certain key management personnel and directors in common with the Company, and pursuant to an agreement dated March 30, 2012, provided geological, corporate development, administrative and management services to the Company on a cost recovery basis. Effective July 1, 2013, the Company notified UMS that it would no longer require any personnel services but will continue to share the cost of UMS’s office tenancy and IT services where required.

(ii)

During the nine months ended September 30, 2013, the Company reviewed its equity investment in UMS for impairment and concluded that the carrying amount exceeded its recoverable amount and therefore recorded an impairment charge of $626,394. No impairment charges related to the investment in associate were recorded during the nine months ended September 30, 2014.

20

ASANKO GOLD INC.

Notes to Condensed Interim Consolidated Financial Statements (Unaudited)

Three and nine months ended September 30, 2014 and 2013

Expressed in United States Dollars

14.

Commitments and contractual obligations

As at September 30, 2014, the Company had contractual obligations totaling $26.9 million, relating to long term debt. Contractual obligations related to the long term debt are subject to changes in the three-month LIBOR rate (note 19 (a)(i)).

In addition, the Company has entered into certain construction and engineering contracts relating to the construction of the Asanko Gold Mine Project Phase 1. Work incurred on these contracts is predominately driven by hours worked and as such is exposed to one month’s fees, per a standard one month notice period.  The Company has open purchase orders relating to these construction and engineering contracts totaling approximately $63.3 million.

15.

Contingencies

(a)

Ghanaian mining taxes

Changes to the Ghanaian tax system were announced and substantively enacted during the year ended March 31, 2012. Corporate tax rates rose from 25% to 35% and capital deductions were reduced from an 80% deduction in year one to a straight-line depreciation of 20% per year over 5 years. A 10% windfall profit tax has been proposed but to date has not been enacted. The windfall profit tax was proposed to be calculated based on taxable income less taxes paid, capital expenditures incurred, additions to inventory and various other deductions and additions. The Company now believes it is unlikely that a windfall profit tax will be implemented in the near future.

(b)

Financial guarantee

The Company continues to provide a financial guarantee for the UMS office lease until May 2015 (note 13 (b)).

(c)

Legal proceedings

Except as set forth below, there are no legal proceedings to which the Company is a party or, to the best of the Company's knowledge, to which any of the Company's property is or was subject, and there are no such proceedings known by the Company.

Goknet Arbitration

On November 6, 2012, PMI  received a request from Goknet Mining Company Limited (“Goknet”) seeking PMI’s consent to the assignment of certain royalties under a 2006 Purchase Agreement between the Company and Goknet. The Company provided its consent on January 9, 2013 without pre-supposing that certain royalties alleged to have been created under such agreement were created. Goknet subsequently invoked the arbitration provisions of the contract under British Columbia law. An arbitral panel was established by the end of April, 2013, and the arbitration hearing was scheduled for September 2014.

On August 15, 2014, the Company entered into a settlement agreement with Goknet to eliminate Goknets’s claim for a 2% NSR royalty on Phase 1 of the Asanko Gold Mine Project. The settlement involves cash, one million Asanko shares and the transfer to Goknet of two exploration projects, Kubi and Diaso. Included in the agreement the Company retains a right to match any future offer made to Goknet with respect to a disposal of the Diaso Project concessions.

21

ASANKO GOLD INC.

Notes to Condensed Interim Consolidated Financial Statements (Unaudited)

Three and nine months ended September 30, 2014 and 2013

Expressed in United States Dollars

15.

Contingencies (continued)

(c)

Legal proceedings (continued)

Godbri Datano Claim

On September 14, 2012, Godbri Mining Limited (“Godbri”) lodged a statement of claim in the High Court of Justice, Accra, Ghana, seeking a declaration that, among other things, that the sale of the Datano concession to Adansi Ghana is null and void. Godbri claims to be the owner of 38% of the issued share capital of Midras Mining Limited (“Midras”) and states that it did not consent to the acquisition of the Datano concession by Adansi Ghana. Adansi Ghana filed a defence on November 12, 2012. Godbri subsequently amended its claim on January 29, 2013 and in March 2013, both the Company and Adansi Ghana filed further defences. The matter is currently awaiting trial. The Datano concession was acquired in August 2013 from Midras. The Company considers the claim made by Godbri to be spurious and without any merit. Godbri is a private Ghanaian company.

