---



CONSOLIDATED FINANCIAL STATEMENTS

Years ended December 31, 2016 and 2015

|TABLE OF CONTENTS                                                           |             
|--------------------------------------------------------------------------- | ------------
|                                                                            |             
|Managements
      Responsibility for Financial Reporting                   | 2           
|                                                                            |             
|Reports
      of the Independent Auditor                                    | 3
      - 4 
|                                                                            |             
|Consolidated
      Statements of Financial Position                         | 5           
|                                                                            |             
|Consolidated
      Statements of Operations and Comprehensive Income (Loss) | 6           
|                                                                            |             
|Consolidated
      Statements of Changes in Equity                          | 7           
|                                                                            |             
|Consolidated
      Statements of Cash Flow                                  | 8           
|                                                                            |             
|Notes
      to the Consolidated Financial Statements                        | 9
      - 41

1

---

MANAGEMENTS RESPONSIBILITY FOR FINANCIAL REPORTING

Managements Report on Financial Statements

The consolidated financial statements of Asanko Gold Inc. have
been prepared by, and are the responsibility of the Companys management. The
consolidated financial statements have been prepared by management on a going
concern basis in accordance with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board (IASB).
When alternative accounting methods exist, management has chosen those it deems
most appropriate in the circumstances. Financial statements are not exact since
they include certain amounts based on estimates and judgements. Management has
determined such amounts on a reasonable basis in order to ensure that the
financial statements are presented fairly, in all material respects.

The Board of Directors is responsible for ensuring management
fulfills its financial reporting responsibilities. The Audit Committee meets
with the Companys management and external auditors to discuss the results of
the audits and to review the consolidated financial statements prior to the
Audit Committees submission to the Board of Directors for approval. The Audit
Committee also reviews the quarterly financial statements and recommends them
for approval to the Board of Directors, reviews with management the Companys
systems of internal control, and reviews the scope of the external auditors
audit and nonaudit work. The Audit Committee is appointed by the Board, and all
of its members are independent directors.

The consolidated financial statements have been audited by KPMG
LLP, Chartered Professional Accountants, in accordance with Canadian generally
accepted auditing standards and standards of the Public Company Accounting
Oversight Board (United States) on behalf of the shareholders.

Managements Report over Internal Controls over Financial
Reporting

Management has developed and maintains systems of internal
accounting and administrative controls in order to provide, on a reasonable
basis, assurance that the financial information is relevant, reliable and
accurate and that the Company's assets are appropriately accounted for and
adequately safeguarded. All internal control systems have inherent limitations,
including the possibility of circumvention and overriding of controls, and
therefore, may not prevent or detect misstatements. Management has assessed the
effectiveness of the Companys internal control over financial reporting based
on the framework in Internal Control  Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). The
effectiveness of the companys internal control over financial reporting as of
December 31, 2016 has been audited by KPMG LLP.





|Peter
      Breese                            |  | Fausto Di Trapani    
|----------------------------------------------- |  | -----------------------
|                                                |  |                        
|Peter Breese                                    |  | Fausto Di Trapani      
|Director, President and Chief Executive Officer |  | Chief Financial Officer

2

---

| | KPMG LLP                           | Telephone | (604) 691-3000
| | ---------------------------------- | --------- | --------------
| | Chartered Professional Accountants | Fax       | (604) 691-3031
| | PO Box 10426 777 Dunsmuir Street   | Internet  | www.kpmg.ca   
| | Vancouver BC V7Y 1K3               |           |               
| | Canada                             |           |               

REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

To the Shareholders and Board of Directors of Asanko Gold Inc.

We have audited the accompanying consolidated statements of
financial position of Asanko Gold Inc. as of December 31, 2016 and 2015 and the
related consolidated statements of operations and comprehensive income (loss),
changes in equity and cash flows for the years then ended. These consolidated
financial statements are the responsibility of Asanko Gold Inc.s management.
Our responsibility is to express an opinion on these consolidated 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). Those standards require that we plan and
perform the audit to obtain reasonable assurance about 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. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the consolidated financial
position of Asanko Gold Inc. as of December 31, 2016 and 2015, and its
consolidated financial performance and its consolidated cash flows for the years
then ended in conformity with International Financial Reporting Standards as
issued by the International Accounting Standards Board.

We also have audited, in accordance with the standards of the
Public Company Accounting Oversight Board (United States), Asanko Gold Inc.s
internal control over financial reporting as of December 31, 2016, based on the
criteria established in Internal Control  Integrated Framework (2013)issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO), and our report dated March 15, 2017 expressed an unqualified
opinion on the effectiveness of Asanko Gold Inc.s internal control over
financial reporting.

