Ashanti Gold Corp. Strategically Located West African Gold Prospect. Investment Rationale (TSX.V: AGZ)

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1 (TSX.V: AGZ) April 11, 2018 Price (as of April 10, 2018): $0.175 Beta: N/A Price/Book: 3.43x Debt/Equity Ratio: Listed Exchange: Source: Yahoo! Finance N/A TSX.V Recent News 05-Apr-18: Ashanti announced a non-brokered private placement of up to 15,000,000 units at $0.15 per Unit for gross proceeds of up to $2,250,000. Each Unit will consist of one common share and one-half of one common share purchase warrant. 03-Apr-18: Ashanti appointed John Robins as Strategic Advisor 21-Mar-18: Soil sampling continues to expand Anumso Gold Zone with positive new results from its ongoing surface exploration program on the Anumso Project, Ghana. 05-Mar-18: Ashanti Gold Ltd identified new mineralization zones through a soil sampling campaign at the Kossanto East Project. 18-Jan-18: Identified two mineralization zones (each of 1km strike length and 240m wide) of significant gold anomalies at the Anumso Gold Project. 06-Nov-17: Initiated second phase of exploration work at the Kossanto East Project. The exploration program plans to drill approximately 60 holes to identify new mineralization zones. 17-Oct-17: Exercised option agreement to earn 100% interest in the Ashanti Gold Belt licenses. 11-Oct-17: Ashanti Closed a non-brokered private placement of 7,000,000 units for a total gross proceed of $2,100,000 at $0.40 per unit. Each unit comprises of one-half of common share purchase warrant and one common share. Common shares outstanding: 39.8 million Fully diluted shares outstanding: 52.7 million Market Cap: $6.97 million 52 Week High: $ Week Low: $0.17 Note: All $ symbol represents Canadian Dollars (CAD), unless otherwise specified. Strategically Located West African Gold Prospect Ashanti Gold Corp. (TSX.V: AGZ) ( Ashanti or Ashanti Gold or the Company ) is a gold exploration company which owns mineral projects in West Africa. The Company has three gold projects spread across more than 160 square kilometers (km 2 ) of substantial and strategic mining concessions in the Ashanti Belt shear zone (Ghana) and Kenieba Inlier shear zone (Mali) regions of West Africa. These regions are known for their rich and diverse gold mineralization prospects. The Company is actively undertaking exploration and development activity at its flagship Kossanto East Project located in Mali. The Company s assets sit in strategic locations which neighbor major gold producers. Ashanti has also outlined a strategy to transform itself into a major gold exploration company in West Africa. Investment Rationale High-grade prospective gold mineralization of Kossanto East and Anumso projects should benefit Ashanti Ashanti Gold s Kossanto East Project, Mali and Anumso Gold Project, Ghana are located at prolific gold producing zones with rich exploration histories. Successful gold producing mines surround the Company s assets. The Company s Kossanto East Project is in near proximity (40km to the south) to the successful Loulo asset of Randgold (a gold mining company with operations in Mali). Further, Ashanti Gold's Anumso license geology is similar to Tarkwa (production of 560,000 oz Au/yr) and Iduapriem (production of 560,000 oz Au/yr) gold assets, which are situated on the same geological structure. A preliminary drilling program (53 holes for a total of 6,073m) carried out at the Kossanto East Project confirmed the presence of highgrade gold mineralization zones as determined from historical drill programs. The highlights include g/t Au (gram/metric ton gold) including g/t Au, g/t Au including g/t Au, g/t Au, g/t Au including g/t Au. Further, drill programs at the Anumso license also confirmed historical gold mineralization and further identified new mineralization targets for expansion. The drill highlights include g/t Au, 2.11 g/t Au, g/t Au. Presence of high-grade gold mineralization, along with the successful extraction of gold at neighboring projects, increases the Company s future development and commercialization prospects. Strategic location of Ashanti Belt Project should help ink supply agreements Ashanti Gold has an on-going gold project, optioned from Kinross and called the Ashanti Belt Project, in the Ashanti Belt shear zone, which is located close to Newmont s Akyem mine. The Ashanti Gold Project has attractive historic drilling results for gold mineralization 8.8g/t Au) and likely operational synergies with Newmont s Akyem mine. Newmont s Akyem mine is approaching its end of mine life. The Akyem mine has an estimated production of 325,600 ounces (oz) Au in 2019 down from 473,000 oz in 2015 and is in need of feedstock to push outward its mine life as desired by the operator. The Ashanti Belt Project s close proximity to the Akyem mine and its infrastructure facilities should enable the Company to enter into a potential supply agreement with Newmont. An agreement could provide significant upside to Ashanti s future revenue prospects. Qualified Management Team The management team has more than 70 years of combined experience in the mining and exploration industry. The team has an established track record of finding, funding and mining gold development projects in the West African region. Mr. McCutcheon, CEO & Director, has more than 20 years of extensive international experience in mining research. He was a forerunner in mining research of gold companies operating in the Eurasian area. He has also worked with numerous financial institutions including Bear Stearns, Pioneer Investments and Aton Capital. Further, Mr. Paul Klipfel, COO and Head Geologist of the Company has more than 35 years of gold exploration experience across the globe and has worked with major gold miners. He has also played a significant role in the discovery of key gold deposits including Las Cristinas, Venezuela (>12 Million ounces Moz ), Musselwhite, Ontario, Canada (> 5 Moz) and others. In addition, the senior management is well experienced in raising funds, legal administration, and supervision of mining and exploration activities.

