UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549



FORM 20-F

Annual Report





[ ]

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

[X]

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2008

OR

[ ]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to __________

OR

[  ]

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report __________



KEEGAN RESOURCES INC.

(Exact name of Registrant as specified in its charter)



British Columbia, Canada

(Jurisdiction of incorporation or organization)



1204 - 700 West Pender Street, Vancouver, British Columbia, V6C 1G8

(Address of principal executive offices)



Securities to be registered pursuant to Section 12(b) of the Act:

None



Securities to be registered pursuant to Section 12(g) of the Act:

Common Shares, without par value

(Title of Class)



Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None



Indicate the number of outstanding shares of each of the Companys classes of capital or common stock as of the close of the period covered by the annual report.  27,467,648 common shares at March 31, 2008.



Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.   Yes [  ]   No [X]



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 12 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past ninety days.

Yes [  ]   No [X]

#





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer.  See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.



Large accelerated filer [  ]  Accelerated filer [  ]  Non-accelerated filer [X]



Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:



US GAAP

International Financial Reporting Standards as issued

by the International Accounting Standards Board



Other  [X]



If Other has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow: Item 17 [X]  Item 18 [  ]



If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes [  ]   No    [X]



























Keegan Resources Inc.

FORM 20-F ANNUAL REPORT

TABLE OF CONTENTS

|Part I   |                                                            | Page
|-------- | ---------------------------------------------------------- | ----
|         |                                                            |     
|Item 1.  | Identity of Directors, Senior Management and Advisors      | 1   
|Item 2.  | Offer Statistics and Expected Timetable                    | 2   
|Item 3.  | Key Information                                            | 2   
|Item 4.  | Information on the Company                                 | 7   
|Item 4A. | Unresolved Staff Comments                                  | 25  
|Item 5.  | Operating and Financial Review and Prospects               | 25  
|Item 6.  | Directors, Senior Management and Employees                 | 31  
|Item 7.  | Major Shareholders and Related Party Transactions          | 40  
|Item 8.  | Financial Information                                      | 42  
|Item 9.  | The Offer and Listing                                      | 42  
|Item 10. | Additional Information                                     | 46  
|Item 11. | Quantitative and Qualitative Disclosures About Market Risk | 59  
|Item 12. | Description of Securities Other Than Equity Securities     | 59  



|Part II   |                                                                              |   
|--------- | ---------------------------------------------------------------------------- | --
|          |                                                                              |   
|Item 13.  | Defaults, Dividend Arrearages and Delinquencies                              | 59
|Item 14.  | Material Modifications to the Rights of Security Holders and Use of Proceeds | 59
|Item 15.  | Controls and Procedures                                                      | 59
|Item 16A. | Audit Committee Financial Expert                                             | 59
|Item 16B. | Code of Ethics                                                               | 61
|Item 16C. | Principal Accounting Fees and Services                                       | 61
|Item 16D. | Exemptions from the Listing Standards for Audit Committees                   | 62
|Item 16E. | Purchases of Equity Securities by Keegan/Affiliated Purchasers               | 62



|Part III |                      |   
|-------- | -------------------- | --
|         |                      |   
|Item 17. | Financial Statements | 62
|Item 18. | Financial Statements | 62
|Item 19. | Exhibits             | 63









FINANCIAL AND OTHER INFORMATION

In this Annual Report, (i) references to we, us, our, the Company or Keegan mean Keegan Resources Inc. and its subsidiaries, unless the context requires otherwise; (ii) we use the Canadian dollar as our reporting currency and, unless otherwise specified, all dollar amounts are expressed in Canadian dollars and references to CDN$ or $ mean Canadian dollars; and (ii) our financial statements are prepared in accordance with Canadian generally accepted accounting principles (Canadian GAAP) and Note 13 to these financial statements provides a reconciliation of our financial statements to United States generally accepted accounting principles (U.S. GAAP).

FORWARD-LOOKING STATEMENTS

Certain statements in this document constitute forward-looking statements.  Forward-looking statements can be identified by the use of words such as anticipate, believe, plan, estimate, expect, and intend, statements that an action or event may, might, could, should, or will be taken or occur, or other similar expressions.  Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Registrant, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the risks associated with outstanding litigation, risks associated with project development; the need for additional financing; operational risks associated with mining and mineral processing; fluctuations in metal prices; title matters; uncertainties and risks related to carrying on business in foreign countries; environmental liability claims and insurance; reliance on key personnel; the potential for conflicts of interest among certain officer, directors or promoters of the registrant with certain other projects; the absence of dividends; currency fluctuations; competition; dilution; the volatility of the Registrants common share price and volume; and tax consequences to U.S. Shareholders; and other risks and uncertainties set out under Risk Factors in this Annual Report.  Except as required by applicable law, we do not intend to update any of the forward-looking statements included herein to conform those statements to actual results.

CAUTIONARY NOTE TO U.S. INVESTORS CONCERNING 
ESTIMATES OF MINERAL RESOURCES



The SEC permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce.  We may use certain terms in this Annual Report and other documents we file with or furnish to the SEC, such as inferred resources, indicated resources and measured resources, that the SEC guidelines strictly prohibit U.S. registered companies from including in their filings with the SEC.

We advise U.S. investors that while these terms are recognized and required by Canadian regulators, the SEC does not recognize them.  Inferred resources have a great amount of uncertainty as to their economic and legal feasibility.  It cannot be assumed that all or any part of an inferred resource will ever be upgraded to a higher category.  Under Canadian rules, estimates of inferred resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases.  U.S. investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable.  In addition, U.S. investors are cautioned not to assume that any part or all of the mineral deposits in the category of indicated resources will ever be converted into reserves.

#





PART I

ITEM 1.

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

Directors

The following table sets out as of September 10, 2008 certain information relating to our directors and executive officers:



|Name | Age                                    | Date First Elected or Appointed
|---- | -------------------------------------- | -------------------------------
|     | Richard J. Haslinger(2)                | 43                             
|     | Daniel T. McCoy(3)                     | 47                             
|     | Robert J. McLeod(1) (3)                | 37                             
|     | Gordon J. Fretwell(1) (4)              | 55                             
|     | Mark Orsmond(1) (5)                    | 41                             
|     | Daniel T. McCoy, President & CEO       | 47                             
|     | Tony M. Ricci, Chief Financial Officer | 45                             
|     | Michael Bebek, Corporate Secretary     | 32                             



(1)

Member of Audit Committee.

(2)

448 West 22nd Ave. Vancouver, BC V5Y 2G5

(3)

1204  700 West Pender Street, Vancouver, B.C. V6C 1G8

(4)

1780  400 Burrard Street, Vancouver, B.C. V6C 3A6

(5)

Suite 880  609 Granville Street, Vancouver, B.C. V7Y 1H2

Advisors

The Companys U.S. Legal Counsel:

Lang Michener LLP

1500 Royal Centre
1055 West Georgia Street
Vancouver, BC  V6E 4N7

Contact:  Michael H. Taylor
Telephone: 604-691-7410

The Companys Canadian Legal Counsel:

McCullough OConnor Irwin

1100-888 Dunsmuir St

Vancouver, BC  V6C 3K4

Contact: Jonathan McCullough

Telephone: 604-687-7077



Gordon J. Fretwell Law Corporation

1780-400 Burrard St

Vancouver, B.C.  V6C 3A6

Contact: Gordon J. Fretwell

Telephone: 604-689-1280



1

Auditors

The Companys auditor is:

BDO Dunwoody LLP

600 Cathedral Place - 925 West Georgia Street

Vancouver, BC V6C 3L2

Telephone: 604-688-5421

ITEM 2.

OFFER STATISTICS AND EXPECTED TIMETABLE

Not Applicable.

ITEM 3.

KEY INFORMATION

Selected Financial Data

The following table presents selected financial data derived from our audited financial statements for the fiscal years ended March 31, 2008, 2007, 2006, 2005 and 2004.  You should read this information in conjunction with our audited financial statements and related notes, as well as Item 4: Information on the Company and Item 5: Operating and Financial Review and Prospects of this annual report.

Our financial statements have been prepared in accordance with Canadian GAAP in Canadian dollars.  Note 13 to the annual financial statements included herein provides descriptions of material measurement differences between Canadian GAAP and US GAAP as they relate to us and a reconciliation of our financial statements to US GAAP.

We were a Capital Pool Company as defined in the TSX Venture Exchange Policy 2.4 until completing a Qualifying Transaction on January 31, 2005 pursuant to which we acquired the right to earn an interest in a project known as the Horse Mountain Project in Nevada, which we determined not to pursue in fiscal 2006.  On March 4, 2005, we entered into an option agreement to acquire a 100% interest in a project known as the Regent Gold Silver Project in Nevada, which we determined not to pursue in 2007.  On March 11, 2005, we entered into an option agreement to acquire the Asumura Gold Project in West Ghana.  On May 31, 2005, we entered into an option agreement to acquire an interest in a property known as the Fri Property in Nevada, which we determined not to pursue in fiscal 2006.  On December 7, 2005, we entered into an option agreement to acquire a 100% interest in the Black Velvet Gold Project in Nevada, which we determined not to pursue in 2007.  In March 2007, the Company entered into an option agreement with Mt. Olives Goldfields, Ltd. to earn a 100% ownership of the Mt. Olives Reconnaissance Concession and  purchased 100% private ownership of the Jeni Concession mining lease and exploration rights, both located in Ghana. As a result, the summary financial information set forth below may not be comparable from period to period.









2



Table No. 3

Selected Financial Data

(CDN$ in 000, except per share data)

|              | Year Ended March 31, 2008 | Year Ended March 31, 2007 | Year Ended March 31, 2006 | Year Ended March 31, 2005 | Year Ended March 31, 2004
|------------- | ------------------------- | ------------------------- | ------------------------- | ------------------------- | -------------------------
|CANADIAN GAAP |                           |                           |                           |                           |                          
|Revenue       | Nil                       | Nil                       | Nil                       | Nil                       | Nil                      
|              | Expenses                  | ($4,170)                  | ($3,641)                  | ($1,798)                  | ($601)                   
|              | Other Income (Expenses)   | ($146)                    | ($740)                    | ($1,191)                  | ($28)                    
|              | Loss for the Period       | ($4,316)                  | ($4,381)                  | ($2,989)                  | ($629)                   
|              | Loss Per Share            | ($0.17)                   | ($0.28)                   | ($0.31)                   | ($0.09)                  
|              | Wtg. Avg. Shares (000)    | 24,605                    | 15,595                    | 9,602                     | 6,648                    
|              | Period-End Shares         | 27,468                    | 22,808                    | 12,164                    | 8,011                    
|              | Working Capital           | $15,064                   | $13,907                   | $625                      | $664                     
|              | Resource Properties       | $19,105                   | $7,198                    | $1,449                    | $529                     
|              | Long-Term Debt            | Nil                       | Nil                       | Nil                       | Nil                      
|              | Capital Stock             | $40,489                   | $25,459                   | $4,982                    | $1,674                   
|              | Shareholders Equity      | $34,293                   | $21,142                   | $2,112                    | $1,239                   
|              | Total Assets              | $34,670                   | $21,494                   | $2,372                    | $1,288                   
|              | US GAAP                   |                           |                           |                           |                          
|              | Net Loss                  | ($14,549)                 | ($9,661)                  | ($4,095)                  | ($661)                   
|              | Loss Per Share            | ($0.59)                   | ($0.62)                   | ($0.43)                   | $0.10)                   
|              | Resource Properties       | $2,779                    | $1,105                    | $343                      | $498                     
|              | Shareholders Equity      | $17,967                   | $15,049                   | $1,006                    | $1,208                   
|              | Total Assets              | $18,344                   | $15,401                   | $1,266                    | $1,257                   

We have not declared or paid any dividends in the past and also do not expect to do so in the foreseeable future.

Exchange Rates

The following tables present for the periods indicated, certain rates of exchange for Canadian dollars in terms of U.S. dollars (based on the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York):

Table No. 4

U.S. Dollar/Canadian Dollar

|Period | Average                          | High | Low  | Close
|------ | -------------------------------- | ---- | ---- | -----
|       | Fiscal Year Ended March 31, 2008 | 1.03 | 1.16 | 0.92 
|       | Fiscal Year Ended March 31, 2007 | 1.14 | 1.19 | 1.10 
|       | Fiscal Year Ended March 31, 2006 | 1.19 | 1.27 | 1.13 
|       | Fiscal Year Ended March 31, 2005 | 1.30 | 1.40 | 1.18 
|       | Fiscal Year Ended March 31, 2004 | 1.35 | 1.48 | 1.27 



3



| | Mar. 2008 | Apr. 2008 | May 2008 | Jun. 2008 | Jul. 2008 | Aug. 2008
| | --------- | --------- | -------- | --------- | --------- | ---------
| | High      | $1.03     | $1.03    | $1.02     | $1.03     | $1.03    
| | Low       | $0.98     | $1.00    | $0.98     | $1.00     | $1.00    

The rate of exchange for the Canadian dollar to the U.S. dollar on September 10, 2008 was US$1.00 = Cdn$1.07.

Capitalization

Not Applicable.

Reasons for the Offer and Use of Proceeds

Not Applicable.

Risk Factors

Before making an investment decision, you should carefully consider the risks and uncertainties described below as well as the other information contained and incorporated by reference in this annual report.  These risks and uncertainties are not the only ones facing us, additional risks and uncertainties not presently known to us or that we currently consider immaterial may also impair our business operations.  If any of such risks actually occur, our business, prospects, financial condition, cash flows and operating results could be materially adversely affected.

Keegan has not yet achieved profitable operations and expects to incur further losses in the development of its business, all of which casts substantial doubt about the Companys ability to continue as a going concern.

The Companys ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. The Company has not earned any material revenues to date and has been funding its operations from the sale of common stock.  This raises substantial doubt about the Companys ability to continue as a going concern.

Keegan has no revenues from operations and no ongoing mining operations of any kind.  The chances of Keegan ever reaching the development stage are remote.

The expenditures to be made by Keegan in the exploration of its properties as described herein may not result in discoveries of mineralized material in commercial quantities.  Most exploration projects do not result in the discovery of commercially mineable ore deposits and this occurrence could ultimately result in Keegan having to cease operations. Management feels that if exploration efforts were unsuccessful for a period of ten years, the Company would cease operations. If that were the case, investors would lose their entire investment in the company.

Keegan has no known reserves on the properties in which it has an interest and if reserves are not defined the Company could have to cease operations.

Although Keegans Esaase property has been determined to contain mineral resources, the properties in which Keegan has an interest or the concessions in which Keegan has the right to earn an interest are in the exploratory stage only.  None of the Companys properties have any known reserves.  If Keegan does not ultimately find a body of ore to extract, it would have to cease operations. As stated above, management believes that if reserves are not defined on any of the properties on which Keegan has an interest after a period of ten years, the Company would cease operations. If that were the case, investors would lose their entire investment in the Company.

4



Keegan has no positive cash flow and no recent history of significant earnings and is dependent upon public and private distributions of equity to obtain capital in order to sustain operations.  The sale of securities to the public results in dilution to existing shareholders.

None of Keegans properties have advanced to the commercial production stage and Keegan has no history of earnings or positive cash flow from operations. Keegan does not know if it will ever generate material revenue from mining operations or if it will ever achieve self-sustaining commercial mining operations. Historically, the only source of funds available to Keegan has been through the sale of its common shares. Any future additional equity financing would cause dilution to current stockholders.

Keegan currently has 3,528,315 share purchase options outstanding and 5,819,250 share purchase warrants outstanding. If all of the share purchase warrants and share purchase options were exercised, the number of common shares issued and outstanding would increase from 27,467,648 (as of March 31, 2008) to 36,815,213.  This represents an increase of 34% in the number of shares issued and outstanding and would result in significant dilution to current shareholders.

Dilution through employee/director/consultant options could adversely affect Keegans stockholders.

Because the success of Keegan is highly dependent upon its respective employees, the Company has granted to some or all of its key employees, Directors and consultants options to purchase common shares as non-cash incentives.  To the extent that significant numbers of such options may be granted and exercised, the interests of the other stockholders of the Company may be diluted. There are currently 3,528,315 share purchase options outstanding, which, if exercised, would result in an additional 3,528,315 common shares being issued and outstanding. (For a breakdown of dilution, refer to the risk factor entitled: Keegan Has Minimal Positive Cash Flow and No Recent History of Significant Earnings and Is Dependent Upon Public and Private Distributions of Equity to Obtain Capital in Order to Sustain Operations. Public distributions of capital result in dilution to existing shareholders)

The amount of capital necessary to meet regulations associated with the exploration programs of Keegan could have a material adverse effect on its financial condition.

The current and anticipated future operations of Keegan, including further exploration activities require permits from various Federal and Provincial governmental authorities in Canada, the United States and the Republic of Ghana.   Such operations are subject to various laws governing land use, the protection of the environment, production, exports, taxes, labor standards, occupational health, waste disposal, toxic substances, mine safety and other matters.  Unfavorable amendments to current laws, regulations and permits governing operations and activities of resource exploration companies, or more stringent implementation thereof, could have a materially adverse impact on the Company and cause increases in capital expenditures which could result in a cessation of operations by the Company.

Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions thereunder, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment or remedial actions. Parties engaged in resource exploration may be required to compensate those suffering loss or damage by reason of the mining activities and may have civil or criminal fines or penalties imposed for violation of applicable laws or regulations.

Large increases in capital expenditures resulting from any of the above factors could force Keegan to cease operations. If that were the case, investors would lose their entire investment in the Company.



5



Keegan faces significant competition.

Keegan competes with other mineral resource exploration companies for financing, for the acquisition of new mineral properties and for the recruitment and retention of qualified employees and other personnel.  Many of the mineral resource exploration and development companies with which Keegan competes have greater financial and technical resources.  Accordingly, these competitors maybe able to spend greater amounts on acquisitions of mineral properties of merit, on exploration of their mineral properties and on development of their mineral properties.  In addition, they may be able to afford more geological expertise in the targeting and exploration of mineral properties.  This competition could result in competitors having mineral properties of greater quality and interest to prospective investors who may finance additional exploration and development.  This competition could have an adverse impact on our ability to finance further exploration and to achieve the financing necessary for us to develop our properties.

The risks associated with penny stock classification could affect the marketability of the common stock of Keegan and shareholders could find it difficult to sell their stock.

Keegans stock is subject to penny stock rules as defined in 1934 Securities and Exchange Act rule 3a51-1.  The Commission has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks.  Keegan s common shares are subject to these penny stock rules. Transaction costs associated with purchases and sales of penny stocks are likely to be higher than those for other securities.  Penny stocks generally are equity securities with a price of less than U.S. $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).

The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market.  The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customers account.  The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customers confirmation.

In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from such rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchasers written agreement to the transaction.  These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the Companys common shares in the United States and shareholders may find it more difficult to sell their shares.

Keegan is dependent on key personnel and the absence of any of these individuals could result in the Company having to cease operations.

While engaged in the business of exploring mineral properties, the nature of Keegans business, its ability to continue its exploration of potential exploration projects, and to develop a competitive edge in the marketplace, depends, in large part, on its ability to attract and maintain qualified key management personnel.  Competition for such personnel is intense and the Company may not be able to attract and retain such personnel.  Keegans growth will depend, on the efforts of its Senior Management, particularly its President, Daniel T. McCoy, its Chief Financial Officer, Tony Ricci, its Corporate Secretary, Michael Bebek and its Board of Directors that includes Richard Haslinger, Robert McLeod, Mark Orsmond, and Gordon Fretwell, in addition to Mr. McCoy. Keegan does not carry key-man insurance on any individuals.



6



Operating hazards and risks associated with the mining industry could result in the Company having to cease operations.

Resource exploration activities generally involve a high degree of risk.  Hazards such as unusual or unexpected formations and other conditions are involved.  Operations in which the Company has a direct or indirect interest will be subject to all the hazards and risks normally incidental to exploration for precious and base metals, any of which could result in work stoppages, damage to or destruction of exploration facilities, damage to life and property, environmental damage and legal liability for any or all damage.  The Company may become subject to liability for cave-ins and other hazards for which it cannot insure or against which it may elect not to insure where premium costs are disproportionate to the Companys perception of the relevant risks.  The payment of such insurance premiums and of such liabilities would reduce the funds available for exploration activities and could force the Company to cease operations.

U.S. investors may not be able to enforce their civil liabilities against us or our directors, controlling persons and officers.

It may be difficult to bring and enforce suits against Keegan.  Keegan is a corporation incorporated in the province of British Columbia under the British ColumbiaCorporations Act.  A majority of the Company's directors must be residents of Canada, and all or substantial portions of their assets are located outside of the United States, predominately in Canada.  As a result, it may be difficult for U.S. holders of our common shares to effect service of process on these persons within the United States or to realize in the United States upon judgments rendered against them.  In addition, a shareholder should not assume that the courts of Canada (i) would enforce judgments of U.S. courts obtained in actions against us or such persons predicated upon the civil liability provisions of the U.S. federal securities laws or other laws of the United States, or (ii) would enforce, in original actions, liabilities against us or such persons predicated upon the U.S. federal securities laws or other laws of the United States.

As a "Foreign Private Issuer, Keegan is exempt from the Section 14 proxy rules and Section 16 of the 1934 Securities Act Results in Shareholders Having Less Complete and Timely Data.

The submission of proxy and annual meeting of shareholder information (prepared to Canadian standards) on Form 6-K results in shareholders having less complete and timely data.  The exemption from Section 16 rules regarding sales of common shares by insiders results in shareholders having less data in this regard.

ITEM 4.

INFORMATION ON THE COMPANY

Item 4.A

History and Development of the Company

Incorporation and Name Changes

The Company was incorporated as Quicksilver Ventures Inc. on September 23, 1999 under the British Columbia Company Act. Pursuant to a resolution passed at a meeting of the shareholders of the Company that was held on August 13, 2004, the Company changed its name from Quicksilver Ventures Inc. to Keegan Resources Inc.

Keegans executive office is located at Suite 1204, 700 West Pender Street, Vancouver, British Columbia, Canada V6C 1G8, Telephone: (604) 683-8193, Facsimile: (604) 683-8194, Website: www.keeganresources.com, Email: info@keeganresources.com.  Keegans registered office is located at 1500 Royal Centre, 1055 West Georgia Street, P.O. Box 11117, Vancouver, BC V6E 4N7.  Keegan's common shares trade on the TSX Venture Exchange under the symbol: KGN.



7





Financings

The Company has financed its operations through funds raised in loans, public/private placements of common shares, shares issued for property, shares issued in debt settlements, and shares issued upon exercise of stock options and share purchase warrants.

|Fiscal Year | Nature of Share Issuance | Number of Shares                                         | Amount   
|----------- | ------------------------ | -------------------------------------------------------- | ---------
|Fiscal 2000 | Nil                      |                                                          |          
|            | Fiscal 2001              | Private Sale of Escrow Shares (1)                        | 1,333,334
|            | Fiscal 2002              | Initial Public Offering (2)                              | 3,300,000
|            |                          | Exercise of Agents Options (2)                          | 70,000   
|            | Fiscal 2003              | Pursuant to the Exercise of Share Purchase Options       | 95,000   
|            | Fiscal 2004              | Nil                                                      |          
|            | Fiscal 2005              | Private Placement (3)                                    | 3,200,000
|            |                          | Private Placement (4)                                    | 870,500  
|            |                          | Finders fees associated with the private placements (5) | 33,900   
|            |                          | Exercise of stock options (6)                            | 100,000  
|            |                          | Payment for resource properties (7)                      | 341,159  
|            | Fiscal 2006              | Issued for resource property payment (8)                 | 246,059  
|            |                          | Private Placement (9)                                    | 3,000,000
|            |                          | Exercise of share purchase warrants (10)                 | 785,300  
|            |                          | Exercise of share purchase options (11)                  | 122,500  
|            | Fiscal 2007              | Exercise of share purchase warrants (12)                 | 2,721,850
|            |                          | Private Placement (13)                                   | 2,000,000
|            |                          | Issued for resource property payment (14)                | 187,725  
|            |                          | Private Placement (15)                                   | 5,662,500
|            |                          | Exercise of share purchase options (16)                  | 71,685   
|            | Fiscal 2008              | Issued for resource property payment (17)                | 44,000   
|            |                          | Private Placement (18)                                   | 3,300,000
|            |                          | Exercise of share purchase warrants (19)                 | 1,115,470
|            |                          | Exercise of share purchase options (20)                  | 200,000  

(1)

When the Company was still in the private stage, it sold 1,333,334 escrow shares, in a private sale, to investors at a price of $0.08 per escrow share. These shares were not tradable and were held in escrow by the Companys transfer agent. These escrow shares were subsequently cancelled during the fiscal year ended March 31, 2004.

(2)

On June 22, 2001, Keegan announced that it had completed its initial public offering. This offering consisted of the sale of 3,300,000 common shares at a price of $0.15 per share. 70,000 Agents options were associated with this offering. The Agents options were part of the fee charged by the agent. These options allowed the Agent, Research Capital Corporation, to purchase 70,000 common shares at a price of $0.15 per common share.

(3)

This private placement consisted of the sale of 3,200,000 common shares at a price of $0.10 per share. These shares were subject to a hold period until August 28, 2004. Mr. Robert Guistra, an unaffiliated third party, arranged this sale. Mr. Guistra was paid a fee of $10,000 as consideration for his arranging the private placement.





8





(4)

This private placement consisted of the sale of 870,500 units at a price of $0.75 per unit. Each unit consisted of one common share and one common share purchase warrant. Each common share purchase warrant entitled the holder to purchase one additional common share until January 31, 2007 at a price of $0.85. In consideration of arranging investors in this private placement, Leo Kosowan (an unaffiliated third party) was paid $10,500 as a finders fee in connection with the private placement. Dundee Securities Corp. received 15,700 units and Canaccord Capital Corp. received 18,200 units as finders fees in connection with this private placement. These units carried the same privileges as the units, which were sold in the private placement.

(5)

These finders fees were issued to Dundee Securities Corp. and Canaccord Capital Corp.

(6)

These options were exercised by former directors and officers of the Company.

(7)

These shares were issued in partial payment for the Horse Mountain property.

(8)

These shares were issued as finders fees and partial payment for the Black Velvet, Regent, Fri and Asumara properties.

(9)

This private placement consisted of the sale of 3,000,000 units at a price of $0.80 per unit for proceeds of $2,400,000. Each unit consisted of one common share and one nontransferable share purchase warrant, entitling the holder to purchase, within two years, one additional common share of the Company at a price of $1 per share. The warrants are subject to an acceleration clause whereby if the shares of the Company trade above $2 for a period of 10 consecutive trading days, the Company has the right to require the earlier exercise of the warrants within 30 days of formal notice from the Company.

(10)

These share purchase warrants were issued in conjunction with (4) above.

(11)

These share purchase options were exercised by Dr. Dan McCoy (60,000) and the remainder (62,500) by Scott Gibson, a consultant to the Company.

(12)

These share purchase warrants were related to the private placements disclosed in (4) and (9) above. 639,100 share purchase warrants related to the private placement disclosed in (4) and 2,082,750 share purchase warrants related to the private placement disclosed in (9) above.

(13)

This private placement consisted of the sale of 2,000,000 units. Each unit consisted of one common share and 1⁄2 of 1 share purchase warrant. Each full share purchase warrant entitles the holder to purchase one additional common share at a price of $2.40 until May 2, 2008. The warrants are subject to an acceleration clause whereby if the shares of Keegan trade above $3.25 for a period of 10 days, Keegan will have the option to require the earlier exercise of the warrants within 30 days of formal notice from Keegan.

(14)

These shares were issued in partial payment for the Esaase Property; the Black Velvet Property; and, the Asumara Property.

(15)

This private placement consisted of the sale of 5,662,500 units at a price of Cdn$2.75 per unit. Each unit consisted of one common share and one half of one non-transferable share purchase warrant entitling the holder to purchase, by February 16, 2009, one additional common share of Keegan for each full warrant at a price of $3.25.  The warrants are subject to an acceleration clause whereby if after nine months the shares of the Company trade above $4.00 for a period of 20 consecutive days, the Company will have the option to require the earlier exercise of the warrants within 30 days of formal notice from the Company. All of the securities issued are subject to a four-month resale restriction period.

(16)

These share purchase options were exercised by Dan McCoy (exercised 31,685), the President of the Company and by Scott Price (exercised 40,000) a consultant to the Company.

(17)

These shares were issued in partial payment for the Esaase Property.

(18)

This private placement consisted of the sale of 3,300,000 units of the Company at a price of $4.10 per unit.  Each unit consisted of one common share and one-half of one share purchase warrant entitling the holder to purchase, by May 27, 2009, one additional common share of the Company for each full warrant at a price of $5.25.  These warrants are subject to an acceleration clause whereby if shares of the Company trade above $6.00 for a period of 20 consecutive days, the Company will have the option to require exercise of the warrants within 30 days of formal notice from the Company.

(19)

These share purchase warrants were issued in conjunction with (9), (13) and (15) above.

(20)

These options were exercised by a consultant to the Company.











9





Capital Expenditures

We have made the following capital expenditures:

| | Fiscal Year |            
| | ----------- | -----------
| |             | Fiscal 2000
| |             | Fiscal 2001
| |             | Fiscal 2002
| |             | Fiscal 2003
| |             | Fiscal 2004
| |             | Fiscal 2005
| |             | Fiscal 2006
| |             | Fiscal 2007
| |             | Fiscal 2008

(1)

$51,660 of this was attributed to the purchase of furniture, equipment and leasehold improvements; $202,595 was attributed to mineral property acquisition costs; and, the balance of $31,155 was attributed to deferred exploration costs. The mineral property acquisition costs were associated with the Horse Mountain and Asumura properties. The deferred exploration costs were associated with the Horse Mountain property.

(2)

$1,816 of this was attributed to the purchase of furniture, equipment and leasehold improvements; $180,471 was attributed to mineral property acquisition costs; and, the balance of $1,718,723 was attributed to deferred exploration costs. The mineral property acquisition costs were associated with the Fri Property (which was written off at fiscal year end); Regent Gold/Silver Property; the Asumara Gold Project; and, the Black Velvet Gold Project. The deferred exploration costs were associated with the same properties.

(3)

9,482 of this was attributed to the purchase of furniture, equipment and leasehold improvements; $856,700 was attributed to mineral property acquisition costs; and, the balance of $4,924,500 was attributed to deferred exploration costs. The mineral property acquisition costs were associated with the Regent; Black Velvet; Asumura; and Esaase properties. (The Regent and Black Velvet properties were written off at fiscal year end). The deferred exploration costs were associated with the same properties.

(4)

$110,459 of this was attributed to the purchase of furniture, equipment and leaseholds, $1,515,725 was attributed to mineral property acquisition costs; and the balance of $9,861,207 was attributable to deferral exploration costs.  The mineral property acquisition costs were attributable to the Esaase and Asumura properties as were the deferred exploration costs.

(5)

For purposes of US GAAP, the deferred exploration costs would not be capitalized until commercially mineable deposits are determined to exist within a particular property. Until it is able to determine the existence of commercially mineable deposits on a property, the Company, for US GAAP, charges all exploration costs to operations.

Item 4.B

Business Overview

Corporate Development

Keegan is a natural resource company currently engaged in the acquisition and exploration of mineral resources in West Ghana.  Keegan became a public company on June 22, 2001 as a Capital Pool Company.