//s// KPMG LLPChartered Professional
Accountants

March 15, 2017Vancouver, Canada

KPMG LLP is a Canadian
limited liability partnership and a member firm of the KPMG network of
independentmember firms affiliated with KPMG
International Cooperative (KPMG International), a Swiss entity.KPMG Canada provides services to KPMG LLP.

---

| | KPMG LLP                           | Telephone | (604) 691-3000
| | ---------------------------------- | --------- | --------------
| | Chartered Professional Accountants | Fax       | (604) 691-3031
| | PO Box 10426 777 Dunsmuir Street   | Internet  | www.kpmg.ca   
| | Vancouver BC V7Y 1K3               |           |               
| | Canada                             |           |               

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Shareholders and Board of Directors of Asanko Gold Inc.

We have audited Asanko Gold Inc.s (the Company) internal
control over financial reporting as of December 31, 2016, based on criteria
established inInternal Control  Integrated Framework (2013)issued by
the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The
Companys management is responsible for maintaining effective internal control
over financial reporting and for its assessment of the effectiveness of internal
control over financial reporting, included in the accompanying Managements
Annual Report on Internal Control over Financial Reporting. Our responsibility
is to express an opinion on the Companys internal control over financial
reporting based on our audit.

We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether effective internal control over financial reporting was maintained in
all material respects. Our audit included obtaining an understanding of internal
control over financial reporting, assessing the risk that a material weakness
exists, and testing and evaluating the design and operating effectiveness of
internal control based on the assessed risk. Our audit also included performing
such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion.

A companys internal control over financial reporting is a
process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. A
companys internal control over financial reporting includes those policies and
procedures that (1) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of the
assets of the company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the companys assets that could have a
material effect on the financial statements.

Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting as of December 31,
2016, based on criteria established in Internal Control  Integrated
Framework(2013) issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO).

We also have audited, in accordance with Canadian generally
accepted auditing standards and the standards of the Public Company Accounting
Oversight Board (United States), the consolidated statements of financial
position of the Company and subsidiaries as of December 31, 2016 and 2015, and
the related consolidated statements of operations and comprehensive income
(loss), changes in equity, and cash flows for the years then ended, and our
report dated March 15, 2017 expressed an unqualified opinion on those
consolidated financial statements.

//s// KPMG LLP

Chartered Professional Accountants

Vancouver, Canada March 15, 2017

KPMG LLP is a Canadian
limited liability partnership and a member firm of the KPMG network of
independentmember firms affiliated with KPMG
International Cooperative (KPMG International), a Swiss entity.KPMG Canada provides services to KPMG LLP.

---

|ASANKO GOLD INC.                             
|---------------------------------------------
|CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|DECEMBER 31, 2016 AND 2015                   
|(In thousands of
      United States Dollars)

|                                                 |           |  | December 31, 2016 |   |  | December 31, 2015 |  
|------------------------------------------------ | --------- |  | ----------------- | - |  | ----------------- | -
|                                                 | Note      |  | $                 |   |  | $                 |  
|Assets                                           |           |  |                   |   |  |                   |  
|Current assets                                   |           |  |                   |   |  |                   |  
|Cash and cash equivalents                        |           |  | 59,675            |   |  | 114,800           |  
|Receivables                                      |           |  | 1,468             |   |  | 18                |  
|Inventories                                      | 12        |  | 32,374            |   |  | 1,179             |  
|Prepaid expenses and deposits                    |           |  | 3,320             |   |  | 2,923             |  
|VAT receivable                                   | 13        |  | 22,881            |   |  | -                 |  
|                                                 |           |  | 119,718           |   |  | 118,920           |  
|Non-current assets                               |           |  |                   |   |  |                   |  
|Reclamation deposit                              | 14        |  | 1,750             |   |  | 1,696             |  
|Exploration and evaluation
      assets          | 15        |  | 12,757            |   |  | 12,732            |  
|Mineral properties, plant and equipment          | 15        |  | 528,487           |   |  | 490,821           |  
|                                                 |           |  | 542,994           |   |  | 505,249           |  
|Total assets                                     |           |  | 662,712           |   |  | 624,169           |  
|Liabilities                                      |           |  |                   |   |  |                   |  
|Current liabilities                              |           |  |                   |   |  |                   |  
|Accounts payable and accrued
      liabilities   |           |  | 46,934            |   |  | 34,789            |  
|Foreign currency forward contract liability      | 25 (d)(i) |  | -                 |   |  | 36                |  
|Current portion of long-term debt                | 16        |  | 469               |   |  | 15,214            |  
|                                                 |           |  | 47,403            |   |  | 50,039            |  
|Non-current liabilities                          |           |  |                   |   |  |                   |  
|Long-term debt                                   | 16        |  | 154,503           |   |  | 131,880           |  
|Asset retirement provisions                      | 17        |  | 25,374            |   |  | 18,741            |  
|Deferred income tax liability                    | 11        |  | 19,007            |   |  | 9,100             |  
|                                                 |           |  | 198,884           |   |  | 159,721           |  
|Total
      liabilities                          |           |  | 246,287           |   |  | 209,760           |  
|Shareholders equity                             |           |  |                   |   |  |                   |  
|Share capital                                    | 18        |  | 556,256           |   |  | 540,133           |  
|Equity reserves                                  | 19        |  | 46,613            |   |  | 47,504            |  
|Accumulated
      deficit                        |           |  | (186,444          | ) |  | (173,228          | )
|Total shareholders' equity                       |           |  | 416,425           |   |  | 414,409           |  
|Total
      liabilities and shareholders' equity |           |  | 662,712           |   |  | 624,169           |  
|Commitments and contractual obligations          | 20        |  |                   |   |  |                   |  
|Contingencies                                    | 21        |  |                   |   |  |                   |  