Matisse and Madison Claim

On October 22, 2013, Matisse & Madison Co. Ltd. (“M&M”) lodged a statement of claim in the High Court of Justice, Accra, Ghana, seeking compensatory damages of $20 million plus interest for breach of a verbal contract related to the purchase of the Datano Concessions from Midras. The Company maintains that this is a frivolous lawsuit lacking in merit and will vigorously defend itself.

16.

Segmented information

Geographic Information

The Company operates in one reportable operating segment, being the exploration and development of resource properties.

Geographic allocation of non-current assets

22

ASANKO GOLD INC.

Notes to Condensed Interim Consolidated Financial Statements (Unaudited)

Three and nine months ended September 30, 2014 and 2013

Expressed in United States Dollars

16.

Segmented information (continued)

Geographic allocation of loss (income)

17.

Supplemental cash flow information

23

ASANKO GOLD INC.

Notes to Condensed Interim Consolidated Financial Statements (Unaudited)

Three and nine months ended September 30, 2014 and 2013

Expressed in United States Dollars

18.

Loss (earnings ) per share

Basic loss (earnings) per share amounts are calculated by dividing the net loss (income) for the period by the weighted average number of ordinary shares outstanding during the period.  

Weighted average number of common shares are calculated as follows:

19.

 Financial instruments

(a)

Risk exposure

The risk exposure arising from financial instruments is summarized as follows:

(i)

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

The Company’s loan agreement with Red Kite (note 8) provides for interest at LIBOR plus 6% with a minimum LIBOR of 1%. The Company’s sensitivity to a 1% decrease or increase in market rates of interest in relation to its long term debt liability would have an immaterial effect on the Company’s interest expense for the three and nine months ended September 30, 2014.

The Company’s cash and cash equivalents attract interest at floating rates and have maturities of 90 days or less  or maturity over ninety days but redeemable on demand without penalty. The interest is typical of Canadian banking rates, which are at present low, however the conservative investment strategy mitigates the risk of deterioration to the investment. A sensitivity analysis suggests that a change of 10 basis points in the interest rates would result in a corresponding increase or decrease in loss for the nine months ended September 30, 2014 of approximately $228,000 (nine months ended September 30, 2013 - $185,000).

24

ASANKO GOLD INC.

Notes to Condensed Interim Consolidated Financial Statements (Unaudited)

Three and nine months ended September 30, 2014 and 2013

Expressed in United States Dollars

19.

 Financial instruments (continued)

(ii)

Foreign currency risk

The Company is exposed to foreign currency risk through its foreign currency monetary assets and liabilities. A significant change in the currency exchange rate between the US dollar and Canadian dollar (CAD) and South African rand (ZAR) could have an effect on the Company’s results of operations, financial position and cash flows.  As at September 30, 2014 and December 31, 2013, the Company had no hedging agreements in place with respect to foreign exchange rates. As at September 30, 2014, the Company had a CAD cash balance of $33.0 million (December 31, 2013 – $21.9 million) expressed in US dollar equivalent.

 (b)

Fair values

(i)

Foreign currency warrant liability

The foreign currency share purchase warrants issued in the non-brokered private placement of November 5, 2012 have not been listed on an exchange and therefore do not trade on an active market. The fair value at September 30, 2014 and December 31, 2013 of the foreign currency warrant liability associated with the issuance of these warrants is valued using level 2 of the fair value hierarchy assumptions and was estimated using the Black-Scholes option pricing model with the following assumptions:

(ii)

Embedded derivative

The embedded derivative liability associated with the interest rate floor of the long term loan is valued using level 2 of the fair value hierarchy assumptions. The fair value of the embedded derivative was estimated using the three-month LIBOR forward rates to 2020 ranging from 0.24% to 3.16%  using an option pricing model.