Under the TSX Venture Exchanges Policy 2.4, a company with only minimal working capital is allowed to list on the Exchange for the purposes of negotiating an acquisition of, or the participation in, assets or businesses, known as a Qualifying Transaction (QT). Such companies are classified as a Capital Pool Company, or CPC, and are governed by a specific set of rules and regulations.

10



The sole purpose of a CPC is to identify and evaluate existing businesses or assets for possible acquisition, which if acquired, would provide the company for a full listing on the TSX-V. The only business a CPC is allowed to conduct prior to its Initial Public Offering and listing on the TSX-V is to prepare for its offering. This typically consists of raising a limited amount of seed capital, establishing a management team and board of directors, as well as hiring professionals to assist in the offering, including an auditor, legal counsel, and an agent for the Offering.

On June 11, 2003, Keegan announced that it had entered into a letter of intent to purchase an interest in a property located in Australia. On July 22, 2003, Keegan announced that it had decided not to proceed with this transaction because, upon further examination of the property, management determined that it did not warrant further exploration.

On September 5, 2003, Keegan announced that it entered into another letter of intent to purchase a 100% interest in some mining claims located in British Columbia. This agreement was also terminated during the year ended March 31, 2004 because, upon further examination of the property, management determined that it did not warrant further exploration.

As Keegan had not completed a QT by December 2003, the directors of the Company scheduled an extraordinary general meeting of its shareholders to request shareholder approval to the proposed listing of Keegans shares on the NEX Exchange. The NEX Exchange is a separate board of the TSX Venture Exchange for companies previously listed on the TSX Venture Exchange or the Toronto Stock Exchange, which have failed to maintain compliance with the ongoing financial listing standards of either of these stock exchanges. Shareholder approval was obtained and Keegans common shares began trading on the NEX Stock Exchange on February 12, 2004.

On September 7, 2004, Keegan entered into agreements with the Hunter Dickinson Group, Inc. (HDG), Anaconda Gold Corp. (Anaconda) and Barrick Gold Exploration Inc. (Barrick) whereby it acquired the right to earn an interest in the Horse Mountain Project located in Nevada.

On January 31, 2005, Keegan announced that the TSX Venture Exchange had accepted the transaction pertaining to the Horse Mountain Project as the Qualifying Transaction for the Company and that it no longer considered Keegan to be a Capital Pool Company.  Keegan was reclassified by the TSX Venture Exchange as a Gold Ore Mining company.  On March 1, 2005, the Company began trading on the TSX Venture Exchange under the name Keegan Resources with the stock symbol of KGN.

On March 4, 2005, Keegan announced that it had entered into an option agreement to acquire a 100% interest in the Regent Gold Silver Project located in Mineral County, Nevada.  Keegan terminated its interest in this property in 2007 due to its focus on its properties in Ghana.

On March 11, 2005, Keegan announced that it had entered into an option agreement to acquire the Asumura Gold Project located in West Ghana.

On May 31, 2005, Keegan announced that it had entered into an option agreement to acquire a 100% interest in the Fri Property located in Nye County, Nevada.  During the fiscal year ended March 31, 2006, the Company decided not to pursue its options agreement pertaining to the Fri Property because, after completing preliminary exploration work, management determined that the results did not warrant further exploration work.

On December 7, 2005, Keegan announced that it had entered into an option agreement to acquire a 100% interest in the Black Velvet Gold Project located in Pershing County, Nevada.  Keegan terminated its interest in this property in 2007 due to its focus on its properties in Ghana.



11



During the fiscal year ended March 31, 2006, management announced that it had decided not to pursue the Companys option to earn an interest in the Horse Mountain Claims and, as a result, $1,018,587 in acquisition and deferred exploration expenditures associated with the property were written-off. Management took this action because, due to limited financial resources, it determined to concentrate the Companys efforts on its more recent acquisitions.

The Company entered into an option agreement dated March 27, 2008 with Mt. Olives Goldfields, Ltd. to earn a 100% ownership of the Mt. Olives Reconnaissance Concession located in Ghana. In addition, during the year ended March 31, 2008, the Company purchased 100% private ownership of the Jeni Concession mining lease and exploration rights, which lies directly to the southwest and contiguous to the Esaase Gold property. No work was conducted on these properties during the year ended March 31, 2008. See Item 10.C  Material Contracts for more information.

Our Properties

Keegan is currently in the exploration stage.  Although its Esaase property has been determined to contain mineral resources, none of the Companys properties have been determined to contain any known reserves of minerals.  There can be no assurance that any of Keegans properties will be determined to contain reserves of any minerals.

The Companys material properties currently consist of the Asumura Project and the Esaase Project, both in West Ghana, Africa.  See Item 4.D: Property, Plant and Equipment below for more information relating to these properties.

Plan of Operations

Our plan of operations for the next 12 months is to:

(a)

continue to explore the Esaase property and to update the resource calculation by the fourth quarter of fiscal 2009; and

(b)

continue exploration of the Asumura property, as well as the Mt. Olives Reconnaissance Concession and Jeni Concession.

Source of Funds for Fiscal 2009

Keegans primary source of funds since incorporation has been through the issuance of common shares.

As of March 31, 2008, Keegan had cash and cash equivalents of approximately $15,241,053.  Management believes that additional capital may be obtained through the exercise of outstanding share purchase options and share purchase warrants. There is no guarantee, however, that any of these share purchase options and share purchase warrants will be exercised.

Keegan anticipates it has sufficient funds to pursue its business plans for the next 18 months.  Additional financing will be required going forward.  However, there can be no assurance that any such financing will be obtained.

Use of Funds for Fiscal 2009

During the fiscal year ended March 31, 2008, Keegan expended $2,459,137 on general and administrative expenses including property evaluation costs prior to acquisition.

Keegan has budgeted $2,796,000 for general/administrative expenses, $7,660,800 for property exploration and acquisition costs through the end of fiscal 2009.

12



Anticipated Changes to Facilities/Employees

Management of Keegan anticipates no changes to either facilities or employees in the near future.

Material Effects of Government Regulations

The current and anticipated future operations of Keegan including further exploration activities, require permits from various Canadian, U.S. and West Ghanaian, Federal, Provincial, and/or state governmental agencies.  Such operations are subject to various laws governing land use, the protection of the environment, production, exports, taxes, labor standards, occupational health, waste disposal, toxic substances, well safety and other matters.  Unfavorable amendments to current laws, regulations and permits governing operations and activities of resource exploration companies, or more stringent implementation thereof, could have a materially adverse impact on Keegan and cause increases in capital expenditures which could result in a cessation of operations by Keegan.  Keegan has had no material costs related to compliance and/or permits in recent years, and anticipates no material costs in the next year.

Competition

Keegan competes with other mineral resource exploration companies for financing, for the acquisition of new mineral properties and for the recruitment and retention of qualified employees and other personnel.  Many of the mineral resource exploration and development companies with which Keegan competes have greater financial and technical resources.  Accordingly, these competitors maybe able to spend greater amounts on acquisitions of mineral properties of merit, on exploration of their mineral properties and on development of their mineral properties.  In addition, they may be able to afford more geological expertise in the targeting and exploration of mineral properties.  This competition could result in competitors having mineral properties of greater quality and interest to prospective investors who may finance additional exploration and development.  This competition could have an adverse impact on our ability to finance further exploration and to achieve the financing necessary for us to develop our properties.

Item 4.C

Organization Structure

Keegan has two wholly-owned subsidiaries: Quicksilver Ventures (Nevada) Inc., a Nevada corporation, and Keegan Resources Ghana Limited, a corporation organized under the laws of Ghana, Africa.

Item 4.D

Property, Plant and Equipment

Although mineral resources have been determined on the Companys Esaase property, Keegans properties are only exploration stage properties and a substantial amount of capital will have to be spent on each property before management will know if they contain commercially viable mineral deposits.

Keegans executive offices are located in rented premises of approximately 1,788 sq. ft. at Suite 1204, 700 West Pender Street, Vancouver, British Columbia, Canada, V6C 1G8.  Keegan began occupying these facilities on May 3, 2004.  Monthly rent is $4,118.

1.

The Asumura Project

The Asumura Project is without known reserves and the work being done by Keegan is exploratory in nature. Keegans interest in this property stemmed from earlier exploration work, as described below, that was done in the area.





13





Acquisition of Interest

Keegan entered into an agreement with GTE Ventures Ltd. (GTE), an unrelated privately held Ghanaian company, which allows Keegan to acquire 100% of the Asumura Property by performing work expenditures totaling US$1Million, deliver cash payments adding together US$100,000 and delivering shares of Keegan totaling US$100,000 in value over a period of three years, under the following schedule:

pay US$100,000 as follows:



-

US$10,000 upon signing the agreement (paid);

-

US$30,000 on or before October 8, 2006 (paid through the issuance of 16,775 shares)

-

US$60,000 on or before October 8, 2007. (paid through the issuance of 20,087 shares)

issue common shares of the Company with a value of US$100,000 to GTE as follows:



-

common shares with a value of US$10,000 upon regulatory approval (issued  13,899 shares);

-

common shares with a value of US$30,000 based on the 10 day average closing price prior to issuance on or before October 8, 2006 (issued 16,775 shares); and,

-

common shares with a value of US$60,000 based on the 10 day average closing price prior to issuance on or before October 8, 2007 (issued 20,088 shares).

complete US$1,000,000 of exploration work on the Asumura property as follows:



-

US$80,000 on or before July 31, 2005, (incurred);

-

an additional US$400,000 on or before July 31, 2006 (incurred); and

-

an additional US$520,000 on or before July 31, 2007 (incurred).

The Company has met all the above commitments and now has an undivided 100% private interest in the Asumura property subject to a 3.5% NSR royalty, 50% of which may be purchased for US$2,000,000. If the property is converted to a Mining License, it may become subject to a 3 to 6% NSR (3% is the standard amount) and 10% ownership by the Ghanaian government. 11,270 shares were issued to Hunter Dickinson Inc. (HDI) as finders fees with respect to the original option agreement.

During the year ended March 31, 2008, the Company acquired an option to purchase the remaining 50% of the GTE NSR royalty for an additional US$4,000,000.





14





Location



[keegan20fannual2008001.jpg]

The property is located in the southwestern part of Ghana and is divided into two parts by the Bia River. The western part of the property is within the Western Region of Ghana in the Juabeso Bia District and the eastern part is in the Brong Ahafo Region of Ghana.

Accessibility, Climate, Infrastructure and Physiography

This property is accessible from the town of Kumasi by road, the majority of which is asphalt. The last 22 miles is a laterite road. Laterite is a surface formation, found mostly in tropical areas, which is enriched in iron and aluminum. Within the property, there is a good network of laterite roads and foot trails, which provide access for the exploration crews.

Annual rainfall is between 58 inches and 78 inches and temperatures vary between 72 degrees and 97 degrees Fahrenheit with an average of about 84 degrees Fahrenheit. A major rainy season occurs from April to July followed by a minor one from September through October.

The closest town, Goaso, is about 24 miles away. It contains hotels, markets and restaurants, hospitals and medical clinics, a cell phone tower, a network of land phones connected to the Ghana Telephone system via radio, and an internet café with satellite dish.

The property itself is sparsely populated.

15



Land Status, Existing Agreements and Permits to Work

The Asumura property currently consists of two exploration concessions:  Fosukrom and Asumura, which together equal 279.4 sq km.  Keegan entered into an agreement with GTE minerals, an unrelated privately held Ghanaian company, which allows Keegan to acquire 100% of the private interest in the Asumura Property by performing work expenditures totaling US$1Million, deliver cash payments adding together US$100,000 and delivering shares of Keegan totaling US$100,000 in value over a period of three years. GTE will retain a 3.5% Net Smelter Return, 50% of which may be purchased for US$2 million by Keegan.  The Ghanaian government is also entitled to claim a 3-6% NSR after the property is converted to a mining license; a 3% has been standard in recent history.  The Ghanaian government is also entitled to participate up to 10% in the project.  During the year ended March 31, 2008, the Company acquired an option to purchase the remaining 50% of the GTE NSR royalty for an additional US$4,000,000.

The exploration license allows Keegan permission to trench and drill on the property, providing Keegan obtains a permit from the Environmental Protection Agency.  Keegan obtained its permit for 2006 in January 2006 and its permit for 2007 was received in January 2007.  The exploration license was renewed in January of 2008 and new EPA permit received in the same month.

Regional and Property Geology

The property is located in Southwest Ghana which is dominated by the Birmian Supergroup of metasedimentary and metavolcanic rocks with various granitoid intrusions. Within the Birmian Supergroup, northeast striking mafic metavolcanic belts are separated from intervening metasedimentary basins by major faults. The property is situated on the NW edge of the Sefwi-Bibiani Greenstone Belt along a well-defined zone of gold occurrences. It covers a 6 kilometer segment of grandiorite-metasediment contact and a 5 kilometer segment of a metavolcanic-metasediment contact.

Through surface geochemistry and aeromagnetic and EM studies, three major gold bearing regional structures have been located on the property, one of which is the belt bounding structure mentioned in the previous paragraph.

History

This property was once licensed by Anglo American, an unrelated public company. Keegan is unaware of any surface exploration that Anglo American carried out in the area.  There are no recorded mineral resources, reserves, or production from this property.  When Keegan entered into the option agreement with GTE, there were no known exploration samples of any kind taken from the property.  Zaknet, Inc.  a private Ghanaian company unrelated to Keegan, acquired a reconnaissance concession from the Ghanaian government in 2003.  They quit claimed the property to GTE Minerals in 2004 and Keegan entered into an option agreement with GTE in 2005.

Recent Activities by Keegan

Keegan initially explored the concession using stream sediment techniques.  After discovering significant stream sediment anomalies, Keegan conducted reconnaissance soil sampling in the drainages, which showed anomalous gold in the stream sediments.  Keegan subsequently used grid sampling soil techniques at approximately 100 meter line spacing and 25 meter sample spacing together with IP geophysical surveying.  The end result was the discovery of three distinct anomalies in the Twiapasi, Wagyakrom and Mangoase areas. The Twiapasi and Wagyakrom anomalies are on the southern side of a large topographic depression that hosts the Bia River and one of its major tributaries.  The Mangoase anomaly is on the north side of the trough and parallels the east north east trend. The next phase will include further soil sampling, induced polarization geophysical studies and augur drilling.

16



Keegan received approval from the Ghanaian government during the latter part of 2005 to convert its holdings from reconnaissance to exploration concessions. This conversion allowed exploration trenching and drilling to proceed after successful permitting from the Ghanaian Environmental Protection Agency in early 2006.

The Company began drilling at Asumura shortly after receiving the approval from the government. Keegan drilled 124 shallow (30-102 meter) reverse circulation holes and 13 core holes.  Keegan discovered from 10-30 meter widths of 0.5-1.68 g/t Au mineralization at the Wagyakrom and Mangoase anomalies.

Subsequent to the initial drilling, Keegan was able to obtain aeromagnetic geophysical data for the entire property that caused Keegan to prioritize the existing Mangoase area and to identify a new potential mineralized structure: the Bia structure, which underlies the previously described topographic depression transcending the length of the property.  This zone had not been previously explored due to alluvial cover.

In July 2007, the Company discovered the NW anomaly, which coincides with a large regional north east trending fault coincident with an aeromagnetic break in the northwestern portion of the property. The anomaly is over 5.5 km long and varies from 300 -- 500 meters wide and is defined very consistently by Au values obtained in the low lying, deeply lateritic soils.   In January of 2008 the company released auger results of up to 5900 ppb Au from the NW zone, following up on the previously mentioned soil anomalies

In March of 2008, the company conducted a small reverse circulation reconnaissance drilling program.  An intercept of 14 meters of 14.48 g/t Au was intersected on the NW structure.

In April of 2008, Keegan obtained the contiguous Mt. Olives reconnaissance concession, which tripled the size of the Asumura project.  Since that time, the company has continuously been engaged in surface exploration during April and September of 2008; stream sediment and soil sampling on the newly acquired Mt. Olives reconnaissance concession and soil and auger sampling on the Asumura exploration concessions.

The fiscal 2009 exploration program is scheduled to consist of auger sampling and testing of soil anomalies along the NW, Mangoase and Bia anomalies and an airborne electromagnetic survey in order to obtain a resistivity map for the entire concession. Both of these programs are designed to identify targets to identify potential resources.

The budget for the fiscal 2009 exploration program at Asumura is US$835,000 which consists of the following:



|Activity                                        | Amount    
|----------------------------------------------- | ----------
|                                                |           
|Geophysics, Geochemistry                        | 750,000   
|Camp Operations, Supplies, Fuel, Transportation | 85,000    
|Total                                           | US$835,000

Rock Formations and Mineralization of Potential Economic Significance

The Asumura Concession is located on the major fault bounding structure on the NW edge of the Sefwi-Bibiani Greenstone Belt, a well-defined aeromagnetic feature along which many gold occurrences occur. Volcanic and granitic rocks dominate the belts, while basin sedimentary rocks occur outboard to the belt. Approximately 15 km of this tectonic-depositional boundary is contained within the Asumura Concession.  Parallel faults that divide sedimentary and metaclastic rocks of the basin, such as the NW fault are also gold-bearing.

Condition and Description of Equipment, Plants and Infrastructure

There are no existing equipment, plants or infrastructure on the Asumura project.



17



Potential Sources of Power and Water

The closest town, Goaso, is about 35 km away. It contains hotels, markets and restaurants, hospitals and medical clinics, a cell phone tower, a network of land phones connected to the Ghana Telephone system via radio, and high voltage, high tension power lines connected to the national power grid.

2.

Esaase Gold Property

The Esaase Gold Property is without known reserves and the work being done by Keegan is exploratory in nature.  However, the property has been determined to contain mineral resources.  Keegans interest in this property stemmed from earlier exploration work, as described below, that was done in the area.

Acquisition of Interest

Under an agreement dated May 2006 between the Company and Sametro Co. Ltd (Sametro), the Company can earn a 100% interest (subject to the Ghanaian Government retaining a 10% underlying interest and a 3% NSR, and a 0.5% NSR owed to the Bonte Liquidation Committee) in the Esaase Project located in Ghana. To earn its interest, the Company must pay US$540,000, issue 780,000 common shares, and spend US$2,250,000 in exploration on the project, all over a 4 year period, to both Sametro and to the Esaase Liquidation Committee (the Committee) under the following schedule:

(a)

Payment of US$100,000 by May 17, 2006 (paid);

(b)

Payment of US$100,000 by June 30, 2006 which payment Sametro will deliver to the Committee (paid);

(c)

Payment of US$40,000 on the first anniversary;

(d)

Payment of US$300,000 to the Committee over a four year period;

(e)

Issuance of 780,000 common shares to Sametro over a three year period;

(f)

expend US$2,250,000 on exploration over a three year period.

In addition, the Company is required to pay Sametro US$50,000 on the fourth anniversary and every anniversary thereafter until production. Upon production, the Company is required to pay US$100,000 to Sametro and US$200,000 to the Committee. A finders fee equal to 10% of the consideration paid to Sametro is also due.

In June 2007, the Company announced that it had successfully renegotiated the Esaase purchase agreement. In addition to the required payments and share issuances made under the original agreement, the Company paid US$850,000 to an underlying creditor of Sametro and has issued an additional 40,000 common shares to Sametro in exchange for full private ownership of the Esaase Lease. The completion of this transaction now gives the Company sole possession of the lease, which has been signed by the Ghanaian Minister of Lands, Forests, and Mines. The Ghanaian government retains a standard 10% carried interest and 3% NSR and the Committee retains a 0.5% NSR.

During the year ended March 31, 2008, the Company purchased 100% private ownership of the Jeni Concession mining lease and exploration rights. The Jeni Concession lies directly to the southwest and contiguous to the Esaase Gold property. In consideration for the acquisition of the mining lease, Keegan paid US$50,000 to the Bonte Liquidation Committee and US$50,000 to the Minerals Commission of Ghana for the title transfer. The Ghanaian government retains a standard 10% carried interest and 3% NSR and the Bonte Liquidation Committee retains a 0.5% NSR.



18



Location

The property is located in southwestern Ghana in the Amansi East district within the Ashanti region. The concession covers 42.32 square kilometers.

[keegan20fannual2008002.jpg]

The exploration license allows Keegan permission to trench and drill on the property, providing Keegan obtains a permit from the Environmental Protection Agency.  Keegan obtained its permit for 2008.

Accessibility, Climate, Infrastructure and Physiography

The large towns closest to the concession include the District Assembly in Manso Nkwanta, located approximately 30 kilometers south and one hour by car, or the Kumasi, the regional capital, located 35 kilometers to the northeast, one hour by car. Access is from Kumasi by asphalt roads for the majority of the distance, and then via laterite roads to the town of Tetrem, which is central to the concession and the location of the exploration camp. Roads pass through the length of the concession, and access is available to all areas of the concession by way of numerous roads and trails which are also used by local farmers.

Annual rainfall is between 58 and 78 inches, and temperatures vary between 72 degrees and 97 degrees Fahrenheit with an average of about 84 degrees Fahrenheit. A major rainy season occurs from April to July followed by a minor one from September through October. The concession is drained by the Bonte River which flows southwest. The river is bounded by steep hills which reach to a height of about 1600 feet in elevation. The area is predominately farmland, with some forest and thick brush.



19



Electricity is available in the 8 villages within the concession and in the exploration camp. No land line telephones are available, but several of the villages have radio phones connected to the telephone grid. Cellular phones have limited coverage in several areas of the concession, and a satellite dish is installed at the exploration camp for internet access. As the regional capital, Kumasi contains a hospital and government offices, and food and supplies are easily available.

Regional and Property Geology

The property is located in Southwest Ghana which is dominated by the Birmian Supergroup of metasedimentary and metavolcanic rocks with various granitoid intrusions. Within the Birmian Supergroup, northeast striking mafic metavolcanic belts are separated from intervening metasedimentary basins by major faults. The property is situated in the center of the Kumasi basin, equidistant between the northwest flank of the Ashanti Belt and the southeast flank of the Sefwi-Bibiani Belt. The concession contains a portion of the Asankrangwa Gold Belt, a complex northeast trending shear system. Gold mineralization in the area is hosted in Birimian metasediments and basin type granitoid.

Mineralization occurs within moderately west dipping, NE striking zones that were likely originally thrust zones.  Within these zones, NS striking, steeply dipping quartz veins, (which are likely later sinistral strike slip features) that are preferentially hosted in these earlier structures) control mineralization.

History

The concession shows evidence of pre-colonial quartz vein mining, as well as adits which date from 1900 to 1939 with indigenous miners working both within the old adits and by hand on alluvial gravels, continuing to the present day.

In 1966-1967, exploration work was conducted on the Bonte river valley alluvial sediments. In 1990, a mining lease was granted to Akrokeri-Ashanti Gold Mines (AAGM), an unrelated Canadian public company, which was later transferred to Bonte Gold Mines, a local subsidiary of AAGM. AAGM constructed and operated an alluvial processing plant on the concession, and public records show an estimated 200,000 ounces of alluvial gold production by AAGM from the concession. Low gold prices forced AAGM to suspend production before placing Bonte Gold Mines into receivership in 2002.

Historical work on the property was largely confined to the study and production of the surface placer gold located in the Bonte River valley and little to no exploration was ever conducted on the sub-surface potential of the property.

Recent Activities by Keegan

In June 2006, Keegan announced that it had successfully completed title due diligence on the Esaase gold property in southeast Ghana and had begun a surface and underground exploration program.  Previous soil and rock sampling by the Company during technical due diligence uncovered a northeast trending mineralized bedrock fault and gold bearing lode quartz veins, which have historic shafts and adits.  Numerous and extensive stockwork veined zones were sampled by Keegan and showed potential for a large bulk pit mine. The soils also revealed other parallel bedrock soil anomalies in more recessed terrains.

In October 2007, the Company released a resource estimation that included 240,000 ounces of indicated resources and 1.43 M ounces of inferred resources, both at a 1.4 g/t average grade using a 0.6 g/t cutoff.    A 43-101 compliant technical report detailing this resource was published in November of 2007.





20



Since the publication of the resource, Keegan has drilled over 200 additional holes; both to convert inferred ounces to indicated as well as to expand the resource along strike of the A-1 fault that contains the resource as well as to explore for new resource along parallel structures.  Areas of new potential resource drilled from 40x80 meters to 40x40 meters include the south A-1 extension, which is contiguous to the 43-101 resource to the south, the north A-1 extension, which is continuous to the north as well as new discoveries to the far north on the A-1 structure, and on parallel mineralized faults, named the B-1 and D-1 zones.  Continuous mineralization along the A-1 structure has been extended 900 meters to the south (40x40 meter spacing), 500 meters to the north (40x40 meter spacing), on the parallel B-1 structure (600 meter strikelength identified) and along the D-1 structure (200 meter strikelength identified).  In addition Keegan has drilled reconnaissance holes to the far north along the A-1 structure and encountered significant mineralization a full 1.1 km north of the northern boundary of the 43-101 resource.

Drill intercepts with higher than 15 g/t x meter  obtained since September of 2007 from along the A-1 structure to the  south of the 43-101 resource are as follows:

