csr report-2015

Asanko Gold CSR Report 1

2015CORPORATE SOCIAL

RESPONSIBILITY REPORT

LAYING THE FOUNDATIONS FOR AFRICA’S NEWEST GOLD PRODUCER


Contents

ABOUT US 01ABOUT THIS REPORT 12OUR HOST COUNTRY AND LOCAL COMMUNITIES 14OUR CSR APPROACH 16STAKEHOLDER ENGAGEMENT 20GOVERNANCE AND BUSINESS PRACTICES 28SUPPORTING OUR COMMUNITIES 32PEOPLE AT WORK 38ENVIRONMENTAL STEWARDSHIP 46ARTISANAL AND SMALL-SCALE MINING 54PREPARING FOR GROWTH: PHASE 2 562015 SOCIAL, HEALTH AND ENVIRONMENT INDICATORS 58GLOSSARY 60CONTACT US BACK COVER

The currency used throughout this report is the US dollar $.

Asanko Gold’s vision is to become a low-cost, mid-tier gold mining company that maximizes value for all its stakeholders. The Company’s flagship project is the multi-million ounce Asanko Gold Mine located in Ghana, West Africa.

Construction of Phase 1 was successfully completed in 2015, on budget and ahead of schedule.


World Class Asset Phase 1P+P Reserves: 2.52Moz @ 2.15g/t 190,000oz/yr; AISC $781/oz

Strong Balance Sheet$150m debt facility with no covenants $40m funding buffer

Organic GrowthPhase 2 potential411,000oz/yr; AISC <$800/oz

Execution As Planned On budget – $295mAhead of schedule

Production First Gold – Jan 2016Commercial production – Q2 2016


IN REVIEW2015


Dewatering and pre-stripping of the

Nkran pit

HDPE lined Tailings Storage

Facility approved by the EPA

88 households relocated to the

Nkran resettlement village

Commissioning commenced in

December 2015

Asanko Gold CSR Report2

Asanko Gold CSR Report4 Asanko Gold CSR Report 5

Asanko’s Economic Contribution

The Asanko Gold Mine is a proudly Ghanaian business, and is committed to delivering and sharing the significant and wide-ranging benefits it brings, with local communities and the country as a whole.

The development of the Asanko Gold Mine offers an opportunity to create a positive and lasting legacy; the mine will be a major economic driver for the local economy through direct and indirect employment, infrastructure development and the Company’s Community Assistance Programs and Sustainable Development Projects.

THE AFRICA MINING VISIONAsanko actively supports the Africa Mining Vision (AMV) and we are contributing to the AMV’s objective by ensuring we extend the positive economic impact of the Asanko Gold Mine into the wider Ghanaian economy via procurement, hiring and investment in skills development. We are also engaging with local, regional and national institutions so that we are aligned, where possible, with broader development goals.

100% Revenue*

Cost of Gold Production Distribution of Net Cash Flows

Initi

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Prod

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Gov

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Free

Car

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Asa

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Shar

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12%53% 2% 18% 2% 13%

67%

61% to Ghana 39%

THE ASANKO GOLD MINE WILL GENERATE SIGNIFICANT REVENUES FOR THE GOVERNMENT OF GHANA

*at $1,200/oz gold

$202 million contribution to Ghanaian economy

Increased Demand for Local Goods & Services• 223 Ghanaian businesses supported through procurement of goods

and services• $157 million spent on goods & services from Ghanaian suppliers

Vocational Training• 112 students graduated from the Obotan and Esaase

vocational training centres

Community Support• $470,000 spent on projects

Employment Opportunities• 97% workforce Ghanaians• 38% from local communities

Economic Contribution

2015

33%


The Year in Review by the President and CEO

2015 was an historic year for Asanko as we successfully completed construction of Phase 1 and joined the ranks of responsible miners in Ghana. First gold was poured in January 2016 and ramp-up to steady-state production is expected during Q2 2016. This is a quantum step forward towards realizing our vision of becoming a mid-tier gold producer and maximizing value for all our stakeholders.

We believe effective stakeholder engagement and collaboration is inherently intertwined with our business and our value proposition. Delivering Phase 1 within budget and ahead of schedule is a clear testimony to this. I would like to thank all the stakeholders involved – our employees and contractors, local communities, business partners, regulatory authorities and Government - who contributed their part in turning a project plan into a reality. This is a tremendous accomplishment.

The year was, however, marred by a fatality involving a mining contractor, which occurred in June. This is unacceptable and overshadows the excellent safety record achieved during the construction of the mine where we had zero Lost Time Injuries. We are uncompromising on safety. It is our number one priority and our goal is always to achieve zero fatalities and zero harm. As we transition from a construction site to an operating mine, we have designed a site-specific safety management system called Fihankra, whose origins are from the Ghanaian Adrinkra symbol for safety and security. This will be rolled out in early 2016 to all employees and contractors.

Building a mine brings with it a lot of expectations and challenges, particularly from local and regional communities who are keen to receive a fair share of the benefits. From the outset, genuine engagement, transparency, regular communication and most importantly, the willingness to listen, have played a vital role in managing these expectations and shaping our community support.

The overwhelming message we have received from our in-country stakeholders is to share the wealth created by the mine and to invest in projects that have a lasting, positive impact. Our resettlement project was designed with this in mind. It was built by locals, for locals, with over 60% of the contractors from the project catchment area and all the concrete blocks used sourced locally. Our two nationally accredited vocational training centres have continued to positively impact lives, turning out graduates skilled in plumbing, electrics, catering and masonry. We have also supported the establishment of the Obotan Co-operative Credit Union, which will provide much needed access to capital and other financial services to local communities. To underpin these long-term sustainable development projects, we have recently partnered with CODE Canada and their “Reading Ghana” program for schools, which will improve literacy and reduce school drop-out rates.

We are still a young, growing organization. Successfully building Phase 1 demonstrates that we have a highly capable team and supportive stakeholder relationships. Our focus for 2016 is to continue delivering against our stated plan and to start our planning for Phase 2. Once again, I would like to thank everyone involved in building Phase 1. It is an achievement that we can all be proud of.

Peter BreesePresident and CEO

Message from the Executive Chairman, Ghana

When I joined Asanko back in 2010 it was still an exploration company and gold production seemed a distant reality. So it was enormously satisfying to watch the Phase 1 being built and to observe the professionalism and dedication of the construction team and contractors who ensured the project was built within budget and ahead of schedule. I commend them all. I have been involved with a number of projects during my 40 year career and it is rare to see a mine built according to budget and schedule.

Our stakeholder relationships have played an important part in ensuring the construction success of Phase 1. It is very easy for an organization to become completely consumed by a construction project and neglect its local communities and the surrounding environment. Often it is due to a lack of experience in how to engage effectively with local communities or how to implement the right sort of projects that will make a meaningful difference to living standards. Fortunately our stakeholder engagement commenced back in 2007. Over the years we have formed strong relationships with our communities. This is evidenced by our community support programs, which have been designed specifically to meet local community aspirations of economic empowerment.

Asanko’s Corporate Social Responsibility (CSR) program, which seeks to leverage the presence of the mine to support development and positively impact local communities, is built on partnerships with our local and international stakeholders and has already made giant strides, even before pouring of first gold.

This year we expanded our partnership with GIZ to include the Obotan Co-Operative Credit Union, which will offer access to capital to support new businesses as well as financial literacy to help people plan and invest sensibly for their futures. The Credit Union has already recruited over 200 members. We are also excited to be partnering with CODE Canada on their “Reading Ghana” literacy program, which will strengthen literacy and education in the Ashanti Region, including the Asanko Gold Mine’s catchment area. This will be launched during 2016 and will run over a six year period. We now have three very solid projects in place (covering the key areas of literacy, skills development and financial assistance), to help combat the rural poverty cycle and ensure our long-term objective of creating positive legacies.

Whilst I believe we have established supportive and respectful relationships with our local communities, we cannot get complacent. We must maintain our open, two-way dialogue and continue to manage and meet expectations.

Dr Ben AdooExecutive Chairman, Ghana


Our 2015 Performance

In last year’s report we outlined our priorities for 2015. Here is how we have performed against them:


HEALTH AND SAFETYMaintain a high standard of health and safety by continuing to build a culture and operating environment that supports this standard.

Regretfully the excellent safety record achieved on the plant construction of zero lost time injuries was overshadowed by a mining contractor fatality in the Nkran pit.

Safety performance is a company-wide Key Performance Indicator. As a direct consequence, a portion of all employees and management bonuses for 2015 have been withheld for six months and will only be granted if we achieve a zero fatality rate in H1 2016.

5,713 safety inductions were held, alongside weekly and monthly safety meetings.

In addition, in preparation for the transition to an operating mine, we developed the Fihankra Safety Management System, which seeks to achieve a safe and secure working environment while promoting positive safety behaviours among our employees.

PROJECTConstruct Phase 1 on schedule and within budget to achieve first gold in 2016.

This was achieved.• Gold production commenced on 26 January 2016.

COMMUNITIESComplete the partial relocation of the Nkran village to the satisfaction of the affected stakeholders.

88 households successfully resettled into new and improved accommodation.

The Nkran village partial relocation project provided numerous employment opportunities for local youth, skilled labour and contractors.

• 300 community members were employed in the construction of the new resettlement site.

• 60% local contractors were used for the construction program.

Establishment of the Obotan Co-operative Credit Union.

112 students successfully graduated with a nationally recognized certificate from our two training centres.

$5,000 spent on the catering cooperative formed by five graduates from the Esaase training centre.

This report showcases the range of employment opportunities, skills development and community support programs the Project has provided in 2015, to ensure the mine’s construction benefits as many local community members as possible.

Continue to support livelihood re-establishment efforts.

Maximize the benefits for all project-affected stakeholders.

ECONOMIC EMPOWERMENTContinue to prioritize Ghanaian suppliers of goods and services where products and prices are internationally competitive.

This was achieved.

• 223 Ghanaian businesses supported through procurement of goods and services.

• $157 million spent on good and services from Ghanaian suppliers.

• $202 million contributed to the Ghanaian economy.

ENVIRONMENTMaintain high standards of environmental management and monitoring throughout construction of the Asanko Gold Mine.

This was achieved.

• The Company ensured that all contractors engaged on the Project complied with environmental standards set out by Asanko and the EPA.

• Environmental monitoring stations were fully established and monitored regularly.

• We complied with all permitting and regulatory requirements during the year.

CORPORATE REPORTINGAdvance CSR management rigor through expanded and improved metrics, measurement and reporting.

This year we formalized our CSR data gathering and reporting systems across our key topic areas of community affairs, health and safety, organizational capability, environment and finance, which are now compiled on a monthly and annual basis.

We recruited a Ghanaian national as Executive: Corporate Affairs, with responsibility for the strategy and execution of our in-country CSR initiatives.