2 Global economic growth should favor investments on gold In 2017, gold recorded gains of 13%, amidst the strong growth seen in asset markets around the world. In particular, jewelry demand from India and China had a significant influence on global gold demand in 4Q17. In China, the younger generation sees gold as a fashionable ornament rather than as an investment asset. This trend increased the Chinese jewelry demand to metric tons in 4Q17, or a 6% increase compared to 4Q16. In India, the festive season sales increased gold jewelry demand to metric tons in 4Q17, or a 4% increase compared to 4Q16. Thomson Reuters "GFMS Gold Survey 2018" expects Chinese market share of gold jewelry demand to increase compared to other gold segments in Further, Thomson Reuters also believes that Fed rate hikes (depending upon the pace of hikes) will have a significant impact on gold demand in The World Gold Council (WGC) also expects income growth, transparency and efficiency in the gold market and global asset market growth should be positive for gold in In addition, factors such as the weakening of the US dollar and global economic uncertainties should continue to support gold s safe haven asset status. Ghana and Mali - prominent gold mining destinations in Africa Ghana and Mali are the second and third largest producers of gold in the African region behind South Africa. Ghana is rich in gold mineralization with vast unexplored and untapped gold deposits. Gold accounts for more than 80% of the mining activities and more than 90% of the total mineral exports of Ghana. Further, the government of Ghana has mining-friendly policies, making the country an attractive gold mining destination in Africa. Policies such as Ghana s Minerals and Mining Law, which allow investors with more than $500 million investments to negotiate special tax conditions for a period of 15 years, continue to attract investments. Ghana's FDI inflows for the first three quarters of 2017 increased approximately 80% to US$3.25 billion compared to US$1.81 billion in Specifically, FDI inflows registered at the Minerals Commission amounted to US$ million, a significant increase compared to other sectors. In 2017, the government of Ghana has also taken efforts to curb illegal small-scale mining with the intention of reducing environmental damage and ensuring international standards. BMI Research, a UK based research firm, projects the mining industry in Mali to grow by 10% between 2017 and Mali has significant untapped resources, as only six reserves were explored to-date out of the 133 gold-rich reserves in the country. Mali has also made the issuance of mining licenses more modern and hassle-free. Company Overview Business Ashanti Gold is currently developing one gold exploration project in the resource-rich West region of Mali and two gold exploration projects in Ghana. The Company s flagship project, Kossanto East Project, is located in the prospective Kenieba Inlier shear zone in Mali with rich exploration potential. Further, the Company also is developing two projects in Ghana - Anumso Gold Project and Ashanti Belt Project. The Company has a significant strategic advantage due to the management team s extensive mining and development experience in the regions of Ghana and Mali. We now present each of the Company s projects in detail highlighting location, geology, status and future timeline. Key Projects We begin by discussing the Kossanto East Project followed by the Anumso Gold Project and Ashanti Belt Project. Kossanto East Project On August 17, 2017, the Company signed an agreement to acquire a 100% interest in the Kossanto East Project from Alecto Minerals PLC ( Alecto ), an AIM (Alternative Investment Market, a submarket of London Stock Exchange) listed company. Location & Geology The Kossanto East Project is a square kilometer (km 2 ) concession located in the gold-rich West Mali Gold Belt (one of the fastest growing gold producing regions in West Africa), along the intersection of the Main Transcurrent shear zone and Kenieba Inlier shear zone. The Kedougou-Kenieba Inlier shear zone is a highly productive major gold mining hub. The region is home to numerous gold prospective geological structures, with approximately 40 million ounces of gold discovered close to these structures over the last 20 years. Gourbassi East ( GE ) and Gourbassi West ( GW ) are the two primary drill targets of the project. Exhibit 1 shows the location of the Kossanto East Project along with other major gold miners operating near the Kedougou- Kenieba Inlier shear zone. 2

3 Exhibit 1: Kossanto East Project lies in the highly productive Kedougou-Kenieba Inlier shear zone Source: Company website Favorably located in resource-rich neighborhood with strong exploration history The Kossanto East Project s shear-based gold system is surrounded by major gold deposits of similar geology such as Randgold s Loulo mine, Teranga s Sabodala mine and a few others as seen in Exhibit 2. Historical drilling campaigns conducted by previous explorers in the drill targets, Gourbassi East ( GE ) and Gourbassi West ( GW ), also revealed attractive gold mineralization. A total of ninety-one Diamond Drilling and Reverse Circulation (RC) holes drilled between 2013 and 2014 for approximately 10,119 meters identified significant gold intercepts. Further, other notable drill intercepts in the region also revealed positive gold mineralization. The promising results, coupled with rich exploration history of the project concession and its neighboring areas, prompted Ashanti to undertake fieldwork in the prospective GE and GW drill targets. Exhibit 2 shows the location and details of the Kossanto East Project and other major miners operating in the Kedougou- Kenieba Inlier shear zone respectively. Exhibit 2: Kossanto East Project location 3

4 Exhibit 3: Major mines operating in the Kedougou-Kenieba Inlier shear zone Company Ticker Project Market Cap Endeavour Mining TSE:EDV Tabakoto CAD$2.4B Randgold NASDAQ:GOLD Loulo US$8.7B IAMGold NYSE:IAG Sadiola US$2.6B AngloGold Ashanti NYSE:AU Sadiola US$3.9B Teranga TSE:TGZ Sabodala CAD$280M B2Gold TSE:BTO Fekola CAD$3.6B Attractive drilling results strengthen the project s ability to develop into a major mineralization zone The Company conducted an RC (Reverse Circulation) drilling campaign in June 2017, targeting the GW and GE drill zones. The drill program identified significant gold mineralization in the GW and GE zones, reinforcing historical mineralization data results. The program also extended drill data along the strike of the GW and GE mineralization zones. The drill campaign consisted of 53 drill holes at 6,073m depth targeting the GW and GE mineralization zones. Exhibit 4 highlights the drill details of the GW and GE exploration zones. Exhibit 4: Two major mineralization zones - GW and GE We now present the drill assay results of GW zone followed by the GE zone. Gourbassi West (GW) mineralization Drill assay results of the GW mineralization zone revealed attractive results with exceptional grades and widths. The highlights include g/t Au (grams/metric ton gold), including g/t Au (GWRC125), g/t Au (GWRC119), g/t (GWRC124), g/t Au (GWRC131) including g/t Au, g/t Au and g/t Au (GWRC140) including g/t Au. The drill results also expanded known mineralization areas of the region with a 1.3 km northwest-trending, m wide Mali-Senegal shear zone. The identification of northeast shear zones further expands gold exploration opportunities at the Gourbassi West region. The Company expects to undertake further drilling in the region to test the depth and continuity of the gold mineralization and expand future gold resources. Exhibit 5 shows the drill assay results of the GW mineralization zone. Exhibit 5: Drill assay results - Gourbassi West Hole # From (m) To (m) Interval (m)* Au (g/t) Gourbassi West GWRC GWRC Including (incl.) incl incl