|Hole ID | From (m)                                                                                                                                                                                                                          | To (m)  | Width (m) | Au Grade (g/t)
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------- | --------- | --------------
|KERC171 | 79                                                                                                                                                                                                                                | 137     | 58        | 1.27          
|        |                                                                                                                                                                                                                                   | KERC172 | 44        | 108           
|        |                                                                                                                                                                                                                                   | KERC173 | 110       | 137           
|        |                                                                                                                                                                                                                                   | KERC174 | 35        | 49            
|        |                                                                                                                                                                                                                                   | KERC174 | 79        | 85            
|        |                                                                                                                                                                                                                                   | KERC175 | 31        | 60            
|        |                                                                                                                                                                                                                                   | KERC176 | 87        | 155           
|        |                                                                                                                                                                                                                                   | KERC178 | 71        | 133           
|        |                                                                                                                                                                                                                                   | KERC179 | 14        | 42            
|        |                                                                                                                                                                                                                                   | KERC179 | 52        | 96            
|        |                                                                                                                                                                                                                                   | KERC179 | 104       | 134           
|        |                                                                                                                                                                                                                                   | KEDD183 | 146       | 159           
|        |                                                                                                                                                                                                                                   | KEDD183 | 76        | 105           
|        |                                                                                                                                                                                                                                   | KERC192 | 32        | 69            
|        |                                                                                                                                                                                                                                   | KERC193 | 71        | 122           
|        |                                                                                                                                                                                                                                   | KERC194 | 34        | 54            
|        |                                                                                                                                                                                                                                   | KERC194 | 114       | 133           
|        |                                                                                                                                                                                                                                   | KERC194 | 6         | 21            
|        |                                                                                                                                                                                                                                   | KERC195 | 12        | 17            
|        |                                                                                                                                                                                                                                   | KERC196 | 28        | 77            
|        |                                                                                                                                                                                                                                   | KEDD199 | 179       | 189           
|        |                                                                                                                                                                                                                                   | KEDD199 | 120       | 153           
|        |                                                                                                                                                                                                                                   | KERC200 | 87        | 148           
|        |                                                                                                                                                                                                                                   | KERC202 | 6         | 22            
|        |                                                                                                                                                                                                                                   | KERC203 | 22        | 67            
|        |                                                                                                                                                                                                                                   | KERC203 | 22        | 67            
|        |                                                                                                                                                                                                                                   | KERC204 | 51        | 82            
|        |                                                                                                                                                                                                                                   | KERC204 | 51        | 82            
|        |                                                                                                                                                                                                                                   | KERC214 | 1         | 51            
|        |                                                                                                                                                                                                                                   | KERC215 | 0         | 31            
|        |                                                                                                                                                                                                                                   | KERC216 | 105       | 125           
|        |                                                                                                                                                                                                                                   | KERC217 | 158       | 179           
|        |                                                                                                                                                                                                                                   | KERC219 | 39        | 82            
|        |                                                                                                                                                                                                                                   | KERC221 | 48        | 95            
|        |                                                                                                                                                                                                                                   | KERC221 | 104       | 138           
|        |                                                                                                                                                                                                                                   | KERC223 | 36        | 59            
|        |                                                                                                                                                                                                                                   | KERC225 | 72        | 82            
|        |                                                                                                                                                                                                                                   | KERC226 | 7         | 51            
|        |                                                                                                                                                                                                                                   | KERC228 | 20        | 59            
|        |                                                                                                                                                                                                                                   | KERC229 | 54        | 75            
|        |                                                                                                                                                                                                                                   | KERC230 | 118       | 155           
|        |                                                                                                                                                                                                                                   | KERC230 | 175       | 197           
|        |                                                                                                                                                                                                                                   | KEDD231 | 158       | 193           
|        |                                                                                                                                                                                                                                   | KERC232 | 83        | 103           
|        |                                                                                                                                                                                                                                   | KERC238 | 137       | 180           
|        |                                                                                                                                                                                                                                   | KERC239 | 76        | 151           
|        |                                                                                                                                                                                                                                   | KEDD250 | 73        | 125           
|        |                                                                                                                                                                                                                                   | KEDD252 | 81        | 108           
|        |                                                                                                                                                                                                                                   | KEDD252 | 138       | 163           
|        |                                                                                                                                                                                                                                   | KEDD256 | 130       | 140           
|        |                                                                                                                                                                                                                                   | KEDD270 | 76        | 104           
|        |                                                                                                                                                                                                                                   | KERC273 | 48        | 88            
|        |                                                                                                                                                                                                                                   | KERC379 | 52        | 62            
|        |                                                                                                                                                                                                                                   | KEDD381 | 42        | 80            
|        | Drill intercepts with higher than 15 g/t x meter  obtained since September of 2007 from along the A-1 structure to the  south of the 43-101 resource are as follows:                                                             
|        | KEDD302                                                                                                                                                                                                                           | 264     | 285       | 21            
|        |                                                                                                                                                                                                                                   | KEDD315 | 463       | 519           
|        |                                                                                                                                                                                                                                   | KEDD316 | 431       | 447           
|        |                                                                                                                                                                                                                                   | KERC323 | 208       | 224           
|        |                                                                                                                                                                                                                                   | KERC324 | 228       | 238           
|        |                                                                                                                                                                                                                                   | KERC325 | 256       | 286           
|        |                                                                                                                                                                                                                                   | KEDD326 | 256       | 276           
|        |                                                                                                                                                                                                                                   | KERC333 | 203       | 227           
|        |                                                                                                                                                                                                                                   | KEDD334 | 234       | 276           
|        |                                                                                                                                                                                                                                   | KEDD335 | 273       | 307.1         
|        |                                                                                                                                                                                                                                   | KEDD336 | 326.4     | 345           
|        |                                                                                                                                                                                                                                   | KERC337 | 129       | 134           
|        |                                                                                                                                                                                                                                   | KERC338 | 28        | 48            
|        |                                                                                                                                                                                                                                   | KERC338 | 89        | 103           
|        |                                                                                                                                                                                                                                   | KERC340 | 34        | 54            
|        |                                                                                                                                                                                                                                   | KERC340 | 70        | 88            
|        |                                                                                                                                                                                                                                   | KERC340 | 117       | 141           
|        |                                                                                                                                                                                                                                   | KERC341 | 55        | 77            
|        |                                                                                                                                                                                                                                   | KERC392 | 206       | 232           
|        |                                                                                                                                                                                                                                   | KERC393 | 205       | 213           
|        |                                                                                                                                                                                                                                   | KERC394 | 62        | 75            
|        |                                                                                                                                                                                                                                   | KERC395 | 93        | 118           
|        |                                                                                                                                                                                                                                   | KERC397 | 49        | 67            
|        |                                                                                                                                                                                                                                   | KERC397 | 118       | 131           
|        |                                                                                                                                                                                                                                   | KERC397 | 207       | 219           
|        |                                                                                                                                                                                                                                   | KERC404 | 28        | 43            
|        |                                                                                                                                                                                                                                   | KERC406 | 111       | 120           
|        |                                                                                                                                                                                                                                   | KERC409 | 43        | 61            
|        |                                                                                                                                                                                                                                   | KERC411 | 99        | 114           
|        |                                                                                                                                                                                                                                   | KERC412 | 0         | 29            
|        |                                                                                                                                                                                                                                   | KERC413 | 140       | 156           
|        |                                                                                                                                                                                                                                   | KERC414 | 47        | 70            
|        |                                                                                                                                                                                                                                   | KERC415 | 145       | 156           
|        |                                                                                                                                                                                                                                   | KEDD416 | 119       | 144           
|        |                                                                                                                                                                                                                                   | KEDD417 | 203       | 212           
|        |                                                                                                                                                                                                                                   | KEDD419 | 45        | 57            
|        |                                                                                                                                                                                                                                   | KEDD419 | 117       | 135           
|        |                                                                                                                                                                                                                                   | KEDD420 | 238.7     | 245           
|        |                                                                                                                                                                                                                                   | KERC424 | 114       | 141           
|        |                                                                                                                                                                                                                                   | KERC427 | 158       | 171           
|        |                                                                                                                                                                                                                                   | KEDD428 | 229.9     | 264.9         
|        |                                                                                                                                                                                                                                   | KEDD431 | 297       | 307           
|        |                                                                                                                                                                                                                                   | KERC447 | 99        | 120           
|        |                                                                                                                                                                                                                                   | KERC450 | 141       | 155           
|        |                                                                                                                                                                                                                                   | KEDD451 | 134       | 157           
|        | Drill intercepts with higher than 15 g/t x meter  obtained since September of 2007 from Esaase far north reconnaissance drilling are as follows:                                                                                 
|        |                                                                                                                                                                                                                                   | KERC344 | 13        | 19            
|        |                                                                                                                                                                                                                                   | KERC356 | 118       | 129           
|        |                                                                                                                                                                                                                                   | KERC434 | 111       | 119           
|        |                                                                                                                                                                                                                                   | KERC442 | 72        | 77            
|        |                                                                                                                                                                                                                                   | KERC443 | 146       | 157           
|        |                                                                                                                                                                                                                                   | KEDD446 | 180       | 188           
|        | Drill intercepts with higher than 15 g/t x meter  obtained since September of 2007 from Esaase the B-1 zone are as follows:                                                                                                      
|        | KERC131                                                                                                                                                                                                                           | 1       | 35        | 35            
|        |                                                                                                                                                                                                                                   | KERC206 | 144       | 170           
|        |                                                                                                                                                                                                                                   | KERC207 | 144       | 197           
|        |                                                                                                                                                                                                                                   | KERC209 | 138       | 160           
|        |                                                                                                                                                                                                                                   | KERC365 | 154       | 166           
|        |                                                                                                                                                                                                                                   | KEDD368 | 208.9     | 240.9         
|        |                                                                                                                                                                                                                                   | KEDD371 | 176       | 196           
|        |                                                                                                                                                                                                                                   | KERC374 | 116       | 147           
|        |                                                                                                                                                                                                                                   | KERC305 | 92        | 133           
|        | Drill intercepts with higher than 15 g/t x meter  obtained since September of 2007 from Esaase the B-1 zone are as follows:                                                                                                      
|        | KERC241                                                                                                                                                                                                                           | 96      | 101       | 5             
|        |                                                                                                                                                                                                                                   | KERC242 | 64        | 87            
|        |                                                                                                                                                                                                                                   | KERC243 | 28        | 45            
|        |                                                                                                                                                                                                                                   | KERC245 | 8         | 57            
|        |                                                                                                                                                                                                                                   | KERC041 | 126       | 146           
|        | In addition to stepout drilling, Keegan performed infill drilling in order to convert inferred resources to indicated resources.
Drill intercepts with higher than 15 g/t x meter obtained during infill drilling are as follows:
|        | KEDD162                                                                                                                                                                                                                           | 166     | 183       | 16            
|        |                                                                                                                                                                                                                                   | KERC164 | 129       | 147           
|        |                                                                                                                                                                                                                                   | KEDD165 | 88        | 100           
|        |                                                                                                                                                                                                                                   | KEDD165 | 153       | 173           
|        |                                                                                                                                                                                                                                   | KEDD165 | 184       | 214           
|        |                                                                                                                                                                                                                                   | KEDD167 | 182       | 208           
|        |                                                                                                                                                                                                                                   | KEDD168 | 240.2     | 274           
|        |                                                                                                                                                                                                                                   | KEDD169 | 117       | 131           
|        |                                                                                                                                                                                                                                   | KEDD169 | 206       | 236           
|        |                                                                                                                                                                                                                                   | KEDD169 | 286       | 299           
|        |                                                                                                                                                                                                                                   | KEDD170 | 0         | 15            
|        |                                                                                                                                                                                                                                   | KEDD170 | 52        | 72            
|        |                                                                                                                                                                                                                                   | KEDD170 | 188       | 198           
|        |                                                                                                                                                                                                                                   | KERC261 | 8         | 72            
|        |                                                                                                                                                                                                                                   | KERC262 | 44        | 66            
|        |                                                                                                                                                                                                                                   | KERC262 | 83        | 133           
|        |                                                                                                                                                                                                                                   | KERC262 | 148       | 179           
|        |                                                                                                                                                                                                                                   | KERC263 | 39        | 101           
|        |                                                                                                                                                                                                                                   | KEDD269 | 57        | 108           
|        |                                                                                                                                                                                                                                   | KERC274 | 9         | 27            
|        |                                                                                                                                                                                                                                   | KERC275 | 49        | 88            
|        |                                                                                                                                                                                                                                   | KERC276 | 48        | 99            
|        |                                                                                                                                                                                                                                   | KERC277 | 9         | 31            
|        |                                                                                                                                                                                                                                   | KERC278 | 0         | 117           
|        |                                                                                                                                                                                                                                   | KERC281 | 93        | 152           
|        |                                                                                                                                                                                                                                   | KERC283 | 99        | 109           
|        |                                                                                                                                                                                                                                   | KERC289 | 87        | 114           
|        |                                                                                                                                                                                                                                   | KERC290 | 34        | 92            
|        |                                                                                                                                                                                                                                   | KEDD291 | 41        | 54            
|        |                                                                                                                                                                                                                                   | KERC292 | 24        | 83            
|        |                                                                                                                                                                                                                                   | KERC293 | 12        | 52            
|        |                                                                                                                                                                                                                                   | KERC294 | 9         | 36            
|        |                                                                                                                                                                                                                                   | KERC295 | 67        | 82            
|        |                                                                                                                                                                                                                                   | KERC296 | 2         | 134           
|        |                                                                                                                                                                                                                                   | KEDD297 | 140       | 156           
|        |                                                                                                                                                                                                                                   | KERC299 | 197       | 257           
|        |                                                                                                                                                                                                                                   | KERC300 | 217       | 238           
|        |                                                                                                                                                                                                                                   | KERC301 | 73        | 87            
|        |                                                                                                                                                                                                                                   | KERC301 | 83        | 111           
|        |                                                                                                                                                                                                                                   | KERC301 | 127       | 157           
|        |                                                                                                                                                                                                                                   | KEDD303 | 238       | 270           
|        |                                                                                                                                                                                                                                   | KERC304 | 269       | 297           
|        |                                                                                                                                                                                                                                   | KERC317 | 39        | 112           
|        |                                                                                                                                                                                                                                   | KERC318 | 1         | 7             
|        |                                                                                                                                                                                                                                   | KERC318 | 19        | 49            
|        |                                                                                                                                                                                                                                   | KERC318 | 73        | 93            
|        |                                                                                                                                                                                                                                   | KERC319 | 46        | 71            
|        |                                                                                                                                                                                                                                   | KERC319 | 123       | 138           
|        |                                                                                                                                                                                                                                   | KERC319 | 157       | 195           
|        |                                                                                                                                                                                                                                   | KEDD320 | 117       | 139           
|        |                                                                                                                                                                                                                                   | KEDD320 | 150       | 164           
|        |                                                                                                                                                                                                                                   | KEDD320 | 218       | 264           
|        |                                                                                                                                                                                                                                   | KERC322 | 178       | 213           
|        |                                                                                                                                                                                                                                   | KERC327 | 67        | 76            
|        |                                                                                                                                                                                                                                   | KERC328 | 0         | 16            
|        |                                                                                                                                                                                                                                   | KERC329 | 45        | 71            
|        |                                                                                                                                                                                                                                   | KERC329 | 90        | 112           
|        |                                                                                                                                                                                                                                   | KERC329 | 130       | 150           
|        |                                                                                                                                                                                                                                   | KERC330 | 113       | 138           
|        |                                                                                                                                                                                                                                   | KERC331 | 27        | 50            
|        |                                                                                                                                                                                                                                   | KEDD332 | 18        | 50            
|        |                                                                                                                                                                                                                                   | KERC389 | 84        | 86            
|        |                                                                                                                                                                                                                                   | KERC390 | 86        | 93            

24



Drilling programs continue on the property, and additional results will be released as they are received.

For fiscal 2009, the Companys planned exploration program has the following goals:

a)

Update the  geologic block model with the new drill results and complete the second NI 43-101 resource detailing resources on all zones identified to date

b)

Push forward publishable scoping study on optimal mining methods on indicated resource (deliver by end of first quarter fiscal year 2010)

c)

Continue community development programs as identified by the local community through the Keegan Community Development Committee

d)

Execute environmental baseline studies

e)

Continue exploration to potentially identify one or more additional potential resources outside the Main Zone particularly on new property acquisitions to the south.

The budget for fiscal 2009 exploration and development on the Esaase Property has a total budget of US$11,360,000 which consists of:

|Activity | Amount                                                                                 
|-------- | ---------------------------------------------------------------------------------------
|         | Exploration: Drilling, Trenching, Drill Pad Preparation, Assays, Database, Geochemistry
|         | Development Studies: Metallurgy, Engineering, Environmental Baseline and Reclamation   
|         | License and Acquisitions                                                               
|         | Camp Operations, Supplies, Fuel and Transportation                                     
|         | Total                                                                                  

ITEM 4A.

UNRESOLVED STAFF COMMENTS

None.

ITEM 5.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion of our results of operations and financial condition for the fiscal years ended March 31, 2008, 2007 and 2006 should be read in conjunction with the financial statements and the notes thereto included elsewhere herein and Item 4: Information on the Company.

Overview

We are a natural resource company engaged in the exploration of properties in West Ghana.  None of our properties have any mineral reserves and there can be no assurance any such mineral reserves will be discovered.  However, our Esaase property has been determined to contain mineral resources.

We plan to pursue the plan of operations as described under Item 4: Information on the Company.



25





Results of Operations

Fiscal Year Ended March 31, 2008 Compared to Fiscal Year Ended March 31, 2007

During the prior year, Keegan terminated the agreements to acquire an interest in both the Regent Property and the Black Velvet Property. Consequently it wrote down $729,327 in acquisition and deferred expenditures pertaining to the Regent Property and $55,367 in acquisition and deferred expenditures pertaining to the Black Velvet Property.

During the year ended March 31, 2008, Keegan reported a loss of ($4,316,042) or ($0.17) per share compared to a loss of ($4,381,139) or ($0.28) per share during the previous year, a decrease of $65,097.

Expenses incurred during the fiscal year ended March 31, 2008 increased by $529,362 as compared to expenses incurred during the fiscal year ended March 31, 2007.

The primary reason for the decrease in the loss was the increase in the amount of $569,134 in foreign exchange loss and $353,325 in consulting fees, directors fees and wages and benefits, being offset by decreases in properties written off by $784,694 and increases in interest and other income by $378,899.

The Black Velvet and Regent properties were both written off because management decided to concentrate the majority of the Companys efforts on its properties in Ghana. Management felt that, because of the results obtained from the exploration work on the Black Velvet Property and the Regent Property, it was prudent not to expend additional funds on either one.

Fiscal Year Ended March 31, 2007 Compared to Fiscal Year Ended March 31, 2006

During the year, Keegan terminated the agreements to acquire an interest in both the Regent Property and the Black Velvet Property. Consequently it wrote down $729,327 in acquisition and deferred expenditures pertaining to the Regent Property and $55,367 in acquisition and deferred expenditures pertaining to the Black Velvet Property.

During the year ended March 31, 2007, Keegan reported a loss of ($4,381,139) or ($0.28) per share compared to a loss of ($2,989,019) or ($0.31) per share during the previous year, an increase in loss of $1,392,120.

Expenses incurred during Fiscal 2007, ended March 31, 2007 increased by $1,842,631 as compared to expenses incurred during the fiscal year ended March 31, 2006.

The primary reason for the increase in the loss was the increase, in the amount of $1,228,608, in the expense category of stock based compensation. This resulted from the increased amount of share purchase options, which were awarded, to officers, directors and consultants. During the fiscal year ended March 31, 2006, Keegan awarded 280,000 stock options to officers, directors and consultants; whereas, during Fiscal 2007, ended March 31, 2007, Keegan awarded 1,349,000 stock options to officers, directors and consultants.

The Black Velvet and Regent properties were both written off because management decided to concentrate the majority of the Companys efforts on its properties in Ghana. Management felt that, because of the results obtained from the exploration work on the Black Velvet Property and the Regent Property, it was prudent not to expend additional funds on either one.







26





Liquidity and Capital Resources

The Company reported working capital of $15,063,520 at March 31, 2008 compared to working capital of $13,906,662 at March 31, 2007, representing an increase in working capital by $1,156,858. As at March 31, 2008, the Company had net cash on hand of $15,241,053 compared to $14,156,515 at March 31, 2007. Financing for the Companys operations was funded primarily from private placements and the exercise of share purchase warrants and share purchase options. Capital obtained from private placement financings during fiscal 2008 totaled $13,530,000.  In addition, $2,033,528 was obtained from the exercise of share purchase warrants and $184,000 was obtained from the exercise of share purchase options.

The Company believes it currently has sufficient working capital on hand to meet its expected capital requirements for fiscal 2009.  The Company will require additional financing going forward.  Additional funds may be received through the exercise of currently outstanding common stock warrants, as well as the possible exercise of common stock options.  The Company may also sell additional common shares either as a private placement or common stock offering during the year.  However, there can be no assurance that any such additional funds will be obtained.

Current assets  increased by $1,181,688, from $14,258,364 at March 31, 2007 to $15,440,052 as at March 31, 2008. The increase in current assets is attributable to the private placement financing which took place during the year ended March 31, 2008, which raised $13,530,000 from the sale of 3,300,000 units.

Non-cash working capital balances increased by $199,631 for the fiscal year ended March 31, 2008 and cash utilized in operating activities totaled $2,382,527. During the prior period, non-cash working capital increased by $36,270 while cash utilized in operating activities was $1,764,862.

During the period, the Company utilized an aggregate of $1,515,725 of its cash to acquire various interests in resource properties, utilized $9,861,207 for deferred exploration and $110,459 to purchase equipment. These expenditures are disclosed in Item 4.D: Property, Plant and Equipment.

During the period, the Company generated cash of $2,033,528 from the exercise of 1,115,470 warrants at a price of $1.00, $2.40 and $3.25.  The Company also raised $13,530,000 froma private placement financing as described in Item 4.A: History and Development of the Company, Financings.

The other sources of funds potentially available to the Company are through the exercise of outstanding share purchase warrants. 630,500 of these share purchase warrants are exercisable at $2.40 per share; 3,208,750 are exercisable at a price of $3.25 per share; and, 330,000 are exercisable at a price of $4.25 per share; and 1,650,000 of these share purchase warrants are exercisable at $5.25 per share.  There can be no assurance, whatsoever, that any of these outstanding exercisable securities will be exercised.

Financing for the Companys operations was funded primarily from various share issuances through private placements and exercise of warrants. The Company has and may continue to have capital requirements in excess of its currently available resources. In the event the Companys plans change, its assumptions change or prove inaccurate, or its capital resources in addition to projected cash flow, if any, prove to be insufficient to fund its future operations, the Company may be required to seek additional financing.

Although the Company has been successful in raising the above funds, there can be no assurance that the Company will have sufficient financing to meet its future capital requirements or that additional financing will be available on terms acceptable to the Company in the future. The Company has just recently acquired interests in resource properties and its overall success will be affected by its current or future business activities.



27



The Company is in the process of acquiring and exploring its interests in resource properties and has not yet determined whether these properties contain mineral deposits that are economically recoverable. The continued operations of the Company and the recoverability of expenditures incurred to earn an interest in these resource properties are dependent upon the existence of economically recoverable reserves, securing and maintaining title and beneficial interest in the properties, obtaining necessary financing to explore and develop the properties, and upon future profitable production or proceeds from disposition of the resource properties.

US GAAP Reconciliation

Our financial statements are prepared in accordance with Canadian GAAP.  However, Note 13 to the financial statements included herein provides a reconciliation of the statements to U.S. GAAP.

Item 5.E

Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes of financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources, which individually or in the aggregate is material to our investors.

Item 5.F

Tabular Disclosure of Contractual Obligations

The following shows the Company's contractual obligations as at March 31, 2008:

|Contractual Obligations | Total                 | 1  3 Years | 4  5 Years | After 5 Years
|----------------------- | --------------------- | ----------- | ----------- | -------------
|                        | Lease commitments (1) | $64,435     | $64,435     | ---          

(1)

The Company has entered into lease agreements for its corporate office premises.

Significant Accounting Policies

Management is required to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  On a regular basis, we evaluate our estimates and assumptions.  We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions or conditions.

These critical accounting policies include:

Resource Properties and Deferred Exploration Costs

The Company accounts for resource property costs in accordance with the Canadian Institute of Chartered Accountants Handbook Section 3061, Property, plant and equipment (CICA 3061), and abstract EIC- 126, Accounting by Mining Enterprises for Exploration Costs (EIC-126) of the Emerging Issues Committee. CICA 3061 provides for the capitalization of the acquisition and exploration costs of a resource property where such costs are considered to have the characteristics of property, plant and equipment. EIC-126 provides that a mining enterprise is not precluded from considering exploration costs to have the characteristics of property, plant and equipment when it has not established resource reserves objectively and therefore does not have a basis for preparing a projection of the estimated future net cash flow from the property.

The fair value of resource properties acquired in exchange for the issuance of the Companys shares is determined by the trading price of the Companys shares on the date of the shares were issued.

28



Resource property costs include initial acquisition costs and related option payments, which are recorded when paid. Exploration and development costs are capitalized until properties are brought into production, when costs are amortized on a unit-of-production basis over economically recoverable reserves. Option payments are credited against resource property costs when received. No gain or loss on disposition of a partial interest is recorded until all carrying costs of the interest have been offset by proceeds of sale or option payments received.

CICA 3061 also provides that property, plant and equipment be written down when the long-term expectation is that the net carrying amount will not be recovered. EIC-126 states that a mining enterprise which has not objectively established resource reserves and therefore does not have a basis for preparing a projection of the estimated future cash flow from a property is not obliged to conclude that the capitalized costs have been impaired. However, EIC-126 references certain conditions that should be considered in determining subsequent write-downs, such as changes or abandonment of a work program or poor exploration results, and management reviews such conditions to determine whether a write-down of capitalized costs is required. When the carrying value of a property exceeds its net recoverable amount, provision is made for the impairment in value.

Accounting standards subsequently issued by the CICA dealing with Intangible Assets (CICA 1581 and CICA 3062) include reference to Use rights such as drilling, water, air, mineral, timber cutting, and route authorities as examples of intangible assets. CICA 3062 also states, inter alia, that intangible assets should be amortized over their useful life and tested for impairment. Management has reviewed this potential reporting conflict with the previously issued standards and is of the opinion that it is appropriately accounting for its resource properties as having the characteristics of property, plant and equipment.

Asset Retirement Obligations

The fair value of a liability for an asset retirement obligation, such as site reclamation costs, is recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The Company is required to record the estimated present value of future cash flows associated with site reclamation as a liability when the liability is incurred and increase the carrying value of the related assets for that amount. The obligations recognized are statutory, contractual or legal obligations. The liability is accreted over time for changes in the fair value of the liability through charges to accretion, which is included in depletion, amortization and accretion expense. The costs capitalized to the related assets are amortized in a manner consistent with the depletion and asset retirement obligations. Accordingly, adoption of HB 3110 had no impact on the consolidated financial statements.

Changes in Accounting Policies

Effective April 1, 2007, the Company adopted the provisions of the following new Canadian Institute of Chartered Accountants (CICA) accounting standards:

(a)

Comprehensive Income (Section 1530)

This section describes standards for reporting and disclosing comprehensive income, its components and related changes in equity. Comprehensive income includes net income as well as changes in equity during a period from transactions and events from non-owner sources, such as unrealized gains or losses on available-for-sale financial instruments. Adopting this standard had no impact on the Companys consolidated financial statements as at April 1, 2007 or for the year ended March 31, 2008.

(b)

Financial Instruments  Recognition and Measurement (Section 3855)

This section describes the standards for recognizing and measuring financial assets, financial liabilities and non-financial derivatives. Under the new standard, all financial instruments will be classified as one of the following: held-for-trading, held-to-maturity, loans and receivables, available for sale financial assets or other financial liabilities.

29



•

Held-for-trading financial instruments are measured at fair value. All gains and losses resulting from changes in their fair value are included in net earnings (loss) in the period in which they arise.

•

Held-to-maturity investments, loans and receivables, and other financial liabilities are initially measured at fair value and subsequently measured at amortized cost. Amortization of premiums or discounts and transaction costs are amortized into net earnings (loss), using the effective interest method.

•

Available-for-sale financial assets are measured at fair value, with unrealized gains and losses recorded in other comprehensive income until the asset is realized, at which time they will be recorded in net earnings (loss). Other than temporary impairments on available-for-sale financial assets are recorded in net earnings (loss).

(c)

Financial Instruments  Disclosure and Presentation (Section 3861)

CICA Section 3861 sets out standards which address the presentation of financial instruments and non-financial derivates, and identifies the related information that should be disclosed. These standards also revise the requirements for entities to provide accounting policy disclosures, including disclosure of the criteria for designating as held-for-trading those financial assets or liabilities that are not required to be classified as held-for-trading; whether categories of normal purchases and sales of financial assets are accounted for at trade date or settlement date; the accounting policy for transaction costs on financial assets and financial liabilities classified as other than held-for-trading; and provides several new requirements for disclosure about fair value.

The Company has chosen to recognize all transaction costs in operations on all financial instruments that have been designated as other than held for trading in accordance with S3855.57(a).

(d)

Hedging (Section 3865)

CICA Section 3865 specifies the circumstances under which hedge accounting is permissible and how hedge accounting may be performed. The Company currently does not hold any financial instruments designated for hedge accounting.

(e)

Accounting Changes (Section 1506)

Section 1506 revised the standards on changes in accounting policy, estimates or errors to require a change in accounting policy to be applied retrospectively (unless doing so is impracticable or is specified otherwise by an new accounting standard), changes in estimates to be recorded prospectively, and prior period errors to be corrected retrospectively. Voluntary changes in accounting policy are allowed only when they result in financial statements that provide reliable and more relevant information. In addition, these revised standards call for enhanced disclosures about the effects of changes in accounting policies, estimates and errors on the financial statements. The impact of this new standard cannot be determined until such time as the Company makes a change in accounting policy, other than the changes resulting from the implementation of the new CICA Handbook standards discussed in this note.





30



(f)

Accounting Policy for Transaction Costs, EIC-166:

On June 1, 2007, the Emerging Issues Committee of the CICA issued abstract No. 166, Accounting Policy Choice for Transaction Costs (EIC-166). This EIC addresses the accounting policy choice of expensing or adding transaction costs related to the acquisition of financial liabilities that are classified as other than held-for-trading to its initial carrying cost measured upon the adoption of CICA Handbook Section 3855, Financial Instruments  Recognition and Measurement (Section 3855). Specifically, it requires that the same accounting policy choice be applied to all similar financial instruments classified as other than held-for-trading, but permits a different policy choice for financial instruments that are not similar. The Company has adopted EIC-166 effective for the year ended March 31, 2008. The Company has chosen to recognize all transaction costs in operations on all financial instruments that have been designated as other than held for trading. The adoption of this policy had no material effect on the Companys financial statements.

Recent Pronouncements

There are two new CICA accounting standards that have been issued but not yet adopted by the Company. These two standards will become effective for the Company on April 1, 2008. The Company is currently assessing the impact of these new accounting standards on its consolidated financial statements.

The CICA has issued new accounting standards Section 3862, Financial Instruments  Disclosures and Section 3863, Financial Instruments  Presentation which replace Section 3861 Financial InstrumentsDisclosure and Presentation. The new disclosure standard increases the emphasis on the risks associated with both recognized and unrecognized financial instruments and how those risks are managed. The new presentation standard carries forward the existing presentation requirements.

These new standards are effective for the Company for periods beginning on or after October 1, 2007. The Company is evaluating the impact that the adoption of Section 3862 and Section 3863 will have on its consolidated financial statements.

Effective April 1, 2008, the Company will adopt new accounting standard Section 1535, Capital Disclosures, which requires companies to disclose their objectives, policies and processes for managing capital. In addition, disclosures are to include whether companies have complied with externally imposed capital requirements and, if not in compliance, the consequences of such noncompliance. The Company is evaluating the impact that the adoption of Section 1535 will have on its consolidated financial statements.

International Financial Reporting Standards ("IFRS") In 2006, the Canadian Accounting Standards Board ("AcSB") published a new strategic plan that will significantly affect financial reporting requirements for Canadian companies. The AcSB strategic plan outlines the convergence of Canadian GAAP with IFRS over an expected five year transitional period. In February 2008 the AcSB announced that 2011 is the changeover date for publicly-listed companies to use IFRS, replacing Canada's own GAAP. The date is for interim and annual financial statements relating to fiscal years beginning on or after April 1, 2011. The transition date of April 1, 2011 will require the restatement for comparative purposes of amounts reported by the Company for the year ended March 31, 2011. While the Company has begun assessing the adoption of IFRS for fiscal year 2012, the financial reporting impact of the transition to IFRS cannot be reasonably estimated at this time.

ITEM 6.

DIRECTORS, SENIOR MANAGEMENT, AND EMPLOYEES

Item 6.A

Directors and Senior Management

The following table sets forth certain information relating to our directors and executive officers:





31





Table No. 6

Directors and Senior Management

|Name | Position               | Age                     | Date of First Election
Or Appointment
|---- | ---------------------- | ----------------------- | -------------------------------------
|     |                        |                         |                                      
|     | Daniel T. McCoy        | President & Director    | 47                                   
|     | Tony M. Ricci          | Chief Financial Officer | 45                                   
|     | Michael Bebek          | Corporate Secretary     | 32                                   
|     | Richard J. Haslinger   | Director                | 43                                   
|     | Robert J. McLeod (1)   | Director                | 37                                   
|     | Gordon J. Fretwell (1) | Director                | 55                                   
|     | Mark Orsmond (1)       | Director                | 41                                   

(1)

Member of Audit Committee

Daniel T. McCoyis the President and a Director of Keegan.  Mr. McCoy obtained a B.S. and Ph.D in Geology from the University of Alaska and has over 22 years of work experience in the mineral exploration sector. Before being named President of Keegan, he was Senior Geologist from Placer Dome where he coordinated acquisitions and field programs for Placers Nevada generative exploration office and coordinator of acquisition and exploration projects in Alaska and Canada. From 1992 to 1995, he was a teaching and research associate at the University of Alaska, Fairbanks, and also served as a contract geologist for other major metals companies throughout the United States. His recent employment history is disclosed in the following table:

|Position | From                                     | Until        
|-------- | ---------------------------------------- | -------------
|         | Placer Dome, Senior Geologists           | January 1997 
|         | Keegan Resources, President and Director | November 2004

Dr. McCoy spends 100% of his time on the affairs of Keegan.

Tony M. Ricciis a former Director and the Chief Financial Officer of Keegan. Mr. Ricci is a chartered accountant who received his designation as a CA (Chartered Accountant) in 1989 and spent 100% of his time in public and private practice from that time through August of 2005. His recent employment history is disclosed in the following table:



|Position                                     | From          | Until       
|-------------------------------------------- | ------------- | ------------
|Self-employed consultant                     | 1994          | Present     
|CFO and Director, Norsement Mining Inc.      | August 2005   | October 2007
|CFO and Director Keegan Resources            | November 2005 | Present     
|CFO, Remstar Resources Ltd.                  | April 2006    | Present     
|CFO and Secretary Altair Ventures            | January 2006  | Present     
|CFO, Petaquilla Minerals Ltd.                | November 2006 | January 2008
|CFO, Mosam Capital Corp.                     | March 2006    | April 2008  
|CHO, Milk Capital Corporation                | December 2006 | Present     
|CFO, Petaquilla Copper Ltd.                  | January 2007  | January 2008
|CFO and Director, Grid Capital Corporation   | May 2008      | Present     
|President and Director Jantar Resources Ltd. | May 2008      | Present     
|CFO, EmerGeo Solutions Inc.                  | May 2008      | Present     

Mr. Ricci resigned as a Director of the Company on September 10, 2007 but continued as CFO. He spends 15% of his time on the affairs of Keegan.



32





Michael Bebek has the Corporate Secretary of Keegan since December of 2005. Mr. Bebeks recent employment history is disclosed in the following table:



|Position                                     | From          | Until        
|-------------------------------------------- | ------------- | -------------
|Self-employed computer consultant            | January 2001  | April 2004   
|Enwin Resources Inc., President and Director | June 2002     | Present      
|Keegan, Investor Relations                   | March 2004    | December 2005
|Keegan, Corporate Secretary                  | December 2005 | Present      

Mr. Bebek devotes 90% of his time to the affairs of Keegan.

Richard J. Haslingeris a Director of Keegan. Mr. Haslinger received a Bachelor of Applied Science degree in Geological Engineering from the University of British Columbia in 1986 and is a registered professional geological engineer with over 20 years of experience in the mineral exploration industry. During the last 15 years Richard has managed numerous multi-disciplinary exploration and deposit delineation projects at sites ranging from Alaska to South Africa. In his role with Keegan he provides exploration guidance and drill program management. Mr. Haslingers recent employment history is disclosed in the following table:



|                                                                        | Position         | From       | Until  
|----------------------------------------------------------------------- | ---------------- | ---------- | -------
|Site Manager and Project Coordinator, The Hunter Dickenson Mining Group | January 1993     | April 2006
|                                                                        | Keegan, Director | May 2006   | Present

Mr. Haslinger devotes 100% of his time to the affairs of Keegan.