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OUR 2016 GOALS

• Zero fatalities

• LTIFR of <2

• Continue to embed our health and safety culture with the roll-out of our Fihankra Safety Management System

• Provision of Education System Support for schools in the local communities

• Upgrade feeder roads in the catchment area

•

• Commence the implementation of ‘Reading Ghana’, a literacy partnership program with CODE. Read more on page 36

• Continue support of the Obotan Co-operative Credit Union

• Continue the GIZ training centre partnership to develop vocational skills to support livelihoods

• Implement a Graduate Attachment Scheme. Read more on page 36

• Ensure the mine is fully aligned to the EPA Akoben baseline audit

• Ensure the Phase 2 permitting requirements are met

• Integrate CSR performance monitoring with monthly and quarterly operational reports

• Review and update the Risk Register to address operational impacts

SAFETY

ENVIRONMENT

CSR REPORTING

COMMUNITY ASSISTANCE PROGRAMMES

SUSTAINABLE DEVELOPMENT PROJECTS

CO

MM

UN

ITY

SU

PPO

RT

CSR IN 2015

CSR LOOKING FORWARDS

CSR IN 2016

The focus of our CSR program in 2015 was to put the foundations in place for a long-term, sustainable business. We designed and implemented programs for safety, health, community development and environmental monitoring. We engaged with our key stakeholders in order to understand their needs and concerns. We supported a number of community assistance programs and created numerous opportunities for direct employment with the mine and through the provision of goods and services. We also provided vocational training in practical skills such as plumbing, catering and carpentry.

As the business matures, we will develop a longer-term CSR strategy with a focus on adding value to existing programs and certification as appropriate, together with regular auditing and inspection to ensure continuous improvement.

As we move into production, our focus is shifting towards operational efficiency and continuous improvement. Our 2016 CSR focus is clear and based on our understanding of risks and opportunities and our goals to operate the project safely and with minimal impact on the environment.

Specific goals will include:

• Fully implementing our production-orientated Safety Management System.

• Providing opportunities for employment and the supply of goods and services.

• Providing vocational training to improve access to the supply chain.

• Supporting community assistance programs and sustainable development projects.

• Finalising our programs of CSR monitoring and reporting on all SHE indicators.

• Drawing up a five-year CSR action plan in consultation with local stakeholders, that will facilitate a sustainable future with our host communities beyond the life of the mine.


About this Report

REPORT SCOPE AND CONTENTThis report is Asanko’s second Corporate Social Responsibility Report and focuses on Asanko’s flagship project, the Asanko Gold Mine in Ghana, West Africa. The primary activity during the year was the construction of Phase 1, which was completed in December 2015, one month ahead of schedule.

With this report we seek to communicate our commitment to Corporate Social Responsibility (CSR), to long-term sustainable development, to human rights, to our host communities, to the environment and to the principles of regular and open communication on progress. This report is aimed at all of our stakeholders; our employees and service providers, local communities, government and non-government groups, regulatory bodies, business partners and shareholders in the Company.

The data presented here covers the Company’s CSR activities and performance for the financial and calendar year 2015 and includes historical data from previous years, as appropriate. Our previous report for 2014 was published in March 2015 and is available online, in pdf format and hard copy.

We have prepared the report using guidance from the Global Reporting Initiative (GRI) guidelines – now in their fourth generation (G4) and the International Council of Mining and Metals (ICMM) Mining and Metals Sector Disclosures (previously the Mining and Metals Sector Supplement). While the report preparation and content disclosure are aligned with the G4 guidelines, the report has not been prepared in accordance with the Core or Comprehensive level.

As the operations at the mine transform from site and community preparation to full-scale production, our reporting processes and monitoring procedures will continue to be improved and adapted. This is an ongoing, iterative process. Going forward we plan to further develop Key Performance Indicators (KPIs) in line with the GRI and ICMM guidelines.

MATERIALITY ASSESSMENTIn 2014, in preparation for construction of Phase 1, Asanko conducted a comprehensive Materiality Assessment using the GRI G4 guidelines to identify the key environmental, social, health and safety, and corporate governance risks affecting our operations. This included defining the scope and boundary of the assessment process.

As 2015 was a transitional year for Asanko, we felt it was more appropriate to defer the Materiality Assessment to 2016 when it will be fit-for-purpose for an operating mining company and reflect our new status as a gold producer. Therefore, for the purposes of this report, we have used the Material Aspects identified in 2014, and reported further on the core topics that apply at this stage of mine development:

• Working with our communities and helping them to adapt to the start of operations, and ensuring we have an open engagement and feedback process so we can improve, compensate and adapt.

• Identifying environmental and social risks and impacts and putting in place environmental and social management systems.

• Managing the transition to an operating mine with respect to our People – establishing safe and secure working conditions.

• Managing our resources and putting in place efficient work practices.

DATA COLLECTION AND VERIFICATIONThis report has been prepared by the Company’s Corporate Affairs and Investor Relations Department and external Environment, Social and Governance specialists in collaboration with the Mine Management Committee. It has been reviewed by the Executive Management Team and approved by the President and CEO. The information has been provided by the Organizational Capability, Health and Safety, Community Affairs, Finance and Environmental departments as well as the Company’s internal reporting and information systems. This report has not been audited by an external firm.

FEEDBACKWe welcome feedback and comments from stakeholders on this report and the issues covered.

Please address any comments, suggestions or observations to Frans de Bruyn, Executive, Organizational Capability by email: [email protected].

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ASANKO’S MATERIAL ASPECTS

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9 Indirect Economic Impacts

Procurement Practices

Local Communities

Training & Education

Anti-Corruption

Local Communities

Market Presence/Hiring Practices

Economic Performance

Resettlement

Health & Safety; Emergency Response

Importance to Business Success

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Asanko Gold CSR Report14 15

Our Host Country and Local Communities

GHANAGhana is the oldest democratic independent state in sub-Saharan Africa with an estimated population of 26 million in 2015. The country achieved independence in March 1957 (the first in sub-Saharan Africa) and has a stable and functioning constitutional democracy, which presents a significant investment opportunity for the mining sector. Ghana received a $918 million IMF loan in 2015 to restore macroeconomic stability through lower inflation and interest rates, a stabilized exchange rate and tightened fiscal policy. This will boost growth and help cut poverty.

QUICK FACTS (2015 ESTIMATES)

Population: 26 million

Life Expectancy: 66 years

Literacy: 76%

GDP:

$113.3 billion - Purchasing Power Parity (PPP)

$37.68 billion Official Exchange Rate

GDP Growth rate: 3.5%

GDP per capita: 15%

Inflation rate: 17%

GDP per capita (PPP): $4,300

Unemployment Level: 5.2%

OUR LOCAL COMMUNITIESThe Asanko concessions are located in the Amansie West district of the Ashanti region, 250km northwest of the capital Accra and 80km southwest of the regional capital Kumasi.

There are 35 villages in the Asanko Gold Mine’s total catchment area; 23 villages in the Phase 1 area and 12 villages in Phase 2. There are 20 schools, four health centres and two police stations serving this population. Water supply for most of the villages is via borehole with around 80% reported to be operational.

The population is constituted primarily from the Ashanti people (80%), with the remainder being from a mix of ethnic groups, who have come to the area looking for farmland and informal mining work. In 2000, the population was recorded by census, with 13,103 people in total and an equal gender distribution.

The two main institutions responsible for local governance in Ghana are the District Assemblies and the Traditional Councils. The District Assemblies are the highest political authority vested with powers to deliberate, legislate, plan and develop the Districts through the preparation and implementation of development plans and budget. All the communities in the footprint of the Asanko Gold Mine are under the administration of the Amansie West District Assembly.

The Traditional Councils in the Amansie West District have control over the stool lands within the concession area of the Asanko Gold Mine and pay allegiance directly to the King of Ashanti.

Local land is held under customary tenure through traditional authorities and can be bought, leased or sharecropped. Small scale farming is the primary commercial activity, with a mixture of varied cash and subsistence crop cultivation: plantain, cassava, aubergine, peppers, tomatoes and maize.

The community also keep livestock, such as cows, poultry, pigs, goats and sheep. Complementary export-based cash crops of cocoa and palm oil supplement local incomes considerably.

Alongside farming activites, large areas in the District have been taken over by small scale mining operators know locally as ‘galamsey’. Please refer to page 54 for more information on how we engage with galamsey.

A majority (65%) of the community earn less than GH¢150 ($38) per month, compared with the average national salary of GH¢2,472 ($873) per month.


HISTORY OF GOLD MININGGold mining is extremely important to the economy of Ghana. Mining dates back for hundreds of years to when Ghana was referred to as the ‘Gold Coast’, with four prolific greenstone belts that have yielded +120 million ounces of gold in past production.

Ghana is one of the largest gold producers in the world; according to the GFMS, Ghana ranked 10th in the world and 2nd in Africa for gold production. In 2014, Ghana generated revenue of $3.84 billion from gold exports. There are a number of gold mining companies operating in the country, including AngloGold Ashanti, Newmont and Goldfields. The mining tenure, royalty and tax laws are stable and well legislated. The country has a highly trained and skilled mining workforce at all levels of operation.

More than 90% of all production comes from the Ashanti Region, with the majority of gold mined by established national and international operators. In contrast, however, there is a burgeoning informal artisanal mining sector, which continues to be responsible for significant environmental damage through extensive deforestation and contamination of water supplies.

CONTRIBUTION OF THE MINING SECTORMining is an important contributor to raising the socio-economic standards of Ghana. The ICMM reports that since 1991, household poverty has declined substantially in Ghana, suggesting that economic growth has benefited a wide cross-section of the economy. The regions with high levels of mining activity have lower absolute levels of poverty and have also experienced faster declines in poverty levels than other regions. Gold production now accounts for around 48% of the country’s export revenue along with offshore oil and gas, bauxite, manganese, industrial diamonds and agricultural products.

Asanko Gold CSR Report


Our CSR Approach

Exploration

Focus and Compliance Areas

Benefit Delivery

1. Sustainable Development Projects

2. Community Assistance Programs

3. Taxes, Royalties, Salaries, Goods and Services

Benefits to Host

Communities

Consultative Mechanisms

EnvironmentSafety Health Education Social Economic

Across the Mining Life Cycle

Design Construct Operation Closure Post-Closure

OUR CSR FRAMEWORK

• Transparent reporting

• Compliance with laws and regulations

• Compliance with laws

• Safety training

• Reporting

• Monitoring


• Health programs

• Skill training

• Education assistance

• Vocational training

• Community programs and support

• Infrastructure

• Facilities

• Labor practices


• Salaries

• Taxes

• Royalties

• Procurement

CSR Charter

Corporate Social Responsibility informs every major action and decision we take. It is embedded in the way we plan, manage and execute our business, engage with our stakeholders and behave towards one another.

We aspire to be a positive contributor to our host country and local communities during mining operations, and to create a positive, self-sustaining legacy that will survive beyond the life of the mine.

INTERNATIONAL STANDARDSAsanko draws on the following international standards to guide our management principles, policies and approach:

• Global Reporting Initiative – G4

• International Council of Mining and Metals principles and disclosure requirements

• Extractive Industries Transparency Initiative

• Equator Principles III

• International Finance Corporation Performance Standards on Environmental and Social Sustainability 2012

OUR CSR CHARTER Through our CSR programs and leadership team, we are committed to providing a safe and healthy place of work for our employees and contractors, to demonstrating sound environmental stewardship and to fostering meaningful dialogue with the communities in which we operate.

Our approach is based on the following Principles, as described in our CSR Charter:

• Respecting the human rights of anybody who works for us, supplies good or services to us or is affected in any way by our business activities.