5 GWRC GWRC incl incl GWRC incl GWRC incl GWRC GWRC incl incl incl GWRC incl incl GWRC incl GWRC incl incl GWRC incl incl GWRC incl incl incl GWRC incl incl GWRC

6 Exhibit 6 shows the cross sections of GW s key drill intercepts. Exhibit 6: Gourbassi West key drill intercepts 6

7 Gourbassi East mineralization The GE mineralization zone also intercepted high-grade gold mineralization of g/t Au, g/t Au and 47 m of 3.29 g/t. Mineralization in GE occurred along two adjacent mineralization zones for a strike of 900 m approximately. Exhibit 7 and 8 shows the drill results and key intercepts of the GE mineralization zone respectively. Exhibit 7: Drill assay results - Gourbassi East Hole # From (m) To (m) Interval (m) * Au (g/t) Gourbassi East GERC incl GERC GERC GERC incl incl GERC GERC GERC incl incl GERC GERC incl GERC incl Exhibit 8: Gourbassi East drill intercepts 7

8 The Company proceeded with a comprehensive exploration program to advance mineralization zones of the GE region and identified further drill targets in the unexplored concession area. The successful exploration programs should better assist in identifying drill targets for the second phase of drill expansion planned during the second quarter of Comprehensive exploration program results support second phase The results from the initial phase of the comprehensive exploration program released on March 5, 2018, supported further drilling operations at the GE and GW mineralization zones. They identified new mineralization zones of grades, higher than 0.1 g/t Au, southwest and parallel to GE. The highlights include two samples reporting grades in excess of 5 g/t Au and advanced strike continuity with a potential to extend more than the known 2.3 km in the region. These positive results supported the Company s thesis on extensive mineralization across the unexplored regions of GW and GE licenses. The Company expects to explore this further during the second phase of drilling planned in 2Q18. The exploration program results included the testing of 450 soil geochemical samples of the total 500 soil samples (more than 100 trench samples and more than 100 rock chip samples) collected in the region. The exploration program also included relogging of RC chips and diamond drilling core, mapping, soil sampling of unexplored areas of the concession and resampling of past trenches. Exhibit 9 shows the concession map of drill targets, geochemical anomalies and historical drill targets in the region. Exhibit 9: Parallel mineralization southwest to Gourbassi East Terms of agreement On November 28, 2016, Ashanti entered into a formal option agreement with Alecto Minerals PLC ( Alecto ) to earn a 65% interest in the project. According to the agreement, Ashanti will earn a 65% interest in the project after completing a Preliminary Feasibility Study (PFS) within 36 months of the option period. Ashanti has the possibility to extend the period by an additional 12 months. Ashanti also has the option to pay US$4 million within 90 days post the option period instead of producing a PFS. Further, on August 8, 2017, the Company signed an agreement with Alecto to acquire 100% interest in the project for a purchase price of $1 million and Alecto will retain a 1.5% Net Smelter Revenue (NSR). The Company also has the opportunity to purchase the whole or some part of the 1.5% NSR share by paying Alecto US$100,000 for each of the 0.1% NSR. Postacquisition, the Company will have a 90% net interest in the project, net of 10% carried interest attributable to the Mali government. 8

9 Kossanto East Project timeline Exhibit 10 shows the timeline of the Kossanto East Project. The Company is actively advancing the project to a second drilling phase planned in 2Q18. Exhibit 10: Kossanto East Project Timeline Anumso Gold Project (Ghana) Location & Geology The Anumso Project is a 29 km 2 mining concession located along the northeastern margin of Ashanti Gold Belt, and approximately 15 km west of Newmont s Akyem mine in Ghana. The license consists of Banket conglomerate-hosted gold deposits extending 10 km in strike length in the prolific Ashanti Gold Belt. The Ashanti Gold Belt is one of the major gold exploration regions in the world and home to major gold mines including Tarkwa (Gold Fields), Akyem (Newmont), Obuasi and Iduapriem (AngloGold Ashanti). The eastern edge of the Ashanti Gold Belt remains mostly unexplored, which presents a significant opportunity for expansion. Exhibit 11 shows the location of the Anumso license and other gold mines present in the Ashanti Gold Belt. Exhibits 11 and 12 show the location of the Anumso Project and details of other gold exploration companies located at the Ashanti Gold Belt respectively. Exhibit 11: Anumso Project location within the Ashanti Gold Belt Exhibit 12: Major mines operating in the Ashanti Gold Belt Company Ticker Project Market Cap Newmont NYSE: NEM Akyem US$21.5B AngloGold Ashanti Gold Fields NYSE: AU NYSE: GFI Obuasi, Iduapreim Tarkwa, Damang US$3.9B US$3.2B 9