Robert J. McLeod is a Director of Keegan.  Mr. McLeod is the VP of Exploration and a director of Full Metal Minerals Ltd. He has over 12 years of experience in mining and exploration, working for a variety of major and junior mining companies. Technical skills include advanced GIS and 3D geologic modeling, grade-block modeling and resource calculation, mine design and geostatistics, lithogeochemical and structural studies, as well as project generation and property evaluation. His exploration strategy is a multi-tier approach including: conceptual geologic and project generation, early-stage project advancement focusing on discovery, and advancing mid-stage projects towards feasibility. As an exploration geologist and project manager at Miramars Hope Bay project, he was part of the team that discovered the Naartok deposit, as well as expanding and delineating the Boston and Doris deposits. He was previously VP of Exploration for Atna Resources Ltd, where he helped assemble a portfolio of gold properties in Nevada. Mr. McLeod obtained his Bachelor of Science Degree, majoring in Economic Geology from UBC in 1993 and graduated from Queens Universitys, Masters in Geology, Mineral Exploration Program in 1998. He is a Fellow of the Society of Economic Geologists, member of the Association of Professional Engineers and Geoscientists of BC, Prospectors and Developers Association of Canada, Alaska Miners Association and the BC & Yukon Chamber of Mines. Mr. McLeods recent employment history is disclosed in the following table:

|Position | From                                              | Until       
|-------- | ------------------------------------------------- | ------------
|         | Miramar Mining, Project Manager                   | January 2000
|         | Atna Resources, Vice President                    | January 2003
|         | Keegan, Vice President                            | January 2004
|         | Full Metals Minerals, VP Exploration and Director | June 2003   

Mr. McLeod devotes 10% of his time to the affairs of Keegan.

33





Gordon J. Fretwell is a Director of Keegan.  Mr. Fretwell holds a Bachelor of Commerce degree and graduated from the University of British Columbia in 1979 with a Bachelor of law degree. Mr. Fretwell has, since 1991, been a self-employed solicitor in Vancouver practicing primarily in the areas of corporate and securities law. He currently serves on the board or is an officer of several public companies engaged in mineral exploration including Bell Resources Corporation, Copper Ridge Exploration Inc., Continental Minerals Corporation, Rockwell Ventures Inc., Grandcru Resources Corp., Pine Valley Mining Corp., Quartz Mountain Resources Ltd., and Icon Industries Ltd.

Mr. Fretwell devotes 10% of his time to the affairs of Keegan.

Mark Orsmond is a Director of Keegan.  Mark is a professional accountant, qualified in both Canada and South Africa. He obtained a Bachelor of Accounting Science (B-Compt) Degree from the University of South Africa in 1998.  Mark has spent most of his working career in the corporate finance area, working for an international brokerage firm in South Africa and a boutique corporate finance firm, Mercantile Consulting, which he has owned and operated in Canada from 2001 to the present.  During his career he has assisted many public, private and government entities with M&A, financing and related activities.  Mark acted as the Chief Financial Officer of the Amex listed Minco Group for a period of six months prior to working on a financing for Minco Silver lead by CIBC World Markets. He was recently on the Sterling Mining team which closed an institutional financing lead by TD Securities.

Mr. Orsmond devotes approximately 10% of his time to the affairs of Keegan.

The Directors have served in their respective capacities since their election and/or appointment and will serve until the next Annual General Meeting or until a successor is duly elected, unless the office is vacated in accordance with the Articles/By-Laws of the Company.

The Senior Management serves at the pleasure of the Board of Directors.

No Director and/or Senior Management had been the subject of any order, judgment, or decree of any governmental agency or administrator or of any court or competent jurisdiction, revoking or suspending for cause any license, permit or other authority of such person or of any corporation of which he is a Director and/or Senior Management, to engage in the securities business or in the sale of a particular security or temporarily or permanently restraining or enjoining any such person or any corporation of which he is an officer or director from engaging in or continuing any conduct/practice/employment in connection with the purchase or sale of securities, or convicting such person of any felony or misdemeanor involving a security or any aspect of the securities business or of theft or of any felony.

There are no family relationships between any two or more Directors or Senior Management.

There are no arrangements or understandings with major shareholders, customers, suppliers or others, pursuant to which any person referred to above was selected as a Director or member of senior management.

Item 6.B

Compensation

Cash Compensation

Total compensation accrued and/or paid (directly and/or indirectly) to all Directors/Senior Management during the year ended March 31, 2008 was CDN$248,980 in consulting fees, CDN$75,499 in professional fees, $125,138 in geological fees and $6,000 in directors fees paid to directors and officers of the Company.

The following table sets forth information regarding compensation paid to our executive officers for the fiscal periods indicated:

34



Table No. 7

Officer and Director Compensation

|                                |                | Annual Compensation   | Long Term Compensation |                                  
|------------------------------- | -------------- | --------------------- | ---------------------- | ---------------------------------
|                                |                |                       |                        |                                  
|NEO Name and
Principal Position | Year           | Salary
($)            | Bonus
($)              | Other 
Annual 
Compen-
sation ($)
|Daniel T. McCoy                 | 2008
2007
2006 | 108,276
81,336
95,180 | 47,844
Nil
Nil         | Nil
Nil
Nil                      
|Tony M. Ricci                   | 2008
2007
2006 | Nil
Nil
N/A           | Nil
Nil
N/A            | Nil
Nil
N/A                      
|Michael Bebek                   | 2008
2007
2006 | Nil
Nil
Nil           | Nil
Nil
Nil            | Nil
Nil
Nil                      
|Richard J. Haslinger            | 2008
2007
2006 | Nil
Nil
Nil           | 14,532
Nil
Nil         | Nil
Nil
Nil                      
|Robert J. McLeod                | 2008
2007
2006 | Nil
Nil
Nil           | Nil
Nil
Nil            | Nil
Nil
Nil                      
|Gordon J. Fretwell              | 2008
2007
2006 | Nil
Nil
Nil           | Nil
Nil
Nil            | Nil
Nil
Nil                      
|Mark Orsmond                    | 2008
2007
2006 | Nil
Nil
Nil           | Nil
Nil
Nil            | Nil
Nil
Nil                      



The following table sets forth information regarding stock options held by our directors and officers as of March 31, 2008:

Table No. 8

Stock Option Grants

|Name | Number of Options Granted | % Of Total Options Granted on | Exercise Price per Share | Grant Date | Expiration Date | Mkt. Value of Securities Underlying Options on Date of Grant
|---- | ------------------------- | ----------------------------- | ------------------------ | ---------- | --------------- | ------------------------------------------------------------
|     | Tony Ricci                | 75,000                        | 34%                      | $1.16      | 11/21/05        | 11/21/10                                                    
|     |                           | 25,000                        | 2%                       | $2.44      | 11/10/06        | 11/10/11                                                    
|     |                           | 30,000                        | 3%                       | $4.20      | 02/05/08        | 02/05/13                                                    
|     |                           |                               |                          |            |                 |                                                             
|     | Michael Bebek             | 75,000                        | 7%                       | $0.92      | 02/03/05        | 02/03/10                                                    
|     |                           | 25,000                        | 11%                      | $1.16      | 11/21/05        | 11/21/10                                                    
|     |                           | 50,000                        | 4%                       | $2.44      | 11/10/06        | 11/10/11                                                    
|     |                           | 50,000                        | 5%                       | $4.20      | 02/05/08        | 02/05/13                                                    
|     |                           |                               |                          |            |                 |                                                             
|     | Richard Haslinger         | 70,000                        | 7%                       | $0.92      | 02/03/05        | 02/03/10                                                    
|     |                           | 40,000                        | 67%                      | $2.48      | 02/02/06        | 02/02/11                                                    
|     |                           | 125,000                       | 10%                      | $2.44      | 11/10/06        | 11/10/11                                                    
|     |                           | 45,000                        | 5%                       | $4.20      | 02/05/08        | 02/05/13                                                    
|     |                           |                               |                          |            |                 |                                                             
|     | Dan McCoy                 | 258,315                       | 24%                      | $0.92      | 02/03/05        | 02/03/10                                                    
|     |                           | 225,000                       | 18%                      | $2.44      | 11/10/06        | 11/10/11                                                    
|     |                           | 75,000                        | 8%                       | $4.20      | 02/05/08        | 02/05/13                                                    
|     |                           |                               |                          |            |                 |                                                             
|     | Gordon Fretwell           | 200,000                       | 19%                      | $0.92      | 02/03/05        | 02/03/10                                                    
|     |                           | 25,000                        | 2%                       | $2.44      | 11/10/06        | 11/10/11                                                    
|     |                           | 20,000                        | 2%                       | $4.20      | 02/05/08        | 02/05/13                                                    
|     |                           |                               |                          |            |                 |                                                             
|     | Rob Mcleod                | 70,000                        | 7%                       | $0.92      | 02/03/05        | 02/03/10                                                    
|     |                           | 50,000                        | 4%                       | $2.44      | 11/10/06        | 11/10/11                                                    
|     |                           | 20,000                        | 2%                       | $4.20      | 02/05/08        | 02/05/13                                                    
|     |                           |                               |                          |            |                 |                                                             
|     | Mark Orsmond              | 100,000                       | 100%                     | $3.60      | 10/17/07        | 10/17/12                                                    
|     |                           |                               |                          |            |                 |                                                             
|     | Consultant                | 200,000                       | 19%                      | $0.92      | 02/03/05        | 02/03/10                                                    
|     | Consultant                | 20,000                        | 33%                      | $2.48      | 02/02/06        | 02/02/11                                                    
|     | Consultant                | 120,000                       | 55%                      | $1.16      | 11/21/05        | 11/21/10                                                    
|     | Consultants               | 730,000                       | 59%                      | $2.44      | 11/10/06        | 11/10/11                                                    
|     | Consultant                | 100,000                       | 100%                     | $2.48      | 12/20/06        | 12/20/11                                                    
|     | Consultant                | 19,000                        | 100%                     | $3.38      | 03/07/07        | 03/07/12                                                    
|     | Consultant                | 100,000                       | 100%                     | $2.85      | 12/19/06        | 12/19/11                                                    
|     | Consultant                | 100,000                       | 100%                     | $3.60      | 07/17/07        | 07/17/12                                                    
|     | Consultants               | 686,000                       | 74%                      | $4.20      | 02/05/08        | 02/05/13                                                    

There were no stock option exercises during fiscal 2008 by our Senior Management and Directors:.

Director Compensation.  Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of the Board of Directors.  The Board of Directors may award special remuneration to any Director undertaking any special services on behalf of Keegan  other than services ordinarily required of a Director.  Effective November 1, 2007, independent directors have been compensated $600 per month.

Stock Options.  Keegan may grant stock options to Directors, Senior Management, consultants and employees. Stock options have been granted and 200,000 were exercised by a consultant during Fiscal 2008. Refer to Item #6.E., "Share Ownership" and Table No. 8 for information about stock options outstanding.

Change of Control Remuneration.  Keegan had no plans or arrangements in respect of remuneration received or that may be received by Executive Officers of Keegan in Fiscal 2008 to compensate such officers in the event of termination of employment (as a result of resignation, retirement, change of control) or a change of responsibilities following a change of control, where the value of such compensation exceeds US$60,000 per Senior Management.

Other Compensation.  No Senior Management/Director received other compensation in excess of the lesser of US$25,000 or 10% of such officer's cash compensation, and all Senior Management/Directors as a group did not receive other compensation which exceeded US$25,000 times the number of persons in the group or 10% of the compensation.

Bonus/Profit Sharing/Non-Cash Compensation.  Except for the stock option program discussed in Item #6.E., Keegan  had no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to Keegan 's Directors or Senior Management.

Pension/Retirement Benefits.  No funds were set aside or accrued by Keegan during Fiscal 2008 to provide pension, retirement or similar benefits for Directors or Senior Management.

36



Keegan is obligated to pay the following individuals, who are under contract to the Company: Dr. Daniel McCoy receives a salary of US$12,000 per month and is paid health benefits up to $1,155 per month. Dr. McCoy can be terminated by Keegan with four weeks notice. Michael Bebek is paid Cdn$300 per day and he can be terminated with two weeks notice. Tony Ricci is paid Cdn$175 per hour and if he requires his assistants services she is paid Cdn$100 per hour. Mr. Ricci can be terminated with two weeks notice.  See Item 10C.

Item 6.C

Board Practices

Terms of Office

Refer to Item 6.A.1.

None of our directors has any agreement with the Company for benefits upon termination of employment.

Board of Director Committees

Keegan has an Audit Committee, which operates pursuant to a written charter.  The Audit Committee recommends to the Board of Directors the engagement of the independent auditors of Keegan  and reviews with the independent auditors the scope and results of Keegans audits, Keegans internal accounting controls, and the professional services furnished by the independent auditors to Keegan.  The current members of the Audit Committee are: Mark Orsmond, Rob McLeod, and Gord Fretwell, each of whom is independent under applicable rules.  The Audit Committee met four times during the year ended March 31, 2008.

The Board has no remuneration or other committee given the stage of its development currently; however, the Board plans to consider appointing a compensation committee during this fiscal year.

Item 6.D

Employees

As of March 31, 2008, Keegan had five employees and independent contractors, excluding the Senior Management. The Company also employed 180 individuals in Ghana, including field workers, security, camp staff, and local administration.

Item 6.E

Share Ownership

The following table sets out as of September 10, 2008 holdings by Directors and Senior Management who beneficially own Keegan's voting securities.  No shareholder owns more than 5% of our outstanding common stock.



Table No. 10

Shareholdings of Directors and Senior Management

Shareholdings of 5% Shareholders

|Title of Class | Name of Beneficial Owner | Amount and Nature of
Beneficial Ownership | Percent of Class
|-------------- | ------------------------ | ----------------------------------------- | ----------------
|Common         | Daniel T. McCoy (1)      | 551,875                                   | 1.7%            
|Common         | Tony M. Ricci (2)        | 121,750                                   | *               
|Common         | Richard J. Haslinger (3) | 356,625                                   | 1.1%            
|Common         | Robert J. McLeod (4)     | 157,000                                   | *               
|Common         | Gordon J. Fretwell (5)   | 307,600                                   | 1.0%            
|Common         | Michael Bebek (6)        | 210,850                                   | *               
|Common         | Mark Orsmond (7)         | 75,000                                    | *               
|               | Total                    | 1,780,700                                 | 6.0%            

* Less than 1%.

(1)

Of these shares, 530,190 are represented by vested stock options of 558,315 granted.

(2)

Of these shares, 118,750 are represented by vested stock options of 130,000 granted.

(3)

Of these shares, 263,125 are represented by vested stock options of 280,000 granted.

(4)

Of these shares, 132,500 are represented by vested stock options of 140,000 granted.



37



(5)

Of these shares, 237,500 are represented by vested stock options of 245,000 granted.

(6)

Of these shares, 181,250 are represented by vested stock options of 200,000 granted.

(7)

Of these shares, 75,000 are represented by vested stock options of 100,000 granted.

The percentages are based on 28,440,648 shares outstanding as of September 10, 2008 and include stock options that are exercisable within 60 days of September 10, 2008.

Stock Options

The terms of incentive options grantable by Keegan are done in accordance with the rules and policies of the TSX Exchange and the British Columbia Securities Commission, including the number of common shares under option, the exercise price and expiry date of such options, and any amendments thereto.  Keegan  adopted a formal written stock option plan (the "Plan") on June 22, 2004. At the Annual Meeting held on September 29, 2006, Shareholders approved revisions to the Companys Stock Option Plan.

The principal purposes of Keegans Plan is to give Eligible Persons, as additional compensation, the opportunity to participate in the success of the Company. Eligible Persons include Directors, Officers, Employees, Consultants, Consultant Companies, or Management Company Employees.

The Plan provides that the aggregate number of shares of Keegan, which may be issued and sold under the Plan, is 2,774,683.  On October 1, 2007, shareholders of the Company approved a further increase in number of shares reserved for issuance under the plan to 4,663,290.  No optionee under the Plan in aggregate shall exceed 20% of the currently issued and outstanding share capital. Options granted to Insiders as a group may not exceed 20% of the issued shares, and to any one individual may not exceed 5% of the issued shares on a yearly basis, and 2% of the issued shares on a yearly basis if the optionee is engaged in investor relations activities or is a consultant, on a non-diluted basis.

Options granted under the Plan will be exercisable over periods of up to five years as determined by the board of directors of the Company. The price of each option shall be at a price not less than the Market Price prevailing on the date the option is granted less applicable discount, if any, permitted by the policies of the Exchanges and approved by the Board. The Directors, subject to the policies of the Exchange, may determine and impose terms upon which each option shall become vested. Current policies of the TSX Venture Exchange provide that minimum vesting requirements shall be 25% of the option upon TSX Venture Exchange approval and a further 12 1⁄2% every quarter thereafter. The Directors have adopted this vesting schedule.

If an optionee ceases to be an Eligible Person under the Plan, his or her vested options will be exercisable as follows:

a)

Death or Disability: the earlier of 365 days after the date of death or disability or the Expiry Date.

b)

Termination for Cause: Cancelled as of the date of termination.

c)

Early Retirement, Voluntary Resignation or Termination Other than for Cause: The earlier of the Expiry Date or 90 days (30 days if the Optionee was engaged in Investor Relations Activities) after the Optionee ceases to be an Eligible Person.





38





In the event of a bona fide Take-Over Bid where the offeror becomes a control person of the Company, all Option Shares will become vested and the option may be exercised in whole or in part by the Optionee to permit the Optionee to tender the Option Shares received in such exercise pursuant to the offer. If the Take-Over offer is not completed within the time specified, or all of the Option Shares tendered by the Optionee pursuant to the offer are not taken up or paid for by the offeror, then the option shares received upon the exercise may be returned by the Optionee to the Company and reinstated as authorized but unissued shares. In respect to such returned shares, the Option shall be reinstated as if it had not been exercised and the terms upon which such Option Shares were to become vested shall be reinstated and the Company shall refund the exercise price to the Optionee.

The following table sets forth information about stock options granted by the Company to directors, officers and consultants:

Table No.11

Stock Options Outstanding

|Name               | Number of Options Currently Held | Number of Options Vested or Vesting Within  60 Days | Exercise Price per Share | Grant Date | Expiration Date
|------------------ | -------------------------------- | --------------------------------------------------- | ------------------------ | ---------- | ---------------
|Officers/Directors |                                  |                                                     |                          |            |                
|                   | Dan McCoy                        | 258,315                                             | 258,315                  | 0.92       | Feb 03/05      
|                   |                                  | 225,000                                             | 225,000                  | 2.44       | Nov 10/06      
|                   |                                  | 75,000                                              | 46,875                   | 4.20       | Feb 05/08      
|                   |                                  |                                                     |                          |            |                
|                   | Gord Fretwell                    | 200,000                                             | 200,000                  | 0.92       | Feb 03/05      
|                   |                                  | 25,000                                              | 25,000                   | 2.44       | Nov 10/06      
|                   |                                  | 20,000                                              | 12,500                   | 4.20       | Feb 05/08      
|                   |                                  |                                                     |                          |            |                
|                   | Rob McLeod                       | 70,000                                              | 70,000                   | 0.92       | Feb 03/05      
|                   |                                  | 50,000                                              | 50,000                   | 2.44       | Nov 10/06      
|                   |                                  | 20,000                                              | 12,500                   | 4.20       | Feb 05/08      
|                   |                                  |                                                     |                          |            |                
|                   | Richard Haslinger                | 70,000                                              | 70,000                   | 0.92       | Feb 03/05      
|                   |                                  | 40,000                                              | 40,000                   | 2.48       | Feb 02/06      
|                   |                                  | 125,000                                             | 125,000                  | 2.44       | Nov 10/06      
|                   |                                  | 45,000                                              | 28,125                   | 4.20       | Feb 05/08      
|                   |                                  |                                                     |                          |            |                
|                   | Michael Bebek                    | 75,000                                              | 75,000                   | 0.92       | Feb 03/05      
|                   |                                  | 50,000                                              | 50,000                   | 2.44       | Nov 10/06      
|                   |                                  | 25,000                                              | 25,000                   | 1.16       | Nov 22/05      
|                   |                                  | 50,000                                              | 31,250                   | 4.20       | Feb 05/08      
|                   |                                  |                                                     |                          |            |                
|                   | Mark Orsmond                     | 100,000                                             | 75,000                   | 3.60       | Mar 07/07      
|                   |                                  |                                                     |                          |            |                
|                   | Tony Ricci                       | 75,000                                              | 75,000                   | 1.16       | Nov 22/05      
|                   |                                  | 25,000                                              | 25,000                   | 2.44       | Nov 10/06      
|                   |                                  | 30,000                                              | 18,750                   | 4.20       | Feb 05/08      
|                   | Consultants                      |                                                     |                          |            |                
|                   | Ivan Bebek                       | 200,000                                             | 200,000                  | 0.92       | Feb 03/05      
|                   |                                  | 225,000                                             | 225,000                  | 2.44       | Nov 10/06      
|                   |                                  | 150,000                                             | 93,750                   | 4.20       | Feb 05/08      
|                   |                                  |                                                     |                          |            |                
|                   | Shawn Wallace                    | 225,000                                             | 225,000                  | 2.44       | Nov 10/06      
|                   |                                  | 150,000                                             | 93,750                   | 4.20       | Feb 05/08      
|                   |                                  |                                                     |                          |            |                
|                   | John Eren                        | 120,000                                             | 120,000                  | 1.16       | Nov 22/05      
|                   |                                  | 30,000                                              | 30,000                   | 2.44       | Nov 10/06      
|                   |                                  | 20,000                                              | 12,500                   | 4.20       | Feb 05/08      
|                   |                                  |                                                     |                          |            |                
|                   | John Allotey                     | 25,000                                              | 25,000                   | 2.44       | Nov 10/06      
|                   |                                  |                                                     |                          |            |                
|                   | Jim Slayton                      | 50,000                                              | 50,000                   | 2.44       | Nov 10/06      
|                   |                                  | 20,000                                              | 20,000                   | 2.48       | Feb 02/06      
|                   |                                  | 30,000                                              | 18,750                   | 4.20       | Feb 05/08      
|                   |                                  |                                                     |                          |            |                
|                   | Vincent Dzakpasu                 | 25,000                                              | 25,000                   | 2.44       | Nov 10/06      
|                   |                                  | 20,000                                              | 12,500                   | 4.20       | Feb 05/08      
|                   |                                  |                                                     |                          |            |                
|                   | O&M Partners                     | 75,000                                              | 75,000                   | 2.44       | Nov 10/06      
|                   |                                  |                                                     |                          |            |                
|                   | Eric Ewen                        | 75,000                                              | 75,000                   | 2.44       | Nov 10/06      
|                   |                                  | 50,000                                              | 31,250                   | 4.20       | Feb 05/08      
|                   |                                  |                                                     |                          |            |                
|                   | Diana Bebek                      | 19,000                                              | 14,250                   | $3.38      | Mar 07/07      
|                   |                                  | 21,000                                              | 13,125                   | 4.20       | Feb 05/08      
|                   |                                  |                                                     |                          |            |                
|                   | Roman Shlanka                    | 100,000                                             | 87,500                   | $2.85      | Dec 20/06      
|                   |                                  | 50,000                                              | 31,250                   | 4.20       | Feb 05/08      
|                   |                                  |                                                     |                          |            |                
|                   | Felix Sibsa                      | 50,000                                              | 31,250                   | 4.20       | Feb 05/08      
|                   |                                  |                                                     |                          |            |                
|                   | Paul Mann                        | 30,000                                              | 18,750                   | 4.20       | Feb 05/08      
|                   |                                  |                                                     |                          |            |                
|                   | Paul Klipfel                     | 50,000                                              | 31,250                   | 4.20       | Feb 05/08      
|                   |                                  |                                                     |                          |            |                
|                   | Otis Mandy                       | 40,000                                              | 25,000                   | 4.20       | Feb 05/08      
|                   |                                  |                                                     |                          |            |                
|                   | Eunice Nyadu                     | 25,000                                              | 15,625                   | 4.20       | Feb 05/08      
|                   | Total Outstanding                | 3,528,315                                           | 3,138,815                |            |                

ITEM 7.

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

Item 7.A

Major Shareholders

No person owns 5% or more of the Companys outstanding shares and there have been no changes in holdings of significant shareholders.



40





Share Ownership

On September 10, 2008, Keegans shareholders list showed 28,440,648 common shares outstanding and 33 registered shareholders, including depositories.  Of these shareholders six are located in Canada holding 27,531,872 common shares, or 96.8% of the total issued and outstanding; 21 are located in the United States holding 802,394 common shares, or 2.8% of the issued and outstanding; and six are located in other countries, holding 106,382 common shares, or 0.4% of the issued and outstanding common shares.

Control of the Company

Keegan to its knowledge is not controlled by any foreign government or other person(s).

Item 7.B

Related Party Transactions

Included in professional fees is $24,119 (2007  $60,508, $2006 - $39,443)) paid or accrued for legal fees to a company controlled by Gordon Fretwell a director and officer of the Company and $51,380 (2007  $35,895, 2006 - $35,895) for accounting fees to a company controlled by Tony Ricci, a former director and current officer of the Company.

Included in consulting fees, wages and benefits is $65,722 (2007 - $50,758, 2006: $17,005) paid or accrued for consulting fees paid to Michael Bebek, an officer of the Company.

The Company has entered into a consulting agreement with Dan McCoy, a director and officer of the Company in the amount of US$6,667 per month plus benefits. (This amount was subsequently increased to US$7,000 per month plus benefits and further increased to US$12,000.) During the year ended March 31, 2008, the Company paid consulting fees and benefits of $183,258 (2007 - $113,758, 2006  $112,307) under this agreement.

During the year ended March 31, 2008, the Company paid or accrued $125,138 (2007 - $105,036, 2006 - $11,625) for deferred exploration costs to Richard Haslinger, a director of the Company.

These charges were measured by the exchange amount, which is the amount agreed upon by the transacting parties.

Included in accounts payable and accrued liabilities is $55,933 (2007 - $97,910, 2006 - $32,424) owing to Richard Haslinger a director of the Company, Dan McCoy, the President and a director of the Company and a company controlled by Tony Ricci, a former director and current officer of the Company. The prior year balance was owed to Dan McCoy, an officer and director of the Company and to a company controlled by Gordon Fretwell, also an officer and director of the Company.

During the year ended March 31, 2006, the Company issued 31,685 common shares (2005  nil) to Dan McCoy, a director and officer of the Company pursuant to the exercise of options at $0.92 per share for total proceeds of $80,797.

Management believes that all of these transactions were on terms at least as favorable to Keegan as could have been obtained from unaffiliated third parties.

Accounting Fees

Keegan paid accounting fees of $51,380 (2007 - $51,735; 2006  35,895) to Tony M. Ricci, Inc., a chartered accounting firm.



41



Amounts Owing to Senior Management/Directors

There is $55,933 (2007 - $97,910) owing senior management or members of the Board of Directors.

There have been no transactions since March 31, 2008, or proposed transactions, which have materially affected or will materially affect Keegan in which any director, executive officer, or beneficial holder of more than 5% of the outstanding common shares, or any of their respective relatives, spouses, associates or affiliates has had or will have any direct or material indirect interest.

Item 7.C

Interests of Experts and Counsel

Not Applicable.

ITEM 8.

FINANCIAL INFORMATION

Item 8.A

Consolidated Statements and Other Financial Information

Keegan's financial statements are stated in Canadian Dollars (CDN$) and are prepared in accordance with Canadian Generally Accepted Accounting Principles (GAAP).  However, Note 13 to the financial statements includes a reconciliation to the financial statements to U.S. GAAP.  The financial statements are filed under Item 17.

Legal Proceedings

Keegan is not a party to any material legal proceedings nor, to the knowledge of its management, are any such proceedings pending or threatened.

ITEM 9.

THE OFFER AND LISTING

Item 9.A

Common Share Trading Information

The Company's common shares trade on the TSX Venture Exchange in Canada, under the symbol "KGN" since June 25, 2001.

The following table lists the high and low sales prices on the TSX Venture Exchange for the periods indicated:

Table No. 12

TSX Venture Exchange (formerly the Canadian Venture Exchange)

Common Shares Trading Activity

- Sales -

Canadian Dollars

|Period | High                                    | Low 
|------ | --------------------------------------- | ----
|       |                                         |     
|       | Month Ended August 2008                 | 2.96
|       | Month Ended July 2008                   | 3.34
|       | Month Ended June 2008                   | 3.93
|       | Month Ended May 2008                    | 4.50
|       | Month Ended April 2008                  | 5.85
|       | Month Ended March 2008                  | 5.49
|       | Month Ended February 2008               | 5.25
|       | Month Ended January 2008                | 4.35
|       |                                         |     
|       | Fiscal Year Ended March 31, 2008        | 5.49
|       | Fiscal Year Ended March 31, 2007        | 4.95
|       | Fiscal Year Ended March 31, 2006        | 2.75
|       | Fiscal Year Ended March 31, 2005        | 1.85
|       | Fiscal Year Ended March 31, 2004        | 0.60
|       |                                         |     
|       | Fiscal Quarter Ended June 30, 2008      | 5.85
|       | Fiscal Quarter Ended March 31, 2008     | 5.49
|       | Fiscal Quarter Ended December 31, 2007  | 4.75
|       | Fiscal Quarter Ended September 30, 2007 | 3.83
|       | Fiscal Quarter Ended June 30, 2007      | 4.95
|       | Fiscal Quarter Ended March 31, 2007     | 4.25
|       | Fiscal Quarter Ended December 31, 2006  | 3.70
|       | Fiscal Quarter Ended September 30, 2006 | 2.30
|       | Fiscal Quarter Ended June 30, 2006      | 2.38

Description of Share Capital

Share Capital

The authorized capital of Keegan consists of an unlimited number of common shares with no par value and an unlimited number of preferred shares with no par value, of which 28,440,648 common shares and no preferred shares are currently issued and outstanding.  See Item 10.B for more information.

Pacific Corporate Trust Company of Canada (located at 510 Burrard Street 2nd Floor Vancouver, BC V6C 3B9) is the registrar and transfer agent for the common shares.

Stock Options and Warrants

Refer to Item 6.E. and Table No. 11 for additional information.

The following table lists, as of March 31, 2008 information relating to share purchase warrants outstanding:



Table No. 13

Share Purchase Warrants Outstanding



|Effective Date of Issuance | Number of Share Purchase
Warrants Currently
Outstanding | Year #1 | Year #2 | Expiration Date of Share
Purchase Warrants
|-------------------------- | ------------------------------------------------------- | ------- | ------- | ------------------------------------------
|                           |                                                         |         |         |                                           
|05/02/06                   | 630,500                                                 | $2.40   | $2.40   | 04/30/08                                  
|02/16/07                   | 3,208,750                                               | $3.25   | $3.25   | 02/16/09                                  
|05/27/07                   | 330,000                                                 | $4.25   | $4.25   | 05/27/09                                  
|05/27/07                   | 1,650,000                                               | $5.25   | $5.25   | 05/27/09                                  
|                           | 5,819,250                                               |         |         |                                           

Shareholders Rights Plan

The Company adopted a Shareholders Rights Plan (the Rights Plan) dated September 1, 2006, which was approved by shareholders at the Annual and Special Meeting of Shareholders held on September 29, 2006. The Rights Plan was not adopted in response to any specific bid and is not aimed at blocking future bids, but is designed to ensure that any acquisition of control is through a public offer to all shareholders and that sufficient time is available to evaluate any offer.