• Complying with our corporate governance principles, national and international laws, industry codes and being a responsible corporate citizen.

• Mitigating our impact on the environment

• Maintaining a high level of Health and Safety performance.

• Actively identifying opportunities to make a positive and meaningful economic contribution to the communities we operate in beyond the life of our mines.

• Engaging with our stakeholders and taking into consideration their perspectives, concerns, customs and cultural heritage before we act.

• Working closely with landowners prior to commencing activities on the ground, and negotiating fair compensation measures.

• Developing the skills and careers of our employees.

• Adhering to our values and demonstrating them in our behavior. We do not tolerate any unethical behavior by any stakeholder involved in our business.

• Voluntary Principles on Security and Human Rights

• World Bank Environment, Health and Safety Guidelines (General and Sector)

• World Health Organization Guidelines for Drinking-water Quality

• International Cyanide Management Code (ICMC)

• International Labour Organization Core Standards


STRATEGIC PARTNERSHIPSWe recognize that our core competency is mining. To help us achieve our CSR aspirations and goals, we have adopted a partnership strategy that seeks to collaborate with governmental and non-governmental organizations (NGO) in leveraging expertise and funding so that our Community Assistance Programs and long-term Sustainable Development Projects have a greater impact and chance of success. We currently work with three partners; GIZ, the Don Bosco Youth Network and CODE Canada.

Over the past three years we have had a very fruitful partnership with the German government backed development organization, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, as part of their Employment for Sustainable Development in Africa (E4D) program. GIZ matches Asanko’s funding dollar for dollar. Together we have implemented a successful development initiative to educate, empower, train and build the capacity of the local youth in our communities. In 2015, following the success of the training centres, GIZ approached Asanko to support the establishment of a Credit Union in the Project’s catchment area, which was launched in December 2015 (refer to page 33).

As part of the vocational training program with GIZ, we are also partnering with Don Bosco Youth Network (DBYN), an NGO, which runs education, capacity building and youth programs across West Africa. DBYN are our implementation partner for the skills development programs at the Esaase and Obotan Training Centres. These training centres exemplify the successful application of our strategic partnership approach. There is more information on page 34 of this report.

In 2015, we agreed to partner with CODE, Canada’s leading international development agency uniquely focused on advancing literacy and education, to sponsor a six year literary program (refer to page 36). This is an exciting initiative and will be the standard bearer of our community support projects. The Reading CODE Model focuses on building three main elements to develop and sustain literacy; interesting books, high quality teaching and effective partnerships. Our participation in CODE’s Reading Ghana program supports the basic human right of access to quality education, while also helping to create long-term and sustainable impact. Implementation of this program will commence in 2016.


OUR STAKEHOLDERSOur engagement methods are tailored to the stakeholders involved. We aim to be culturally-sensitive at all times and fully inclusive, so that all of our directly and indirectly affected stakeholders can be involved in the project. Some of our key engagement methods, interests and expectations are presented in the table below.

Stakeholder Group Interests and Expectations Method of Engagement

Employees • A safe working environment

• Sustainable employment

• Career and skills development

• Contribute to the success of the business

• Competitive compensation

• Regular meeting between managers and teams

• A culture of openness that encourages continuous dialogue

• Regular briefings, updates and meetings on operation, safety, environmental and social performance

• Grievance mechanism

Investors and Shareholders • Return on investment

• Value-accretive growth

• Compliance and corporate governance

• Consistent delivery of plans

• Continuous disclosure

• Accuracy in reporting

• Regular corporate / project update announcements

• Regular meetings with the Executive Management Team

• Annual general meetings

• CSR reporting

Ghanaian Government (all levels) • Responsible operations and corporate citizenship

• Compliance and corporate governance

• Successful operations to ensure long-term employment and revenues for Ghana

• Visible improvements to society

• Direct and regular engagement through our government relations program

• Multi-stakeholder roundtables

• Site visits

• Compliance and progress reporting

• CSR reporting

Stakeholder Group Interests and Expectations Method of Engagement

Local Communities • Sustainable employment

• Increase in trade

• Maximum and equitable community development

• Alternative livelihood projects that will last beyond the life of the mine

• Minimized environmental impact

• Continuous dialogue and engagement via company-community forums, associations, and committees

• Open-door policy at site office

• Community Information Centres

• Participation in ceremonial gatherings


Traditional Structures and Heritage • Maximum benefits for communities

• Recognition and consultation

• Respect for cultural values and practices

• Continuous dialogue and engagement via meetings with village chiefs, company-community forums, associations and committees.


Suppliers and Contractors • Long-term success of the project

• Fair treatment

• A safe and healthy working environment

• Regular one-on-one meetings

• Contract management

• An open culture that encourages dialogue

Industry Bodies • Participation

• Compliance with legislation

• Attendance at quarterly Chamber of Mines meetings

• Annual Mines Safety Competition

• Regular inspection visits to project sites

• Bi-annual proficiency examinations conducted by Inspectorate Division of Minerals Commission based on the various legislative instruments of Ghana

Public Sectors Partners • Effective partnerships

• Sustainable development

• Active partnerships and collaboration

• Progress reporting on initiatives

• CSR reporting

Non-Governmental Organizations • Cooperation and satisfaction of relevant interests

• Active partnerships and collaboration

• Continuous dialogue and engagement via Asanko’s Community Affairs department

• Progress reporting on initiative

• CSR reporting

Media • Engagement and transparency • Regular corporate / project update announcements

• Briefings with management

Stakeholder Engagement


LOCAL COMMUNITY ENGAGEMENT Since the initial exploration of the Esaase deposit in 2007, we have conducted extensive stakeholder mapping and engaged regularly with each stakeholder group to understand common interests and concerns.

In February 2015, we assessed our community relations activities across our entire Project area and prepared an Action Plan for the year to further define our stakeholders, methods of engagement and frequency of engagement. Our community consultation routes now include, among others:

• Community information centres

• Individual and focus group meetings

• Social Responsibility Forums

• Women consultative committees

• Community Consultation Committee

• Community liaison committees

• Attendance at community ceremonies, events and celebrations

• Open-door policy at site offices

We have nine community relations officers working fulltime: five on the Phase 1 Project and four on Phase 2 at Esaase. Our team meets at least once a week with formal and informal engagements conducted with our stakeholder groups on a regular basis. In addition, Community Affairs representatives visit each of the 23 communities within the Project’s catchment area every quarter. In 2015, our team attended 154 stakeholder meetings, including 130 meetings on the Phase 1 Project. Refer to page 56 for specific stakeholder activities regarding the development of Phase 2.

In order for us to learn lessons from these engagement meetings and take remedial actions, the outcomes of all meetings are documented and reviewed. Feedback is provided on the community concerns raised and the Company’s response is shared with all concerned.

Construction updates, meeting notices and job vacancies are posted on community noticeboards and distributed throughout the communities.

During Q3 2015, a Social Responsibility Forum (SRF) was established for Phase 1. The SRF provides the framework for the Company and local communities to interact with each other so all parties can co-exist peacefully. It sets out the roles of all parties involved, details the conflict resolution process and is the overarching umbrella that will guide specific agreements, including local employment and sustainable livelihoods. Clarifying and agreeing roles, responsibilities and commitments in a transparent manner, following extensive community consultations, will enable expectations to be managed more effectively. The SRF is expected to be formally inaugurated during 2016, to provide a framework for all ongoing consultation.

Consultative Body Members Frequency of Meeting/

Communication

Key Topic Areas

Traditional Authorities 68 Quarterly Project Updates, Policies Sensitization*, Cultural Heritage Consultations

Ghana Education Institutions 18 Quarterly Project Updates, “Reading Ghana” program

Governmental/Regulatory Bodies 15 Quarterly Project Updates

Compensation Negotiation Committee

137 Quarterly Crop Rate Review, Compensation Negotiations, Project Updates

Farmers Representatives 23 Quarterly Project Updates, Issues and Company, Policies Sensitization, Crop Rates Review

District Assembly 18 Monthly Project Updates

Youth Associations 160 Quarterly Project Updates

Religious Bodies 70 Twice a year Project Updates

Obotan Social Responsibility Forum

65 Monthly Deliberation on CSR agreements and Implementation

Esaase Social Responsibility Forum

62 Quarterly Deliberation on CSR Agreements and Implementation

Community Liaison Committees 110 Twice a year Project Updates, Policies Sensitization, Community Support Consultations

Community Consultation Committee

65 Quarterly Project Updates, Policies sensitization, Crop Rates Review and Negotiations, Community Support Consultations, Local Employment

Women Consultative Committees 60 Quarterly Project Updates and Policies Sensitization

Community Development Committees

233 Quarterly Project Updates, Policies Sensitization, Community Support Consultations, Local Employment

*This refers to the work our Community Affairs team have undertaken to introduce and explain company policies and procedures to the local communities

LOCAL STAKEHOLDER ENGAGEMENT PLAN


Asanko Gold CSR Report24 25Asanko Gold CSR Report

LAND AND CROP COMPENSATION In line with the Ghana’s Minerals and Mining Act, 2006 (Act 703), we have negotiated and agreed with farmers and landowners compensation rates for crops and deprivation of land use. Compensation is paid for both crops and land on a per acre basis. During 2015, Asanko paid $1.88 million in crop compensation to 1,500 affected farmers.

COMPLAINTS AND GRIEVANCES IN 2015

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Dec Total %

Being addressed 2 0 0 0 1 2 2 21 4 3 1 36 47%

Resolved 4 5 3 4 7 8 5 4 0 1 0 41 53%

Total complaints 6 5 3 4 8 10 7 25 4 4 1 77 100

COMMUNITY GRIEVANCE MECHANISMWe have implemented a Complaints and Grievance Management procedure that is accessible to all our local stakeholders. Stakeholders can lodge complaints formally or anonymously at any time and expect that such complaints receive the required attention. We seek to deal with complaints on a timely basis and in a transparent manner. During 2015, we received 77 complaints in relation to Phase 1 and none for Phase 2. 47% of these complaints are still being addressed to the satifisfaction of all parties.


ISSUES

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Dec

Number of complaints and grievances50 10 15 20 25

Breach of Tradition

Crop Compensation

Employment

Galamsey

Land Compensation

Staff Behaviour

Structure Compensation

Foot Path Access

Farm Survey

Water

Blasting

1 1 1 1

1 1 1

1

1 1

1

7

24

11 1

1

1

1

1

3

3

4

4

2

2

2

26

Asanko Gold CSR Report26 272626

Case Study: The Manso Nkran Village Partial Resettlement Project

In our 2014 CSR Report, we outlined the plan and process for the resettlement of 88 households that were located within the 500 metre blast radius of the Nkran pit, as required by Ghanaian law. Prior to commencing construction of the new settlement, we consulted extensively with the community and the affected households to ensure that we understood their concerns, involved them in the compensation and planning process and fully explained the new settlement and infrastructure provisions and processes.

Whilst the resettlement process itself is very prescriptive in Ghana and is overseen by both the Environmental Protection Agency (EPA) and the Minerals Commission (Mincom), we were also guided by the International Finance Corporation’s Performance Standard 52, which is the global standard for resettlement planning, implementation and monitoring.

This resettlement project is the largest and most visible community-related project we have been involved in since we first began our exploration activities in the area almost eight years ago. The project provided an opportunity to demonstrate how we turn our guiding CSR principles and charter into tangible actions, with direct input from the project beneficiaries.

