Our securities attorneys are investigating claims on behalf of purchasers of Asanko Gold, Inc. (NYSE: AKG) common stock or securities after a report by a U.S. investment firm precipitated more than a 30% drop in the share price on May 31, 2017.
According to the Muddy Waters report, the Vancouver-based West African mining company made investments in Ghana’s Nkran and Esaase mines on the basis of flawed geological work that may result in a liquidity crisis as early as 2018.
Muddy Waters announced it was shorting the stock, believe it was “highly likely to end up a zero.” In a May 31, 2017 interview reported on Bloomberg, Muddy Waters founde Carson Block stated,
At this point Asanko has backed itself into a corner…we don’t see how this company gets out of it.
Asanko Gold Losses?
If you purchased or otherwise acquired shares in Asanko Gold or would like to speak privately with a securities attorney to contribute to or learn more about the investigation, fill out to the form or contact the securities team directly at (800) 254-9493.
Problems at Mines, Inflated Ore Estimates
According to the Muddy Waters report, which referenced interviews with 21 sources familiar with the Nkran mining operation:
- Asanko made investments based on flawed geology in Ghana’s Nkran and Esaase mines
- A serious collapse of the Nkran mine west wall requires an investment of $75 million to $115 million to keep it operational, which may prompt the impending liquidity crisis
- Alternatively, the failure to keep Nkran operational may limit cash flow required to further develop minig operations in Esaase
Additionally, the Muddy Waters report alleges that problems with Asanko’s resource models may have caused estimates of some of their deposits’ ore content to be inflated.
Gibbs Law Group LLP is one of the nation’s leading firms representing individual and institutional investors in securities litigation to correct abusive corporate governance practices, breaches of fiduciary duty, and proxy violations. The firm has recovered over a billion dollars for its clients against some of the world’s largest corporations, and has earned Tier-1 rankings and been named in the U.S. Lawyers – Best Law Firms list for four consecutive years.