43



Summary of the Plan

A summary of the principal terms of the Shareholder Rights Plan is set forth below and is qualified in its entirety by reference to the Plan, a copy of which has been filed with the SEC

(a)

Effective Date. The effective date of the Shareholder Rights Plan is September 1, 2006 (the Effective Date).

(b)

Term. The Shareholder Rights Plan will terminate on the sixth anniversary of the Effective Date, subject to ratification by the shareholders at the Meeting and to reconfirmation by shareholders at the third annual general meeting thereafter.

(c)

Shareholder Approval.For the Shareholder Rights Plan to continue in effect following the Meeting, the Shareholder Rights Plan Resolution must be approved by a majority of the votes cast at the Meeting by shareholders voting in person and by proxy.

(d)

Issue of Rights.On the Effective Date, one right (a Right) is issued and attached to each Common share outstanding and will attach to each Common share subsequently issued.

(e)

Rights Exercise Privilege.The Rights will separate from the Common shares and will be exercisable eight business days (or such later business day as may be determined by the board of directors) (the Separation Time) after a person has acquired, or commences or publicly announces or discloses its intention to commence a take-over bid to acquire, 20% or more of the Common shares, other than by an acquisition pursuant to a take-over bid permitted by the Shareholder Rights Plan (a Permitted Bid). The acquisition by any person (an Acquiring Person) of 20% or more of the Common shares, other than by way of a Permitted Bid, is referred to as a Flip-in Event. Any Rights held by an Acquiring Person will become void upon the occurrence of a Flip-in Event. From and after the Separation Time, each Right (other than those held by the Acquiring Person), will permit the purchase of CDN$100 worth of Common shares (at the market price on the date of the Flip-in Event) for CDN$50 (i.e., at a 50% discount). The issue of the Rights is not initially dilutive; however, upon a Flip-in Event occurring and the Rights separating from the Common shares, reported earnings per Common share on a fully diluted or non-diluted basis may be affected. Holders of Rights not exercising their Rights upon the occurrence of a Flip-in Event may suffer substantial dilution.

(f)

Certificates and Transferability. Prior to the Separation Time, the Rights will be evidenced by a legend imprinted on certificates for Common shares issued from and after the Effective Date and will not be transferable separately from the Common shares. From and after the Separation Time, the Rights will be evidenced by Rights certificates which will be transferable and traded separately from the Common shares.

(g)

Permitted Bid Requirements.The requirements for a Permitted Bid include the following:

(i)

the take-over bid must be made by way of a take-over bid circular;

(ii)

the take-over bid must be made to all holders of Common shares;

(iii)

the take-over bid must be outstanding for a minimum period of 60 days and Common shares tendered pursuant to the take-over bid may not be taken up and paid for prior to the expiry of such 60-day period and only if at such time more than 50% of the Common shares held by shareholders other than the bidder, its affiliates and persons acting jointly or in concert with the bidder (collectively, the Independent Shareholders) have been tendered to the take-over bid and not withdrawn;

(iv)

the Common shares deposited pursuant to the take-over bid may be withdrawn until taken up and paid for; and

44



(v)

if more than 50% of the Common shares held by Independent Shareholders are tendered to the take-over bid within such 60-day period, then the bidder must make a public announcement of that fact and the take-over bid must remain open for deposits of Common shares for an additional 10 business days from the date of such public announcement.

The Shareholder Rights Plan allows for a competing Permitted Bid (a Competing Permitted Bid) to be made while a Permitted Bid is in existence. A Competing Permitted Bid must satisfy all of the requirements of a Permitted Bid except that it may expire on the same date as the Permitted Bid.

(h)

Waiver and Redemption.The board of directors may, prior to the Flip-in Event, waive the dilutive effects of the Shareholder Rights Plan in respect of a particular Flip-in Event resulting from a take-over bid made by way of a take-over bid circular to all holders of Common shares, or to waive one or more of the requirements of a Permitted Bid, or a Competing Permitted Bid, in which event such waiver would be deemed also to be a waiver in respect of any other Flip-in Event, and any such requirement, occurring under a take-over bid made by way of a take-over bid circular to all holders of Common shares. The board of directors may also waive the Shareholder Rights Plan in respect of a particular Flip-in Event that has occurred through inadvertence, provided that the Acquiring Person that inadvertently triggered such Flip-in Event reduces its beneficial holdings to less than 20% of the outstanding voting shares of the Company within 14 days or such later date as may be specified by the board of directors. With the majority consent of shareholders or Rights holders at any time prior to the later of a Flip-in Event and the Separation time, the board of directors may at its option redeem all, but not less than all, of the outstanding Rights at a price of CDN$0.00001 each.

(i)

Exemptions for Investment Advisors. Investment advisors (for client accounts), trust companies (acting in their capacities as trustees and administrators), statutory bodies managing investment funds (for employee benefit plans, pension plans, insurance plans or various public bodies) and administrators or trustees of registered pension funds or plans acquiring greater than 20% of the Common shares are exempted from triggering a Flip-in Event, provided that they are not making, or are not part of a group making, or proposing to make or participate in, or has not announced a current intention to make, a take-over bid.

(j)

Exemptions for Lock-up Agreements.A person is deemed not to be the beneficial owner of Common shares if the holder of such Common shares has agreed to deposit or tender its Common shares pursuant to a Permitted Lock-up Agreement to a take-over bid (the Lock-up Bid) made by such person. In order for an agreement to constitute a Permitted Lock-up Agreement, certain conditions must be met including, among other things, (i) any break-up fees payable by the tendering shareholder, cannot exceed in the aggregate the greater of the cash equivalent of 2.5% of the price or value of the consideration payable under the Lock-up Bid and 50% of the amount by which the price or value of the consideration payable under another take-over bid or transaction exceeds the price or value of the consideration that would have been received under the Lock-up Bid and (ii) the terms of such agreement are publicly disclosed and a copy of which is made available to the public (including to the Company) and the Permitted Lock-up Agreement permits the tendering shareholder to withdraw its Common shares in order to deposit or tender the Common shares to another take-over bid or support another transaction where the price or value offered under such other bid is at least 7% higher than the price or value offered under the Lock-up Bid or the number of Common shares to be purchased under another take-over bid or transaction is at least 7% more than the number proposed to be purchased under the Lock-up Bid.

(k)

Supplements and Amendments.The Company is authorized to make amendments to the Shareholder Rights Plan to correct any clerical or typographical error or to maintain the validity of the Shareholder Rights Plan as a result of changes in law, regulation or rules. Prior to the Meeting, the Company is authorized to amend or supplement the Shareholder Rights Plan as the board of directors may in good faith deem necessary or desirable. No such amendments have been made to date. The Company will issue a press release relating to any significant amendment made to the Shareholder Rights Plan prior to the Meeting and will advise the shareholders of any such amendment at the Meeting. Other amendments or supplements to the Shareholder Rights Plan may be made with the prior approval of shareholders or Rights holders.

45



A copy of the Plan was included in the Companys Management Information Circular for the Annual and Special Meeting of Shareholders held on September 29, 2006, and which was filed as an exhibit to the Companys 20-F Registration Statement.

Item 9.B

Stock Exchanges Identified

The common shares trade on the TSX Venture Exchange in Canada under the symbol KGN.

ITEM 10.

ADDITIONAL INFORMATION

Item 10.A

Share Capital

Authorized/Issued Capital

We are authorized to issue an unlimited number of common shares and 100,000,000 preferred shares.

As of September 10, 2008, there were 28,440,648 common shares issued and no preferred shares issued.

Stock Options/Share Purchase Warrants

Refer to Table No. 8 and Table No. 10.

Item 10.A.6.

History of Share Capital

Keegan has financed its operations through funds raised in public/private placements of common shares and Special Warrants; and shares issued upon conversion of Special Warrants.

|Fiscal Year | Nature of Share Issuance | Number of Shares                                     | Amount   
|----------- | ------------------------ | ---------------------------------------------------- | ---------
|            |                          |                                                      |          
|Fiscal 2000 | Nil                      |                                                      |          
|            |                          |                                                      |          
|            | Fiscal 2001              | Private Sale of Escrow Shares                        | 1,333,334
|            |                          |                                                      |          
|            | Fiscal 2002              | Initial Public Offering                              | 3,300,000
|            |                          | Exercise of Agents Options                          | 70,000   
|            | Fiscal 2003              | Pursuant to the Exercise of Share Purchase Options   | 95,000   
|            |                          |                                                      |          
|            | Fiscal 2004              | Nil                                                  |          
|            |                          |                                                      |          
|            | Fiscal 2005              | Private Placement                                    | 3,200,000
|            |                          | Private Placement                                    | 870,500  
|            |                          | Finders fees associated with the private placements | 33,900   
|            |                          | Exercise of stock options                            | 100,000  
|            |                          | Payment for resource properties                      | 341,159  
|            |                          |                                                      |          
|            | Fiscal 2006              | Issued for resource property payment                 | 246,059  
|            |                          | Private Placement                                    | 3,000,000
|            |                          | Exercise of share purchase warrants                  | 785,300  
|            |                          | Exercise of share purchase options                   | 122,500  
|            |                          |                                                      |          
|            | Fiscal 2007              | Exercise of share purchase warrants                  | 2,721,850
|            |                          | Private Placement                                    | 2,000,000
|            |                          | Issued for resource property payment                 | 187,725  
|            |                          | Private Placement                                    | 5,662,500
|            |                          | Exercise of share purchase options                   | 71,685   
|            |                          |                                                      |          
|            | Fiscal 2008              | Issued for resource property payment                 | 44,000   
|            |                          | Private Placement                                    | 3,300,000
|            |                          | Exercise of share purchase warrants                  | 1,115,470
|            |                          | Exercise of share purchase options                   | 200,000  

Item 10.B

Memorandum and Articles of Association

Keegan Resources Inc. (Keegan or the Company) was incorporated as Quicksilver Ventures Inc. on September 23, 1999 under the British Columbia Company Act. Pursuant to a resolution passed at a meeting of the shareholders of the Company that was held on September 17, 2004, the Company changed its name from Quicksilver Ventures Inc. to Keegan Resources Inc.

At the Annual and Special General meeting of the Company held on September 17, 2004, shareholders passed appropriate resolutions to complete the transition procedures to revise the Companys Articles under the new British Columbia Business Corporations Act (the New Act). At the Annual and Special Meeting held on September 29, 2006, shareholders approved an increase of the number of common shares which the Company is authorized to issue to an unlimited number of common shares and an unlimited number of preferred shares. The Notice of Alteration of the Companys Articles was filed with the British Columbia Registrar of Companies on October 11, 2006.

There are no restrictions on the business the Company may carry on in the Articles of Incorporation.

Under Part 17 of the Companys Articles and Division 3 of the New Act, a director or senior officer must declare its interest in any existing or proposed contract or transaction with the Company and such director is not allowed to vote on any transaction or contract with the Company in which has a disclosable interest, unless all directors have a disclosable interest in that contract or transaction, in which case any or all of those directors may vote on such resolution. A director may hold any office or place of profit with the Company in conjunction with the office of director, and no director shall be disqualified by his office from contracting with the Company. A director or his firm may act in a professional capacity for the Company and he or his firm shall be entitled to remuneration for professional services. A director may become a director or other officer or employee of, or otherwise interested in, any corporation or firm in which the Company may be interested as a shareholder or otherwise. The director shall not be accountable to the Company for any remuneration or other benefits received by him, subject to the New Act.

Part 16 of the Companys articles address the duties of the directors. Directors must manage or supervise the management of the business and affairs of the Company and have the authority to exercise all such powers which are not required to be exercised by the shareholders, or as governed by the New Act. Part 19 addresses Committees of the Board of Directors. Directors may, by resolution, create and appoint an executive committee consisting of the director or directors that they deem appropriate.

This executive committee has, during the intervals between meetings of the Board, all of the directors powers, except the power to fill vacancies in the Board, the power to remove a Director, the power to change the membership of, or fill vacancies in, any committee of the Board and any such other powers as may be set out in the resolution or any subsequent directors resolution. Directors may also by resolution appoint one or more committees other than the executive committee. These committees may be delegated any of the directors powers except the power to fill vacancies on the board of directors, the power to remove a director, the power to change the membership or fill vacancies on any committee of the directors, the power to appoint or remove officers appointed by the directors, and make any delegation subject to the conditions set out in the resolution or any subsequent directors resolution. Part 18 details the proceedings of directors. The quorum necessary for the transaction of the business of the directors may be fixed by the directors and if not so fixed shall be two directors.

Part 8 details the borrowing powers of the Directors. They may, on behalf of the Company:

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•

Borrow money in a manner and amount, on any security, from the sources and on the terms and conditions that they consider appropriate;

•

Issue bonds, debentures, and other debt obligations either outright or as security for any liability or obligation of the Company or any other person and at such discounts or premiums and on such other terms as they consider appropriate;

•

Guarantee the repayment of money by any other person or the performance of any obligation of any other person; and

•

Mortgage, charge, whether by way of specific or floating charge, grant a security interest in or give other security on, on the whole or any part of the present or future assets and undertaking of the Company.

A director need not be a shareholder of the Company, and there are no age limit requirements pertaining to the retirement or non-retirement of directors. The directors are entitled to the remuneration for acting as directors, if any as the directors may from time to time determine. If the directors so decide, the remuneration of directors, if any, will be determined by the shareholders. That remuneration may be in addition to any salary or other remuneration paid to any officer or employee of the Company as such who is also a director. The Company must reimburse each director for the reasonable expenses that he or she may incur in and about the business of the Company. If any director performs any professional or other services for the Company that in the opinion of the directors are outside the ordinary duties of a director, or if any director is otherwise specially occupied in or about the Companys business, he or she may be paid remuneration fixed by the directors, or, at the option of that director, fixed by ordinary resolution and such remuneration may be either in addition to, or in substitution for, any other remuneration that he or she may be entitled to receive.

Part 21 provides for the mandatory indemnification of directors, senior officers, former directors, and alternate, as well as their respective heirs and personal or other legal representatives, or any other person, to the greatest extent permitted by the New Act. The indemnification includes the mandatory payment of expenses. The failure of a director, alternate director, or officer of the Company to comply with the Business Corporations Act or the Companys Articles does not invalidate any indemnity to which he or she is entitled under Part 21. The directors may cause the Company to purchase and maintain insurance for the benefit of eligible parties.

The rights, preferences and restrictions attaching to each class of the Companys shares are as follows:

Common Shares

The authorized share structure consists of unlimited common shares without nominal or par value, and 100,000,000 preferred shares without nominal or par value. All the shares of common stock of the Company are of the same class and, once issued, rank equally as to dividends, voting powers, and participation in assets.  Holders of common stock are entitled to one vote for each share held of record on all matters to be acted upon by the shareholders.  Holders of common stock are entitled to receive such dividends as may be declared from time to time by the Board of Directors, in its discretion, out of funds legally available therefore.

Upon liquidation, dissolution or winding up of the Company, holders of common stock are entitled to receive pro rata the assets of Company, if any, remaining after payments of all debts and liabilities and the satisfaction of preferred shareholders, if any.  No shares have been issued subject to call or assessment.  There are no pre-emptive or conversion rights and no provisions for redemption or purchase for cancellation, surrender, or sinking or purchase funds.

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Under Part 9 and subject to the New Act, the Company may alter its authorized share structure by special resolution. These special resolutions may:

(1)

create one or more classes or series of shares or, if none of the shares of a series of a class or series of shares are allotted or issued, eliminate that class or series of shares;

(2)

increase, reduce or eliminate the maximum number of shares that the Company is authorized to issue out of any class or series of shares or establish a maximum number of shares that the company is authorized to issue out of any class or series of shares for which no maximum is established;

(3)

subdivide or consolidate all or any of its unissued, or fully paid issued, shares;

(4)

if the Company is authorized to issue shares of a class or shares with par value;

(a)

decrease the par value of those shares; or

(b)

if none of the shares of that class of shares are allotted or issued, increase the par value of those shares;

(5)

change all or any of its unissued, or fully paid issued, shares with par value into shares without par value or any of its unissued shares without par value into shares with par value;

(6)

alter the identifying name of any of its shares; or

(7)

otherwise alter its share or authorized share structure when required or permitted to do so by the New Act.

Subject to Part 9.2 and the New Act, the Company may by special resolution:

(1)

create special rights or restrictions for, and attach those special rights or restrictions to, the shares of any class or series of shares, whether or not any or all of those shares have been issued; or

(2)

vary or delete any special rights or restrictions attached to the shares of any class or series of shares, whether or not any or all of those shares have been issued.

An annual general meeting shall be held once every calendar year at such time (not being more than 15 months after holding the last preceding annual meeting) and place as may be determined by the Directors. The Directors may, as they see fit, to convene an extraordinary general meeting. An extraordinary general meeting, if requisitioned in accordance with the New Act, shall be convened by the Directors or, if not convened by the Directors, may be convened by the requisitionists as provided in the New Act.

There are no limitations upon the rights to own securities.

There are no provisions that would have the effect of delaying, deferring, or preventing a change in control of the Company. However, the Company has adopted a Shareholders Rights Plan dated September 1, 2006. A copy of the Plan was included in the Companys Management Information Circular for the Annual and Special Meeting of Shareholders held on September 29, 2006, and which was filed as an exhibit to the Companys 20-F Registration Statement.

There is no special ownership threshold above which an ownership position must be disclosed. However, any ownership level above 10% must be disclosed to the TSX Venture Exchange and the British Columbia Securities Commission.

A copy of the Companys revised articles were filed as an exhibit to the Companys Form 20-F Registration Statement.

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Item 10.C

Material Contracts

1.

Asumura Project

Under an agreement dated February 18, 2005 between the Company and GTE Ventures Limited (GTE) the Company can earn a 100% interest (subject to a 3.5% NSR) in the Asumura property located in Ghana by completing US$1,000,000 in exploration work (US$80,000 required in year 1) by July 31, 2007; deliver cash payments totaling US$100,000 by October 8, 2007; and issue common shares equivalent to US$100,000 in value over a period of 3 years. Once the above conditions have been met, the Company will have a 100% interest in the project, subject to a 3.5% NSR. The Company may purchase 50% of the NSR (leaving a 1.75% NSR) for the payment of US$2,000,000. The Company also issued Hunter Dickinson Group 11,270 common shares as a finders fee.

The Company has met all the above commitments and now has an undivided 100% private interest in the Asumura property subject to a 3.5% NSR royalty, 50% of which may be purchased for US$2,000,000. If the property is converted to a Mining License, it may become subject to a 3-6% NSR (3% is the standard amount) and 10% ownership by the Ghanaian government.

During the year ended March 31, 2008, the Company acquired an option to purchase the remaining 50% of the GTE NSR royalty for an additional US$4,000,000.

The Company entered into an option agreement dated March 27, 2008 with Mt. Olives Goldfields, Ltd. (Mt. Olives) to earn a 100% ownership of the Mt. Olives Reconnaissance Concession located in Ghana. Under the option agreement, the Company is required to pay US$70,000 upon signing of the agreement and US$300,000 over a four year period. In addition, the Company will pay US$80,000 when the full interest is earned and title to the property is transferred in the Companys name. The Company must expend US$500,000 in work commitments over a four year period. The Company also has the right to accelerate both cash and work expenditures to earn a full interest in the property at any time.

2.

Esaase Project

Under an agreement dated May 9, 2006 between the Company and Sammetro Co. Ltd (Sammetro), the Company can earn a 100% interest (subject to the Ghanian Government retaining a 10% underlying interest and 3% NSR and a 0.5% NSR to the Liquidation Committee) in the Esaase Project located in Ghana. To earn its interest, the Company must pay US$540,000, issue 780,000 common shares, and spend US$2,250,000 in exploration on the project, all over a 4 year period, to both Sammetro and to the Esaase Liquidating Committee (the Committee) under the following schedule:

(a)

Payment of US$100,000 by May 17, 2006;

(b)

Payment of US$100,000 by June 30, 2006;

(c)

Payment of US$40,000 on the first anniversary;

(d)

Payment of US$300,000 to the Committee by December 2007;

(e)

Issuance of 780,000 common shares to Sammetro over a four year period;

(f)

expend US$2,250,000 on exploration over a four year period.

50



In addition, the Company is required to pay Sammetro US$50,000 on the fourth anniversary and every anniversary thereafter until production. Upon production, the Company is required to pay US$100,000 to Sammetro and US$200,000 to the Committee. A finders fee equal to 10% of the consideration paid to Sammetro was also due.

In June 2007, the Company announced that it had successfully renegotiated the Esaase purchase agreement. In addition to the required payments and share issuances made under the original agreement, the Company paid US$850,000 to an underlying creditor of Sametro and has issued an additional 40,000 common shares to Sametro in exchange for full private ownership of the Esaase Lease. The completion of this transaction now gives the Company sole possession of the lease, which has been signed by the Ghanaian Minister of Lands, Forests, and Mines. The Ghanaian government retains a standard 10% carried interest and 3% NSR and the Committee retains a 0.5% NSR

During the year ended March 31, 2008, the Company purchased 100% private ownership of the Jeni Concession mining lease and exploration rights. The Jeni Concession lies directly to the southwest and contiguous to the Esaase Gold property. In consideration for the acquisition of the mining lease, Keegan paid US$50,000 to the Bonte Liquidation Committee and US$50,000 to the Minerals Commission of Ghana for the title transfer. The Ghanaian government retains a standard 10% carried interest and 3% NSR and the Bonte Liquidation Committee retains a 0.5% NSR.

3.

Dan McCoy Consulting Agreement

Under an agreement between the Company and Dan McCoy dated January 1, 2005, Dan McCoy agrees to serve as a consultant to the Company in the capacity of President and CEO. The consultant shall be paid US$6,667 per month, plus benefits, and the agreement may be terminated by either party of four weeks written notice. Effective November 1, 2006, these consulting fees were increased to US$7,000 per month.  Effective November 1, 2007, the fee was increased to US$12,000 per month.

4.

Tony Ricci Consulting Agreement

Under an agreement between the Company and Tony Ricci dated December 9, 2005, Tony Ricci agrees to serve as a consultant to the Company in the capacity of Chief Financial Officer. The consultants position is not full-time, and shall be paid on an hourly basis for services rendered. The agreement may be terminated by either party on two weeks notice.

5.

Michael Bebek Consulting Agreement

Under an agreement between the Company and Michael Bebek dated December 9, 2005, Michael Bebek agrees to serve as a consultant to the Company in the capacity of Corporate Secretary. The consultants position is full-time and shall be paid on a daily basis. The agreement may be terminated by either party on two weeks notice.

6.

Black Velvet Project

Under an agreement dated December 7, 2005 between the Company and Gerald Baughman and Fabiola Baughman, the Company could earn a 100% interest in the Black Velvet project located in Pershing County, Nevada. To earn a 100% interest, the Company must deliver cash payments totaling US$150,000 and 150,000 common shares over four years under the following schedule:





51





|Cash Payment | Common Share Issuance | Date Due                       
|------------ | --------------------- | -------------------------------
|             |                       |                                
|US$2,500     | -                     | Upon Execution of the Agreement
|             | -                     | 10,000                         
|             | -                     | 20,000                         
|             | US$27,500             | -                              
|             | US$30,000             | 30,000                         
|             | US$40,000             | 40,000                         
|             | US$50,000             | 50,000                         

During the year ended March 31, 2007, the Company decided not to further pursue the option agreement on the property and wrote down its entire capitalized acquisition and deferred exploration costs of $55,367.

7.

Regent Project

Under an agreement dated March 4, 2005 between the Company and Jerry Baughman and Fabiola Baughman, the Company can earn a 100% interest (subject to a 2.5% NSR) in the Regent Project located in Mineral County, Nevada by completing US$3,000,000 in exploration work (US$250,000 in year 1); deliver cash payments totaling US$305,000 ($US80,000 in year 1); and issuing a total of 500,000 common shares (150,000 in year 1), all over a period of six years. A 2.5% NSR will remain on the property, 60% of which may be purchased by the Company (leaving a 1% NSR) for the payment of US$3,000,000. The Company also issued 35,890 common shares to Hunter Dickinson Group as a finders fee.

During the year ended March 31, 2007, the Company decided not to further pursue the option agreement on the property and wrote down its entire capitalized acquisition and deferred exploration costs of $729,327.

Copies of all the material contracts discussed above have been filed as exhibits to the Companys Form 20-F Registration Statement.

Item 10.D

Exchange Controls

There is no law or governmental decree or regulation in Canada that restricts the export or import of capital, or affects the remittance of dividends, interest or other payments to a non-resident holder of common shares of the Company, other than withholding tax requirements. See Taxation.

There is no limitation imposed by Canadian law or by the charter or other constituent documents of the Company on the right of a non-resident to hold or vote common shares of the Company, other than as provided in the Investment Canada Act (Canada) (the Investment Act).

The following discussion summarizes the principal features of the Investment Act for a non-resident who proposes to acquire common shares of the Company. It is general only, it is not a substitute for independent legal advice from an investors own advisor, and it does not anticipate statutory or regulatory amendments.

The Investment Act is a federal statute of broad application regulating the establishment and acquisition of Canadian businesses by non-Canadians, including individuals, governments or agencies thereof, corporations, partnerships, trusts or joint ventures (each an entity). Investments by non-Canadians to acquire control over existing Canadian businesses or to establish new ones are either reviewable or notifiable under the Investment Act. If an investment by a non-Canadian to acquire control over an existing Canadian business is reviewable under the Investment Act, the Investment Act prohibits implementation of the investment unless after review the Director of Investments, who is appointed by the Minster of Industry, is satisfied that the investment is likely to be of net benefit to Canada.

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A non-Canadian would acquire control of the Company for the purposes of the Investment Act through the acquisition of common shares if the non-Canadian acquired a majority of the common shares of the Company. Further, the acquisition of less than a majority but one third or more of the common shares of the Company would be presumed to be an acquisition of control of the Company unless it could be established that, on the acquisition, the Company was not controlled in fact by the acquirer through the ownership of common shares.

For a direct acquisition that would result in an acquisition of control of the Company, subject to the exception for WTO-investors that are controlled by persons who are resident in World Trade Organization (WTO) member nations, a proposed investment would be reviewable where the value of the acquired assets is CAD $5 million or more, or if an order for review was made by the federal cabinet on the grounds that the investment related to Canadas cultural heritage or national identity, regardless of the value of the assets of the Company.

For a proposed indirect acquisition that would result in an acquisition of control of the Company through the acquisition of a non-Canadian parent entity, the investment would be reviewable where (a) the value of the Canadian assets acquired in the transaction is CAD $50 million or more, or (b) the value of the Canadian assets is greater than 50% of the value of all of the assets acquired in the transaction and the value of the Canadian assets is CAD $5 million or more.

In the case of a direct acquisition by or from a WTO investor, the threshold is significantly higher, and is adjusted for inflation each year.  The 2008 threshold is CAD$295 million.  Other than the exception noted below, an indirect acquisition involving a WTO investor is not reviewable under the Investment Act.

The higher WTO threshold for direct investments and the exemption for indirect investments do not apply where the relevant Canadian business is carrying on the following businesses that have been deemed to be sensitive: (i) the production of uranium and the ownership of an interest in a producing uranium property in Canada; (ii) the provision of any financial service; (iii) the provision of any transportation service; or (iv) a cultural business.

Certain transactions relating to common shares of the Company are exempt from the Investment Act, including

(a)

acquisition of common shares of the Company by a person in the ordinary course of that persons business as a trader or dealer in securities,

(b)

acquisition of control of the Company in connection with the realization of security granted for a loan or other financial assistance and not for a purpose related to the provisions on the Investment Act, and

(c)

acquisition of control of the Company by reason of an amalgamation, merger, consolidation or corporate reorganization following which the ultimate direct or indirect control in fact of the Company, through the ownership of common shares, remained unchanged.



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Item 10.E

Taxation

CANADIAN INCOME TAX CONSEQUENCES

The following summarizes the principal Canadian federal income tax considerations generally applicable to the holding and disposition of Common Shares of the Company by a holder (a) who, for the purposes of the Income Tax Act (Canada) the (Tax Act), is not resident in Canada, deals at arms length with the Company, holds the Common Shares as capital property and does not use or hold the Common Shares in the course of carrying on, or otherwise in connection with, a business in Canada, and (b) who, for the purposes of the Canada-United States Income Tax Convention (the Treaty), is a resident of the United States, has never been a resident of Canada, has not held or used (and does not hold or use) Common Shares in connection with a permanent establishment or fixed base in Canada, and who qualifies for the full benefits of the Treaty.  Holders who meet all such criteria in clauses (a) and (b) are referred to herein as a U.S. Holder or U.S. Holders, and this summary only addresses such U.S. Holders.  The summary does not deal with special situations, such as particular circumstances of traders or dealers, limited liability companies, tax-exempt entities, insurers, financial institutions (including those to which the mark-to-market provisions of the Tax Act apply), or otherwise.

This summary is based on the current provisions of the Tax Act, the regulations thereunder, and the Treaty, all proposed amendments thereto publicly announced by the Minister of Finance (Canada) to the date hereof, and our understanding of the current administrative practice of the Canada Revenue Agency.  It has been assumed that all currently proposed amendments to the Tax Act, regulations and Treaty will be enacted or passed as proposed and that there will be no other relevant change in any governing law, the Treaty or administrative policy, although no assurance can be given in these respects.  This summary does not take into account provincial, U.S., state or other foreign income tax considerations.

This summary is not exhaustive of all possible Canadian income tax consequences.  It is not intended as legal or tax advice to any particular U.S. Holder and should not be so construed.  The tax consequences to a U.S. Holder will depend on that U.S. Holders particular circumstances.  Accordingly, all U.S. Holders or prospective U.S. Holders should consult their own tax advisors with respect to the tax consequences applicable to them having regard to their own particular circumstances.  The discussion below is qualified accordingly.

Dividends

Dividends paid or deemed to be paid or credited by the Company to a U.S. Holder are subject to Canadian withholding tax.  Under the Treaty, the rate of withholding tax on dividends paid to a U.S. Holder is generally limited to 15% of the gross dividend (or 5% in the case of corporate shareholders owning at least 10% of the Companys voting shares).  The Company will be required to withhold the applicable tax from any dividend and remit the withheld amount to the Canadian tax authorities.

Disposition

A U.S. Holder is not subject to tax under the Tax Act in respect of a capital gain realized on the disposition of a Common Share in the open market unless the share is taxable Canadian property to the holder thereof, and even then only if the U.S. Holder is not entitled to relief under the Treaty.

A Common Share will be taxable Canadian property to a U.S. Holder if, at any time during the 60 month period ending at the time of disposition, the U.S. Holder or persons with whom the U.S. Holder did not deal at arms length (or the U.S. Holder together with such persons) owned 25% or more of the issued shares of any class or series of the Company.



54



A U.S. Holder holding Common Shares as taxable Canadian property should consult with the U.S. Holders own tax advisors in advance of any disposition or deemed disposition of Common Shares under the Tax Act in order to determine whether any relief from tax under the Tax Act may be available by virtue of the Treaty.  A U.S. Holder may in general qualify for such relief under the Treaty provided the value of the Common Shares at the relevant time is not derived principally from real property situated in Canada.

ALL PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF PURCHASING THE COMPANYS COMMON SHARES

UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

The following is a discussion of material United States Federal income tax consequences, under the law, generally applicable to a U.S. Holder (as defined below) of common shares of the Company. This discussion does not cover any state, local or foreign tax consequences.