The project was designed and financed by Asanko and built by the local community. It took seven months to complete at a cost of $9 million and comprises 88 houses over 45 acres with kitchen, bathroom, potable water and electricity; water storage with 140,000L capacity; integrated waste management system; street lighting; a school with computer lab; Community Centre; and football field.

300 members of the local community were employed in the construction activities. Ten Ghanaian contractors were engaged to implement the project, out of which six were from the local area. In addition all the concrete blocks were sourced from local contractors, skills training and health and safety training was provided.

We are pleased to report the resettlement was completed within the timeframe to the satisfaction of all stakeholders, particularly members of the affected community. We will continue to monitor the condition of all of the resettlement houses.

We believe this resettlement project is one of the best to be implemented in Ghana.

2Performance Standard 5: Land Acquisition and Involuntary Resettlement, 2012

OLD SETTLEMENT26


Governance and Business Practices

Robust corporate governance and ethical business practices are integral to successful CSR. Our Code of Conduct ensures that we comply with applicable laws and regulations, act with the utmost professional integrity at all times and manage risks to the business appropriately.

This section should be read in conjunction with our Annual Information Form (for further details on the Company’s structure and its associated subsidiaries) and our Corporate Governance Policies and Procedures Manual (which includes information on the charters for each Board committee, criteria for Board membership and terms of reference for the Board, the Chairman and the President and CEO), both are available on our website, www.asanko.com. Biographies of the Board and Executive Management Team are also available on our website.

LEADERSHIPThe Asanko Board is responsible for the Company’s operational, financial and CSR performance and ensuring compliance with relevant legal and regulatory requirements. The Board is responsible for approving and monitoring all significant policies and procedures that govern the Company’s activities.

The Board approved the Corporate Governance Policies and Procedures Manual in November 2015. This established the Charters for all aspects of governance and defined executive management responsibilities.

The Executive Management Team is responsible for the development of the Company’s overall corporate strategy. Health, safety and environmental responsibilities are managed by highly-qualified Heads of Department, with

leadership from the General Manager and the Executive Management Team. Heads of Department are responsible for compliance and performance reviews, as well as overseeing investigations into any serious accidents.

Our organizational structure is open and transparent, values diversity, offers opportunities for professional growth and development, and prioritizes the health and safety of our employees.

BOARD STRUCTUREThe Asanko Board consists of seven members, including the President and CEO as an Executive Director. The Board members are professionals with extensive experience across the mining, legal and financial sectors. The Board meets a minimum of four times a year, with at least one Board meeting held onsite at the mine.

The Board currently has four committees that meet at least once a year; an Audit Committee, a Compensation Committee, a Governance and Nominating Committee and a Safety, Heath and Environment Committee. The Board appoints the independent directors of these committees.

BOARD INDEPENDENCEFive of the seven members of the Board are independent, as defined by the Canadian securities governance guidelines. The two members who are not independent are: Peter Breese, the current President and CEO and Shawn Wallace, who was previously Executive Chairman and President and CEO until October 2012.

The Audit, Compensation and Governance and Nominating Committees are composed entirely of independent directors. During 2015, the independent directors met four times.

Asanko Chairman, CEO and in-country leadership team29Asanko Gold CSR Report


ANTI-BRIBERY AND CORRUPTIONAsanko is committed to conducting its business affairs with integrity and in compliance with Ghanaian and Canadian laws, including Canada’s Corruption of Foreign Public Officials Act. No employee shall make any form of payment, direct or indirect, to any public official as an inducement to procuring or keeping business or obtaining or revoking a permit to operate.

We also subscribe to the practices of the Extractive Industries Transparency Initiative (EITI) and report openly on our business with joint venture partners and contractors. Ghana has been a supporting country and compliant with EITI since 2010.

Asanko prohibits officers, directors and employees from participating in political activities in countries of which they are not nationals. We have not made any financial contributions to political parties in Ghana or Canada.

INTERNAL CONTROLS AND MANAGEMENT INFORMATION SYSTEMSDuring 2015, in preparation for commercial operations in 2016, Asanko rolled out a company-wide business management software system to manage the procurement process, with the appropriate levels of authorization, inventory, cost control and financial accounting. Monthly production and operational reports, prepared based on information from the business management software system, are distributed to and reviewed by the Executive Management Team.

In addition, Asanko has also established an internal audit function, which is currently outsourced to PriceWaterhouseCoopers.

SUPPLY CHAIN MANAGEMENTThe identification of high quality suppliers of goods and services to our operations, the ‘supply chain’, is a critical part of sustainable business operations. At Asanko, goods and services are only requested by the end user within the company and through a careful process of interview, review and evaluation.

Our Tender Procedures for Contracts is a key mechanism for ensuring that all suppliers to the project are able to comply with our own standards of labour management, quality control, health and safety, codes of conduct and environmental stewardship. Suppliers are required to demonstrate their organization capacity, measures for the control of risk and accreditations as required. For high risk services, we may conduct a site visit in accordance with our tender procedures. The tender process itself is tightly controlled with a number of key steps to ensure a fair and equitable opportunity for all tenderers.

MANAGING GRIEVANCES AND WHISTLEBLOWINGWe have a whistleblowing procedure in place which enables employees to report fraudulent, inappropriate or suspicious behavior anonymously via telephone in Ghana, South Africa and Canada or alternatively by email. The service is operated by an independent third party. Any employee who believes that he or she is being asked to commit a wrongdoing or who believes that a wrongdoing has been committed, may submit a good faith report at any time.

EXECUTIVE COMPENSATIONWe seek to be a High Performance Organization, attracting and retaining highly qualified and experienced industry professionals. Executive remuneration is designed to be aligned to the interests of shareholders, to be competitive and to reward performance. This is measured on an annual basis against a set of personal Key Performance Indicators (KPIs) and the Company’s strategic objectives. Remuneration consists of a base salary, a short-term cash incentive plan and a long-term share incentive scheme.

Asanko holds an annual vote on executive compensation, which gives shareholders the opportunity to engage with the Company on this subject, and ultimately approve or reject the executive compensation program. For further information, please refer to the Company’s Annual General Meeting materials, which are available on our website.

ETHICAL CONDUCT The Asanko Code of Business Conduct and Ethics sets the standard for our commitment to work with transparency, integrity and respect. These guidelines promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships.

The guidelines:

• Promote avoidance of conflicts of interest, including disclosure to an appropriate person of any material transaction or relationship that could be expected to give rise to a conflict.

• Promote full, fair, accurate and timely disclosure in reports, documents and other public communications.

• Promote compliance with applicable governmental laws, rules and regulations.

• Promote the prompt internal reporting to an appropriate person of violations of this Code.

• Promote accountability for adherence to this Code.

• Provide guidance to employees to help them recognize and deal with ethical issues.

• Provide mechanisms to report unethical conduct.

• Help foster the Company’s culture of honesty and accountability.

The Company expects all its employees, officers and directors to comply at all times with the principles in this Code. Any violation of the code results in disciplinary action. All employees, officers and directors receiving training on our Code of Business Conduct and Ethics and are required to read and sign it annually.

In addition, we have a Disclosure, Confidentiality and Insider Trading policy to ensure we meet our obligations under the Toronto and New York Stock Exchange rules and securities laws. It includes guidelines on the timely disclosure of material information, the confidentiality of undisclosed material information and provides for the imposition of trading blackout periods. All employees receive training on this policy to ensure compliance.

RESPECTING HUMAN RIGHTSWe uphold fundamental human rights and do not interfere or take sides in politics or social issues. All employees and contractors are required to comply with our Code of Business Conduct and Ethics. Any behavior which contravenes the Code is reported immediately to senior management. We take into account the cultural diversity of our workforce observing customs and religious worship. We have a zero tolerance approach to discrimination of any form. We provide a procedure for ‘whistleblowing’ which any of our workers or contractors can access to register a complaint or grievance about the Company. Our mine site is fully-secured. Security staff are carefully vetted to ensure that their policies and practices are aligned with the Voluntary Principles on Security and Human Rights.


Supporting Our Communities

In line with Ghana’s objective of continuously improving its socio-economic indicators, there is an opportunity across the country to address challenges relating to poverty, healthcare provision, access to education, unemployment and gender inequality, and the Amansie West District is no exception. The majority of these challenges can be attributed to lack of access to financial capital and other financial services that are needed to both trigger and support economic growth.

In 2014, Asanko Gold and GIZ entered into a development partnership agreement, aimed at improving livelihoods amongst 23 communities within the Asanko Gold Mine project area. Key to improving livelihoods is improving financial literacy, education and access to capital.

In July 2015, Asanko, with support from GIZ, consulted with community members through consultative meetings regarding the establishment of a credit union. The proposal was overwhelmingly positive, with over 93% of people polled supporting the idea and believing it would be beneficial to the community.

Credit Unions are member-owned, not-for-profit financial cooperatives that provide savings, credit and other financial services to their members. Credit union members pool their savings and deposits to finance loans to other members and benefit from higher returns on savings, lower interest rates and fewer fees.

The Obotan Cooperative Credit Union (OCCU) was formally launched in December 2015 and to date has a membership of 305 and an asset base of GHc32,000 in cash and assets, across seven catchment communities. Its aim is to become the leading financial services provider within the Amansie West District of the Region. Asanko has provided GHc50,000 in seed capital and donated an office, which cost $50,000 to build.

By December 2016, the OCCU is targeting to have a membership base of 2,000 and a capital base of GHc 100,000. The OCCU is an affiliate member of the Credit Union Association of Ghana, the umbrella association of all credit union activities in Ghana.

Case Study: The Obotan Co-Operative Credit Union

OUR APPROACHEstablishing and fostering beneficial relationships with our local communities is key to the success of the Asanko Gold Mine and its future. We have a two-pronged approach; Community Assistance Programs, which are typically short to medium-term and designed to improve quality of life, and Sustainable Development Projects that are longer-term and aim to create positive, self-sustaining legacies beyond the life of the mine.

Our current focus areas for community assistance and sustainable development are: skills development, education and literacy, healthcare and infrastructure. All of our programs and projects are designed in consultation with community-based groups and key stakeholders.

All of our support projects are selected based on a series of clear criteria:

• Project outcomes must make a material difference to members of our communities.

• Initiatives must be owned by the community and sustainable after the life of the mine.

• Projects and initiatives must be integrated in nature to support a defined/desired future state.

• Projects must be designed in such a manner as to maximize community participation and management post-completion.

• Projects must be of a direct or indirect benefit to the mine.

• Projects must be aligned with District Development Plans and not be duplicated.

In 2015, we invested a total $470,000 on our community support projects.

OPPORTUNITY CYCLE

Asanko Gold CSR Report 33Asanko Gold CSR Report32

COMMUNITY


FELICIA KARIKARI, CATERER

“In fact, I never dreamt ever working with a gold mining company, but the Esaase Skills Development Project (ESDP) gave me what it takes to be who I am today. It’s such a great feeling working with other knowledgeable people in the company and am able to complete tasks and duties with professionalism and the greatest sense of care. The pay is really good. Thank you to GIZ , Don Bosco and Asanko.”