Approved by the Board of Directors on March 15, 2017

|Peter
      Breese |  | Marcel de Groot
|-------------------- |  | -----------------
|Director             |  | Director         

SEE ACCOMPANYING NOTES WHICH FORM AN INTEGRAL PART OF THESE
FINANCIAL STATEMENTS

---

|ASANKO GOLD INC.                                                              
|------------------------------------------------------------------------------
|CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
      INCOME (LOSS)   
|YEARS ENDED DECEMBER 31, 2016 AND 2015                                        
|(In thousands of
      United States Dollars, except dollar per share amounts)

|                                                    |           |  | 2016        |   |  | 2015        |  
|--------------------------------------------------- | --------- |  | ----------- | - |  | ----------- | -
|                                                    | Note      |  | $           |   |  | $           |  
|                                                    |           |  |             |   |  |             |  
|Revenue                                             | 6         |  | 185,167     |   |  | -           |  
|Royalties                                           | 6         |  | (9,258      | ) |  | -           |  
|Net Revenue                                         |           |  | 175,909     |   |  | -           |  
|Cost of sales                                       |           |  |             |   |  |             |  
|Production costs                                    | 7         |  | (88,688     | ) |  | -           |  
|Depreciation and depletion                          | 15        |  | (52,958     | ) |  | -           |  
|Total cost of sales                                 |           |  | (141,646    | ) |  | -           |  
|                                                    |           |  |             |   |  |             |  
|Write-off of deferred stripping asset               | 9         |  | (7,123      | ) |  | -           |  
|Income from mine operations                         |           |  | 27,140      |   |  | -           |  
|Exploration and evaluation expenditures             |           |  | (1,425      | ) |  | (3,515      | )
|General and
      administrative expenses           | 8         |  | (12,538     | ) |  | (7,520      | )
|Income (loss) from operations                       |           |  | 13,177      |   |  | (11,035     | )
|Finance income                                      |           |  | 634         |   |  | 1,015       |  
|Finance expense                                     | 10        |  | (13,849     | ) |  | (524        | )
|Foreign exchange loss                               |           |  | (1,777      | ) |  | (1,645      | )
|                                                    |           |  |             |   |  |             |  
|Gain on
      derivatives                           | 25 (d)(i) |  | 37          |   |  | 899         |  
|Loss before income taxes                            |           |  | (1,778      | ) |  | (11,290     | )
|                                                    |           |  |             |   |  |             |  
|Income tax (expense) recovery                       | 11        |  | (11,438     | ) |  | 2,984       |  
|                                                    |           |  |             |   |  |             |  
|Net loss and comprehensive loss for the period      |           |  | (13,216     | ) |  | (8,306      | )
|Loss per share                                      |           |  |             |   |  |             |  
|Basic and diluted                                   |           |  | ($0.07      | ) |  | ($0.04      | )
|                                                    |           |  |             |   |  |             |  
|Weighted average number of shares
      outstanding |           |  |             |   |  |             |  
|Basic
      and diluted                             |           |  | 198,973,570 |   |  | 194,357,744 |  

SEE ACCOMPANYING NOTES WHICH FORM AN INTEGRAL PART OF THESE
FINANCIAL STATEMENT

---

|ASANKO GOLD INC.                                                                 
|---------------------------------------------------------------------------------
|CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY                                     
|YEAR ENDED DECEMBER 31, 2016 AND 2015                                            
|(In thousands of
      United States Dollars, except for number of common shares)