The following discussion is based upon the sections of the Internal Revenue Code of 1986, as amended (the Code), Treasury Regulations, published Internal Revenue Service (IRS) rulings, published administrative positions of the IRS and court decisions that are currently applicable, any or all of which could be materially and adversely changed, possible on a retroactive basis, at any time.  In addition, the discussion does not consider the potential effects, both adverse and beneficial, or recently proposed legislation which, if enacted, could be applied, possibly on a retroactive basis, at any time. The discussion is for general information only and it is not intended to be, nor should it be construed to be, legal or tax advice to any holder or prospective holder of common shares of the Company. Each holder and prospective holder of common shares of the Company is advised to consult their own tax advisors about the federal, state, local, and foreign tax consequences of purchasing, owning and disposing of common shares of the Company applicable to their own particular circumstances.

U.S. Holders

As used herein, a (U.S. Holder) includes a holder of common shares of the Company who is a citizen or resident of the United States, a corporation created or organized in or under the laws of the United States or of any political subdivision thereof, an estate whose income is taxable in the United States irrespective of source or a trust subject to the primary supervision of a court within the United States and control of a United States fiduciary as described in Section 7701(a)(30) of the Code. This summary does not address the tax consequences to, and U.S. Holder does not include, persons subject to special provisions of Federal income tax law, such as tax-exempt organizations, qualified retirement plans, financial institutions, insurance companies, real estate investment trusts, regulated investment companies, broker-dealers, non-resident alien individuals, persons or entities that have a functional currency other than the U.S. dollar, shareholders who hold common shares as part of a straddle, hedging or conversion transaction, and shareholders who acquired their common shares through the exercise of employee stock options or otherwise as compensation for services. This summary is limited to U.S. Holders who own common shares as capital assets. This summary does not address the consequences to a person or entity holding an interest in a shareholder or the consequences to a person of the ownership, exercise or disposition of any options, warrants or other rights to acquire common shares.



55





Distribution on Common Shares of the Company

U.S. Holders receiving dividend distributions (including constructive dividends) with respect to common shares of the Company are required to include in gross income for United States Federal income tax purposes the gross amount of such distributions equal to the U.S. dollar value of such distributions on the date of receipt (based on the exchange rate on such date), to the extent that the Company has current or accumulated earnings and profits, without reduction for any Canadian income tax withheld from such distributions.  Such Canadian tax withheld may be credited, subject to certain limitations, against the U.S. Holders United States Federal Income tax liability or, alternatively, individuals may be deducted in computing the U.S. Holders United States Federal taxable income by those individuals who itemize deductions.  (See more detailed discussion at Foreign Tax Credit below).  To the extent that distributions exceed current or accumulated earnings and profits of the Company, they will be treated first as a return of capital up to the U.S. Holders adjusted basis in the common shares and thereafter as gain from the sale or exchange of the common shares. Dividend income will be taxed at marginal tax rates applicable to ordinary income while preferential tax rates for long-term capital gains are applicable to a U.S. Holder which is an individual, estate or trust.  There are currently no preferential tax rates for long-term capital gains for a U.S. Holder which is a corporation.

In the case of foreign currency received as a dividend that is not converted by the recipient into U.S. dollars on the date of receipt, a U.S. Holder will have a tax basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Generally any gain or loss recognized upon a subsequent sale of other disposition of the foreign currency, including the exchange for U.S. dollars, will be ordinary income or loss.

Dividends paid on the common shares of the Company will not generally be eligible for the dividends received deduction provided to corporations receiving dividends from certain United States corporations.  A U.S. Holder which is a corporation may, under certain circumstances, be entitled to a 70% deduction of the United States source portion of dividends received from the Company (unless the Company qualifies as a foreign personal holding company or a passive foreign investment company, as defined below) if such U.S. Holder owns shares representing at least 10% of the voting power and value of the Company.  The availability of this deduction is subject to several complex limitations which are beyond the scope of this discussion.

Under current Treasury Regulations, dividends paid on the Companys common shares, if any, generally will not be subject to information reporting and generally will not be subject to U.S. backup withholding tax. However, dividends and the proceeds from a sale of the Companys common shares paid in the U.S. through a U.S. or U.S. related paying agent (including a broker) will be subject to U.S. information reporting requirements and may also be subject to the 31% U.S. backup withholding tax, unless the paying agent is furnished with a duly completed and signed Form W-9. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a refund or a credit against the U.S. Holders U.S. federal income tax liability, provided the required information is furnished to the IRS.

Foreign Tax Credit

For individuals whose entire income from sources outside the United States consists of qualified passive income, the total amount of creditable foreign taxes paid or accrued during the taxable year does not exceed $300 ($600 in the case of a joint return) and an election is made under section 904(j), the limitation on credit does not apply.

A U.S. Holder who pays (or has withheld from distributions) Canadian income tax with respect to the ownership of common shares of the Company may be entitled, at the option of the U.S. Holder, to either a deduction or a tax credit for such foreign tax paid or withheld.  Generally, it will be more advantageous to claim a credit because a credit reduces United States Federal income taxes on a dollar-for-dollar basis, while a deduction merely reduces the taxpayers income subject to tax.  This election is made on a year-by-year basis and applies to all foreign income taxes (or taxes in lieu of income tax) paid by (or withheld from) the U.S. Holder during the year.  There are significant and complex limitations which apply to the credit, among which is the general limitation that the credit cannot exceed the proportionate share of the U.S. Holders United States income tax liability that the U.S. Holders foreign source income bears to his/her or its worldwide taxable income in the determination of the application of this limitation. The various items of income and deduction must be classified into foreign and domestic sources. Complex rules govern this classification process.  In addition, this limitation is calculated separately with respect to specific classes of income such as passive income, high withholding tax interest, financial services income, shipping income, and certain other classifications of income. Dividends distributed by the Company will generally constitute passive income or, in the case of certain U.S. Holders, financial services income for these purposes.  The availability of the foreign tax credit and the application of the limitations on the credit are fact specific and management urges holders and prospective holders of common shares of the Company to consult their own tax advisors regarding their individual circumstances.

56



Disposition of Common Shares of the Company

A U.S. Holder will recognize gain or loss upon the sale of common shares of the Company equal to the difference, if any, between (I) the amount of cash plus the fair market value of any property received, and (ii) the shareholders tax basis in the common shares of the Company.  Preferential tax rates apply to long-term capital gains of U.S. Holders, which are individuals, estates or trusts. This gain or loss will be capital gain or loss if the common shares are capital assets in the hands of the U.S. Holder, which will be a short-term or long-term capital gain or loss depending upon the holding period of the U.S. Holder.  Gains and losses are netted and combined according to special rules in arriving at the overall capital gain or loss for a particular tax year.  Deductions for net capital losses are subject to significant limitations.  For U.S. Holders, which are not corporations, any unused portion of such net capital loss may be carried over to be used in later tax years until such net capital loss is thereby exhausted, but individuals may not carry back capital losses. For U.S. Holders, which are corporations (other than corporations subject to Subchapter S of the Code), an unused net capital loss may be carried back three years from the loss year and carried forward five years from the loss year to be offset against capital gains until such net capital loss is thereby exhausted.

Other Considerations

In the following circumstances, the above sections of the discussion may not describe the United States Federal income tax consequences resulting from the holding and disposition of common shares of the Company.

Foreign Personal Holding Company

If at any time during a taxable year more than 50% of the total combined voting power or the total value of the Companys outstanding shares is owned, actually or constructively, by five or fewer individuals who are citizens or residents of the United States and 60% (50% after the first tax year) or more of the Companys gross income for such year was derived from certain passive sources (e.g. from interest income received from its subsidiaries), the Company would be treated as a foreign personal holding company.  In that event, U.S. Holders that hold common shares of the Company would be required to include in gross income for such year their allocable portions of such passive income to the extent the Company does not actually distribute such income.

The Company does not believe that it currently has the status of a foreign personal holding company. However, there can be no assurance that the Company will not be considered a foreign personal holding company for the current or any future taxable year.

Foreign Investment Company

If 50% or more of the combined voting power or total value of the Companys outstanding shares are held, actually or constructively, by citizens or residents of the United States, United States domestic partnerships or corporations, or estates or trusts other than foreign estates or trusts (as defined by the Code Section 7701(a)(31), and the Company is found to be engaged primarily in the business of investing, reinvesting, or trading in securities, commodities, or any interest therein, it is possible that the Company might be treated as a foreign investment company as defined in Section 1246 of the Code, causing all or part of any gain realized by a U.S. Holder selling or exchanging common shares of the Company to be treated as ordinary income rather than capital gains.

Passive Foreign Investment Company

As a foreign corporation with U.S. Holders, the Company could potentially be treated as a passive foreign investment company (PFIC), as defined in Section 1297 of the Code, depending upon the percentage of the Companys income which is passive, or the percentage of the Companys assets which is held for the purpose of producing passive income.



57



Certain United States income tax legislation contains rules governing PFICs, which can have significant tax effects on U.S. shareholders of foreign corporations.  These rules do not apply to non-U.S. shareholders.  Section 1297 (a) of the Code defines a PFIC as a corporation that is not formed in the United States and, for any taxable year, either (I) 75% or more of its gross income is passive income, which includes interest, dividends and certain rents and royalties or (ii) the average percentage, by fair market value (or, if the company is a controlled foreign corporation or makes an election, by adjusted tax basis), of its assets that produce or are held for the production of passive income is 50% or more.  The taxation of a US shareholder who owns stock in a PFIC is extremely complex and is therefore beyond the scope of this discussion.  Management urges US persons to consult with their own tax advisors with regards to the impact of these rules.

Controlled Foreign Corporation

A Controlled Foreign Corporation (CFC) is a foreign corporation more than 50% of whose stock by vote or value is, on any day in the corporations tax year, owned (directly or indirectly) by U.S. Shareholders. If more than 50% of the voting power of all classes of stock entitled to vote is owned, actually or constructively, by citizens or residents of the United States, United States domestic partnerships and corporations or estates or trusts other than foreign estates or trusts, each of whom own actually or constructively 10% or more of the total combined voting power of all classes of stock of the Company could be treated as a controlled foreign corporation under Subpart F of the Code.  This classification would affect many complex results, one of which is the inclusion of certain income of a CFC, which is subject to current U.S. tax. The United States generally taxes United States Shareholders of a CFC currently on their pro rata shares of the Subpart F income of the CFC. Such United States Shareholders are generally treated as having received a current distribution out of the CFCs Subpart F income and are also subject to current U.S. tax on their pro rata shares of the CFCs earnings invested in U.S. property. The foreign tax credit described above may reduce the U.S. tax on these amounts. In addition, under Section 1248 of the Code, gain from the sale or exchange of shares by a U.S. Holder of common shares of the Corporation which is or was a United States Shareholder at any time during the five-year period ending with the sale or exchange is treated as ordinary income to the extent of earnings and profits of the Company (accumulated in corporate tax years beginning after 1962, but only while the shares were held and while the Company was controlled) attributable to the shares sold or exchanged. If a foreign corporation is both a PFIC and a CFC, the foreign corporation generally will not be treated as a PFIC with respect to the United States Shareholders of the CFC. This rule generally will be effective for taxable years of United States Shareholders beginning after 1997 and for taxable years of foreign corporations ending with or within such taxable years of United States Shareholders. The PFIC provisions continue to apply in the case of PFIC that is also a CFC with respect to the U.S. Holders that are less than 10% shareholders. Because of the complexity of Subpart F, a more detailed review of these rules is outside of the scope of this discussion.

The amount of any backup withholding will not constitute additional tax and will be allowed as a credit against the U.S. Holders federal income tax liability.

Filing of Information Returns.  Under a number of circumstances, United States Investor acquiring shares of the Company may be required to file an information return with the Internal Revenue Service Center where they are required to file their tax returns with a duplicate copy to the Internal Revenue Service Center, Philadelphia, PA 19255. In particular, any United States Investor who becomes the owner, directly or indirectly, of 10% or more of the shares of the Company will be required to file such a return. Other filing requirements may apply, and management urges United States Investors to consult their own tax advisors concerning these requirements.

Item 10.F

Dividends and paying Agents

Not applicable

Item 10.G

Statement by Experts

Not applicable.

58



Item 10.H

Document on Display

The documents concerning the Company referred to in this Annual Report may be viewed at Suite 725, 666 Burrard Street, Vancouver, British Columbia, Canada during normal business hours.  Copies of our financial statements and other continuous disclosure documents required under the Securities Act (British Columbia) are available for viewing on the internet at www.SEDAR.com.

ITEM 11.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Keegan is not currently subject to any material market risks.

ITEM 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not Applicable.

PART II

ITEM 13.

DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

Not Applicable.

ITEM 14.

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

Not Applicable.

ITEM 15.

CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company carried out an evaluation of the effectiveness of the design and operation of the Companys disclosure controls and procedures as of March 31, 2008, being the date of our most recently completed fiscal year. Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 (the Exchange Act) is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure.

Based upon that evaluation, our chief executive officer and our chief financial officer concluded that the Companys disclosure controls and procedures were not effective in timely alerting management to material information relating to us required to be included in our periodic SEC filings, due to the deficiencies resulting from changes in internal controls as described below.

Managements Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company.  Management has designed such internal control over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with Canadian GAAP, and reconciled to US GAAP, as applicable.

59



The Companys management, including the Chief Executive Officer and Chief Financial Officer, believe that any disclosure controls and procedures or internal controls over financial reporting, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, they cannot provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been prevented or detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by unauthorized override of the control. The design of any systems of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Accordingly, because of the inherent limitations in a cost effective control system, misstatements due to error or fraud may occur and not be detected.

To evaluate the effectiveness of the Companys internal control over financial reporting for the fiscal year ended March 31, 2008, management has used the Internal Control - Integrated Framework, which is a suitable, recognized control framework established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).  Management, including the chief executive officer and chief financial officer, has assessed the effectiveness of the Companys internal control over financial reporting as at March 31, 2008 and has concluded that such internal control over financial reporting was not effective as of March 31, 2008 due to changes in internal controls as described below.

Changes in Internal Control over Financial Reporting

There have been significant changes in the Companys internal control over financial reporting during the Companys year ended March 31, 2008 that have materially affected the Companys internal controlenvironment.

During managements review and evaluation of the design of its internal controls over financial reporting, management concluded that significant deficiencies existed within the Companys internal control environment as a result of the commencement of operations of Keegan Ghana. These significant deficiencies are as follows:

| |  | the lack of effective controls over the handling of cash disbursements at the Ghana operations;                                                                            
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |  |                                                                                                                                                                            
| |  | the lack of effective segregation of duties where responsibilities for the preparation, entry and approval of accounting transactions at the Companys operations in Ghana;
|  |  |                                                                                                                                                                            
| |  | the lack of standardized, formal policies and procedures around the financial closing and reporting of financial results in Ghana; and                                     
|  |  |                                                                                                                                                                            
| |  | the lack of formal evidence of management oversight and review of financial information in Ghana.                                                                          

To address these issues, management has undertaken a remediation effort including, but are not limited to, the following initiatives: adopting and implementing common policies, procedures and controls, and communicating roles and responsibilities to all personnel involved in the financial reporting function in Canada and Ghana.  These initiatives will require time to train personnel; build internal control knowledge; define user-access rights to the Companys accounting systems; develop and formalize policies and procedures; formalize approval, review and reporting protocols; and enhance the Companys information systems and lines of communications.

Management has established a goal of remediating all material weaknesses in internal control over financial reporting for the fiscal year ended March 31, 2009, although no assurance can be given that this goal will be attained.

60



Attestation Report of the Registered Accounting Firm.

This annual report does not include an attestation report of the Companys registered public accounting firm regarding internal control over financial reporting. Managements report was not subject to attestation by the Companys registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only managements report in this Form 20-F annual report.

ITEM 16A.

AUDIT COMMITTEE FINANCIAL EXPERT

The Company has an audit committee comprised of Mark Osmond, Rob McLeod and Gord Fretwell.  Each member of the audit committee is independent as that term is used in the AMEX listing standards.

The Company has determined that Mark Orsmond is the Companys Audit Committee Financial Expert.

ITEM 16B.

CODE OF ETHICS

The Company has adopted a Code of Ethics for the Companys Officers, Directors, Employees, and Contractors. A copy of the Code is available on the Companys corporate website at www.keeganresources.com/s/ CorporateGovernance.asp.

ITEM 16C.

PRINCIPAL ACCOUNTING FEES AND SERVICES

The Company had paid its auditors the following fees for audit and audit related services during the past two fiscal years ended March 31:

|               | Fiscal 2008        | Fiscal 2007
|-------------- | ------------------ | -----------
|Audit Fees     | $32,793            | $23,650    
|               | Audit Related Fees | ---        
|               | Tax Fees           | 2,475      
|All Other Fees | ---                | ---        
|Totals         | $35,268            | $23,650    

(1)

Audit Fees include fees necessary to perform the annual audit and quarterly reviews of the Corporations consolidated financial statements.  Audit Fees include fees for review of tax provisions and for accounting consultations on matters reflected in the financial statements.  Audit Fees also include audit or other attest services required by legislation or regulation, such as comfort letters, consents, reviews of securities filings and statutory audits.

(2)

Audit-Related Fees include services that are traditionally performed by the auditor.  These audit-related services include employee benefit audits, due diligence assistance, accounting consultations on proposed transactions, internal control reviews and audit or attest services not required by legislation or regulation.

(3)

Tax Fees include fees for all tax services other than those included in Audit Fees and Audit-Related Fees.  This category includes fees for tax compliance, tax planning and tax advice.  Tax planning and tax advice includes assistance with tax audits and appeals, tax advice related to mergers and acquisitions, and requests for rulings or technical advice from tax authorities.

(4)

All Other Fees include all other non-audit services.

Our audit committee has adopted a formal policy on auditor independence requiring it to approve all professional services rendered by our independent auditor prior to the commencement of the specified services.  The audit committee will consider annually and, if appropriate, approve the provision of audit services by our independent auditor and consider and, if appropriate, pre-approve the provision of certain defined audit and non-audit services.  The audit committee also will consider on a case-by-case basis and, if appropriate, approve specific engagements that are not otherwise pre-approved.  Any proposed engagement that does not fit within the definition of a pre-approved service may be presented to the audit committee for consideration at its next regular meeting or, if earlier consideration is required, to the audit committee for action by written consent.

61



ITEM 16D.

EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not Applicable.

ITEM 16E.

PURCHASES OF EQUITY SECURITIES BY KEEGAN/AFFILIATED PURCHASERS

Not Applicable.

PART III

ITEM 17.

FINANCIAL STATEMENTS

The audited consolidated financial statements for the years ended March 31, 2008, 2007 and 2006 of Keegan are included in this Annual Report.

ITEM 18.

FINANCIAL STATEMENTS

Keegan has elected to provide financial statements pursuant to Item 17.



















62





ITEM 19.

EXHIBITS



|Exhibit | Description of Exhibit                                                                                                                                                                                                      
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.1     | Certificate of Incorporation (incorporated by reference from our Registration on Form 20-F filed with the SEC on October 17, 2006)                                                                                          
|1.2     | Certificate of Name Change (incorporated by reference from our Registration on Form 20-F filed with the SEC on October 17, 2006)                                                                                            
|1.3     | Articles of Incorporation (incorporated by reference from our Registration on Form 20-F filed with the SEC on October 17, 2006)                                                                                             
|1.4     | By-Laws (incorporated by reference from our Registration on Form 20-F filed with the SEC on October 17, 2006)                                                                                                               
|1.5     | Notice of Alteration (incorporated by reference from our Registration on Form 20-F filed with the SEC on October 17, 2006)                                                                                                  
|4.1     | Asumura Project  Agreement dated February 18, 2005 between the Company and GTE Ventures Limited (incorporated by reference from our Registration on Form 20-F filed with the SEC on October 17, 2006)                      
|4.2     | Esaase Project  Agreement dated May 9, 2006 between the Company and Sammetro Co. Ltd. (incorporated by reference from our Registration on Form 20-F filed with the SEC on October 17, 2006)                                
|4.3     | Option agreement dated March 27, 2008 with Mt. Olives Goldfields, Ltd.                                                                                                                                                      
|4.4     | Jeni Concession mining lease and exploration rights.                                                                                                                                                                        
|4.5     | Dan McCoy Consulting Agreement  Agreement between the Company and Dan McCoy dated January 1, 2005 (incorporated by reference from our Registration on Form 20-F filed with the SEC on October 17, 2006)                    
|4.6     | Tony Ricci Consulting Agreement  Agreement between the Company and Tony Ricci dated December 9, 2005 (incorporated by reference from our Registration on Form 20-F filed with the SEC on October 17, 2006)                 
|4.7     | Michael Bebek Consulting Agreement  Agreement between the Company and Michael Bebek dated December 9, 2005 (incorporated by reference from our Amended Registration on Form 20-F/A filed with the SEC on December 27, 2006)
|4.8     | Stock Option Plan (incorporated by reference from our Registration on Form 20-F filed with the SEC on October 17, 2006)                                                                                                     
|8.1     | List of Subsidiaries  See Item 4.C.                                                                                                                                                                                        
|12.1    | 302 Certification of Chief Executive Officer                                                                                                                                                                                
|12.2    | 302 Certification of Chief Financial Officer                                                                                                                                                                                
|13.1    | 906 Certification of Chief Executive Officer                                                                                                                                                                                
|13.2    | 906 Certification of Chief Financial Officer                                                                                                                                                                                







63









































KEEGAN RESOURCES INC.

(An Exploration Stage Company)



Consolidated Financial Statements



Years ended March 31, 2008 and 2007





_______________________



















































64







|[keegan20fannual2008003.jpg] | BDO Dunwoody LLP
Chartered Accountants and Advisors | 604  750 West Pender Street
Vancouver, BC, Canada V6C 2T7
Telephone:  (604) 689-0188
Telefax:  (604) 689-9773
|---------------------------- | --------------------------------------------------- | --------------------------------------------------------------------------------------------------------------







REPORT OF INDEPENDENT REGISTERED PUBLIC  ACCOUNTING FIRM



To the Shareholders of Keegan Resources Inc.

(An Exploration Stage Company)



We have audited the accompanying consolidated balance sheets of Keegan Resources Inc. (An Exploration Stage Company) as at March 31, 2008 and 2007 and the consolidated statements of operations and deficit and cash flows for each of the years in the three-year period ended March 31, 2008. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.



We conducted our audits in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.



In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at March 31, 2008 and 2007 and the results of its operations and its cash flows for each of the years in the three-year period ended March 31, 2008 in accordance with Canadian generally accepted accounting principles.





(signed) BDO Dunwoody LLP





|Independent Registered Chartered Accountants | 
|-------------------------------------------- | 
|                                             | 
|Vancouver, Canada                            | 
|June 27, 2008                                | 





















BDO DunwoodyLLP is a Limited Liability Partnership registered in Ontario











65









KEEGAN RESOURCES INC.

(An Exploration Stage Company)



Consolidated Balance Sheets



March 31, 2008 and 2007

Expressed in Canadian Dollars



|                                                         | 2008          | 2007          
|-------------------------------------------------------- | ------------- | --------------
|                                                         |               |               
|Assets                                                   |               |               
|                                                         |               |               
|Current assets:                                          |               |               
|Cash and cash equivalents (note 3)                       | $ 15,241,053  | $ 14,156,515  
|Receivables                                              | 136,150       | 56,993        
|Prepaid expenses and deposits                            | 62,849        | 44,856        
|                                                         | 15,440,052    | 14,258,364    
|                                                         |               |               
|Furniture, equipment and leasehold improvements (note 4) | 124,895       | 37,409        
|                                                         |               |               
|Resource properties (note 5 and schedule)                | 19,104,569    | 7,197,740     
|                                                         | $ 34,669,516  | $ 21,493,513  
|                                                         |               |               
|                                                         |               |               
|Liabilities                                              |               |               
|                                                         |               |               
|Current liabilities:                                     |               |               
|Accounts payable and accrued liabilities (note 7)        | $     376,532 | $      351,702
|                                                         |               |               
|                                                         |               |               
|Shareholders Equity                                     |               |               
|                                                         |               |               
|Share capital (note 6)                                   | 40,489,334    | 25,459,176    
|Contributed surplus (note 6)                             | 6,238,410     | 3,801,353     
|Deficit accumulated in the exploration stage             | (12,434,760)  | (8,118,718)   
|                                                         | 34,292,984    | 21,141,811    
|                                                         |               |               
|                                                         | $ 34,669,516  | $ 21,493,513  



Commitments (note 8)

Subsequent events (note 10)

Approved by the Directors:

__ Dan McCoy___________ Director

__Gord Fretwell__________ Director





SEE ACCOMPANYING NOTES





66









KEEGAN RESOURCES INC.

(An Exploration Stage Company)



Consolidated Statements of Operations and Deficit

Years ended March 31, 2008 and 2007

Expressed in Canadian Dollars



|                                                                 | 2008               | 2007             | 2006            
|---------------------------------------------------------------- | ------------------ | ---------------- | ----------------
|                                                                 |                    |                  |                 
|Expenses:                                                        |                    |                  |                 
|Amortization                                                     | $        22,973    | $         9,503  | $      10,336   
|Bank charges and interest                                        | 25,043             | 20,477           | 2,894           
|Consulting fees, directors fees and wages
and benefits (note 7) | 912,756            | 559,431          | 372,304         
|Office, rent and administration                                  | 372,774            | 270,676          | 99,718          
|Professional fees (note 7)                                       | 159,808            | 188,690          | 119,794         
|Regulatory                                                       | 87,783             | 25,197           | 34,001          
|Stock-based compensation (note 6(d))                             | 1,710,911          | 1,785,810        | 557,202         
|Transfer agent and shareholder information                       | 111,373            | 103,669          | 109,440         
|Travel, promotion and investor relations                         | 766,627            | 677,233          | 492,366         
|                                                                 | 4,170,048          | 3,640,686        | 1,798,055       
|                                                                 |                    |                  |                 
|Other expenses (income)                                          |                    |                  |                 
|Interest and other income                                        | (476,034)          | (97,135)         | (10,779)        
|Write-off of interest in resource properties                     | -                  | 784,694          | 1,198,118       
|Foreign exchange loss                                            | 622,028            | 52,894           | 3,625           
|                                                                 | 145,994            | 740,453          | 1,190,964       
|                                                                 |                    |                  |                 
|Loss and comprehensive loss of the year                          | 4,316,042          | 4,381,139        | 2,989,019       
|                                                                 |                    |                  |                 
|Deficit accumulated in the exploration stage,
beginning of year  | 8,118,718          | 3,737,579        | 748,500         
|                                                                 |                    |                  |                 
|Deficit accumulated in the exploration stage,
end of year        | $  12,434,760      | $  8,118,718     | $  3,737,579    
|                                                                 |                    |                  |                 
|Loss per share - basic and diluted                               | $             0.17 | $           0.28 | $           0.31
|                                                                 |                    |                  |                 
|Weighted average number of shares outstanding                    | 24,605,326         | 15,594,720       | 9,601,522       











SEE ACCOMPANYING NOTES











67















KEEGAN RESOURCES INC.

(An Exploration Stage Company)



Consolidated Statements of Cash Flows

Years ended March 31, 2008 and 2007

Expressed in Canadian Dollars



|                                                                                                 | 2008                  | 2007          | 2006         
|------------------------------------------------------------------------------------------------ | --------------------- | ------------- | -------------
|                                                                                                 |                       |               |              
|Cash provided by (used in):                                                                      |                       |               |              
|                                                                                                 |                       |               |              
|Operations:                                                                                      |                       |               |              
|Loss for the year                                                                                | $    (4,316,042)      | $
(4,381,139) | $
(2,989,019)
|Items not involving cash:                                                                        |                       |               |              
|Amortization                                                                                     | 22,973                | 9,503         | 10,336       
|Stock-based compensation                                                                         | 1,710,911             | 1,785,810     | 557,202      
|Write-off of interest in resource properties                                                     | -                     | 784,694       | 1,198,118    
|Changes in non-cash working capital:                                                             |                       |               |              
|Receivables                                                                                      | (79,157)              | (31,904)      | 4,638        
|Prepaid expenses and deposits                                                                    | (17,993)              | (23,019)      | (13,337)     
|Accounts payable and accrued liabilities                                                         | 296,781               | 91,193        | 211,596      
|                                                                                                 | (2,382,527)           | (1,764,862)   | (1,020,466)  
|                                                                                                 |                       |               |              
|Investing:                                                                                       |                       |               |              
|Purchase of furniture, equipment and leasehold
improvements                                      | (110,459)             | (9,482)       | (1,816)      
|Acquisition of interest in resource properties                                                   | (1,515,725)           | (856,700)     | (180,471)    
|Deferred exploration                                                                             | (9,861,207)           | (4,924,500)   | (1,718,723)  
|                                                                                                 | (11,487,391)          | (5,790,682)   | (1,901,010)  
|                                                                                                 |                       |               |              
|Financing:                                                                                       |                       |               |              
|Shares issued for cash, net of share issue costs                                                 | 14,954,456            | 20,873,250    | 3,085,368    
|                                                                                                 | 14,954,456            | 20,873,250    | 3,085,368    
|                                                                                                 |                       |               |              
|Increase in cash and cash equivalents                                                            | 1,084,538             | 13,317,706    | 163,892      
|                                                                                                 |                       |               |              
|Cash and cash equivalents beginning of year                                                      | 14,156,515            | 838,809       | 674,917      
|                                                                                                 |                       |               |              
|Cash and cash equivalents, end of year                                                           | $   15,241,053        | $
14,156,515  | $
838,809    
|                                                                                                 |                       |               |              
|                                                                                                 |                       |               |              
|Supplemental disclosure of cash flow information:                                                |                       |               |              
|Cash paid for:                                                                                   |                       |               |              
|Interest                                                                                         | $                   - | $
-           | $
-          
|Income taxes                                                                                     | -                     | -             | -            
|Non-cash investing and financing activities:                                                     |                       |               |              
|Shares issued pursuant to resource property
option agreement                                     | 158,360               | 367,592       | 218,736      
|Reclassification of contributed surplus on exercise
of options and brokers warrants (note 6(f)) | 296,181               | 62,825        | 70,869       
|Warrants issued for services:                                                                    |                       |               |              
|Share issue costs                                                                                | 378,839               | 826,405       | 67,385       





SEE ACCOMPANYING NOTES





68













KEEGAN RESOURCES INC.

(An Exploration Stage Company)



Consolidated Schedule of Resource Property Costs

Year ended March 31, 2008

Expressed in Canadian Dollars







|                                     | Ghana       |                
|------------------------------------ | ----------- | ---------------
|                                     | Esaase      | Asumura        
|                                     |             |                
|                                     |             |                
|Balance, March 31, 2007              | $
4,452,189 | $
2,745,551    
|                                     |             |                
|Acquisition costs:                   |             |                
|Cash                                 | 1,144,145   | 371,580        
|Shares                               | 158,360     | -              
|                                     |             |                
|                                     | 1,302,505   | 371,580        
|                                     |             |                
|Deferred exploration costs:          |             |                
|Assays                               | 482,581     | 220,013        
|Consulting (note 7)                  | 421,758     | -              
|Drilling                             | 5,095,204   | 678,144        
|Equipment rental and related costs   | 669,700     | 2,634          
|Field supplies                       | 315,796     | 100,757        
|Geological fees and expenses         | 55,609      | -              
|Office and miscellaneous             | 33,027      | 2,903          
|Property maintenance                 | 62,927      | 13,773         
|Stock-based compensation (Note 6(d)) | 643,488     | -              
|Travel and accommodation             | 435,849     | 202,108        
|Wages and salaries                   | 537,761     | 258,712        
|                                     |             |                
|                                     | 8,753,700   | 1,479,044      
|                                     |             |                
|Balance, March 31, 2008              | $14,508,394 | $     4,596,175











SEE ACCOMPANYING NOTES













69





















KEEGAN RESOURCES INC.