“In just three months after graduating from the ESDP, I have completely taken over my mother’s traditional kitchen at Asuowinn and I have successfully turned it into a modernized, profitable and locally patronized restaurant, which now serves a variety of dishes and pastries including meat pie, bread, chips, fufu etc. The restaurant is now a preferred choice for many members of the community.”

Supp

ortin

g O

ur

Com

mun

ities

Supp

ortin

g O

ur

Com

mun

ities

Carpentry

Plumbing

Catering

Electrical

Masonry

120 students enrolled at the Obotan and Esaase training centres

67% male and 33% female

112 trainees graduated with a NVTI Level 1 certificate

6 trainees were employed in the construction of Phase 1

3 graduates were employed by contractors working on Phase 1

1 graduate has been employed by Asanko as a Plant Attendant

SUSTAINABLE DEVELOPMENT PROJECTSSKILLS DEVELOPMENT

Vocational Training

In partnership with GIZ and DBYN, Asanko has built two vocational training centres at Obotan and Esaase, to teach the local youth trades and skills to enable them to gain employment at the Asanko Gold Mine or pursue entrepreneurial ventures that will benefit from the growth in business opportunities in the area. In 2015, Asanko spent approximately $371,000 on the two training centres.

Training is provided in core, practical vocations such as carpentry, masonry, catering, plumbing, metal work, fabrication and electrical installation among others. Successful graduates received National Vocational and Technical Institute (NVTI) proficiency certificates and are set up with the basic ‘tools for their trade’. Since the start of the courses in 2014, 260 students have successfully graduated.

Train > 390 local residents local between 2014 and 2016, 293 male and 97 female.

Assist 70% of students with finding employment within 12 months of completing their training. G

OA

LS

2015 HIGHLIGHTS

RAZAK ABUDU, MASON

“Masonry is an energy-sapping job, yet easy to find and profitable as well. People are building everywhere in Esaase and the neighboring villages. I am delighted because there is no single day I am not engaged and am able to earn a living for myself and my family. Life is generally better than before”.

GLADYS AGGYEMANG, ELECTRICIAN

The greatest opportunity life offered her was the ESDP. “I happily embraced the ESDP from the onset as I bravely opted for training in Electrical Installation, a career which is traditionally perceived to be preserved for males. This perception is real in our rural settings. For me, this project was an opportunity as well as a challenge to compete and prove that given the necessary environment, encouragement and available support, women are equally capable of developing careers in male-dominated technical and industrial fields in Ghana.

As a single mother, I had to combine a very busy and difficult schedule of developing myself, raising my child, taking care of my aged mother and attending to my cocoa farm. I am now a beacon of hope to many of my contemporaries and a role model to female trainees after I successfully passed, with distinction, my Proficiency II examinations and subsequently, was offered a job at Asanko, where I currently work as an electrician.”

CASE STUDY Some of our success stories are presented below.



COMMUNITY ASSISTANCE PROGRAMS

In 2015, we carried out the following projects:

• 1,200 members of the community were given health screening covering various diseases, including malaria.

• 200 mosquito nets were distributed.

• 100 community health volunteers were trained in basic health education.

• Five clean up exercises in four communities to promote health and sanitation awareness.

• Replacement of two non-operational community water boreholes at a cost of $20,000.

• Upgrade of local road infrastructure in the Esaase concession area, at a cost of $16,000.

2016 COMMUNITY SUPPORT PROJECTS

Based on feedback following consultation with our local communities, we have identified these community support projects for 2016:


National Service Scheme

As part of the Ghana National Service Scheme, in 2015 we trained 28 students, 11 of whom were subsequently offered employment by Asanko, the other 17 students are completing their academic studies.

Graduate Attachment Program

In 2015, we designed a Graduate Attachment Program, for implementation in 2016. Our aim is to develop a pipeline of skilled workers to address attrition and ensure long-term sustainability of the workforce.

In 2016, we plan to identify at least ten high achievers from within relevant educational institutions in Ghana and provide them with practical vocational training during their course, and then to support them through their national service for one year after graduating.

READING GHANA

During 2015, we commenced preparatory work on our flagship Sustainable Development Project, ‘Reading Ghana’, which is a public-private partnership with CODE, a Canadian NGO with 55 years of experience in advancing literacy and learning, and over 20 years experience of working in Ghana. The project will be launched in 2016 and be rolled out over a six year period across the Ashanti Region, including the catchment area surrounding Asanko’s operations.

‘Reading Ghana’ is a comprehensive literacy program whose ultimate goal is to improve learning outcomes of primary and secondary school children through the acquisition of reading, writing and critical thinking skills. By improving student learning outcomes in upper primary and junior secondary school, this initiative supports completion rates and contributes to strengthening the basics skills of youth in the region. These youth can then continue onto secondary high school, transition to TVET training or enter the workforce. Providing children and youth with strong foundational literacy skills will contribute to their abilities to be critical thinkers, problem solvers, providers for their own well being and, consequently, effective contributors to their communities and the economy overall.

Continuation of our vocational training program in partnership with GIZ

Continued support of the Obotan Co-operative Credit Union in the form of management and administration.

Educational support with launch of ‘Reading Ghana’, rehabilitation of schools and provision of furniture.

Refurbishment of selected community healthcare facilities.

Infrastructure support through the rehabilitation of key community roads.

Support to community security and policing.


People at Work

ASANKO AS AN EMPLOYEROur employees are our most important asset and we are committed to building Asanko into a high performance organization, with our first goal to be a responsible employer. We are an equal opportunity employer and support the principle that everyone has the right to work without suffering discrimination of any form because of race, religion, colour, HIV status, sex, sexual orientation, age, national or ethnic origin, or physical handicap.

Our approach is to fill as many positions as possible with Ghanaians to make the most of the country’s long history of mining and highly-skilled workforce, as well as demonstrate our commitment to the AMV. We are pleased, therefore, to report that we have been successful in meeting that goal with a predominantly Ghanaian workforce since 2007.

Asanko’s Recruitment Policy is designed to ensure that potential candidates for employment are identified and attracted to Asanko, to ensure that candidates are selected on merit and that the process reflects the core values of the Company. We comply with all relevant Ghanaian legal requirements for employment.

Currently, the majority of senior, middle-management and technical employees at the Asanko Gold Mine are Ghanaians, and the vast majority of the contractors and sub-contractors we work with are also Ghanaian and employ Ghanaians. Whilst we are an equal opportunities employer, we recognize that there is some way to go in increasing the number of women in senior roles in our workforce and we are addressing this issue through recruitment and vocational training.

In 2015, with the construction of the Phase 1 Project, our workforce was predominantly contractors and sub-contractors, with a small team of Asanko employees 97% of the workforce was Ghanaian. As we move from construction to steady-state operations in 2016, we expect our workforce

will comprise around 1,500 people, divided between 400 employees, 442 mining contractors and 658 other contractors.

WORKER REPRESENTATIONAn extensive worker representation structure has been put in place where worker representatives meet on a daily, weekly and monthly basis. Outcomes of these meetings are formally recorded and any action required taken as soon as possible.

Unions are recognized and free to conduct their business as they see fit. There are regular meetings between site union representatives and management.

WORKING WITH CONTRACTORSAsanko conducts a thorough tender process when awarding contracts. Contractors are rated on a number of criteria, including safety record, technical capabilities, financial position and employment policies and practices. Where possible, preference is given to Ghanaian-owned companies. Once a contract is awarded, contractors are expected to fully adhere to our high standards for health, safety, and environmental care, which take precedence over their own internal practices. All contractors receive a full safety induction before commencing work.

The Asanko Contractor Management Procedure outlines how Asanko’s Heads of Department will ensure that contractors conform to the requirements of the Asanko Safety, Health, Security, and Environmental Management System. All contractors are required to comply with the Project Labor Agreement, which was drafted on the basis of the National Labor Act, 2003 Act 651 and covers the behavioral and ethics conduct requirement for contractors, together with required standards for safety, security, health management, labor relations and labor working conditions.

TOTAL WORKFORCE (ASANKO & CONTRACTORS)

2014 2015

948 2,946

% GHANAIANS (ASANKO & CONTRACTORS)

2014 2015

96% 97%

% EMPLOYEES HIRED FROM LOCAL COMMUNITIES

2014 2015

38% 35%

% CONTRACTORS HIRED FROM LOCAL COMMUNITIES

2014 2015

41% 39%

BY GENDER

MALE

2014 2015

891 (93%)

2,775 (94%)

FEMALE

2014 2015

57 (6%)

171 (6%)

Peop

le a

t Wor

k

% OF LOCAL COMMUNITY MEMBERS EMPLOYED

2014 2015

45% 38%


To prepare for the Company’s move from a construction site to an operating mine and to reflect the country-specific cultural context, the Fihankra Safety Management System was developed in the second half of 2015.

Fihankra is taken from the Adrinka symbol meaning ‘safety and security’ and the Ashanti symbol denotes a compound with only one point, which serves as both the entrance and exit, demonstrating a place of safety and security. The Asanko Gold Mine is the house, with employees and contractors the Asanko family, all responsible for one another’s safety. In addition to the symbol, the mantra ‘You See It! You Own It’ has been adopted to remind everyone that they are not only responsible for their own safety, but also alerting co-workers to unsafe practices and behaviors.

The Fihankra Safety Management System will be rolled out and embedded into Asanko’s culture during 2016.

THE FIHANKRA SAFETY MANAGEMENT SYSTEM

SAFETY SUPERSTARSTo reinforce our safety culture, reward safety excellence and encourage the proactive identification of safety hazards, the ‘Safety Superstars’ Award was invented. The Award Winners are announced at the monthly safety meeting and receive a specially designed hard hat and certificate. This program has been very successful in supporting the Company’s safety awareness campaigns and motivating the workforce.

HEALTH AND SAFETYOUR APPROACH

The Asanko Occupational Health and Safety Charter documents our commitment to the health, safety and well-being of our people and communities. Our safety practices are aligned with the core international safety standard OHSAS:18001, in addition to other safety management practices, such as HAZOP (hazard and operability analysis) risk-based techniques. In adopting the following principles, Asanko intends to set and implement standards of excellence for occupational health and safety (OH&S):

• Our employees are at the heart of our safety culture.

• Safety is our first consideration at work.

• We communicate to all employees and contract workers the importance of working in a safe environment.

• We comply with host country laws and regulations and augment these as required with international guidelines and best practice management.

• We require all contractors to conduct their activities in a manner consistent with this Charter.

• We identify the hazards associated with our activities and ensure that they are effectively managed.

• We ensure that our employees have the necessary skills, training and equipment to undertake their work safely and with no risk to health.

• We are developing and implementing systems and procedures for managing the OH&S aspects of our business.

• We routinely set and review targets for OH&S performance within a framework of continuous improvement.

2015 SAFETY PERFORMANCE

Our safety performance is monitored regularly and reviewed weekly at HSE meetings. In 2015, we appointed a new Health and Safety Manager and conducted a full and independent audit of our operations. Where corrective actions were identified, these were clearly documented and responsibilities allocated with budgets and timelines.

Our goal will always remain as zero fatalities and zero harm. In June 2015, regrettably, a mining contractor died in a traffic-related accident in the Nkran pit. A full investigation was conducted, the root cause of the accident assessed and immediate recovery actions were taken to redress the unsafe working practice. Our sincerest condolences have been expressed to his family and colleagues.