**Number**
    
    
    **Share**
    
    
    **Equity**
    
    
    **Accumulated**of shares
    
    
    capital
    
    
    reserves
    
    
    **deficit**
    
    
    Total EquityNote
    
    
    
    
    $
    
    
    $
    
    
    $
    
    
    $Balance as at December 31, 2014
    
    
    174,075,607
    
    
    505,469
    
    
    43,032
    
    
    (164,922
    )
    
    383,579Issuance of common shares for:Bought deal financing
    18 (b)
    
    22,770,000
    
    
    34,284
    
    
    -
    
    
    -
    
    
    34,284Exercise of share-based options
    
    
    150,000
    
    
    380
    
    
    (134
    )
    
    -
    
    
    246Share-based payments
    19 (a)
    
    -
    
    
    -
    
    
    3,078
    
    
    -
    
    
    3,078Share-purchase warrants
    
    
    
    
    
    
    
    
    1,528
    
    
    
    
    
    1,528Loss and comprehensive loss for the period
    
    
    -
    
    
    -
    
    
    -
    
    
    (8,306
    )
    
    (8,306
    )Balance as at
      December 31, 2015
    
    
    196,995,607
    
    
    540,133
    
    
    47,504
    
    
    (173,228
    )
    
    414,409Balance as at December 31, 2015
    
    
    196,995,607
    
    
    540,133
    
    
    47,504
    
    
    (173,228
    )
    
    414,409Issuance of common shares for:Asset acquisition
    15
      (e)
    
    2,000,000
    
    
    8,395
    
    
    -
    
    
    -
    
    
    8,395Exercise of share-based
      options
    19 (a)
    
    2,833,600
    
    
    7,728
    
    
    (2,493
    )
    
    -
    
    
    5,235Share-based payments
    19
      (a)
    
    -
    
    
    -
    
    
    1,602
    
    
    -
    
    
    1,602Loss and comprehensive loss for the period
    
    
    -
    
    
    -
    
    
    -
    
    
    (13,216
    )
    
    (13,216
    )Balance as at
      December 31, 2016
    
    
    201,829,207
    
    
    556,256
    
    
    46,613
    
    
    (186,444
    )
    
    416,425


SEE ACCOMPANYING NOTES WHICH FORM AN INTEGRAL PART OF THESE
FINANCIAL STATEMENTS

---

|ASANKO GOLD INC.                             
|---------------------------------------------
|CONSOLIDATED STATEMENTS OF CASH FLOWS        
|YEARS ENDED DECEMBER 31, 2016 AND 2015       
|(In thousands of
      United States Dollars)

|                                                                                                |              |  | 2016     |   |  | 2015     |  
|----------------------------------------------------------------------------------------------- | ------------ |  | -------- | - |  | -------- | -
|                                                                                                | Note         |  | $        |   |  | $        |  
|                                                                                                |              |  |          |   |  |          |  
|Cash provided by (used in):                                                                     |              |  |          |   |  |          |  
|Operating activities:                                                                           |              |  |          |   |  |          |  
|Loss for the period                                                                             |              |  | (13,216  | ) |  | (8,306   | )
|Adjustments for:                                                                                |              |  |          |   |  |          |  
|Depreciation and
      depletion                                                                | 15           |  | 52,977   |   |  | 59       |  
|Write-off of deferred stripping
      asset                                                     |              |  | 7,123    |   |  | -        |  
|Finance expense                                                                                 | 10           |  | 13,849   |   |  | 420      |  
|Gain on derivatives, net                                                                        | 25 (d)(i)    |  | (37      | ) |  | (899     | )
|Deferred income
      tax expense (recovery)                                                    | 11
      (a) |  | 9,907    |   |  | (2,984   | )
|Interest and other income                                                                       |              |  | (634     | ) |  | (1,015   | )
|Share-based
      payments                                                                      | 19
      (a) |  | 983      |   |  | 1,564    |  
|Unrealized foreign exchange loss                                                                |              |  | 2,670    |   |  | 2,860    |  
|Operating cash flow before
      working capital changes                                        |              |  | 73,622   |   |  | (8,301   | )
|Change in non-cash working capital                                                              | 22           |  | (18,660  | ) |  | (2,467   | )
|Cash provided by (used for) operating activities                                                |              |  | 54,962   |   |  | (10,768  | )
|                                                                                                |              |  |          |   |  |          |  
|Investing activities:                                                                           |              |  |          |   |  |          |  
|Expenditures on mineral properties, plant and equipment                                         | 15           |  | (132,355 | ) |  | (219,034 | )
|VAT refund relating to development activities                                                   | 13           |  | 25,979   |   |  | -        |  
|Reclamation bond                                                                                | 14           |  | -        |   |  | (1,696   | )
|Interest received                                                                               |              |  | 435      |   |  | 910      |  
|                                                                                                |              |  | (105,941 | ) |  | (219,820 | )
|                                                                                                |              |  |          |   |  |          |  
|Financing activities:                                                                           |              |  |          |   |  |          |  
|Shares issued
      for cash, net of share issuance costs                                       | 19
      (a) |  | 5,235    |   |  | 34,530   |  
|Interest paid                                                                                   | 16 (a)       |  | (5,859   | ) |  | -        |  
|Long term debt
      proceeds, net of draw down fees and    deferred debt
      financing costs | 16
      (a) |  | -        |   |  | 85,960   |  
|Loan modification fees                                                                          | 16 (a)       |  | (3,275   | ) |  | -        |  
|                                                                                                |              |  | (3,899   | ) |  | 120,490  |  
|                                                                                                |              |  |          |   |  |          |  
|Impact of foreign exchange on cash and cash equivalents                                         |              |  | (247     | ) |  | (3,782   | )
|                                                                                                |              |  |          |   |  |          |  
|Increase (decrease) in cash
      and cash equivalents for the period                           |              |  | (55,125  | ) |  | (113,880 | )
|Cash
      and cash equivalents, beginning of period                                            |              |  | 114,800  |   |  | 228,680  |  
|Cash and cash equivalents, end of period                                                        |              |  | 59,675   |   |  | 114,800  |  
|                                                                                                |              |  |          |   |  |          |  
|Supplemental cash flow
      information                                                        | 22           |  |          |   |  |          |  

SEE ACCOMPANYING NOTES WHICH FORM AN INTEGRAL PART OF THESE
FINANCIAL STATEMENTS

---

|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|1. | Nature of operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Asanko Gold Inc. (Asanko or the Company) was
      incorporated on September 23, 1999 under the laws of British Columbia,
      Canada. The Companys principal project, the Asanko Gold Mine (AGM or
      the Project), which consists of two neighboring gold projects, the
      Obotan Project and the Esaase Project, both located in the Amansie West
      District of the Republic of Ghana (Ghana), West Africa, is being
      developed in three distinct phases. January 2016 saw Phase 1 of the AGM
      produce and pour its first gold and on April 1, 2016, the Company declared
      that the AGM was in commercial production. A definitive feasibility study
      is currently being undertaken with respect to Project 5M and Project 10M
      (formerly described as Phases 2A and 2B, respectively), which together
      form the development of the Esaase deposit and is expected to be released
      in Q2 2017.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | In addition to its principal project, the Company holds a
      portfolio of other Ghanaian gold concessions in various stages of
      exploration.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The parent Company is Asanko Gold Inc., whose head
      office, principal address and registered and records office are located at
      1066 West Hastings Street, Suite 680, Vancouver, British Columbia, V6E
      3X2, Canada.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|2. | Basis of presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

| | (a) | Statement of compliance                                                                                                                                                                                                                                                                                                                                                                                              
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | These consolidated financial statements have been
      prepared using accounting policies in accordance with International
      Financial Reporting Standards (IFRS) as issued by the International
      Accounting Standards Board (IASB) and Interpretations issued by the
      International Financial Reporting Interpretations Committee
    (IFRIC).                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | These consolidated financial statements were authorized
      for issue and approved by the Board of Directors on March 15,
  2017.                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (b) | Basis of presentation and consolidation                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | The financial statements have been prepared on the
      historical cost basis, with the exception of the forward currency contract
      liability (note 25(d)(i)) which is measured at fair value.                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | All amounts are expressed in thousands of United States
      dollars, unless otherwise stated, and the United States dollar is the
      functional currency of the Company and each of its subsidiaries.
      References to C$ are to Canadian dollars. Certain prior period numbers
      have been reclassified in order to conform to current year
      presentation.                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | These consolidated financial statements incorporate the
      financial statements of the Company and its controlled subsidiaries.
      Control exists when the Company has power, directly or indirectly, to
      govern the financial and operating policies of an entity as to obtain
      benefits from its activities. All intercompany amounts and transactions
      have been eliminated on consolidation.

9

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|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|2. | Basis of presentation (continued)                                                                              
|-- | ---------------------------------------------------------------------------------------------------------------
|   |                                                                                                                
|   | The consolidated financial statements include the
      accounts of the Company and the following
subsidiaries:

| | Subsidiary name                                         | Jurisdiction | Ownership
| | ------------------------------------------------------- | ------------ | ---------
| | Asanko Gold Ghana Limited
      (Asanko Ghana)        | Ghana        | 90%      
| | Adansi Gold Company (GH) Limited (Adansi
      Ghana) | Ghana        | 100%     
| | Asanko Gold Exploration Ghana
      Limited             | Ghana        | 100%     
| | Asanko Gold South Africa (PTY) Ltd.                     | South Africa | 100%     
| | Asanko International
      (Barbados) Inc.              | Barbados     | 100%     
| | Asanko Gold (Barbados) Inc.                             | Barbados     | 100%     
| | PMI Gold Corporation                                    | Canada       | 100%     

|   | During the year ended December 31, 2016, the Company
      transferred the assets related to the Obotan project from Adansi Ghana to
      Asanko Ghana in order to have the two neighboring gold projects, Obotan
      and Esaase (which together form the Asanko Gold Mine Project) owned and
      managed by the same Ghanaian subsidiary. The assets transferred include
      the Abirem, Abore and Adubea mining leases and all of the AGM assets. The
      transfer had no impact on the consolidated position or results of the
      Company.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|3. | Significant accounting
policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

| | (a) | Business combinations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | Acquisitions of subsidiaries and businesses are accounted
      for using the purchase method. The cost of the business combination is
      measured as the aggregate of the fair value at the date of acquisition of
      the consideration transferred in exchange for the interest in the
      acquiree. The acquirees identifiable assets, liabilities and contingent
      liabilities that meet the conditions for recognition under IFRS 3 are
      recognized at their fair values at the acquisition date. The acquisition
      date is the date the Company obtains control over the acquiree, which is
      generally the date that consideration is transferred and the Company
      acquires the assets and assumes the liabilities of the acquiree. The
      Company considers all relevant facts and circumstances in determining the
      acquisition date.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | Acquisition-related costs, other than costs to issue
      equity securities, of the acquirer, including investment banking fees,
      legal fees, accounting fees, valuation fees and other professional or
      consulting fees are expensed as incurred. The costs to issue equity
      securities of the Company as consideration for the acquisition are reduced
      from share capital as share issue costs.                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | Goodwill arising on acquisition is recognized as an asset
      and initially measured at cost, being the excess of the cost of the
      business combination over the Companys interest in the net fair value of
      the identifiable assets, liabilities and contingent liabilities
      recognized. If, after reassessment, the Companys interest in the net fair
      value of the acquirees identifiable assets, liabilities and contingent
      liabilities exceeds the cost of the business combination, the excess is
      recognized immediately in the consolidated statement of operations and
      comprehensive income (loss).                                                                                                                                                                                                                               

10

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|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|3. | Significant accounting policies
  (continued)
|-- | ---------------------------------------------

| | (b) | Non-controlling interest                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | Non-controlling interests in the Companys less than
      wholly-owned subsidiaries are classified as a separate component of
      equity. Non-controlling interests are recorded at their proportionate
      share of the fair value of identifiable net assets acquired on initial
      recognition. Subsequent to the acquisition date, adjustments are made to
      the carrying amount of the non-controlling interests for the
      non-controlling interests share of changes to the subsidiarys equity. In
      the event an arrangement (either contractual or statutory) exists between
      the Company and the non-controlling interest whereby losses and all
      commitments are assumed by the parent entity, then net income is allocated
      between the Company and non-controlling interest on the consolidated
      statement of operations and comprehensive income (loss) in accordance with
      the terms of the arrangement.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | Changes in the Companys ownership interest in a
      subsidiary that do not result in a loss of control are recorded as equity
      transactions. The carrying amount of non-controlling interests is adjusted
      to reflect the change in the non-controlling interests relative interest
      in the subsidiary and the difference to the carrying amount of the
      non-controlling interests and the Companys share of proceeds received
      and/or consideration paid is recognized in equity and attributed to the
      shareholders of the Company.                                                                                                                                                                                                                                                                                                                                                                                             

| | (c) | Foreign currency translation                                                                                                                                                                                                                                                                                                                                
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                             
| |     | Transactions in foreign currencies are initially recorded
      at the functional currency rate of exchange at the date of the
      transaction.                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                             
| |     | Monetary assets and liabilities denominated in foreign
      currencies are translated at the functional currency rate of exchange at
      the date of the statement of financial position. Foreign exchange gains
      (losses) are recorded in the consolidated statement of operations and
      comprehensive income (loss) for the period.           
| |     |                                                                                                                                                                                                                                                                                                                                                             
| |     | Non-monetary items that are measured in terms of
      historical cost in a foreign currency are translated using the exchange
      rates as at the dates of the initial transactions. Non-monetary items
      measured at fair value in a foreign currency are translated using the
      exchange rates at the date when the fair value is
  determined.

| | (d) | Cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | Cash and cash equivalents consist of cash on hand and
      short-term investments with original maturity dates of less than ninety
      days or that are fully redeemable without penalty or loss of
    interest.                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (e) | Inventories                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | Gold on hand, gold in process and stockpiled ore
      inventories are recorded at the lower of weighted average production cost
      and net realizable value. Production costs include the cost of raw
      materials, direct labour, mine-site overhead expenses and applicable
      depreciation and depletion. Net realizable value is calculated as the
      estimated price at the time of sale based on prevailing and long-term
      metal prices less estimated future costs to convert the inventories from
      their respective states into saleable form less estimated costs to
      sell.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | Production costs are included in work-in-process
      inventory based on current costs incurred up to the point of dore
      production. The costs of finished goods represents the costs of
      work-in-process inventories plus applicable treatment costs. The
    costs of inventories sold during the period are presented as
      cost of sales in the statement of operations and comprehensive income
  (loss) for the period.                                                                                                                                                                     

11

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|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|3. | Significant accounting policies
  (continued)
|-- | ---------------------------------------------

| |     | Additions to the cost of ore stockpiles are based on the
      related current cost of production for the period, while reductions in the
      cost of ore stockpiles are based on the weighted average cost per tonne of
      ore in the stockpile. Stockpiles are segregated between current and
      non-current inventories in the consolidated statement of financial
      position based on the planned period of usage.                                                                                                                                                                                                                                                                                      
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     | Supplies and spare parts are valued at the lower of
      weighted average cost and net realizable value. Replacement costs of
      materials and spare parts are generally used as the best estimate of net
      realizable value. Provisions are recorded to reduce the carrying amount of
      materials and spare parts inventory to net realizable value to reflect
      current intentions for the use of redundant or slow-moving items.
      Provisions for redundant and slow-moving items are made by reference to
      specific items of inventory. The Company reverses write-downs where there
      is a subsequent increase in net realizable value and where the inventory
      is still on hand.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (f) | Mineral properties, plant and
equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

(i)        Mineral properties

Recognition

Capitalized costs of mining properties
include the following:

| | - | Costs assigned to mining properties acquired in business
      combinations;                                                                                  
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| | - | Expenditures incurred to develop mineral properties
      including pre-production stripping costs;                                                           
| | - | Stripping costs in the production phase of a mine if
      certain criteria have been met (see below);                                                        
| | - | Costs to define and delineate known economic resources
      and develop the project;                                                                         
| | - | Borrowing costs attributable to qualifying mining
      properties;                                                                                           
| | - | Costs incurred during testing of the processing facility,
      net of proceeds from sales, prior to operating in the manner intended by
      management; and
| | - | Estimates of reclamation and closure costs.                                                                                                                   

Stripping costs

In open pit mining operations, it is
necessary to incur costs to remove overburden and other mine waste materials in
order to access the ore from which minerals can be extracted economically.
Stripping costs incurred in order to provide initial access to the ore body
(referred as pre-production stripping) are capitalized as incurred. Stripping
costs incurred during the production stage of an open pit mine are accounted for
as production costs in the consolidated statement of operations and
comprehensive income (loss) during the period that the stripping costs were
incurred, unless these costs provide a future economic benefit. Production phase
stripping costs are considered to generate a future economic benefit when (i) it
is probable that future economic benefit associated with the stripping activity
will flow to the entity; (ii) the entity can identify the component of the ore
body for which access has been improved; and (iii) the costs relating to the
stripping activity associated with that component can be measured reliably.
These costs are capitalized as mine development costs.

12

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|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|3. | Significant accounting policies
  (continued)
|-- | ---------------------------------------------

Production costs are allocated between
inventory produced and the stripping asset based on the volume of waste
extracted compared with the expected volume, for a given volume of ore
production. Stripping costs incurred and capitalized during the production phase
are depleted using the units-of-production method over the proven and probable
reserves of the component of the ore body to which access has been improved as a
result of the specific stripping activity.

Management reviews the estimates of
the waste and ore in each identified component of operating open pit mines at
the end of each financial year, and when events and circumstances indicate that
such a review should be made. Deferred stripping assets are written-down to
their recoverable amount when their carrying value is not considered
supportable. Changes to the estimated identification of components and the
associated waste and ore within each component are accounted for
prospectively.

