Ashanti Gold Announces Mali Gold Project Earn-in Agreement

Vancouver, British Columbia--(Newsfile Corp. - August 22, 2016) - Ashanti Gold Corp. (TSXV: AGZ) ("AGZ" or the "Company") is pleased to announce it has signed a Letter of Intent (LOI) with Alecto Minerals PLC ("Alecto"), an AIM-listed public company, to earn an interest in the Kossanto East Gold Project (the "Project") in western Mali (Figures 1 and 2).

The LOI provides AGZ with the right to earn 65% of Alecto’s interest (after including the Mali State carried interest of 10%, AGZ ownership of the property upon completion of the earn-in agreement will be 58.5%) in the Project by completing a Preliminary Feasibility Study ("PFS") within 36 months following the date of TSXV approval (the "Option Period"). AGZ may elect to pay in cash US$4.0M to Alecto within 90 days following the end of the Option Period in lieu of producing a PFS. AGZ will be the operator of the exploration and development programs during the Option Period.

Upon completion of its earn in rights, AGZ and Alecto will form a joint venture whereby each party will contribute proportionally to the Project’s continuing exploration and development. The terms of the joint venture, including an interest dilution clause, will be set out in an option agreement that is currently being finalized by Alecto and AGZ.

If either party’s interest is reduced to 10% or less (not including the Mali State interest), that interest will be converted into a 1.5% net smelter return royalty (the "NSR") which the other party will have the right for one year to purchase by paying US$100,000 for each 0.1% of the NSR.

The Kossanto East Project is a 66.41 km² concession in the prolific Kedougou - Kenieba Inlier, the northwestern most exposure of Birimian rocks in West Africa. The Property hosts two principle drill-tested targets, Gourbassi East ("GE") and Gourbassi West ("GW") and several surface anomalies. Geochemical anomalies identified by previous explorers and Alecto led to drill testing, successful intersection of gold mineralization, and production by Alecto of an initial Inferred Resource¹ estimate of 121,000 oz gold for GW and a 126,000 oz gold for GE. Gold hasbeen intersected in drill holes over a ~1 km strike length at GW and over a ~900m strike length at GE. Both areas remain open along strike and down dip and include some notable drill intercepts (Table 1). One of the other target areas (Berola) has been tested with shallow Rotary Airblast Drilling (RAB) and returned positive, first-pass intercepts (Table 1).

Gourbassi East is a NNW striking mineralised zone with notable gold grades (multi-meter intercepts at greater than 2 g/t; Table 1) located within a body of felsic volcanics. The Gourbassi West prospect lies approximately 3.7 km WNW of Gourbassi East. Similar gold intercepts are associated with silicified sandstones and NNW striking zone of mineralization (Figure 2).

The Kossanto East Project is located within the highly gold-endowed West Mali Gold Belt which extends approximately 180 km in a north-south direction along the Mali-Senegal border. The Project lies near the intersection of the Senegal-Mali Shear Zone and the Main Transcurrent Shear Zone, two major structures within this district associated with numerous world class orogenic gold deposits (Figure 1). Over the last 20 years approximately 40M oz of gold has been discovered in proximity to these structures resulting in construction of at least 8 new mines, including the world class Loulo group of deposits, Sadiola, Yatela, Gounkoto, Segala, Tabakoto, and Sabodala (Figure 1).

AGZ is very pleased to undertake exploration in this rapidly emerging district. Existing data for GW and GE along with nearby large gold deposits, suggests that significant mineralization could be present at grades, continuity and extent for definition of a larger resource that could lead to mine development in this rapidly emerging key gold region.

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Figure 1. Geologic map of the Kedougou - Kenieba Inlier, the most northwest extent of Birimian rocks in West Africa. The Kossanto East Project is situated at the convergence of the Main Transcurrent Shear Zone and the Senegal-Mali Shear zone offering a rich structural environment for the formation of gold deposits. (adapted from Lawrence, et al., 2013; Economic Geology v.108,pp. 199-227. Gold ounces from Annual Reports and various on-line sources.)

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Figure 2. Kossanto East Project location and targets.

Table 1.
Select Drill Intervals from Alecto Drill Data

Qualified Person

The information presented in this Press Release has been reviewed by Dr. Paul Klipfel CPG of Mineral Resource Services Inc. and a Qualified Person as defined by Canadian NI 43-101. Dr. Klipfel is not an Independent Person, as he is a shareholder of AGZ.

Historical Data

The historical estimates of inferred resources at GE and GW were developed by Alecto; and are considered relevant by the Company. AGZ is advised that such estimates are compliant with JORC rules of disclosure, however the Company has not independently verified such data, the Company’s qualified person has not done sufficient work to classify the historical estimates as current mineral resources, the Company is not treating the historical estimates as current mineral resources, and readers are cautioned not to place undue reliance thereon.

Cautionary Statement on Forward-Looking Information

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THATTERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

This news release includes "forward-looking statements", including forecasts, estimates, expectations and objectives for future operations that are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company and are considered "forward-looking information for the purposes of Canadian Securities laws. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. There is no assurance the Company will be successful in negotiating a final agreement with Alecto, that the Company will be successful in raising the funds necessary to earn any interest in the Project, that the Company will be successful in maintaining tenure to the Project due to political or legal changes that are at the discretion of the Malian government, that historic drill results will be verified by the Company, or that any economic resource will be located within the Project.

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1}Inferred Mineral Resource

"An Inferred Mineral Resource is that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity.

An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.

An Inferred Mineral Resource is based on limited information and sampling gathered through appropriate sampling techniques from locations such as outcrops, trenches, pits, workings and drill holes. Inferred Mineral Resources must not be included in the economic analysis, production schedules, or estimated mine life in publicly disclosed Pre-Feasibility or Feasibility Studies, or in the Life of Mine plans and cash flow models of developed mines. Inferred Mineral Resources can only be used in economic studies as provided under NI 43-101.