We report all near misses and conduct investigations of any accidents occurring using our Accident and Incident Reporting Procedure. All injuries or accidents that result in lost operational time (Lost Time Injuries (LTIs) are monitored and we aim for continuous improvement year-on-year. In 2015, we achieved over 7.3 million LTI-free man hours.


HEALTH MANAGEMENT

Maintaining a healthy workforce is essential to our operations. Similar to safety, we take a preventative approach based on understanding and responding to health risks and health issues.

All employees and contractors have a pre-employment and demobilization Medical Examination, combined with medical monitoring during employment. Our medical team continually educates employees on the prevention of disease transmission. During 2015, primary healthcare services were administered over 5,700 times.

We have a medical centre on site with a qualified and very experienced medical doctor, nurses, an occupational health nurse and a health care assistant. We also have an ambulance, with a paramedic, two trainee paramedics and driver based at the mine.

We are aware of the risks of both communicable and non-communicable disease transmission, particularly during the construction phase when the core workforce was supplemented with a large amount of contractors.

Malaria, in particular, is a key risk due to the high prevalence in the wider region. Our malaria awareness program includes a series of preventive measures to control insect-borne disease through the reduction of breeding grounds and provision of personal protective equipment:

• Providing insecticide treated nets for all rooms on site.

• Larviciding and avoiding buildup of stagnant water on site.

• Maintaining a clean environment and effective waste management across the site.

• Providing protective clothing for night workers.

• Conducting regular awareness campaigns.

Weekly/monthly reports on malaria cases are reported to the district health directorate as required by Ghanaian law. During 2015, due to the large influx of contractors, we had a high number of malaria cases (1,244 in total), which has significantly raised our awareness of the risks and intensified our preventative program in 2016. In addition to enhancing current efforts at reducing malaria incidence on the mine, we are also investigating the option of further complementing existing interventions with an Indoor Residual Spraying program.

HIV/AIDs transmission is another risk associated with a mobile workforce. We have a preventative awareness program in place, provide health care support and advice and continually educate employees on the prevention of communicable diseases, including STDs. We do not discriminate against workers in relation to their HIV status.

In 2015, we continued our Ebola awareness and education campaign, as well as screening all contractors and visitors for elevated body temperatures at the entry point to the mine. No cases of Ebola were identified on site or in Ghana.

ORGANIZATION AND STAFFING

As we move into operations, we are continuing to implement detailed management systems and standard operating procedures to reflect this transition, in line with the international standard OHSAS:18001. The Asanko Gold Mine’s Health and Safety Manager is implementing this program and is highly experienced in mining operations. We require all our staff and our contractors to follow Asanko health and safety initiatives, and this is included in our contract agreements. Our Safety, Health, Security, and Environmental Management System includes standard operating procedures for all high risk areas including:

• Personal Protective Equipment (PPE)

• Working at Height

• Remote Working

• Safe Vehicle Operation

• Electrical and Machine Safety

• Transportation, handling and storage of cyanide

• Operating procedures for the gold room and gravity circuit

• Guarding and security of properties

• Security Management Plan

• Emergency Response Plan

All managers are accountable for the safety of their work areas and all proactively manage any risks identified. Weekly meetings are held to discuss health and safety and all incidents are reported and investigated.

SAFETY TRAINING

All personnel and visitors to site receive a safety induction on arrival, in 2015, there were over 5,700 inductions. No personnel are permitted on site without the correct Personal Protective Equipment (PPE). 51 Asanko employees were trained and certified as first aiders by St John Ambulance, with an additional 61 trained internally but not certified.

We also held a number of specialist training courses in 2015 for those employees involved in higher-risk activities. These included:

• Safe use of fire extinguishers

• People-based safety

• First Aid Training

• Working at Height

• Hydraulic Safety

The health, safety and wellbeing of our people and our communities are a core concern for Asanko. We are committed to protecting the health and safety of our employees, contractors and other people associated with our operations.

Routine and regular drug and alcohol testing is undertaken at site. In 2015, over 12,000 alcohol tests were conducted.

RESPONDING TO EMERGENCIES

In 2014, we developed our initial Emergency Response Plan (ERP) which was further expanded in 2015 as the project moved through construction. The Plan outlines the process to follow in the event of an emergency, such as a fire, chemical or a fuel spill.

Our onsite emergency response team is fully-trained and in place, with roles of Emergency Response Coordinator and Trainee Fireman filled by Ghanaians. The emergency response team is supported by the medical health professionals at the health centre.

We held a comprehensive emergency response training course in 2015, which was attended by 79 people. We have also held training sessions on emergency drills, ropes and knot rescue, emergency medical equipment and emergency hazardous materials response.

In 2016, the ERP will be updated to reflect the change in Project from the construction phase to an operating mine.



SECURITY

We have a Security Management Plan in place, which addresses all legal obligations and is used as a reference point for managers, security, our third-party service providers, contractors and sub-contractors. This is supported by a suite of supporting procedures. All of our security policies, procedures and practices comply with national laws and regulations and reflect the Voluntary Principles on Security and Human Rights. The security management team conducts periodic and annual risk assessments of all our facilities, so that any new risks are identified and can be addressed. Security risks that we have identified onsite include:

• Crimes against people

• Illegal mining

• Natural disasters

• Explosions and fire

• Breach of access control procedures

• Physical security

• Product theft

The security management team comprises 60 personnel including a Security Manager with overall responsibility, supported by a number of trained Security Officers.

1. Manage by walking about

2. Maintain line-of-sight

3. Clear roles and task assignment

4. Give feedback

5. Coach

6. Assert your authorities

7. Show our values in behavior

8. Maintain relationships

9. Review performance

10. Manage change

Effective Managerial Leadership

EMPLOYEE DEVELOPMENTTHE ASANKO WAY

Asanko is building a High Performance Organization. To us, high performance means consistently achieving both our strategic and operational objectives, week in, week out, month in, month out, year in and year out.

In 2015, we further developed our High Performance Management System to ensure that we manage Asanko in a rigorous, disciplined and responsible manner, so that we can achieve our stated objective of becoming a mid-tier gold producer. We expect all our employees to embrace these principles and practices, as they represent the way we do things at Asanko.

Along with the organizational principles we use in designing and managing our business, we have a set of leadership practices we expect leaders to apply and demonstrate on a daily basis. Each practice is designed to contribute to creating productive work relations, where employees can contribute to the full.


TRAINING

In preparation for production, our training in 2015 was focused on Business Readiness, to plan for commissioning and operations, and The Asanko Way, to embed the Asanko culture and values in our growing organization.

All employees received training on safety, the Company’s Code of Conduct and Business Ethics, Inter-cultural awareness, environmental awareness, the principles of a High Performance Organization and the Company’s values during the course of the year.


Environmental Stewardship

OUR APPROACHProtection of the environment in which we work is key to the long-term success of Asanko. We minimize our environmental footprint through the careful management of the habitat and our mining operations, including mine waste treatment and disposal, and prudent use of natural resources, such as water and energy. This commitment is manifested in our Environmental Charter, which guides our everyday actions and responsibilities in relation to environmental protection.

In 2015, we completed construction of Phase 1 of the Asanko Gold Mine. Our principal environmental goal, during this period of intense activity, was to minimize environmental impact through careful design and behavior and to monitor and mitigate any environmental effects which occurred. Environmental highlights for the year include dewatering of the Nkran Pit, implementation of our water quality monitoring program, completion of the Tailings Storage Facility, establishment of a tree nursery in anticipation of restoration works, and preparation of our first Biodiversity Management Plan (BMP).

As we move into operations, we will continue to monitor the effectiveness of our operational controls, established to manage the environmental aspects of the Project, to train our staff and contractors in good environmental stewardship and regularly review our environmental management strategies as part of the Company’s commitment to ensure continuous improvement.

ENVIRONMENTAL LEADERSHIPResponsibility for environmental protection at Asanko rests at the highest level. Our CEO and Executive Management Team are responsible for approving all environmental policies and projects. The in-country Leadership Team is responsible for assuring compliance, with both internal policies and procedures and external permitting requirements, implementing monitoring and evaluation programs, auditing, reporting and providing recommendations for continuous improvement.

In 2015, the Environment Department, with a staff of 19 Ghanaians, managed the environmental aspects of the Obotan and Esaase Projects. Responsibilities include legal compliance, monitoring, laboratory support, reclamation, waste management and administration.

All environmental incidents and accidents, however small, are reported and addressed through the Environmental Incident and Investigation Reporting Procedure. Weekly Environmental Inspections are conducted throughout the Project site to identify any noncompliances for corrective and preventative actions. Environmental performance is reported by the Environment Manager at the weekly Heads of Department (HoD) meeting. If corrective actions are needed, these are agreed by the HoDs and implemented within specific timelines.

Under Asanko’s Contractor Management Procedure, all suppliers and contractors are required to conform to our environmental standards. This is formalized through the contract procurement process.

All material environmental risks and issues have been evaluated by the Environment Department and are discussed subsequently.

ENVIRONMENTAL PERMITS AND APPROVALSAsanko is committed to complying in full with Ghanaian legal and regulatory requirements for environmental management for the extractive industry. This includes the Ghanaian Environmental Protection Agency’s Environmental Performance Rating and Disclosure Methodology for Mining Companies (AKOBEN Program). All ‘greenfield’ projects are subject to the Environmental Impact Assessment (EIA) process, under the national EIA guidelines. In addition to complying with Ghanaian standards, we draw on the key international standard and guidance of the Equator Principles III, IFC Performance Standards 2012, the WHO Guidelines for Drinking Water Quality and the International Cyanide Management Code (ICMC).

We have developed Environmental Management Plans (EMPs) for our operations to ensure continuous improvement in the management of environmental resources. We are now activating these plans as we move into production. We have also complied with all the requirements of the Reclamation Security Agreements (RSA), with the EPA, to enable the commencement of a concurrent reclamation program, as provided by the Environmental Assessment Regulation (LI1652) and the RSA.

MANAGEMENT OF WATER RESOURCESManagement of water resources at Asanko is led by the Environment Department with support from the Mining, Processing and Engineering Departments. A consolidated Water Management Plan was drafted in 2015 and will be implemented during 2016. Water management at Asanko includes:

• Non-contact water drainage, collection and storage.

• Water use for dust control.

• Seepage water flow management.

• Waste Rock embankment run-off management.

• Pit dewatering and management of the discharged water.

• Storm water management.

• Management of standing water in relation to malaria prevention.

In 2015, we dewatered the Nkran pit to allow the commencement of mining operations. Pit dewatering was completed at the end of November 2015.


WATER QUALITY MONITORINGThe sustainable use of water resources is essential to the working life of the Asanko project. Water is needed for our process plant, for dust control at the mine, to allow us to mine the Nkran Pit, for revegetation and for domestic use by our employees and contractors.

During 2015, we dewatered the Nkran Pit to enable mining operations to commence. Discharge water was piped to the Offin River, which served as the receiving water body. Water was pumped via a floating barge equipped with submersible pumps through a 400mm HDPE pipeline. The discharge point was equipped with rock assemblage to reduce the water velocity entering the river.