10 The geology of the Anumso license is composed of Tarkwaian and Birimian metasedimentary systems with significant goldbearing banket conglomerate outcrops of more than 4 km. This is similar to those of the successful neighboring conglomerates including Tarkwa, Iduapriem and Damang. The license area hosts two prospects of Banket conglomerates namely, east and west reefs. Past exploration in the east reef revealed significant gold mineralization zones with gold resources of approximately 250,000 oz Au at a 0.5 g/t Au cut-off grade, however, with minimal subsurface information. Drill holes tested only 2.6 km of the east reef. Further, 1.5 km of the east reef and 4 km strike length of the west reef are composed of untested drill holes, suitable for further drill testing and exploration. The Company targets these untested Banket conglomerates to validate the presence of gold mineralization seen in the 2 km strike length throughout the 10 km conglomerate strike and to explore new additional mineralization zones in the region. Test work supports favorable gold mineralization The Company is currently working on a soil sampling and trenching program to test for gold anomalies along the known 10 km of the conglomerate outcropping. Results from the recent ongoing geochemical sampling program (2,283 samples were tested) identified two additional mineralization zones in excess of 1 km strike length and 240 m width. The new mineralization zones are untested by drilling and exhibit significant anomaly to those of the untested drill holes of east reef conglomerates. Further, multiple lines of mineralization zones are identified in the east and west reefs, as opposed to a single line of mineralization previously determined by the Company. Exhibit 13a and 13b shows the geochemical sampling results highlighting the newly identified multiple mineralization zones. Exhibit 13a: Geochemical sampling program highlights Source: 21 March 2018 Press Release 10

11 Exhibit 13b: Geochemical sampling program highlights Source: 21 March 2018 Press Release The Company conducted the sampling program after a successful 2,000 m RC drill program in March 2017, which confirmed the presence of gold mineralization along the 2.6 km conglomerate area in accordance with the historical drill results. Further, metallurgical testing of the drilled samples also revealed exceptional gold recoveries in the range of approximately 70% through gravitation methods and an improved recovery of approximately 98% after cyanidation. Exhibit 14 shows the picture of the Anumso concession with the locations of historic and new drill holes. Exhibit 14: Anumso concession with historic as well as Ashanti s 2017 drill holes Terms of agreement On September 15, 2016, the Company signed a formal option agreement with Goldplat PLC ( Goldplat ) to earn a 75% interest in the project by spending US$3.0 million over a period of 2.5 years. According to the agreement, Ashanti could earn the initial 51% interest by expending US$1.5 million in the first 18 months. This included a 6-month review period where Ashanti has the option to continue with the earn-in-option or drop the project after paying the deficit to Goldplat. Recently, on January 15, 2018, the Company agreed with Goldplat to extend the 51% earn-in time period to October 31, The Company could earn an additional 24% interest by expending US$1.5 million in the following year or drop the project and pay the deficit to Goldplat. 11

12 Anumso Gold Project timeline The Company expects to undertake drilling in 2Q18 and rapidly advance the project towards a mineral resource estimate planned in 3Q18, as seen in Exhibit 15. Exhibit 15: Timeline of Anumso Gold project Ashanti Belt Project (Ghana) Location & Geology The Ashanti Belt Project consists of three licenses (Kwahu Oda, Asankare and New Abirem) extending approximately 68km 2 in the highly prospective Ashanti Gold Belt of Ghana. The Kwahu Oda license is situated to the north of Newmont s Akyem mine, one of the largest annual producers of gold (470,000 ounces of gold in 2016). The project region is home to shear zone hosted gold targets with substantial grade mineralization. In the past, Red Back Mining Ghana Limited ( Red Back ), a wholly owned subsidiary of Kinross, conducted a 2495 m RC drilling (2013) at the New Abirem license and identified significant mineralization of g/t, g/t, g/t and g/t. The Company acquired an interest in the project through an earn-in option agreement with Red Back. Numerous geochemical samples remain underexplored in the licenses, presenting significant expansion opportunity for Ashanti Gold. Exhibits 16 and 17 shows the historical drill work conducted at the Kwahu Oda geophysical license and mineralization of drill targets respectively. Exhibit 16: Ashanti Belt concession Exhibit 17: Ashanti Belt historical drill results Hole Interval (m) Grade (g/t) KYRC KYRC KYRC KYRC KYRC

13 Proximity to Newmont s Akyem Mine may provide special supply agreement opportunity The Ashanti Gold project may have the opportunity to collaborate with Newmont and supply feedstock to its Akyem mine. Akyem mine is approaching its end of mine life, characterized by falling production rates. Exhibit 18 shows the falling production forecast of the Newmont Akyem mine. Exhibit 18: Akyem mine Production forecast F 2018F 2019F 473, , , , ,600 Source: Company website Exhibit 19 shows the proximate locations of Newmont s Akyem project and the Kwahu Oda license of the Ashanti gold project. Exhibit 19: Location of Kwahu Oda license in near proximity to Newmont s Akyem mine Terms of agreement The Company acquired an interest in the project through an earn-in option agreement signed with Red Back on February 15, The Company elected to initiate the option agreement on October 17, According to the agreement, the Company has the right to acquire the entire 100% interest in the project after expending approximately US$1.0 million in exploration over a period of two years and not less than US$500,000 in the first year of exploration. After completion of its earn-in agreement, Ashanti will own approximately 90% interest net of 10% carried interest attributable to the Ghanaian government. Ashanti Belt Project Timeline Exhibit 20 shows the timeline of the Ashanti Belt Project. The Company expects to undertake soil sampling in 3Q18 to advance the project towards RC drilling planned in 1Q19. Exhibit 20: Timeline of Ashanti Project 13

14 Company Timeline and Key Events Exhibit 21 below shows the reverse chronological timeline of the evolution of Ashanti Gold, summarizing some key annual events for the Company since Dates 05-Apr-18 Exhibit 21: Timeline summarizing significant annual events since 2016 Events Ashanti announced a non-brokered private placement of up to 15,000,000 units at $0.15 per Unit for gross proceeds of up to $2,250,000. Each Unit will consist of one common share and one-half of one common share purchase warrant. 3-Apr-18 The Company appointed John Robins as Strategic Advisor. 21-Mar Mar-18 Soil sampling continues to expand Anumso Gold Zone with positive new results from its ongoing surface exploration program on the Anumso Project in Ghana. Ashanti Gold identified new mineralization zones and expanded gold targets through a soil sampling campaign at its Kossanto East Project 18-Jan-18 Identified two zones (each of 1 km strike length and 240 m wide) of significant gold anomalies at the Anumso Gold Project 15-Jan Nov-17 Announced a trenching program at the Anumso Project, which will begin by February 2018 post the ongoing soil sample program Initiated second phase of exploration work at the Kossanto East Project. The exploration program plans to drill approximately 60 holes to identify new mineralization zones 17-Oct-17 Exercised option agreement to earn the entire 100% interest in the Ashanti Gold Belt licenses 11-Oct Aug Aug-17 Closed a non-brokered private placement of 7,000,000 units for total gross proceeds of $2,100,000 at $0.40 per unit. Each unit comprises one-half of common share purchase warrant and one common share. Intersected high grade gold mineralization zones of g/t gold and g/t gold at the Kossanto East Project through a 53 hole RC drill program Entered into an agreement to acquire 100% interest of the Kossanto East Project 02-Aug-17 Intersected high grade gold mineralization zones of g/t gold and g/t gold at the Kossanto East Project 12-Jun-17 Initiated drill program at the Kossanto East Project, Mali. The drill program targets 55 RC holes at depths of m 09-Jun Mar Feb Feb Dec Oct Sep Aug Aug Jul-16 Closed a non-brokered private placement of 8.08 million units for total gross proceeds of $2.02 million at $0.25 per unit. Each unit comprises one-half of one common share purchase warrant and one common share Intersected high grade gold mineralization including g/t and g/t through a Reverse Circulation drill program Signed a formal option agreement to secure a 100% interest in three licenses located in the Ashanti Belt, Ghana Commenced first drill campaign at the Anumso Gold Project, Ghana Closed the first tranche of a non-brokered private placement of 952,750 units for total gross proceeds of $381,100. Each unit comprises one-half of one common share purchase warrant (exercisable within December 22, 2018 at $0.60 per share) and one common share Signed an earn-in Letter of Intent (LOI) agreement to secure 100% interest in three licenses located in the Ashanti Belt, Ghana Entered into an option agreement with Goldplat PLC to secure a 75% interest in the Anumso Project, Ghana Signed a Letter of Intent (LOI) agreement to secure a 65% interest in the Kossanto East Gold Project, Western Mali Announced a non-brokered private placement of 5 million units for total gross proceeds of $1.3 million. Each unit comprises onehalf of one common share purchase warrant (exercisable within October 26, 2018 at $0.30 per share) and one common share Changed the Company s name to Ashanti Gold Corp. from Gulf Shores Resources Ltd. Source: Company filings 14

15 Industry Overview We now present the reader with a brief overview of the mining and exploration industry in Ghana and Mali, followed by industry trends in the gold market. West Africa- An emerging gold mining destination in Africa Africa accounts for over 30% of the world s mineral resources. Additionally, Africa has rich resources of cobalt, manganese, industrial diamond, gold, bauxite and other precious metals. For more than ten years, South Africa was the mining hub of Africa. However, in recent times, South African gold producers have had to tackle high power costs and low productivity. Further, due to deeper mines, the producers had to incur higher shaft sinking costs. All these factors have increased operating expenses, which caused investors to shift from South Africa to West Africa. Further, West Africa offers lower production costs and stable political conditions for gold production. According to the S&P World Exploration Trend report, West Africa s share of gold exploration spending increased to 61% in 2017, compared to 51% in To note, West African nations gold production surpassed the gold production of South Africa in 2016, making West Africa as the new gold mining hub in Africa. From 2006 to 2015, Ghana, Mali, Burkina Faso, Ivory Coast, Senegal and Sierra Leone commissioned 18 new mines, while South Africa commissioned only four mines during the same period. Exhibit 22 shows the significant increase in gold production in major gold producing countries in West Africa between 2011 and Exhibit 22: Significant increase in gold production from 2011 to 2016 in major West African countries (in metric tons) Country Ghana Mali Burkina Faso Ivory Coast Guinea Senegal Source: USGS and World Gold Council Gold deposits and government initiatives in Ghana and Mali to benefit gold producers Ghana and Mali are the second and third largest gold producing countries in Africa. Gold production started in Ghana in the late 1990s, and the country has established itself in the gold industry. In Ghana, the mining industry contributes 5% of the country s Gross Domestic Product (GDP). Further, minerals account for 37% of the country s total exports, of which gold constitutes about 90%. Mali s gold exports constitute about 70% of total exports. Mali has 133 potentially rich gold reserves, however, only six reserves have been explored to date. These untapped reserves provide tremendous opportunities to gold producers in Mali. Exhibit 23 shows the gold production of major African countries in Both Ghana and Mali governments have taken appropriate steps to support gold producing companies. Recently, in March 2018, the government authorities in Ghana reduced electricity tariffs by 10% to 30%. According to Mr. Ahmed Nantogmah, Director, Ghana Chambers of Mines, the reduction in electricity tariffs will decrease electricity bills by 10% for mining companies who spend around $28 million annually on electricity. The Mali government has also taken initiatives to improve transparency and modernize issuance of mining licenses, making Mali an ideal destination for gold mining. Exhibit 23: Gold exploration in Africa in 2016 (In metric tons) Source: World Gold Council and Tanzania Minerals Audit Agency (TMAA) 15