(iii)

Other

The carrying values of cash and cash equivalents, receivables and accounts payable and accrued liabilities approximate their respective fair values due to the short-term nature of these instruments. The fair value of the long term debt approximates its carrying value due to the floating rate nature of the debt instrument.

25

MANAGEMENT’S DISCUSSION AND ANALYSIS

Three and nine months ended September 30, 2014 and 2013

_______________________

ASANKO GOLD INC.

Management’s Discussion & Analysis

Three and nine months ended September 30, 2014 and 2013

This Management’s Discussion and Analysis (“MD&A”) of Asanko Gold Inc. (formerly Keegan Resources Inc.) (“Asanko” or the “Company”) has been prepared by management as of November 14, 2014 and should be read in conjunction with the Company’s unaudited condensed interim consolidated financial statements for the three and nine months ended September 30, 2014 and the related notes thereto, prepared in accordance with International Accounting Standard No.34, Interim Financial Reporting. This MD&A should also be read in conjunction with the Company’s audited annual consolidated financial statements for the year ended December 31, 2013 and the related notes thereto. All financial information has been prepared in accordance with International Financial Reporting standards (“IFRS”) as issued by the International Accounting Standards Board. All dollar amounts herein are expressed in United States dollars unless stated otherwise. References to C$ are to Canadian dollars.

This MD&A contains Forward Looking Information. Please read the Cautionary Statements on page 31 carefully.

Description of the Business

The Company was incorporated on September 23, 1999 under the laws of British Columbia.   The Company’s shares trade on the Toronto Stock Exchange and NYSE MKT Equities Exchange under the symbol “AKG”.  The Company’s primary asset is its Asanko Gold Mine Project (the “Project”) located on the Asankrangwa gold belt in Ghana.

Asanko’s vision is to become a mid-tier gold producer. In achieving this goal it will continue its emphasis on prudent deployment of capital and a sharp focus on operating costs.  This vision will be achieved through:

·

The phased development of the Asanko Gold Mine Project, with a Phase 1 goal of producing 200,000 ounces per year commencing in 2016 and a Phase 2 potentially adding up to 200,000 ounces per year by 2018;

·

Organic growth via near-mine exploration and judicious regional exploration on its existing exploration projects in Ghana, and

·

Pursuing growth via merger and acquisition opportunities as they arise.

Highlights for the three months ended September 30, 2014 and the subsequent period to November 14, 2014

·

The Company’s Board of Directors approved Phase 1 of the Project for construction and ground breaking occurred in August 2014.   

·

Construction is advancing according to schedule, with 12% of Phase I of the Project complete and on track for first gold production in Q1 2016.  The EPCM contactor and six subcontractors are actively progressing work, with approximately 375 contractors on site.

·

The Company completed a revised Mineral Resource Estimate (“MRE”) for the Phase 1 Project deposits: Nkran, Adubiaso, Abore and Asuadai.  The results of the new MRE for Phase 1 were not materially different to the previous MRE, but more precisely defines grade distribution and continuity within the deposits.  As a result, the revised MRE now supports the ability to plan the mine with the selectivity required to manage grade control and volumes.

·

The Company completed its exploration program on the Dynamite Hill deposit, located 7 km from the Phase 1 plant site.  A maiden Mineral Resource Estimate for Dynamite Hill was included in the updated MRE for Phase 1.

·

The updated MRE was used as a basis for completion of an optimised Phase I mine plan.  The plan, along with updated capital and operating cost estimates were compiled into a “Definitive Project Plan” (“DPP”), which replaces the September 2012 Definitive Feasibility Study completed by PMI Gold.  Highlights of the DPP were, as follows:

·

Life of Mine (“LoM”) gold production of 2.33 million ounces over a 12 year life of mine.

·

Capital cost of $295 million, including all associated infrastructure and allowances for contingencies.

2

ASANKO GOLD INC.

Management’s Discussion & Analysis

Three and nine months ended September 30, 2014 and 2013

·

Lowest quartile All-In-Sustaining-Costs of $781/oz; competitive operating cash costs of $645/oz.

·

First gold production targeted for Q1 2016 and steady-state production in Q2 2016.

·

Robust project economics with strong cash flow generation even in a weak gold price environment: