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Asanko Gold Releases Operating and Financial Results

GuruFocus.com

- By Alberto Abaterusso

Asanko Gold Inc. (AKG) reported operating and financial results for the last quarter of 2016 and the whole year of 2016 Thursday.

From the Ghanaian Asanko Gold Mine's Phase 1, the company's flagship that started commercial production in April 2016, the company produced 147,500 ounces of gold in 2016. Revenue came in at $185,167 and Asanko Gold closed fiscal year 2016 with a loss of $13,216 or 7 cents per share. The operations activities provided the company with cash flows of $55 million, a 610.4% on a year-over-year basis.

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For the second half of 2016, the company produced 111,164 ounces of gold and slightly exceeded its guidance of 111,000 ounces.

With 57,178 ounces of gold produced by Asanko Gold during the last quarter of 2016 at an all-in sustaining cost (AISC) of $893 per ounce, the company also exceeded the quarterly guidance set between 52,000 ounces and 57,000 ounces of gold. However, the company that aims to become a midtier gold producer through a phased development approach, incurred a fourth-quarter 2016 loss of 2 cents and missed analysts' expectations on earnings by 5 cents generating a negative surprise of 166.70%. The figure is adjusted to one-time charges.

Source: Yahoo Finance

In the fourth quarter of 2016, Asanko Gold sold 58,483 ounces of gold, realizing a price of $1,199 per ounce; revenue came in at $70.1 million.

As of Dec. 31, 2016, Asanko Gold Mine has approximately $59.7 million in cash on hand and equivalents, $119.7 million in total current assets and $46.9 in total current liabilities. The current ratio is 2.6.

The total long-term debt amounts to $198 million as of the fourth quarter of 2016, of which $12.6 million is due within 12 months, $128 is due between one and three years and $57.4 million is due between four and five years.

For 2017, the company expects to produce between 230,000 ounces and 240,000 ounces of gold at an AISC of $880 to $920 per ounce.

The stock is trading at $2.54 per share on the New York Stock Exchange with a price-book (P/B) ratio of 1.21 and an Enterprise Value to EBITDA ratio is 15.00.

Disclosure: I have no positions in Asanko Gold.

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This article first appeared on GuruFocus.