16 Political stability in Ghana should support exploration companies Ghana is one of the most politically stable countries in Africa after the country s transition to multi-party democracy in The Mo Ibrahim Index of African Governance, which measures the countries performance to meet political, social and economic expectations of citizens, placed Ghana 6 th on safety and rule law and 5 th in national security. According to Ghana's Investment Promotion Centre, investors term Ghana as a preferred investment destination as it is one of the best-governed and stable countries in West Africa. Exhibit 24 shows the KPMG s Mining in Africa Towards 2020 report, which ranks African countries based on their political risk and operating environment. KPMG has ranked Ghana with political risk ranking and operating environment ranking of about 0.55, with one being the worst. Exhibit 24: KPMG s assessment of African nations Source: Mining in Africa Towards 2020 According to a report from BMI Research, Mali s mining industry is estimated to grow 10% from 2017 to 2021, despite the existing political risk in North and Central Mali. Mining activities in Mali are more concentrated in the Southern region and secured from any kind of civilian unrest, unlike Central and Northern regions. Ghana s FDI inflows to support gold production Ghana is one of the top five countries in Africa to attract Foreign Direct Investments (FDI), and in the past 10 years, Ghana s gold production has increased significantly with FDI inflows. Ghana is dynamically working towards becoming the most attractive business destinations in Africa. According to the Ghana Investment Promotion Centre (GIPC), Ghana s FDI inflows for the first three quarters of 2017 totaled to US$3.25 billion, an 80% increase compared to the same period in 2016 (US$1.81 billion). This is approximately 65% of the country s 2017 FDI target of US$5.00 billion. Further, FDI inflows registered at the Minerals Commission amounted to US$ million, which is significantly higher than other sectors. Favorable investment environment and huge resource potential have significantly increased the FDI inflows to the country. Additionally, the government s stand on making the country investor-friendly through accommodative mining regulations should help the country achieve its 2017 FDI target and continue to attract FDI inflows in the future. Exhibit 25 shows Ghana s FDI inflows from 2011 to 2017, highlighting its 2017 FDI target and the actual FDI inflows for the first quarter of Exhibit 25: Ghanaian FDI inflows for the first three quarters of 2017 amounted to US$3.25 billion (in US$ billions) $6.00 $ (E) $4.00 $ $2.00 $1.00 $ (E) Source: World Investment Report- UNCTAD,GIPC 16

17 Curb on artisanal miners to support gold mining companies in Ghana Ghana produced 4.1 million ounces of gold in 2016, a 46% increase compared to This increase was primarily attributable to the ramping up of gold production from major producers including Asanko Gold Ghana Limited (Obotan Mines) and significant increase in gold supply from artisanal miners. Artisanal gold supply expanded to 1.5 million ounces in 2016 from mere 267,662 ounces in Exhibit 26 shows Ghana s gold production from 2015 and However, gold output in 2017 is expected to fall, as the Ghanaian government temporarily banned artisanal mining in a bid to suppress illegal mining along with environmental concerns. According to Barbara Oteng-Gyasi, Deputy Minister of land and mines, Ghana, gold output from artisanal miners is expected to fall by approximately 50% in Restrictions on artisanal miners could help gold mining companies to increase gold production. Exhibit 26: Artisanal gold production accounted for more than one-third of gold output in 2016 (in 000 ounces) 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, , , , Mine output Artisanal mining We now present the reader with global gold market trends Source: Global economic factors should have significant influence on gold in 2018 In 2017, investors were greatly in favor of the stock markets, which are evident from the significant gains posted by the markets across the world (S&P 500: up 19%, DAX: up 13% and SENSEX: up 28%). Global uncertainties, weak US dollar and other factors kept the gold prices in the uptrend. Promising labor market data and positive economic growth have made the US Federal Reserve to hike interest rate three times in the same year. Further, the US Federal Reserve remains solid on its stance to increase interest rates gradually in spite of the major tax reform in the US. According to Thomson Reuters GFMS Gold Survey 2017, the pace at which the US Fed intends to hike rates will have a significant impact on gold. They also reiterated that a gradual increase in fed rate should benefit gold demand; while a bolder approach should negatively affect gold demand. According to the World Gold Council, in addition to monetary policy tightening, increased income due to global economic growth, continued strength in global asset markets and improved efficiency and transparency in gold market should have a positive influence on global gold demand. Gold price up 13% in 2017 on encouraging investment environment Gold also known as safe haven asset is a hedge against uncertainty. Exhibit 27 shows the gold s price trends in the past 10 years. In the period, 2006 to 2012, gold prices increased due to its safe-haven demand during the 2008/2009 recession. Later in , gold prices fell on strong US dollar. Gold prices generally increase when investors are jittery and shift their investments from riskier assets to gold and vice-versa. In 2017, gold prices climbed more than 13% on the continued geopolitical issue in North Korea, weak US dollar, fluctuation in various asset markets. Exhibit 27: Gold price trend from 2007 to 2018 (in US$ per ounce) Source: World Gold Council 17