The possible impact on the Offin River water quality was evaluated by comparing the physical and chemical properties of the discharge water quality with the permissible limits provided by EPA Sector Specific Effluent Quality Guidelines for Discharges into Natural Water Bodies. In addition, the pitlake discharge water quality was also compared with upstream (reference point) and downstream of the Offin River.

Water quality results from all three stations were used to characterize the quality of the Offin River. Daily discharge volumes and flow rate readings were taken online via a flow meter installed on the discharge pipeline. River flow levels and water quality were also monitored at upstream and downstream points.

The physical and chemical indicators used to screen the Nkran Pit Discharge water continuously recorded levels below the threshold levels of EPA Sector Specific Effluent Quality Guidelines limits. The monitoring point located at the Offin river upstream, which was sited to account for any influence from background effect, compared favorably with the downstream monitoring station.

Groundwater static measurements showed that there was no adverse impact on other water users through dewatering of the Nkran pit.

LOCAL COMMUNITY ENGAGEMENTWATER RESOURCES

As part of its monitoring program, Asanko has established a network of surface water monitoring points and environmental monitoring boreholes from which water quality and quantity are monitored regularly. The results from these monitoring activities comply with established baseline characteristics.

Asanko is assisting local communities with access to clean and reliable water supplies and conducts regular water quality monitoring of potable boreholes in the catchment communities. In 2016, we will establish five new water boreholes to assist with the sustainability of community water supplies.

ENVIRONMENTAL AWARENESS

During 2015, the Environment Department, in collaboration with the Community Affairs Department, implemented an environmental awareness program for the local communities within the Project’s catchment area. The program was designed to inform local communities of Asanko’s environmental monitoring programs, including water resources management, dust and noise monitoring. The Company also conducted training for community representatives on blast monitoring, and currently conducts joint blast monitoring with community representatives.

In 2016, this program will be broadened, in partnership with GIZ to include an Environmental Sanitation Implementation Plan (ESIP) for the Amansie West District Assembly. The ESIP aims to improve sanitation conditions within the communities through education on household hygiene and efficient segregation of waste materials and waste disposal in the communities.

SUSTAINABLE FARMING ACTIVITIES

In addition, efforts into sustainable use of environmental resources are being reinforced to ensure the continuous existence of farming activities practiced by communities located within the project impacted area.

CONSERVING BIODIVERSITYThe Asanko Gold Mine falls within the transition zone of Ghana’s forest and savannah environments. At Asanko, we believe in the

approach of Adaptive Management – maintenance of a high level of biodiversity will help to ensure that the ecosystem is more resilient to development change. Our principal biodiversity aim is to conduct progressive rehabilitation and to restore the area to the pre-mining biodiversity level. In particular, we focus on those aspects of biodiversity that are either important or useful to the community. In practical terms, we undertake a number of activities in support of our biodiversity objectives:

• Restoration of degraded mine site areas

• Invasive species management

• Topsoil management

• Mine-take area fauna protection

• Associated facility (VRA power line) inspections

• Monitoring and Evaluation protocols

• Biodiversity Education and Awareness creation

• Stakeholders engagement and management

In 2015, we developed our Biodiversity Management Plan (BMP), which specifies the actions we will take through construction and into operations to protect the physical environment in which we operate. In 2016, we will implement several key aspects of the program, including regular flora and fauna monitoring, progressive restoration and increased training and awareness. Results of the biodiversity surveys will be used to monitor trends and assess the impacts of our activities. Wherever possible, our approach will be adaptive, to enhance biodiversity where we can and to protect the changing landscape through planting and erosion control.

A Tree Nursery was established during 2015 to serve as the seedling buffer stock for the rehabilitation program, as required by law and for best practice. The extent of vegetation restoration will be monitored through the implementation of biodiversity monitoring programs.

In 2016, we will continue to protect and monitor biodiversity resources through the Biodiversity Action Plan.



Restoration of disturbed areas

Invasive species management

Topsoil management

Mine-take area fauna protection

Biodiversity conservation education

Biodiversity conservation education

Stakeholder engagement & management

Meet with mine planning and internal

stakeholders to discuss restoration

criteria and reclamation plan

for 2016

Develop restoration plan for waste rock

Propagate seedlings of

different species of native trees

Review seedlings list of biodiversity

importance

Implement pilot control of invasive weeds and pest management on reclamation trial

pilot

Assess the effectiveness of various controls and update the invasive species

management plan

Review topsoil management plan (for operations)

Monitor daily topsoil stripping

to ensure optimum recovery of topsoil

for reuse

Supervise stockpile to ensure compliance with environmental

topsoil management

objectives

Stabilize topsoil stockpiles against

erosion and sediment transport

Re-vegetate topsoil stockpiles

Update topsoil volume maps and

database

Continue daily surveillance of

Tailings Storage Facility (TSF) to scare birds and

other wildlife from drinking from

the facility

Prepare user friendly manual for monitoring

Evaluate monitoring

Identify impacts of activities on

biodiversity within the mine-take and

off-site

Train monitoring agents and

reclamation staff on data collection

and analysis

Develop biodiversity

monitoring plans

Develop monitoring

indicators for measuring impacts

Prepare user friendly manual for monitoring

Integrate biodiversity conservation

education into monthly HSE presentations

on site

Develop strategic plan for community biodiversity

education and awareness creation

Identify target groups

Review and update the

identified key stakeholders and interested parties

Develop stakeholder map

Review and identify roles and responsibilities for key stakeholders

Develop stakeholders’

involvement plan for implementation

of biodiversity program

Execute and evaluate plan

2016 BIODIVERSITY ACTION PLAN

Asanko is committed to ensuring that adequate protection is afforded to biodiversity through a sound understanding of our ecological setting and commitment to the Biodiversity Management Plan.

ENERGY AND POWER SUPPLYEnergy efficiency is core to the Asanko approach to environmental management – it both protects the environment and leads to cost-savings.

During 2015, Asanko completed construction of a 30km long, 161kV power line connecting the Project site to the national power grid at the Asawinso substation, along with the 161/11kV substation at site. The line was energized in November 2015 and power is being supplied to site by Volta River Authority, the state-owned power generation company. In addition, the Company also installed 20 megawatts of diesel generator capacity as a 100% redundant back-up supply of power. In 2015, the Company used 3,968 MWh of electricity.

Power factor correction, energy efficient lighting and related technologies are some of the energy efficiency initiatives built into the Asanko operation to ensure energy conservation and efficient use.

MANAGEMENT OF CYANIDE RISKSCyanide is a naturally-occurring substance found as a molecule of carbon and nitrogen. Low concentrations of cyanide are present in some foods and plants, surface and groundwater. Although cyanide decomposes quickly through natural processes, exposure to cyanide through inhalation or ingestion is hazardous to health and potentially fatal.

The primary route of occupational exposure is through inhalation and more rarely, ingestion. Cyanide can also be absorbed through the eyes and skin by contact. There is also a very small risk of exposure through releases to surface and groundwater.

The potential for contact occurs during the transportation, receiving, unloading, handling and storage of solid sodium cyanide briquettes. Cyanide, in the form of a dilute sodium cyanide solution, is used to separate gold metal from the mined ore.

The Phase 1 processing facility has been designed and constructed to comply with all aspects of the International Cyanide Management Code (ICMI, July 2005). During 2015, we prepared a Cyanide Management Plan, which describes the measures to eliminate any risks to employees, contractors, the community and wildlife from the use of cyanide

in the recovery of gold at the mine. The Plan reflects the key requirements of the ICMI and was finalized in preparation for cyanide being brought to site during January 2016.

All employees and contractors have been trained in the health and safety aspects of cyanide use, in emergency first aid and ongoing testing and preventative maintenance of cyanide transport and storage equipment. We have installed HCN gas detectors in all confined areas, fitted with emergency alarms. All designated personnel and employees involved in HCN handling are provided with respiratory protection and trained in the fitting, use and testing of the equipment.

MANAGEMENT OF SOLID AND LIQUID WASTESAs the project moves into operation, the volumes of solid and liquid wastes produced will increase. Under our Environmental Charter, we are committed to the responsible collection, treatment and disposal of wastes we have produced. In 2016, we will complete the construction of an Integrated Waste Management Facility for the collection, segregation and disposal of solid wastes. All wastes leaving the site will be documented through waste tracking forms and will be collected and transported by a licensed contractor. An inventory of all wastes generated will be maintained on site so that we can routinely monitor our performance.

Wherever possible, we will seek to minimize waste generation and to recycle wastes produced. Biodegradable waste will be recycled into compost to support the program for reclamation of disturbed lands, as well as future potential agribusiness projects.

TAILINGS MANAGEMENTTailings from the gold processing unit are transferred to a fully-engineered Tailings Storage Facility (TSF). The TSF is highly engineered with HDPE liner throughout. The tailings pipeline and return water system were completed in November 2015. During the short rainy season in October, sufficient water was captured in the TSF for start-up and commissioning of the process plant.

The TSF was inspected by an independent third party in October 2015 and the Company has received confirmation that all conditions of the permit have been met and the TSF is ready to accept tailings in readiness for operations in early 2016.

CASE STUDY: BIODIVERSITY ACTION MANAGEMENT PLAN



CLIMATE CHANGE Ghana, as signatory to the United Nations Framework Convention on Climate Change (UNFCCC) has been involved in a number of activities aimed at addressing the climate change challenge. The National Climate Change Policy (NCCP), 2013, is Ghana’s integrated response to climate change. The Policy has been prepared and designed within the context of national sustainable development priorities, including achieving the objectives of the Ghana Shared Growth and Development Agenda (GSGDA) 2010–2013.

The NCCP recognizes the risks posed to business and society of: increased and erratic rainfall, sea level rise, increased emissions of greenhouse gases (GHGs) and loss of natural carbon sinks. In 2011, forests covered approximately 20% of the total land area of Ghana (World Bank). Removal of the forested areas has reduced the potential of the environment to absorb carbon, has increased areas prone to soil erosion, and increased flood risks. Whilst Asanko is a minor producer of GHG, we still recognize the need to understand the climate change risks posed to our operations and, in turn, any impacts that we may have on climate change.

We have developed a climate change response that focuses on:

• Understanding and responding to rainfall patterns and rainfall trends.

• Understanding our sources and emissions of potential GHGs.

• Protecting and restoring the habitat where we work and operate.

• Assessing any risks that this may present for our people, our operations and the environment.

Asanko Gold CSR Report

We will continue to monitor rainfall and to ensure that our water-bearing and water storage structures are fit for purpose and prevent risks to the project and our local communities. Conversely, should we experience drier than average conditions, additional water spraying will be undertaken of stockpiles, access roads and other areas with the potential to cause airborne dust.

Our potential to create new habitat is restricted to the license areas in which we operate. However, within these confines, we will undertake progressive rehabilitation as active areas are mined out in accordance with the Biodiversity Action Plan. We have invested in a forest nursery and will begin reforestation activities as lay-down and other construction areas are no longer used.

Future plans include evaluating our GHG emissions inventory based on core operations and our operated vehicle fleet.

Climate change risk forms part of our normal, operating risk assessment procedures. Regular reviews of flooding and other associated risks will be undertaken by our respective Heads of Department.


Artisanal and Small-Scale Mining

Ghana has a long history of artisanal mining, locally known as ‘galamsey’, dating back a number of centuries. It was practiced using rudimentary manual tools and served as the source of locally produced jewelry among others.