(An Exploration Stage Company)



Consolidated Schedule of Resource Property Costs

Year ended March 31, 2007

Expressed in Canadian Dollars



|                                           | United States           |              |          
|------------------------------------------ | ----------------------- | ------------ | ---------
|                                           | Regent                  | Black Velvet | Ghana    
|                                           |                         |              |          
|Balance, March 31, 2006                    | $
585,989               | $
18,280     | $
844,778
|                                           |                         |              |          
|                                           | Acquisition costs:      |              |          
|Cash                                       | 50,296                  | -            | 806,404  
|Shares                                     | 71,500                  | 29,400       | 266,692  
|                                           |                         |              |          
|                                           | 121,796                 | 29,400       | 1,073,096
|                                           |                         |              |          
|Deferred exploration costs:                |                         |              |          
|Assays                                     | 538                     | -            | 413,076  
|Consulting (note 7)                        | -                       | -            | 392,128  
|Drilling                                   | 111                     | -            | 2,289,144
|Equipment rental                           | -                       | -            | 451,295  
|Field supplies                             | -                       | -            | 400,737  
|Geological fees and expenses               | -                       | -            | 55,109   
|Office and miscellaneous                   | 162                     | -            | 119,945  
|Property maintenance                       | 20,731                  | 7,687        | -        
|Stock-based compensation (Note 6 (d))      | -                       | -            | 384,595  
|Telephone                                  | -                       | -            | 11,488   
|Travel and accommodation                   | -                       | -            | 233,100  
|Wages and salaries                         | -                       | -            | 529,249  
|                                           |                         |              |          
|                                           | 21,542                  | 7,687        | 5,279,866
|                                           |                         |              |          
|Less: write-off of resource property costs | (729,327)               | (55,367)     | -        
|                                           |                         |              |          
|                                           | Balance, March 31, 2007 | $
-          | $
-      









SEE ACCOMPANYING NOTES









70













KEEGAN RESOURCES INC.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements, page 1

Years ended March 31, 2008 and 2007

Expressed in Canadian Dollars





1.

Nature of operations



The Company was incorporated on September 23, 1999 under the laws of British Columbia. The Company is in the exploration stage and its principal business activity is the sourcing and exploration of resource properties. The Company has interest in resource properties located in the Republic of Ghana.



The recoverability of amounts shown for resource properties and related deferred exploration costs is dependent upon the discovery of economically recoverable reserves, continuation of the Company's interest in the underlying resource claims, the ability of the Company to obtain necessary financing to complete their development and upon future profitable production or proceeds from the disposition thereof.



2.

Significant accounting policies



The consolidated financial statements of the Company have been prepared in accordance with Canadian generally accepted accounting principles. The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes.  Actual results could differ from those estimates.  The consolidated financial statements have, in managements opinion, been properly prepared using careful judgment within the framework of the significant accounting policies summarized below.



(a)

Basis of consolidation



The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Quicksilver Ventures (Nevada), Inc. and Keegan Resources Ghana Limited.  All significant intercompany amounts and transactions have been eliminated on consolidation.



(b)

Change in accounting policies



Effective April 1, 2007, the Company adopted the provisions of the following new Canadian Institute of Chartered Accountants (CICA) accounting standards:



i.

Comprehensive Income (Section 1530)



This section describes standards for reporting and disclosing comprehensive income, its components and related changes in equity. Comprehensive income includes net income as well as changes in equity during a period from transactions and events from non-owner sources, such as unrealized gains or losses on available-for-sale financial instruments. Adopting this standard had no impact on the Companys consolidated financial statements as at April 1, 2007 or for the year ended March 31, 2008.





71









KEEGAN RESOURCES INC.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements, page 2

Years ended March 31, 2008 and 2007

Expressed in Canadian Dollars







2.

Significant accounting policies (continued)



(b)

Change in accounting policies (continued)



ii

Financial Instruments  Recognition and Measurement (Section 3855)



This section describes the standards for recognizing and measuring financial assets, financial liabilities and non-financial derivatives. Under the new standard, all financial instruments will be classified as one of the following: held-for-trading, held-to-maturity, loans and receivables, available- for-sale financial assets or other financial liabilities.



•

Held-for-trading financial instruments are measured at fair value. All gains and losses resulting from changes in their fair value are included in net earnings (loss) in the period in which they arise.



•

Held-to-maturity investments, loans and receivables, and other financial liabilities are initially measured at fair value and subsequently measured at amortized cost. Amortization of premiums or discounts and transaction costs are amortized into net earnings (loss), using the effective interest method.



•

Available-for-sale financial assets are measured at fair value, with unrealized gains and losses recorded in other comprehensive income until the asset is realized, at which time they will be recorded in net earnings (loss). Other than temporary impairments on available-for-sale financial assets are recorded in net earnings (loss).



iii

Financial Instruments  Disclosure and Presentation (Section 3861)



CICA Section 3861 sets out standards which address the presentation of financial instruments and non-financial derivates, and identifies the related information that should be disclosed. These standards also revise the requirements for entities to provide accounting policy disclosures, including disclosure of the criteria for designating as held-for-trading those financial assets or liabilities that are not required to be classified as held-for-trading; whether categories of normal purchases and sales of financial assets are accounted for at trade date or settlement date; the accounting policy for transaction costs on financial assets and financial liabilities classified as other than held-for-trading; and provides several new requirements for disclosure about fair value.



The Company has chosen to recognize all transaction costs in operations on all financial instruments that have been designated as other than held for trading in accordance with S3855.57(a).



iv.

Hedging (Section 3865)



CICA Section 3865 specifies the circumstances under which hedge accounting is permissible and how hedge accounting may be performed. The Company currently does not hold any financial instruments designated for hedge accounting.





72











KEEGAN RESOURCES INC.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements, page 3

Years ended March 31, 2008 and 2007

Expressed in Canadian Dollars





2.

Significant accounting policies (continued)



(b)

Change in accounting policies (continued)



v.

Accounting Changes (Section 1506)



Section 1506 revised the standards on changes in accounting policy, estimates or errors to require a change in accounting policy to be applied retrospectively (unless doing so is impracticable or is specified otherwise by an new accounting standard), changes in estimates to be recorded prospectively, and prior period errors to be corrected retrospectively. Voluntary changes in accounting policy are allowed only when they result in financial statements that provide reliable and more relevant information. In addition, these revised standards call for enhanced disclosures about the effects of changes in accounting policies, estimates and errors on the financial statements. The impact of this new standard cannot be determined until such time as the Company makes a change in accounting policy, other than the changes resulting from the implementation of the new CICA Handbook standards discussed in this note.



vi.

Accounting Policy for Transaction Costs, EIC-166:



On June 1, 2007, the Emerging Issues Committee of the CICA issued abstract No. 166, Accounting Policy Choice for Transaction Costs (EIC-166).  This EIC addresses the accounting policy choice of expensing or adding transaction costs related to the acquisition of financial liabilities that are classified as other than held-for-trading to its initial carrying cost measured upon the adoption of CICA Handbook Section 3855, Financial Instruments  Recognition and Measurement (Section 3855).  Specifically, it requires that the same accounting policy choice be applied to all similar financial instruments classified as other than held-for-trading, but permits a different policy choice for financial instruments that are not similar.  The Company has adopted EIC-166 effective for the year ended March 31, 2008. The Company has chosen to recognize all transaction costs in operations on all financial instruments that have been designated as other than held for trading.The adoption of this policy had no material effect on the Companys financial statements.

(c)

Cash and cash equivalents



Cash and cash equivalents consist of cash and redeemable short-term deposits. The Company places its cash with institutions of high-credit worthiness.

(d)

Furniture, equipment and leasehold improvements

Furniture, equipment and leasehold improvements are carried at cost less accumulated amortization. Amortization is determined at rates which will reduce original cost to estimated residual value over the useful life of each asset. The annual rates used to compute amortization are as follows:



| | Asset                   | Basis             | Rate         
| | ----------------------- | ----------------- | -------------
| |                         |                   |              
| | Furniture and equipment | declining balance | 20%          
| | Computers               | declining balance | 30%          
| | Leasehold improvements  | Straight-line     | term of lease



Amortization is recorded at half the annual rate in the year of acquisition.





73









KEEGAN RESOURCES INC.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements, page 4

Years ended March 31, 2008 and 2007

Expressed in Canadian Dollars





2.

Significant accounting policies (continued)

(e)

Resource properties and deferred exploration costs



The Company accounts for resource property costs in accordance with the Canadian Institute of Chartered Accountants Handbook Section 3061, Property, plant and equipment (CICA 3061), and abstract EIC-126, Accounting by Mining Enterprises for Exploration Costs (EIC-126) of the Emerging Issues Committee. CICA 3061 provides for the capitalization of the acquisition and exploration costs of a resource property where such costs are considered to have the characteristics of property, plant and equipment. EIC-126 provides that a mining enterprise is not precluded from considering exploration costs to have the characteristics of property, plant and equipment when it has not established resource reserves objectively and therefore does not have a basis for preparing a projection of the estimated future net cash flow from the property.



The fair value of resource properties acquired in exchange for the issuance of the Companys shares is determined by the trading price of the Companys shares on the date of the shares were issued.



Resource property costs include initial acquisition costs and related option payments, which are recorded when paid. Exploration and development costs are capitalized until properties are brought into production, when costs are amortized on a unit-of-production basis over economically recoverable reserves. Option payments are credited against resource property costs when received. No gain or loss on disposition of a partial interest is recorded until all carrying costs of the interest have been offset by proceeds of sale or option payments received.



CICA 3061 also provides that property, plant and equipment be written down when the long-term expectation is that the net carrying amount will not be recovered. EIC-126 states that a mining enterprise which has not objectively established resource reserves and therefore does not have a basis for preparing a projection of the estimated future cash flow from a property is not obliged to conclude that the capitalized costs have been impaired. However, EIC-126 references certain conditions that should be considered in determining subsequent write-downs, such as changes or abandonment of a work program or poor exploration results, and management reviews such conditions to determine whether a write-down of capitalized costs is required. When the carrying value of a property exceeds its net recoverable amount, provision is made for the impairment in value.



Accounting standards subsequently issued by the CICA dealing with Intangible Assets (CICA 1581 and CICA 3062) include reference to Use rights such as drilling, water, air, mineral, timber cutting, and route authorities as examples of intangible assets. CICA 3062 also states, inter alia, that intangible assets should be amortized over their useful life and tested for impairment. Management has reviewed this potential reporting conflict with the previously issued standards and is of the opinion that it is appropriately accounting for its resource properties as having the characteristics of property, plant and equipment.

(f)

Asset retirement obligations

The fair value of a liability for an asset retirement obligation, such as site reclamation costs, is recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The Company is required to record the estimated present value of future cash flows associated with site reclamation as a liability when the liability is incurred and increase the carrying value of the related assets for that amount. The obligations recognized are statutory, contractual or legal obligations. The liability is accreted over time for changes in the fair value of the liability through charges to accretion, which is included in depletion, amortization and accretion expense.  The costs capitalized to the related assets are amortized in a manner consistent with the depletion and asset retirement obligations. Accordingly, adoption of HB 3110 had no impact on the consolidated financial statements.



74













KEEGAN RESOURCES INC.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements, page 5

Years ended March 31, 2008 and 2007

Expressed in Canadian Dollars





2.

Significant accounting policies (continued)



(g)

Foreign currency translation

The Companys functional currency is the Canadian dollar. Foreign denominated monetary assets and liabilities are translated to their Canadian dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Non-monetary items are translated at exchange rates prevailing when the assets were acquired or the obligations incurred. Foreign currency denominated revenue and expense items are translated at exchange rates prevailing at the transaction date. Exchange gains or losses arising on foreign currency translation were charged to the Statement of Operations during the year.



(h)

Loss per share



The Company uses the Treasury Stock Method to calculate loss per share.  Under this method basic loss per share is based on the weighted average aggregate number of common and non-voting shares outstanding during each period.  The diluted earnings per share assumes that the outstanding stock options and share purchase warrants had been exercised at the beginning of the period.



For the year ended March 31, 2008, 2007 and 2006, common equivalent shares (consisting of shares issuable on exercise of stock options and warrants) totaling 9,347,565, 7,657,035 and 4,648,100, respectively, were not included in the computation of diluted loss per share because the effect was anti-dilutive.

(i)

Stock-based compensation

The Company has a stock-based compensation plan which is described in note 6(d). The Company accounts for all stock-based payments and awards under the fair value based method.

Under the fair value based method, stock-based payments to non-employees are measured at the fair value of the consideration received, or the fair value of the equity instruments issued, or liabilities incurred, whichever is more reliably measurable. The fair value of stock-based payments to non-employees is periodically re-measured until counterparty performance is complete, and any change therein is recognized over the vesting period of the award and in the same manner as if the Company had paid cash instead of paying with or using equity instruments. The cost of stock-based payments to non-employees that are fully vested and non-forfeitable at the grant date is measured and recognized at that date.

Compensation cost attributable to awards to employees is measured at fair value at the grant date and recognized over the vesting period. Compensation cost attributable to awards to employees that call for settlement in cash or other assets is measured at intrinsic value and recognized over the vesting period.  Changes in intrinsic value between the grant date and the measurement date result in a change in the measure of compensation cost.  Compensation cost is generally recognized on a straight-line basis over the vesting period.

(j)

Financial instruments



The Companys financial instruments include cash and cash equivalents, receivables and accounts payable and accrued liabilities. The fair values of these financial instruments approximate their carrying values because of their short term nature. The Company had no held-to-maturity financial assets for the year ended March 31, 2008.



75











KEEGAN RESOURCES INC.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements, page 6

Years ended March 31, 2008 and 2007

Expressed in Canadian Dollars





2.

Significant accounting policies (continued)



(k)

Recently Released Canadian Accounting Standards



There are two new CICA accounting standards that have been issued but not yet adopted by the Company. These two standards will become effective for the Company on April 1, 2008. The Company is currently assessing the impact of these new accounting standards on its consolidated financial statements.

i.

The CICA has issued new accounting standards Section 3862, Financial Instruments  Disclosures and Section 3863, Financial Instruments  Presentation which replace Section 3861 Financial InstrumentsDisclosure and Presentation. The new disclosure standard increases the emphasis on the risks associated with both recognized and unrecognized financial instruments and how those risks are managed. The new presentation standard carries forward the existing presentation requirements.

These new standards are effective for the Company for periods beginning on or after October 1, 2007. The Company is evaluating the impact that the adoption of Section 3862 and Section 3863 will have on its consolidated financial statements.

ii.

Effective April 1, 2008, the Company will adopt new accounting standard Section 1535, Capital Disclosures, which requires companies to disclose their objectives, policies and processes for managing capital. In addition, disclosures are to include whether companies have complied with externally imposed capital requirements and, if not in compliance, the consequences of such non-compliance. The Company is evaluating the impact that the adoption of Section 1535 will have on its consolidated financial statements.

iii.

International Financial Reporting Standards ("IFRS")In 2006, the Canadian Accounting Standards Board ("AcSB") published a new strategic plan that will significantly affect financial reporting requirements for Canadian companies. The AcSB strategic plan outlines the convergence of Canadian GAAP with IFRS over an expected five year transitional period. In February 2008 the AcSB announced that 2011 is the changeover date for publicly-listed companies to use IFRS, replacing Canada's own GAAP. The date is for interim and annual financial statements relating to fiscal years beginning on or after April 1, 2011. The transition date of April 1, 2011 will require the restatement for comparative purposes of amounts reported by the Company for the year ended March 31, 2011. While the Company has begun assessing the adoption of IFRS for fiscal year 2012, the financial reporting impact of the transition to IFRS cannot be reasonably estimated at this time.



3.

Cash and cash equivalents



| |                           |               |                
| | ------------------------- | ------------- | ---------------
| |                           | 2008          | 2007           
| |                           |               |                
| | Cash                      | $  7,241,552  | $    14,156,515
| | Bankers Acceptance Notes | 7,999,501     | -              
| |                           |               |                
| |                           | $  15,241,053 | $   14,156,515 



The Bankers Acceptance Notes mature in May 2008 and bear interest at 3.7% per annum.





76











KEEGAN RESOURCES INC.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements, page 7

Years ended March 31, 2008 and 2007

Expressed in Canadian Dollars





4.

Furniture, equipment and leasehold improvements



| |                         |            | Accumulated  | Net book  
| | ----------------------- | ---------- | ------------ | ----------
| | 2008                    | Cost       | amortization | value     
| |                         |            |              |           
| | Furniture and equipment | $  110,921 | $    27,040  | $   83,881
| | Computers               | 55,927     | 16,242       | 39,685    
| | Leasehold improvements  | 6,570      | 3,833        | 2,737     
| |                         |            |              |           
| |                         | $  173,418 | $   47,115   | $  126,303





| |                         |           | Accumulated  | Net book  
| | ----------------------- | --------- | ------------ | ----------
| | 2007                    | Cost      | amortization | value     
| |                         |           |              |           
| | Furniture and equipment | $  41,901 | $    14,697  | $   27,204
| | Computers               | 14,487    | 8,114        | 6,373     
| | Leasehold improvements  | 6,570     | 2,738        | 3,832     
| |                         |           |              |           
| |                         | $  62,958 | $  25,549    | $  37,409 



5.

Resource properties

Title to resource properties involves certain inherent risks due to the difficulties of determining the validity of certain claims as well as the potential for problems arising from the frequent ambiguous conveyancing history characteristic of many resource properties.  The Company has investigated title to all of its resource properties and, to the best of its knowledge, title to all of its properties are in good standing.  However, this should not be construed as a guarantee to title.  The concessions may be subject to prior claims, agreements or transfer and rights of ownership may be affected by undetected defects.



(a)

Esaase Gold Property

The Company entered into an option agreement dated May 3, 2006 with Sammetro Co. Ltd. (Sammetro) to purchase a 100% interest in the Esaase gold property in southwest Ghana, subject to the underlying 10% interest, 3% net smelter return (NSR) royalty of the Ghanaian government in all mining projects in Ghana, and a 0.5% NSR owed to the Bonte Liquidation Committee. The agreement is subject to the following terms:



i)

Cash payments:



-US$100,000 to the bank from which Sammetro borrowed funds by May 17, 2006 (paid);

-US$100,000 to Sammetro by June 30, 2006, which payment Sammetro will deliver to the Esaase Liquidation Committee (the Committee) (paid);

-US$100,000 to the Committee by December 30, 2006 (paid);

-US$40,000 to Sammetro on May 3, 2007 (obligation renegotiated, see below);

-US$100,000 to the Committee by June 30, 2007(paid);

-US$100,000 to the Committee by December 30, 2007 (paid);

-US$50,000 to Sammetro on May 3, 2010 and every year thereafter until production (obligation renegotiated, see below);

-US$200,000 to the Committee on production (paid in advance); and

-US$100,000 to Sammetro on production (obligation renegotiated, see below).





77









KEEGAN RESOURCES INC.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements, page 8

Years ended March 31, 2008 and 2007

Expressed in Canadian Dollars





5.

Resource properties (continued)



ii)

Issuance of 780,000 common shares of the Company to Sammetro over a three year period:



-40,000 common shares of the Company to Sammetro upon TSX Venture Exchange (Exchange) approval (issued);

-120,000 common shares of the Company to Sammetro on May 3, 2007 (obligation renegotiated, see below);

-240,000 common shares of the Company to Sammetro on May 3, 2008 (obligation renegotiated, see below);

; and

-380,000 common shares of the Company to Sammetro on May 3, 2009 (obligation renegotiated, see below).



iii)

Work exploration expenditures of US$2,250,000 over a three year period:



-$500,000 by May 3, 2007 (incurred);

-$750,000 by May 3, 2008 (obligation renegotiated, see below);

; and

-$1,000,000 by May 3, 2009 (obligation renegotiated, see below);.



The Company entered into a finders fee agreement dated June 5, 2006, whereby the Company paid US$10,000 and issued 4,000 common shares as finders fees with respect to this acquisition.

During the year ended March 31, 2008, after having already issued the cash and share payments as detailed in 5(a) i) and 5(a) ii) and completing the full work expenditure indicated in 5(a) iii), the Company renegotiated the option agreement so that all further cash and share payments as indicated in 5(a) i), 5(a) ii) and 5(a) iii) are no longer owed. In lieu of these payments, the Company paid $850,000 to a creditor of Sammetro and issued 40,000 additional common shares to Sammetro. The Company has been granted the full Esaase Mining Lease by the Minerals Commission and Minister of Mines, Lands and Forestry with no further obligation to any party aside from the NSR and government commitments. During the year, the Company paid US$85,000 and issued 4,000 common shares of the Company as finders fees with respect to the renegotiation of the option agreement.

During the year ended March 31, 2008, the Company purchased 100% private ownership of the Jeni Concession mining lease and exploration rights. The Jeni Concession lies directly to the southwest and contiguous to the Esaase Gold property. In consideration for the acquisition of the mining lease, Keegan paid US$50,000 to the Bonte Liquidation Committee and US$50,000 to the Minerals Commission of Ghana for the title transfer. The Ghanaian government retains a standard 10% carried interest and 3% NSR and the Bonte Liquidation Committee retains a 0.5% NSR.





78















KEEGAN RESOURCES INC.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements, page 9

Years ended March 31, 2008 and 2007

Expressed in Canadian Dollars





5.

Resource properties (continued)

(b)

Asumura Gold Project

The Company entered into an option agreement with GTE Ventures Limited (GTE) dated February 18, 2005 and subsequently amended, whereby the Company may acquire 100% of the Asumura Reconnaissance Concession (Asumura property) located in the Republic of Ghana, West Africa, under the following terms:

i)

payment of US$100,000 to GTE as follows:



-US$10,000 upon signing the agreement (paid); and

-US$30,000 on or before October 8, 2006 (paid through the issuance of 16,775 shares).

-US$60,000 on or before October 8, 2007 (paid through the issuance of 20,087 shares).



ii)

issuance of common shares of the Company with a value of US$100,000 to GTE as follows:



-common shares with a value of US$10,000 upon regulatory approval (issued 13,899 shares);

-common shares with a value of US$30,000 based on the 10 day average closing price prior to issuance on or before October 8, 2006 (issued 16,775 shares); and

-common shares with a value of US$60,000 based on the 10 day average closing price prior to issuance on or before October 8, 2007 (issued 20,088 shares).

iii)

completion of US$1,000,000 of exploration work on the Asumura property as follows:

-US$80,000 on or before July 31, 2005, (incurred);

-an additional US$400,000 on or before July 31, 2006 (incurred); and

-an additional US$520,000 on or before July 31, 2007 (incurred).



The Company has met all the above commitments and now has an undivided 100% private interest in the Asumura property subject to a 3.5% NSR royalty, 50% of which may be purchased for US$2,000,000. If the property is converted to a Mining License, it may become subject to a 3-6% NSR (3% is the standard amount) and 10% ownership by the Ghanaian government. 11,270 shares were issued to Hunter Dickinson Inc. (HDI) as finders fees with respect to the original option agreement.



During the year ended March 31, 2008, the Company acquired an option to purchase the remaining 50% of the GTE NSR royalty for an additional US$4,000,000.



The Company entered into an option agreement dated March 27, 2008 with Mt. Olives Goldfields, Ltd. (Mt. Olives) to earn a 100% ownership of the Mt. Olives Reconnaissance Concession located in Ghana. Under the option agreement, the Company is required to pay US$70,000 upon signing of the agreement and US$300,000 over a four year period. In addition, the Company will pay US$80,000 when the full interest is earned and title to the property is transferred in the Companys name. The Company must expend US$500,000 in work commitments over a four year period. The Company also has the right to accelerate both cash and work expenditures to earn a full interest in the property at any time.





79













KEEGAN RESOURCES INC.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements, page 10

Years ended March 31, 2008 and 2007

Expressed in Canadian Dollars





(c)

Regent Gold Silver Project

Pursuant to an agreement dated March 4, 2005, between the Company and Jerry Baughman and Fabiola Baughman (Optionors), the Company may acquire 100% of the Regent Gold Silver Project (Regent property)  located in Mineral County, Nevada, on the following terms:

i)

payment of US$305,000 as follows:

- US$45,000 upon signing the agreement (paid);

- US$35,000 on June 15, 2005 (paid);

- US$45,000 on June 15, 2006 (paid);

ii)

issuance of a total of 500,000 common shares of the Company to the Optionors as follows:

- 100,000 common shares upon obtaining regulatory approval (issued);

- 50,000 common shares on June 15, 2005 (issued);

- 50,000 common shares on June 15, 2006 (issued);

iii)

completion of US$3,000,000 of exploration work on the Regent property as follows:

- US$250,000 prior to March 4, 2006 (incurred);

After meeting the above commitments, the Company will have an undivided 100% interest in the property subject to a 2.5% NSR royalty, 60% of which may be purchased for US$3,000,000. 35,890 shares were issued to HDI as finders fees with respect to the Regent property.

During the year ended March 31, 2007, the Company decided not to pursue its option agreement on the Regent Gold Silver Project and as a result, $729,327 in acquisition and deferred exploration expenditures were written-off and the Company is no longer obligated to issue shares nor incur further exploration costs on the Regent property as detailed in the terms of the option agreement.

(d)

Black Velvet Gold Project

The Company entered into an option agreement dated December 7, 2005 and subsequently amended, with Gerald Baughman and Fabiola Baughman (the Optionors) whereby the Company may acquire 100% interest in the Black Velvet Gold Project in Pershing County, Nevada.

Under the terms of the agreement, the Company has the option to deliver cash payments of US$150,000 and 150,000 common shares of the Company to the Optionors over a period of four years as follows:

i)

cash payment of US$2,500 upon execution of the agreement (paid);

ii)

issuance of 10,000 common shares upon Exchange approval (issued);

20,000 common shares on July 31, 2006 (issued);



During the year ended March 31, 2007, the Company decided not to pursue its option agreement on the Black Velvet gold project and as a result, $55,367 in acquisition and deferred exploration expenditures were written-off and the Company is no longer obligated to issue shares nor incur further exploration costs on the Black Velvet property as detailed in the terms of the option agreement.



80











KEEGAN RESOURCES INC.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements, page 11

Years ended March 31, 2008 and 2007

Expressed in Canadian Dollars





6.

Share capital



(a)

Authorized



Unlimited common shares without par value; and

100,000,000 preferred shares without par value



(b)

Issued and outstanding common shares



|                                                                              | Number of Shares | Amount       
|----------------------------------------------------------------------------- | ---------------- | -------------
|Balance, March 31, 2005                                                       | 8,010,559        | $   1,674,328
|Issued on acquisition of mineral properties                                   |                  |              
|- at $0.85                                                                    | 72,160           | 61,336       
|- at $0.88                                                                    | 150,000          | 132,000      
|- at $0.72                                                                    | 13,899           | 10,000       
|- at $1.54                                                                    | 10,000           | 15,400       
|Issued for cash:                                                              |                  |              
|Pursuant to a private placement                                               |                  |              
|- at $0.80                                                                    | 3,000,000        | 2,400,000    
|Pursuant to the exercise of warrants                                          |                  |              
|- at $0.85                                                                    | 265,300          | 225,505      
|- at $1.00                                                                    | 520,000          | 520,000      
|Pursuant to the exercise of options                                           |                  |              
|- at $0.92                                                                    | 122,500          | 112,700      
|Share issuance costs                                                          |                  | (240,223)    
|Transferred from contributed surplus for
the exercise of options              | -                | 70,869       
|                                                                              |                  |              
|Balance, March 31, 2006                                                       | 12,164,418       | $  4,981,915 
|Issued on acquisition of resource properties                                  |                  |              
|- at $1.43                                                                    | 90,000           | 128,700      
|- at $1.47                                                                    | 20,000           | 29,400       
|- at $1.65                                                                    | 4,000            | 6,600        
|- at $2.00                                                                    | 33,550           | 67,100       
|- at $3.38                                                                    | 40,175           | 135,792      
|Issued for cash:                                                              |                  |              
|Pursuant to private placements                                                |                  |              
|- at $1.80                                                                    | 2,000,000        | 3,600,000    
|- at $2.75                                                                    | 5,662,500        | 15,571,875   
|Pursuant to the exercise of warrants                                          |                  |              
|- at $0.85                                                                    | 639,100          | 543,235      
|- at $1.00                                                                    | 2,078,750        | 2,078,750    
|- at $2.40                                                                    | 4,000            | 9,600        
|Pursuant to the exercise of options                                           |                  |              
|- $0.92                                                                       | 71,685           | 65,950       
|Share issuance costs                                                          | -                | (1,822,566)  
|Transferred from contributed surplus for
the exercise of options and warrants | -                | 62,825       
|                                                                              |                  |              
|Balance, March 31, 2007                                                       | 22,808,178       | 25,459,176   



81











KEEGAN RESOURCES INC.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements, page 12

Years ended March 31, 2008 and 2007

Expressed in Canadian Dollars





6.

Share capital (continued)



(b)

Issued and outstanding common shares (continued)



|Balance, March 31, 2007                                                       | 22,808,178 | 25,459,176  
|----------------------------------------------------------------------------- | ---------- | ------------
|Issued on acquisition of resource properties                                  |            |             
|- at $3.65                                                                    | 40,000     | 146,000     
|- at $3.09                                                                    | 4,000      | 12,360      
|Issued for cash:                                                              |            |             
|Pursuant to a private placement                                               |            |             
|- at $4.10                                                                    | 3,300,000  | 13,530,000  
|Pursuant to the exercise of warrants                                          |            |             
|- at $1.00                                                                    | 505,250    | 505,250     
|- at $2.40                                                                    | 535,220    | 1,284,528   
|- at $3.25                                                                    | 75,000     | 243,750     
|Pursuant to the exercise of options                                           |            |             
|- $0.92                                                                       | 200,000    | 184,000     
|Share issuance costs                                                          | -          | (1,171,911) 
|Transferred from contributed surplus for
the exercise of options and warrants | -          | 296,181     
|                                                                              |            |             
|Balance, March 31, 2008                                                       | 27,467,648 | $ 40,489,334



During the year ended March 31, 2008, the Company issued 40,000 shares with a fair value of $3.65 per share and 4,000 shares with a fair value of $3.09 per share pursuant to the Esaase property option agreement (note 5(a)). The shares issued on acquisition of resources properties fair value was determined by the trading price of the Companys shares on the date they were issued.



During the year ended March 31, 2008, the Company completed a brokered private placement of 3,300,000 units of the Company at a price of $4.10 per unit for total gross proceeds of $13,530,000, pursuant to a letter of engagement with a syndicate of underwriters. Each unit consisted of one common share and one-half of one transferable common share purchase warrant of the Company. Each whole share purchase warrant shall be exercisable into one common share of the Company at a price of $5.25 per share for a period of 18 months expiring May 27, 2009. These warrants are subject to an acceleration clause, see note 6(e). The underwriters received a cash commission of $676,500 plus 330,000 broker warrants exercisable at a price of $4.25 per broker warrant for a period of 18 months expiring May 27, 2009.