18 China 4Q17 gold demand rises 6% on robust holiday buying and improvement in the retail market China accounts for 33% of the total global jewelry demand and is the world s largest consumer of gold. China's gold market continued its stellar performance in the fourth quarter of According to WGC, Chinese gold jewelry demand increased by 6% to metric tons in 4Q17, compared to 4Q16. Further, in 2017, Chinese gold jewelry demand climbed 3% to metric tons, compared to The increase in jewelry demand was due to higher purchases from Chinese consumers during the holiday seasons and improved technique adopted by retailers. According to GFMS Gold Survey 2018, the younger generation of China see gold as a fashionable item rather than a safe-haven asset. Due to this, it is expected that the Chinese gold demand from jewelry segment to increase compared to other gold segments such as bar and coins. Looking at the demand pattern, the Chinese gold retailers have also shifted to 18-carat and 22-carat from 24-carat to offer lightweight and betterdesigned products. Further, to take advantage of online sales, Chinese retailers have started collaborating with various e- commerce companies like Tmall (Alibaba Group e-commerce platform), to broaden their horizons through technology. 4Q17 Indian gold jewelry demand climbed by 4% to metric tons India is the world s second largest consumer of gold and consumes about 24% of the total global gold jewelry. The Indian gold jewelry demand climbed 4% to metric tons in the fourth quarter of 2017, compared to 4Q16. Similarly, in 2017, full year gold demand from India increased 12% to metric tons, compared to This rise in demand was due to the festival season, improvement in rural markets and removal of anti-money laundering regulation. Indian consumers generally purchase gold during festivities and the wedding season, which starts in October. India s rural population contributes around 65% of the total gold consumption. In order to support farmers, the Indian government raised the minimum support price of kharif crop by 6%. This initiative by the government encouraged agricultural activities, which, in turn, boosted rural incomes and thereby supported gold jewelry demand. Additionally, the government also removed the earlier imposed Prevention of Money Laundering Act (PMLA) on the gems and jewelry sector. Earlier in August 2017, the government launched the PMLA, due to which retailers and consumers had to show official identification for all cash transactions above US$750. The removal of PMLA was a big relief in rural areas, where most of the transactions are in cash. Global gold demand increases 6% in 4Q17 on the revival of jewelry demand In the fourth quarter of 2017, global gold demand recovered on increased jewelry demand from China and India. Global gold demand stood at 1,095.8 metric tons in the fourth quarter of 2017, according to the World Gold Council s Q4 gold demand trend report. Exhibit 28 shows 4Q17 global gold demand in various segments. 4Q17 global gold jewelry demand (60% of 4Q17 global gold demand) rose by 3% to metric tons, compared to the same period in India and China s gold jewelry demand climbed by 4% and 6% in 4Q17 respectively. Additionally, improved inflows in gold-backed Exchange Traded Funds (ETFs) also supported global gold demand in 4Q17. Gold-backed ETFs witnessed 28.9 metric tons of inflows in 4Q17, compared to metric tons of outflows in 4Q16. However, 2017 full-year global gold demand fell by 7% due to lower reserves added by Central bank and fall in investment demand. Central bank net purchases for 2017 totaled at metric tons, compared to metric tons in Total investment demand for gold decreased by 23% to 1,231.9 metric tons in 2017, compared to 1,595.5 metric tons in Exhibit 28: Global gold demand from various segments in 4Q17 Technology, 8.05% Central bank & other inst., 6.67% ETFs & similar products, 2.64% Bar & coin, 23.43% Jewelry, 59.22% Source: World Gold Council According to the World Gold Council, global gold supply marginally increased by 1% to 1,094.7 metric tons in 4Q17, compared to 4Q16. The rise in gold supply was due to increased recycled gold in 4Q17. However, fall in mine production hampered gold supply in the fourth quarter of Recycled gold increased by 8% to metric tons, while mine production decreased by 2% to metric tons compared to 4Q16. 18

19 Exhibit 29 shows global gold demand and supply trends for the period 2010 to Exhibit 29: Global gold supply and demand (in metric tons) 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, Global Supply Global Demand We now provide the reader with Ashanti s major comparables. Source: World Gold Council Ashanti Comparables We have chosen the following companies (Kinross Gold Corp, B2Gold Corp, Endeavour Mining Corp, Perseus Mining Ltd, Nexus Gold Corp and Teranga Gold Corp.) as Ashanti s comparables as they are also in the mining industry and have operations in West Africa. Exhibit 30 presents Ashanti s comparables. Newmont Gold Corporation (NYSE: NEM) ( Newmont ) Newmont is a US-based mining and exploration company with market capitalization of US$19.9 billion. Newmont has its projects in the US, Peru, Australia, Ghana and Suriname. As of December 31, 2017, Newmont s Akyema gold project in Ghana has proven and probable reserves of 62.8 million metric tons of gold. Kinross Gold Corporation (TSE: K) ( Kinross ) Kinross is a Toronto-based gold mining company with market capitalization of $5.96 billion, with exploration activities in the US, West Africa and Russia. Kinross has an open-pit gold project in Chirano, Ghana, with proven and probable gold reserves of 567,000 ounces. B2Gold Corporation (TSX: BTO) ( B2Gold ) B2Gold is a Canadian-based gold mining and exploration company with market capitalization of $3.76 billion. B2Gold gold projects are located in Colombia, Finland, Philippines, Nicaragua, Namibia, Burkina Faso and Mali. In February 2018, B2Gold intersected gold resource of 5.13 million metric tons at the El Limon property in Nicaragua. Endeavour Mining Corporation (TSE: EDV), ( Endeavour ) Endeavour is a Canadian gold mining company with market capitalization of $2.64 billion. Endeavour has five mines and two projects in West Africa. Endeavor estimates to produce 670,000 to 720,000 ounces of gold in Teranga Gold Corp (TSX: TGZ) ( Teranga ) Teranga is a Toronto-based gold mining company with market capitalization of $ million. Teranga s gold projects are located in Burkina Faso, Senegal and Côte d Ivoire. In March 2018, Teranga received $165 million secured debt financing from Taurus Funds Management Pty Ltd for the development of Teranga s Wahgnion Gold Project located in Burkina Faso. Perseus Mining Limited (TSE: PRU), ( Perseus ) Perseus is a Western Australia based gold mining and exploration company with market capitalization of $ million, and projects in Ghana and Côte d Ivoire. Perseus Edikan Gold Mine in Ghana has measured and indicated resources of million ounces gold. Nexus Gold Corp (TSX.V: NXS), ( Nexus ) Nexus is a Vancouver-based gold mining and exploration company with market capitalization of $5.02 million. Nexus mining operations are concentrated in Burkina Faso, West Africa. In February 2018, Nexus through filed exploration program discovered gold values up to 5.56 grams per metric ton and 6.27 grams per metric ton at its Bouboulou and Niangouela project areas respectively. 19