Ghana has very clear laws on small-scale mining, which is supposed to be the preserve of Ghanaian citizens who are required to obtained mining leases from the Ghana Minerals Commission prior to engaging in such activities.

Over the past decade however, there has been a significant upsurge in artisanal mining activities, such that mechanized equipment, for example excavators, are now being used to dig up river beds for alluvial gold as well as farmlands and forests on a scale that can only be described as commercial. They leave in their trail significant environmental damage and liability. A number of rivers in the gold-bearing regions of Ghana have become polluted by such activities and silted up, thereby leading to a growing crisis of access to potable water.

Galamsey activities have also negatively impacted attendance to schools in certain communities since the youth perceive it as a route to making quick money. There are also links of the activity to other social vices such as drug abuse, prostitution and criminal activities.

In line with the Africa Mining Vision, Asanko remains committed to working with Ghana’s regulatory bodies and other stakeholders in formalizing and regulating small-scale mining to ensure that it is practiced more responsibly with minimal long-term impacts.

OUR APPROACH TO ‘GALAMSEY’We have a strategy of active engagement in managing ‘galamsey’ issues.

COMMUNICATION

We have communicated extensively with all stakeholder groups on how we plan to manage illegal mining activities on our concession areas with the deployment of security patrols.

EXPECTATIONS

Over the past 18 months, in parallel to the development and construction of Phase 1, we held a number of meetings with landowners and galamsey opinion leaders to discuss the effects of their illegal activity on the Project and the surrounding environment. A roadmap was established with strict timelines for galamsey operators to freely evacuate from identified galamsey spots within the active mine area. Subsequently, a security team was deployed to prevent encroachment.

ACTIONS

The Asanko mining and exploration concession areas are regularly patrolled by our security team. Any illegal mining activity is immediately reported to the authorities. There are currently no galamsey working on the Phase 1 Project site.

ALTERNATIVES

We recognize that to really tackle the allure of illegal mining, young people need to be offered a viable, safe and sustainable alternative source of income and job security. Our employment and recruitment policies have specific procedures for giving preference to locals from our project catchment area, in all categories of jobs available.

In addition, our skills development programs at both Obotan and Esaase Training Centres have been specifically designed to provide vocational training on accredited courses with access to galamsey. Refer to page 34 for more details on the training centres.

Nsiah Degraft is making beds for Asanko Resettlement Project

“Growing up in a purely rural–poor environment, entangled with poverty and enticed by the prospects of illegal mining out of need for survival, I dropped out of school and entered into galamsey operation. After completing the ESDP, I am now a contract staff of Asanko, producing furniture and beds as part of the Company’s resettlement project. I intend to manufacture furniture and make a big show room, which will serve this community and all the other communities around.”

Ms. Acheampong Gifty, a school drop out and formerly a galamsey operator abandoned all that when she heard of ESDP. According to her, “The opportunities were so enticing that I could not refuse to avail myself. Currently, my economic situation has changed phenomenally. I am now a caterer and have become a source of inspiration to my parents, friends and community members, who patronize my meat pie”. She has not only become self-reliant, but is also able to remit her parents and siblings out of the little she makes from the sale of her meat pie.



Preparing for Growth: Phase 2

DEVELOPMENT OF ESAASE AS PHASE 2The second phase of the Asanko Gold Mine is the development and integration of the Esaase deposit with Phase 1 to create one large, multi-pit mining operation, with the potential to produce up to ±410,000 ounces of gold per year over a 12 year Life of Mine.

A Pre-Feasibility Study (PFS) was completed in May 2015, which outlined the development plan; to mine and crush the ore at Esaase and then transport it by overland conveyor to the central processing facility.

An overland conveyor has been chosen as the optimal method because of its low operating cost, minimal disruption to the environment and safety when compared to the various other options that were examined, including trucking, rail or piping. The processing facility would be expanded with the addition of a flotation plant and two extra CIL tanks. A Definitive Feasibility Study (DFS) is underway and due for publication in Q3 2016.

In addition, the Company is studying a smaller-scale expansion plan, Phase 2A, which would initially mine just the oxide ores at Esaase and convey them to the central processing facility. This would remove the need to build the flotation plant, thereby reducing the capital cost substantially. The results of this study will be published alongside the DFS in Q3 2016.

STAKEHOLDER ENGAGEMENTIn preparation for Phase 2, Asanko has commenced the permitting process and its stakeholder engagement. During 2015, we have held 24 meetings with ten different stakeholder groups within the Essase Project area, including His Majesty, Otumfuo Osei Tutu II, Asantehene, the King of Ashanti. The meetings have specifically focused on the proposed development of Phase 2, how it affects the communities, both within the proposed active mine area and along the conveyor corridor.

In early 2016, His Highness Otumfuo Osie Tutu II endorsed the Phase 2 project, and in collaboration with the traditional authorities in Esaase area and Asanko management, established a roadmap to ensure the communities enjoy the full benefit of the project.

PERMITTINGPermitting for Phase 2 commenced during 2015.

The Esaase Environmental Impact Statement (EIS) is being amended and resubmitted to the EPA for approval. This is expected in H2 2016. Particular amendments to the EIS include the exclusion of a processing facility and a tailings storage facility at Esaase, as the Phase 1 infrastructure will be used, and the inclusion of an overland conveyor, the technical design and the route. The following environmental baseline survey reports along the conveyor corridor have been prepared; Flora and Fauna, Archaeological, Water Quality, Noise and Air Quality. In addition, the overland conveyor route will require an environmental permit and an operating permit.

The Phase 1 EIS is being amended to include the expansion of the processing facility to accommodate a 5Mtpa flotation plant and the deposition of Esaase tailings at the current TSF. This is expected to be submitted to the EPA in H2 2016 for approval.


2015 Social, Health and Environment Indicators

2014 2015Number of fatalities 0 1

Lost Time Injuries (LTIs) 0 0

LTI-free man hours 1,802,740 7,300,070

Number of safety training sessions 24 44

Number of safety inductions (employees and contractors) 1,652 5,713

Malaria Cases (employees and contractors) 164 1,244

Investment in environmental management (including AKOBEN Environmental Audit Training and Internal Audit)

$1,900,212 $1,378,034

Number of non-monetary sanctions 0 0

Total monetary value of environmental non-compliance sanctions/fines 0 0

Investment in community assistance programs and sustainable development projects

$423,000 $470,000

Number of stakeholder engagements at Obotan and Esaase 70 130

Number of farmers who received compensation 700 1,500

Total Workforce (Asanko & Contractors) 948 2,946

By Gender

Male Female

891 (93%) 57 (6%)

2,775 (94%) 171 (6%)

% Ghanaians (Asanko & Contractors) 96% 97%

% of Local Community Members Employed 45% 38%

% Employees hired from local communities 38% 35%

% Contractors hired from local communities 46% 39%

HEALTH & SAFETY

PEOPLE

DIRECT ECONOMIC CONTRIBUTION

2014 2015

($)

Payroll (including taxes and benefits) 8,794,936 10,767,189

Government taxes (including VAT*, import duty and licence fees) 3,614,242 31,503,759

Licence fees 620,681 1,288,473

Royalties 0 0

Land & crop compensation 2,011,000 1,887,635

Payments to suppliers for goods and services 62,599,236 156,737,702

Proportion of payments made to local/regional suppliers 15,649,809 38,464,356

Proportion of payments made to in-country contractors 46,949,427 118,273,346

Total 140,239,331 202,654,758

ENVIRONMENT

SOCIAL

*VAT is expected to be refunded


GLOSSARY OF TERMSCSR Corporate Social Responsibility

EPCM Engineering, Procurement and Construction Management

ERMP Emergency Response Management Plan

Galamsey Artisanal and small-scale Mining

HAZOP Hazard and Operability Study

HIA Health Impact Assessment

KPI Key Performance Indicator

NGO Non-Governmental Organization

OH&S Occupational Health and Safety

Phase 1 The development of the Obotan Project, which consists of the Nkran pit, 4 satellite deposits (Abore, Asudadi, Dynamite Hill and Adubiaso) and a Carbon-in-Leach plant with a capacity of three million tonnes of ore per annum

Phase 2 The development of the Esaase deposit

PPE Personal Protective Equipment

SHE Safety, Health and Environment

LTIFR Lost Time Injury Frequency Rate.

ORGANISATIONS

AMV Africa Mining Vision www.africaminingvision.org

DBYN Don Bosco Youth Network www.donboscoyouth.net

EITI Extractive Industries Transparency Initiative www.eiti.org

EPs Equator Principles www.equator-principles.com

EPA Ghanaian Environmental Protection Agency www.epa.gov.gh/web/

GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit www.giz.de

GRI Global Reporting Initiative www.globalreporting.org

ICMI International Cyanide Management Institute Code www.cyanidecode.org

IFC PS International Finance Corporation Performance Standards www.ifc.org

MinCom Ghanian Minerals Commissions www.eservices.gov.gh/MINCOM

FORWARD-LOOKING AND OTHER CAUTIONARY INFORMATION

This report includes certain statements that may be deemed ‘forward-looking’. All statements in this report, other than statements of historical facts, that address estimated resource quantities, grades and contained metals, possible future mining, exploration and development activities, are forward-looking statements. Although the Company believes the forward-looking statements are based on reasonable assumptions, such statements should not be in any way construed as guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market price for metals, the conclusions of detailed feasibility and technical analyses, lower-than-expected grades and quantities of resources, mining rates and recovery rates, and the lack of availability of necessary capital, which may not be available to the Company on terms acceptable to it or at all. The Company is subject to the specific risks inherent in the mining business as well as general economic and business conditions. For more information on the Company, investors should review the Company’s annual Form 20-F filing with the United States Securities Commission and its home-jurisdiction filings that are available at www.sedar.com.

CAUTIONARY NOTE TO U.S. INVESTORS REGARDING MINERAL REPORTING STANDARDS

Asanko has prepared its disclosure in accordance with the requirements of securities laws in effect in Canada, which differ from the requirements of the US securities laws. Terms relating to mineral resources in this report are defined in accordance with National Instrument 43-101 – Standard of Disclosure for Mineral Projects under the guidelines set out in the Canadian Institute of Mining, Metallurgy, and Petroleum Standards on Mineral Resources and Mineral Reserves. The Securities and Exchange Commission (the SEC) permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. Asanko uses certain terms, such as ‘measured mineral resources’, ‘indicated mineral resources’, ‘inferred mineral recourses’ and ‘probable mineral reserves’ that the SEC does note recognize (these terms may be used in this report and are included in the public fillings of Asanko with have been filed with securities commissions or similar authorities in Canada).

Asanko Gold Inc. Suite 680-1066 West Hastings Street Vancouver, BC, V6E 3X2 Canada Email: [email protected] Telephone: +1 604 683 8193 Website: www.asanko.com

Investor and Media Relations: Alex Buck

Telephone: 1 855 246 7341 (toll-free) or +1 604 683 8193 Email: [email protected]

Corporate Affairs Ghana: Frederick Attakumah

Telephone: +233 302 761 454 Email: [email protected]

Asanko Gold Ghana 4, Sir Arku Korsah Road Airport Residential Area Accra Ghana

Telephone: +233 243 690 224