During the year ended March 31, 2008, an aggregate of 1,115,470 common shares were issued for gross proceeds of $2,033,528 on exercise of warrants and brokers warrants. In addition, a reclassification of $180,477 from contributed surplus to share capital was recorded on the exercise of brokers warrants.



During the year ended March 31, 2008, 200,000 common shares were issued for gross proceeds of $184,000 on exercise of options. In addition, a reclassification of $115,704 from contributed surplus to share capital was recorded on the exercise of these options.





82











KEEGAN RESOURCES INC.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements, page 13

Years ended March 31, 2008 and 2007

Expressed in Canadian Dollars





6.

Share capital (continued)



(b)

Issued and outstanding common shares (continued)



During the year ended March 31, 2007, the Company issued 40,000 shares with a fair value of $1.43 per share and 4,000 shares with a fair value of $1.65 per share pursuant to the Esaase property option agreement (note 5(a)), 33,550 shares with a fair value of $2.00 per share and 40,175 shares with a fair value of $3.38 per share pursuant to the Asumura property option agreement (note 5(b)), 50,000 shares with a fair value of $1.43 per share pursuant to the Regent property option agreement (note 5(c)) and 20,000 shares with a fair value of $1.47 per share pursuant to the Black Velvet property option agreement (note 5(d)). These fair value of these shares were determined by the trading price of the Companys shares on the date they were issued.



During the year ended March 31, 2007, the Company completed a non-brokered private placement of 5,662,500 units at $2.75 per unit for gross proceeds of $15,571,875.  Each unit consisted of one common share and one-half of one common share purchase warrant.  Each whole share purchase warrant entitles the holder to acquire one additional common share at an exercise price of $3.25 per common share for a period of two years expiring February 16, 2009.  These warrants are subject to an acceleration clause, see note 6(e). The Company paid cash of $761,063 and issued 452,500 share purchase warrants with the same terms as the private placement, as finders fees.



During the year ended March 31, 2007, the Company completed a non-brokered private placement of 2,000,000 units at $1.80 per unit for gross proceeds of $3,600,000.  Each unit consisted of one common share and one-half of one common share purchase warrant.  Each whole share purchase warrant entitles the holder to acquire one additional common share at an exercise price of $2.40 per common share for a period of eighteen months expiring April 30, 2008. These warrants are subject to an acceleration clause, see note 6(e). The Company paid cash of $185,998 and issued 169,720 share purchase warrants with the same terms as the private placement, as finders fees.



During the year ended March 31, 2007, an aggregate of 2,721,850 common shares were issued for gross proceeds of $2,631,585 on exercise of warrants and brokers warrants. In addition, a reclassification of $21,354 from contributed surplus to share capital was recorded on the exercise of brokers warrants.



During the year ended March 31, 2007, 71,685 common shares were issued for gross proceeds of $65,950 on exercise of options.  In addition, a reclassification of $41,471 from contributed surplus to share capital was recorded on the exercise of these options.



During the year ended March 31, 2006, the Company completed a non-brokered private placement of 3,000,000 units at $0.80 per unit for gross proceeds of $2,400,000.  Each unit consisted of one common share and one-half of one common share purchase warrant.  Each whole share purchase warrant entitles the holder to acquire one additional common share at an exercise price of $1.00 per common share for a period of two years expiring October 13, 2007.  These warrants have since been all exercised. The Company paid cash of $72,387 and issued 104,000 share purchase warrants with the same terms as the private placement, as finders fees.



During the year ended March 31, 2006, 122,500 common shares were issued for gross proceeds of $907,800 on exercise of options.  In addition, a reclassification of $70,869 from contributed surplus to share capital was recorded on the exercise of these options.





83











KEEGAN RESOURCES INC.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements, page 14

Years ended March 31, 2008 and 2007

Expressed in Canadian Dollars





6.

Share capital (continued)



(c)

Shares held in escrow



As at March 31, 2008, nil (2007 - 45,000) common shares of the Company were the subject of an escrow agreement under which the shares may not be transferred, assigned or otherwise dealt with without the consent of the relevant regulatory body having jurisdiction thereon.



(d)

Stock options



The Company maintains a fixed stock option plan that enables it to grant from time to time options to its directors, officers, employees and other service providers. During the year ended March 31, 2007, the Company amended its stock option plan increasing the number of shares reserved for issuance under the plan to 2,774,683. On October 1, 2007, shareholders of the Company approved a further increase in the number of shares reserved for issuance under the plan to 4,663,290. The options vest as to 25% on the date of the grant and 12 1⁄2 % every three months thereafter for a total vesting period of 18 months.



As summary of the status of options granted under the Companys stock option plan for the year March 31, 2008 is presented below:



| |                         | Number
of shares | Weighted average
Exercise price
| | ----------------------- | ---------------- | -------------------------------
| |                         |                  |                                
| | Balance, March 31, 2005 | 1,348,000        | $  0.92                        
| | Granted                 | 280,000          | 1.44                           
| | Exercised               | (122,500)        | 0.92                           
| | Cancelled               | (80,500)         | 0.92                           
| | Balance, March 31, 2006 | 1,425,000        | 1.02                           
| | Granted                 | 1,349,000        | 2.48                           
| | Exercised               | (71,685)         | 0.92                           
| | Balance, March 31, 2007 | 2,072,315        | 1.75                           
| | Granted                 | 1,026,000        | 4.14                           
| | Exercised               | (200,000)        | 0.92                           
| | Balance, March 31, 2008 | 3,528,315        | $  2.49                        



84











KEEGAN RESOURCES INC.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements, page 15

Years ended March 31, 2008 and 2007

Expressed in Canadian Dollars





6.

Share capital (continued)



(d)

Stock options (continued)



The following table summarizes the stock options outstanding and exercisable at March 31, 2008:



| | Exercise price | Number outstanding at
March 31, 2008 | Expiry date       | Number exercisable at
March 31, 2008
| | -------------- | ------------------------------------ | ----------------- | ------------------------------------
| |                |                                      |                   |                                     
| | $0.92          | 873,315                              | February 3, 2010  | 873,315                             
| | $1.16          | 220,000                              | November 22, 2010 | 220,000                             
| | $2,48          | 60,000                               | February 2, 2011  | 60,000                              
| | $2.44          | 1,230,000                            | November 10, 2011 | 1,076,250                           
| | $2.85          | 100,000                              | December 19, 2011 | 87,500                              
| | $3.38          | 19,000                               | March 7, 2012     | 14,250                              
| | $3.60          | 100,000                              | October 17, 2012  | 37,500                              
| | $4.20          | 926,000                              | February 5, 2013  | 231,500                             
| |                | 3,528,315                            |                   | 2,600,315                           



At March 31, 2008, 3,528,315 (2007 - 2,702,315; 2006 - 1,425,000) stock options were outstanding, of which 2,600,315 (2007 - 1,814,315; 2006 - 1,108,500) were exercisable.



At March 31, 2008, the stock options outstanding have a weighted average remaining contractual life of 3.46 years (2007 - 3.61 years).  At March 31, 2008 the stock options exercisable have a weighted average exercise price of $2.61 (2007: $2.01).



During the year ended March 31, 2008, under the fair-value-based method, $1,710,911 (2007 - $1,785,810; 2006 - $557,202) in stock-based compensation expense was recorded in the statements of operations and deficit and $643,488 (2007 - $384,595; 2006 - $Nil) was capitalized to resource properties for stock options granted to directors, employees and consultants of the Company.



The fair value of stock options used to calculate compensation expense has been estimated using the Black-Scholes option valuation model with the following weighted average assumptions:



| |                          | 2008       | 2007       | 2006      
| | ------------------------ | ---------- | ---------- | ----------
| |                          |            |            |           
| | Risk-free interest rate  | 3.18%      | 3.95%      | 3.81%     
| | Expected dividend yield  | 0%         | 0%         | 0%        
| | Stock price volatility   | 89%        | 110%       | 108%      
| | Expected life of options | 4.23 years | 4.10 years | 3.00 years



The weighted average fair value of options granted during the year ended March 31, 2008 is $2.92 (2007 - $2.56) per option.



85













KEEGAN RESOURCES INC.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements, page 16

Years ended March 31, 2008 and 2007

Expressed in Canadian Dollars





6.

Share capital (continued)



(e)

Warrants  Note 10



The following warrants were outstanding at March 31, 2008. Each warrant entitles the holder to purchase one common share of the Company as follows:



| | Number of Shares | Exercise Price | Expiry Date      
| | ---------------- | -------------- | -----------------
| | 630,500 (1)      | $2.40          | April 30, 2008   
| | 3,208,750 (2)    | $3.25          | February 16, 2009
| | 330,000          | $4.25          | May 27, 2009     
| | 1,650,000 (3)    | $5.25          | May 27, 2009     

(1)

(2) These warrants are subject to an acceleration clause whereby after 9 months from issuance of shares, if the shares of the Company trade above $4 for a period of 20 consecutive trading days, the Company will have the option to require the earlier exercise of the warrants within 30 days of formal notice from the Company.

(3) These warrants are subject to an acceleration clause whereby if the shares of the Company trade above $6 for a period of 20 consecutive trading days, the Company will have the option to require the earlier exercise of the warrants within 30 days of formal notice from the Company.



The continuity of share purchase warrants for 2008 is as follows:



| |  | Exercise
 price | Expiry date      | March 31, 
2007 | Issued    | Exercised   | Expired | March 31,
2008
| |  | --------------- | ---------------- | --------------- | --------- | ----------- | ------- | --------------
| |  |                 |                  |                 |           |             |         |               
| |  | $  1.00         | October 13, 2007 | 505,250         | -         | (505,250)   | -       | -             
| |  | $  2.40         | May 16, 2007     | 1,165,720       | -         | (535,220)   | -       | 630,500       
| |  | $  3.25         | Jan 19, 2008     | 3,283,750       | -         | (75,000)    | -       | 3,208,750     
| |  | $  4.25         | May 27, 2009     | -               | 330,000   | -           | -       | 330,000       
| |  | $  5.25         | May 27, 2009     | -               | 1,650,000 | -           | -       | 1,650,000     
| |  |                 |                  | 4,954,720       | 1,980,000 | (1,115,470) | -       | 5,819,250     



The continuity of share purchase warrants for 2007 is as follows:

| |  |                
| |  | ---------------
| |  | Exercise
 price
| |  | $  0.85        
| |  | $  1.00        
| |  | $  2.40        
| |  | $  3.25        
| |  |                





86











KEEGAN RESOURCES INC.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements, page 17

Years ended March 31, 2008 and 2007

Expressed in Canadian Dollars





6.

Share capital (continued)



(e)

Warrants  Note 10



The fair value of broker warrants used to calculate share issuance costs has been estimated using the Black-Scholes option valuation model with the following weighted average assumptions:



| |                          | 2008      | 2007          | 2006   
| | ------------------------ | --------- | ------------- | -------
| |                          |           |               |        
| | Risk-free interest rate  | 3.74%     | 4.04%         | 3.46%  
| | Expected dividend yield  | 0%        | 0%            | 0%     
| | Stock price volatility   | 66.4%     | 65.7%         | 128.25%
| | Expected life of options | 1.5 years | 1.5  2 years | 2 years



The weighted average fair value of broker warrants granted during the year ended March 31, 2008 was $_1.15_ (2007 - $ 1.33; 2006 - $ 0.65) per broker warrant.



(f)

Contributed surplus



| |                                                                       | 2008          | 2007          | 2006       
| | --------------------------------------------------------------------- | ------------- | ------------- | -----------
| |                                                                       |               |               |            
| | Balance, beginning of year                                            | $   3,801,353 | $     867,367 | $   313,649
| | Stock-based compensation                                              | 2,354,399     | 2,170,406     | 557,202    
| | Brokers warrants issued                                              | 378,839       | 826,405       | 67,382     
| | Transferred to share capital for the
exercise of options and warrants | (296,181)     | (62,825)      | (70,869)   
| | Balance, end of year                                                  | $  6,238,410  | $  3,801,353  | $   867,367



(g)

Shareholder rights plan





The directors of the Company approved the adoption of a shareholder rights plan (the Rights Plan).  The objective of the Board of Directors in adopting this Plan is to achieve full and fair value for the Companys shareholders in the event of an unsolicited take-over bid for the Company.



The rights become exercisable only when a person or party acquires or announces its intention to acquire 20% or more of the outstanding shares of the Company without complying with certain provisions of the Rights Plan. Each right would entitle each holder of common shares (other than the acquiring person or party) to purchase additional common shares of the Company at a 50% discount to the market price at the time.





87















KEEGAN RESOURCES INC.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements, page 18

Years ended March 31, 2008 and 2007

Expressed in Canadian Dollars





7.

Related party transactions



Included in professional fees is $24,119 (2007 - $60,508; 2006 - $39,443) paid or accrued for legal fees to a company controlled by a director of the Company and $51,380 (2007 - $51,375; 2006 - $35,895) for accounting fees to a company controlled by an officer of the Company during the year ended March 31, 2008.



Included in consulting fees, wages and benefits is $65,722 (2007 - $50,758; 2006 - $17,005) paid or accrued for consulting fees paid to an officer of the Company during the year ended March 31, 2008.



The Company has entered into a consulting agreement with a director and officer of the Company in the amount of US$7,000 per month plus benefits. The fee was increased to US$12,000 per month effective November 1, 2007. During the year ended March 31, 2008, the Company paid consulting fees and benefits of $183,258 (2007 - $113,758; 2006 - $112,307) under this agreement.



During the year ended March 31, 2008, the Company paid or accrued $125,138 (2007 - $105,036; 2006 - $11,625) for geological fees to a director of the Company. These costs have been included in resource properties.



During the year ended March 31, 2008, the Company paid directors fees of $6,000 (2007 - $nil; 206 - $nil) to certain directors of the Company.



These transactions were measured by the exchange amount, which is the amount agreed upon by the transacting parties.



Included in accounts payable and accrued liabilities at March 31, 2008 is $55,933 (2007 - $97,910) owing to directors of the Company and a company controlled by a director and officer of the Company.



8.

Commitments



The Company is committed to payments regarding agreements to lease its Vancouver office premises as follows:



| | 2009 | 51,548     
| | ---- | -----------
| | 2010 | 12,887     
| |      | $    64,435



The Company also has commitments as described in note 5 and note 10(b) related to resource properties and exploration costs.







88













KEEGAN RESOURCES INC.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements, page 19

Years ended March 31, 2008 and 2007

Expressed in Canadian Dollars





9.

Income taxes



The Company has accumulated foreign resource deductions totaling $19,414,000 and non-capital losses of approximately $6,826,000 in Canada and CDN$1,296,000 in Ghana for income tax purposes, which may be carried forward to reduce taxable income of future years.  The non-capital losses expire as follows:



| |      | Ghana       | Canada      | Total      
| | ---- | ----------- | ----------- | -----------
| |      |             |             |            
| | 2009 | $
-         | $
22,000    | $
22,000   
| | 2010 | -           | 31,000      | 31,000     
| | 2012 | 281,000     | -           | 281,000    
| | 2013 | 1,563,000   | -           | 1,563,000  
| | 2014 | -           | 55,000      | 55,000     
| | 2015 | -           | 370,000     | 370,000    
| | 2026 | -           | 1,098,000   | 1,098,000  
| | 2027 | -           | 1,407,000   | 1,407,000  
| | 2028 | -           | 3,843,000   | 3,843,000  
| |      |             |             |            
| |      | $
1,844,000 | $
6,826,000 | $
8,670,000



A reconciliation of the income tax provision computed at statutory rates to the reported income tax provision is as follows:



| |                                                                | 2008          | 2007          | 2006         
| | -------------------------------------------------------------- | ------------- | ------------- | -------------
| |                                                                |               |               |              
| | Average statutory tax rate                                     | 33.47%        | 34.12%        | 34.12%       
| |                                                                |               |               |              
| | Loss before income taxes                                       | $
(4,316,000) | $
(4,381,000) | $
(2,989,000)
| |                                                                |               |               |              
| | Expected income tax recovery                                   | 1,445,000     | 1,495,000     | 1,020,000    
| | Increase (decrease) in income tax recovery resulting from:     |               |               |              
| | Permanent differences                                          | 32,000        | (678,000)     | (254,000)    
| | Change in statutory rates                                      | (724,000)     | -             | -            
| | Change in the valuation allowance for future income tax assets | (753,000)     | (817,000)     | (766,000)    
| |                                                                |               |               |              
| | Income tax recovery                                            | $
-           | $
-           | $
-          



The significant components of the Companys future income tax assets are as follows:

| |                                                  | 2008        | 2007        | 2006     
| | ------------------------------------------------ | ----------- | ----------- | ---------
| |                                                  |             |             |          
| | Non-capital losses                               | $
2,236,000 | $
1,108,000 | $
541,000
| | Foreign development and exploration expenditures | 332,000     | 435,000     | 168,000  
| | Share issuance costs                             | 478,000     | 556,000     | (45,000)-
| | Capital assets                                   | 8,000       | 9,000       | 5,000    
| |                                                  |             |             |          
| |                                                  | 3,054,000   | 2,108,000   | 669,000  
| | Less: valuation allowance                        | (3,054,000) | (2,108,000) | (669,000)
| |                                                  |             |             |          
| |                                                  | $
-         | $
-         | $
-      



The Company has recorded a valuation allowance against its future income taxes based on the extent to which it is more likely-than-not that sufficient taxable income will not be realized during the carry forward period to utilize all the future tax assets.





89









KEEGAN RESOURCES INC.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements, page 20

Years ended March 31, 2008 and 2007

Expressed in Canadian Dollars





10.

Subsequent events



The following events occurred subsequent to March 31, 2008:



Of the 630,500 share purchase warrants exercisable at $2.40 that were outstanding at March 31, 2008, there were 623,000 exercised for which the  Company issued 623,000 common shares for total proceeds of $1,495,200 and the remaining 7,500 expired unexercised.  The Company issued 150,000 common shares at $3.25 per share pursuant to the exercise of share purchase warrants.  The Company issued 200,000 common shares at $0.92 per share pursuant to the exercise of share purchase options.



11.

Segmented information



Geographic Information

The Company operates in one reportable operating segment, being the exploration of resource properties.



| |                                                 | Canada       | Ghana        | Total       
| | ----------------------------------------------- | ------------ | ------------ | ------------
| |                                                 |              |              |             
| | 2008                                            |              |              |             
| | Current assets                                  | $
13,875,724 | $
1,564,328  | $
15,440,052
| | Furniture, equipment and leasehold
improvements | $
55,817     | $
69,078     | $
124,895   
| | Resource properties                             | -            | 19,104,569   | 19,104,569  
| |                                                 |              |              |             
| |                                                 | $
13,931,541 | $
20,737,975 | $
34,669,516





| |                                                 | Canada       | Ghana       | Total       
| | ----------------------------------------------- | ------------ | ----------- | ------------
| |                                                 |              |             |             
| | 2007                                            |              |             |             
| | Current assets                                  | $
14,034,792 | $
223,572   | $
14,258,364
| | Furniture, equipment and leasehold
improvements | 37,409       | -           | 37,409      
| | Resource properties                             | -            | 7,197,740   | 7,197,740   
| |                                                 |              |             |             
| |                                                 | $
14,072,201 | $
7,421,312 | $
21,493,513





90













KEEGAN RESOURCES INC.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements, page 21

Years ended March 31, 2008 and 2007

Expressed in Canadian Dollars





12.

Financial instruments



(a)

Foreign currency exchange risk:



The Company is exposed to foreign currency fluctuations as many of the Companys expenditures are in U.S. dollars. As at March 31, 2008, the Company had approximately $1,300,000 of assets denominated in US dollars subject to exchange rate fluctuations between the Canadian dollar and the US dollar.



(b)

Credit risk:



Credit risk reflects the risk that the Company may be unable to recover contractual receivables. The Company does not have significant receivables and no one account represents a concentration of credit risk.  The Company employs established credit approval practices to mitigate this risk.



13.

United States generally accepted accounting principles



These consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles (Canadian GAAP).  A description of US GAAP and practices prescribed by the US Securities and Exchange Commission (collectively US GAAP) that result in material measurement differences from Canadian GAAP are as follows:



(a)

Mineral properties and deferred exploration costs



Under Canadian GAAP, costs of mineral property exploration and development expenditures are deferred. Both Canadian and US GAAP require that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  US GAAP requires mineral property exploration and land use costs to be charged to operations as incurred until commercially mineable deposits are determined to exist within a particular property as cash flows cannot be reasonably estimated prior to such determination.  Accordingly, for all periods presented, the Company has expensed all mineral property exploration and land use costs for US GAAP purposes.  The costs remaining for US GAAP purposes, if any, relate to mineral property acquisition costs under which the Company acquired a percentage ownership interest in a mineral property.



For Canadian GAAP, cash flows relating to mineral property exploration and land use costs are reported as investing activities.  For US GAAP, these costs would be characterized as operating activities.



(b)

Stock-based compensation



For US GAAP purposes, the Company accounted for employee stock-based compensation arrangements using the intrinsic value method prescribed in Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees and related interpretations.  Accordingly, since stock options are generally granted with exercise prices that are at or above the quoted market value of the Companys common shares at the date of grant, no compensation expense was recognized.  The Company adopted the fair value based method of accounting for employee stock-based compensation pursuant to Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation (SFAS 123) effective July 1, 2003 using the prospective transition method.





91











KEEGAN RESOURCES INC.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements, page 22

Years ended March 31, 2008 and 2007

Expressed in Canadian Dollars





13.

United States generally accepted accounting principles (continued)



(b)

Stock-based compensation (continued)



Effective July 1, 2005, the Company adopted Statement of Financial Accounting Standard (SFAS 123R) Share Based Payment using the modified prospective method for all employee awards granted, modified or settled after the effective date using the fair value measurement method of this standard.  For unvested employee equity awards as of the effective date, compensation will be recognized based upon the grant date fair value determined under SFAS 123.  Upon adoption of SFAS 123R, there was no cumulative effect adjustment required.  Non-employee awards are accounted for under the fair value method under both Canadian and US GAAP.



There were no significant differences in accounting for stock-based compensation between Canadian GAAP and US GAAP.



(c)

Development stage company



Pursuant to US GAAP, the Company would be subject to the disclosure requirements applicable to a development stage enterprise as the Company is devoting its efforts to establishing commercially viable mineral properties. However, the identification of the Company as such for accounting purposes does not impact the measurement principles applied to these financial statements.



(d)

Income taxes



Under Canadian GAAP, future tax assets and liabilities may be recorded at substantively enacted tax rates.  Under US GAAP, deferred tax assets and liabilities are recorded at enacted tax rates.  There were no significant differences between enacted and substantively enacted tax rates.



Recent accounting pronouncements



Effective January 1, 2007, for US GAAP accounting purposes, the Company has adopted SFAS No. 155, Accounting for Certain Hybrid Financial Instruments  an amendment of FASB Statements No. 133 and No. 140 (SFAS 155). SFAS 155 allows any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, to be carried at fair value in its entirety, with changes in fair value recognized in earnings. In addition, SFAS 155 requires that beneficial interests in securitized financial assets be analyzed to determine whether they are freestanding derivatives or contain an embedded derivative. There in no impact on the Companys March 31, 2008 consolidated financial statements resulting from the adoption of SFAS 155.

Effective April 1, 2007, for US GAAP accounting purposes, the Company has adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109 (FIN 48). FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The provisions of FIN 48 are to be applied to all tax positions upon initial adoption, with the cumulative effect adjustment reported as an adjustment to the opening balance of retained earnings. The Company did not have any unrecognized tax benefits at April 1, 2007. In addition, no adjustments were recognized for uncertain tax benefits during the year. Accordingly, there is no impact on the Companys March 31, 2008 consolidated financial statements resulting from the adoption of FIN 48.

FIN 48 requires that interest expense and penalties related to unrecognized tax benefits be recognized in the Statement of Operations. FIN 48 allows recognized interest and penalties to be classified as either income tax expense or another appropriate expense classification. If the Company recognizes interest expense or penalties on future unrecognized tax benefits, they will be classified as income tax expense.

92













KEEGAN RESOURCES INC.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements, page 23

Years ended March 31, 2008 and 2007

Expressed in Canadian Dollars





13.

United States generally accepted accounting principles (continued)



(e)

Recent accounting pronouncements (continued)

The Company files income tax returns in Canada, the United States and Ghana. Years ranging from 2001 through 2007, as applicable, are subject to examination by the taxing authorities in the respective jurisdictions where returns are filed.

The FASB has issued SFAS No. 157, Fair Value Measurements (SFAS 157). SFAS 157 defines fair value, establishes a framework for measuring fair value under other accounting pronouncements that permit or require measurements, changes the methods used to measure fair value and expands disclosures about fair value measurements. In particular, disclosures are required to provide information on the extent to which fair value is used to measure assets and liabilities; the inputs used to develop measurements; and the effect of certain of the measurements on earnings (or changes in net assets). SFAS 157 is effective for fiscal years beginning after November 15, 2007.  The Company is currently evaluating the potential impact, if any, that the adoption of SFAS 157 will have on its consolidated financial statements.

In March 2008, FASB issued FASB Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities - an amendment of FASB Statement No. 133. This Statement requires enhanced disclosures about an entitys derivative and hedging activities and thereby improves the transparency of financial reporting.

This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. This Statement encourages, but does not require comparative disclosures for earlier periods at initial adoption. The Company is assessing the impact of the new standard.

In December, 2007 FASB issued FASB Statement No. 141 (revised 2007), Business Combinations (FASB 141R).  FASB 141R changes the accounting for the acquisition of a business in fiscal years beginning after December 15, 2008.  When effective, FASB 141R will replace existing FASB 141 in its entirety.  FASB 141R will apply to a broad range of transactions, provides for new measurement and recognition requirements and provides new disclosure requirements for certain elements of an acquisition.  FASB 141R will apply prospectively to business combinations with an acquisition date on or after the first annual reporting period beginning after December 15, 2008.  Both early adoption and retroactive application are prohibited.  The Company is currently evaluating the impact of the provisions of FASB 141R.



93













KEEGAN RESOURCES INC.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements, page 24

Years ended March 31, 2008 and 2007

Expressed in Canadian Dollars



In February 2007, FASB issued FASB Statement No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities". FASB 159 is effective for fiscal years beginning after November 15, 2007. FASB 159 allows entities to choose, at specified election dates, to measure eligible financial assets and liabilities at fair value that are not otherwise required to be measured at fair value. If a company elects the fair value option for an eligible item, changes in that item's fair value in subsequent reporting periods must be recognized in current earnings. FASB 159 also establishes presentation and disclosure requirements designed to draw comparison between entities that elect different measurement attributes for similar assets and liabilities. The Company is currently evaluating the impact of the provisions of FASB 159.

In December 2007, FASB issued FASB statement No. 160 Non-controlling Interests in Consolidated Financial Statements  an amendment of ARB No.51.  This statement establishes accounting and reporting standards for the non-controlling interest in a subsidiary.  The guidance is effective for fiscal years beginning after December 15, 2008. The Company is currently evaluating the impact of the provisions of FASB 160.



(f)

Reconciliation



The effect of the above measurement differences between Canadian GAAP and US GAAP (including practices prescribed by the SEC) on the consolidated balance sheets and statements of loss and deficit and cash flows is summarized as follows:



Reconciliation of losses reported to US GAAP:



| |                                                       |   | 2008         |   | 2007        |   | 2006       
| | ----------------------------------------------------- | - | ------------ | - | ----------- | - | -----------
| |                                                       |   |              |   |             |   |            
| | Net loss as reported in accordance with Canadian GAAP | $ | (4,316,042)  | $ | (4,381,139) | $ | (2,989,019)
| | Adjustments:                                          |   |              |   |             |   |            
| | Mineral property exploration costs (note 13(a))       |   | (10,232,744) |   | (5,279,866) |   | (1,106,195)
| |                                                       |   |              |   |             |   |            
| | Net loss and comprehensive loss under US GAAP         | $ | (14,548,786) | $ | (9,661,005) | $ | (4,095,214)
| |                                                       |   |              |   |             |   |            
| | Net loss per share under US GAAP                      | $ | (0.59)       | $ | (0.62)      | $ | (0.43)     



Reconciliation of total assets, liabilities and shareholders equity to US GAAP:



| |                                                          |   | 2008         |   | 2007       
| | -------------------------------------------------------- | - | ------------ | - | -----------
| |                                                          |   |              |   |            
| | Total assets under Canadian GAAP                         | $ | 34,669,516   | $ | 21,493,513 
| | Adjustments:                                             |   |              |   |            
| | Mineral property exploration costs (note 13(a))          |   | (16,325,347) |   | (6,092,603)
| |                                                          |   |              |   |            
| | Total assets under US GAAP                               | $ | 18,344,169   | $ | 15,400,910 
| |                                                          |   |              |   |            
| | Total liabilities under Canadian and US GAAP             | $ | 376,532      | $ | 351,702    
| |                                                          |   |              |   |            
| | Total shareholders equity under Canadian GAAP           |   | 34,292,984   |   | 21,141,811 
| | Adjustments:                                             |   |              |   |            
| | Mineral property exploration costs (note 13(a))          |   | (16,325,347) |   | (6,092,603)
| | Total shareholders equity under US GAAP                 |   | 17,967,637   |   | 15,049,208 
| |                                                          |   |              |   |            
| | Total liabilities and shareholders equity under US GAAP | $ | 18,344,169   | $ | 15,400,910 





94











KEEGAN RESOURCES INC.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements, page 25

Years ended March 31, 2008 and 2007

Expressed in Canadian Dollars





13.

United States generally accepted accounting principles (continued)



(f)

Reconciliation (continued)



Reconciliation of consolidated statements of cash flows under US GAAP:



| |                                                       |   | 2008         |   | 2007        |   | 2006       
| | ----------------------------------------------------- | - | ------------ | - | ----------- | - | -----------
| |                                                       |   |              |   |             |   |            
| | Cash used in operating activities under Canadian GAAP | $ | (2,382,527)  | $ | (1,764,862) | $ | (1,020,466)
| | Adjustments:                                          |   |              |   |             |   |            
| | Mineral property exploration costs (note 13(a))       |   | (9,861,207)  |   | (4,924,500) |   | (1,718,723)
| |                                                       |   |              |   |             |   |            
| | Cash used in operating activities under US GAAP       | $ | (12,243,734) | $ | (6,689,362) | $ | (2,739,189)





| |                                                       |   | 2008         |   | 2007        |   | 2006       
| | ----------------------------------------------------- | - | ------------ | - | ----------- | - | -----------
| | Cash used in investing activities under Canadian GAAP | $ | (11,487,391) | $ | (5,790,682) | $ | (1,901,010)
| | Adjustments:                                          |   |              |   |             |   |            
| | Mineral property exploration costs (note 13(a))       |   | 9,861,207    |   | 4,924,500   |   | 1,718,723  
| |                                                       |   |              |   |             |   |            
| | Cash used in investing activities under US GAAP       | $ | (1,626,184)  | $ | (866,182)   | $ | (182,287)  











95











SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the Registrant certifies that it meets all of the requirements for filing of Form 20-F and has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.

|Dated: September 30, 2008 | By:   /s/  Daniel T. McCoy
|------------------------- | --------------------------
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