20 Companies Exhibit 30: Ashanti Gold Corp. comparables (March 26, 2018) Market Cap Price EV/Revenue P/S P/B 1-year price charts (CAD million) (CAD) Newmont Mining Corp. (NYSE: NEM) US$19,910 US$ x 1.87x Kinross Gold Corp. (TSE: K) $5,960 $ x 1.30x B2Gold Corp. (TSX: BTO) $3, $ x 2.49x Endeavour Mining Corp. (TSE: EDV) $2, $ x 2.64x Teranga Gold Corp. (TSX: TGZ) $ $ x 0.68x Perseus Mining Limited (TSE: PRU) $ $ x 0.79x Nexus Gold Corp. (TSX.V: NXS) $5.02 $0.035 N/A N/A 1.94x Ashanti Gold Corp. (TSX.V: AGZ) $7.37 $0.18 N/A N/A 3.63x Source: Google Finance and Yahoo! finance Ashanti s flagship Kossanto East Project in Mali is located near Endeavour and B2Gold's projects, two of the top gold companies in Mali. Endeavour s Tabakoto mine in Mali has a measured and indicated resource of 19 million metric tons of gold, with grade of 3.01 g/t Au. B2Gold s Falko mine in Mali produced about 40,000 ounces of gold at an average grade of 3.05 g/t Au, with gold recoveries of 95.5%. Such significant gold recoveries of Endeavor and B2Gold shows that Ashanti s exploration and development path may be also promising in the near future. 20

21 SWOT Analysis We now briefly present the strengths and weakness of the Company, along with the opportunities and threats in the external environment. Strengths Diversified gold assets at favorable geographic locations Ashanti s gold assets have well diversified exposure to different gold systems including shear-zone based gold system (Kossanto East license) and conglomerate hosted gold system (Anumso license). Successful mines operating under the same gold asset classes surround Company s assets. The Company s Kossanto East Project hosting shear zone based gold deposit is in near proximity (40 km to the south) to the successful Loulo asset of Randgold with similar geological structure. Further, successful conglomerate hosted gold mines including Tarkwa (production of 560,000 oz Au/yr) and Iduapriem gold field (production of 560,000 oz Au/yr) surround the Company s Anumso license with conglomerate hosted gold deposits. Strategic presence in West Africa Ashanti s projects are strategically located in the prime gold producing West African regions (Ghana and Mali). West Africa has grown as a key gold producing hub in recent years. West African gold production grew at a CAGR of 6.2% between 2011 and 2016, compared to the global growth rate of 3.1% during the same period. This is due to the regions excellent geology, supportive mining culture, and favorable infrastructure. Special situation for potential synergy with Newmont s aging Akyem mine The Anumso project s proximity to Newmont s Akyem mine and rich infrastructure could potentially benefit Ashanti Gold with feedstock supply opportunity. This is because the Akyem mine is approaching its end of mine as discussed in the Company portion. This could provide Ashanti with a potential quick monetization opportunity by supplying feedstock to the Akyem mill. Qualified and Experienced Management Team The Company s overall management team has over 70 years of experience in the field mining and finance. Mr. McCutcheon, CEO of the Company has more than 20 years of international business experience in mining research and investment banking. He has previously worked with Bear Stearns, Pioneer Investments and other multiple financial institutions. Mr. Paul Klipfel, COO, and head geologist of the Company has 35 years of gold exploration experience in various parts of the world including the Ashanti Belt of Ghana. Such an experienced management team may prove to be a great strength for Ashanti s success. Weakness Negative operating cash flow The Company has not generated any revenue from its operations and has been generating negative cash flows from operations since inception. The Company has raised capital through equity issuances in order to meet its operating and capital expenditure requirements. This is likely to continue as there is no near-term timeline for gold commercialization. Negative operating cash flows and over dependence on equity funding could affect the Company s going concern capability. Opportunities Continued demand for gold should help prices Gold price climbed 13% in 2017, and this uptrend is expected to continue in Gold s safe haven appeal would attract investors amid geopolitical issue and bubbles in various asset classes. Gold demand from China and India, world s two biggest gold consumers, would continue in Additionally, income would increase with growth in the global economy thereby supporting gold demand. Ghana and Mali provide a huge opportunity to gold producers The mining friendly initiatives of both Ghana and Mali should support gold production. In Ghana, policies such as Minerals and Mining Law as well as restrictions on artisanal gold mining should prove beneficial for gold miners. Further, in Mali, as seen in the industry section, only six reserves of the 133 gold rich reserves have been explored. This presents significant opportunity for gold miners. Threats Competition The Company competes with top gold producing companies in the West African region with huge capital resources, technical facilities and mineral claims. Companies such as Newmont, Endeavour (Tabakoto mine indicated resource of 19 million metric tons of gold), B2Gold (Fekola mine gold production of 400,000 ounces at an average grade of 3.05 g/t Au) operate near the company s projects. These companies hold better financial resources and strong technical expertise. Geopolitical risk in Mali Mali is a landlocked nation with a huge current account deficit of -4% of GDP in 2016, primarily attributable to government expenditures. Further, the current account deficit of GDP is forecast to be -3.5% in both 2017 and 2018 with expected higher government s expenditures on security and peace activities. Therefore, the country requires huge FDI to overcome the current account deficit. To note, Mali s GDP growth is projected to be 5.5% in both 2017 and 2018, compared to 5.8% in According to the World Bank s 2018 Doing Business Survey, Mali has a ranking of 143 out of 190 countries. 21