Exploration and evaluation
expenditures

Exploration and evaluation
expenditures include the costs of acquiring rights to explore, exploratory
drilling and related exploration costs incurred on sites without an existing
mine and on areas outside the boundary of a known mineral deposit which contain
proven and probable reserves. Exploration and evaluation expenditures incurred
on a mineral deposit, with the exception of acquisition costs and costs arising
from the recognition of an asset retirement obligation, are expensed as incurred
up to the date of establishing that costs incurred on a mineral deposit are
technically feasible and commercially viable.

Expenditures incurred on a mineral
deposit subsequent to the establishment of being technically feasible and
commercially viable are capitalized and included in the carrying amount of the
related mining property.

The technical feasibility and
commercial viability of a mineral deposit is assessed based on a combination of
factors, such as, but not limited to:

| | - | The extent to which mineral reserves or mineral resources
      have been identified through a feasibility study or similar level
      document;          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------
| | - | The results of optimization studies and further technical
      evaluation carried out to mitigate project risks identified in the
      feasibility study;
| | - | The status of environmental permits, and                                                                                                                   
| | - | The status of mining leases or permits.                                                                                                                    

Borrowing costs

Borrowing costs directly relating to
the financing of qualifying assets are added to the capitalized cost of those
related assets until such time as the assets are substantially ready for their
intended use or sale which, in the case of mining properties, is when they are
capable of commercial production. Where funds have been borrowed specifically to
finance a project, the amount capitalized represents the actual borrowing costs
incurred. Where the funds used to finance a project form part of general
borrowings, the amount capitalized is calculated using a weighted average of
rates applicable to relevant general borrowings of the Company during the
period. Capitalized borrowing costs are depreciated over the life of the related
asset.

All other borrowing costs are
recognized in the consolidated statement of operations and comprehensive income
(loss) in the year in which they are incurred. Borrowing costs are included as
part of interest paid in the statement of cash flows.

13

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|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|3. | Significant accounting policies
  (continued)
|-- | ---------------------------------------------

Depletion

Mining properties in production are
depleted on a mine-by-mine basis using the units-of-production method over the
mines estimated proven and probable reserves, with the exception of deferred
stripping which is depleted using the unit-of-production method over the
reserves that directly benefit from the specific stripping activity, and will
commence when the mine is capable of operating in the manner intended by
management. The Company uses a number of criteria to assess whether the mine is
in the condition necessary for it to be capable of operating in a manner
intended by management. These criteria include, but are not limited to:

| | - | Completion of operational commissioning of each major
      mine and plant component;                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------
| | - | Demonstrated ability to mine and mill consistently and
      without significant interruption at a pre-determined average rate of
      designed capacity;
| | - | The passage of a reasonable period of time for testing of
      all major mine and plant components;                                                      
| | - | Gold recoveries at or near expected production levels;
      and                                                                                          
| | - | A significant portion of available funding is directed
      towards operating activities.                                                                

Mining properties in development are
not depleted.

| | (ii) | Plant and equipment
| | ---- | -------------------

Recognition

The cost of plant and equipment
consists of the purchase price, costs directly attributable to the delivery of
the asset to the location and the condition necessary for it to be capable of
operating in the manner intended by management, including the cost of testing
whether these assets are operating in the manner intended by management.
Subsequent costs are included in the assets carrying amount or recognized as a
separate asset, as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the Company and the cost can be
measured reliably. Where significant components of an asset have differing
useful lives, depreciation is calculated on each separate component.

Depreciation

Depreciation of an asset begins when
it is available for use, i.e. when it is in the location and condition necessary
for it to be capable of operating in the manner intended by management.

The carrying amounts of plant and
equipment are depreciated using either the straight-line or units-of-production
method over the shorter of the estimated useful life of the asset or the life of
mine. The significant classes of depreciable plant and equipment and their
estimated useful lives are as follows:

Fixed plant & related components and
      infrastructure
    Units of
      production over life of mineMobile and other mine equipment components
    3 to 8 yearsComputer equipment and software
    3 years


14

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|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|3. | Significant accounting policies
  (continued)
|-- | ---------------------------------------------

Management reviews the estimated
useful lives, residual values and depreciation methods of the Companys plant
and equipment at the end of each financial year, and when events and
circumstances indicate that such a review should be made. Changes to estimated
useful lives, residual values or depreciation methods resulting from such review
are accounted for prospectively.

Major maintenance and
repairs

Expenditure on major maintenance and
repairs includes the cost of replacement parts of assets and overhaul costs.
Where an asset or part of an asset is replaced and it is probable that future
economic benefits associated with the item will be available to the Company,
that expenditure is capitalized and the carrying amount of the item replaced
derecognized. Similarly, overhaul costs associated with major maintenance are
capitalized when it is probable that future economic benefits will be available
and any remaining carrying amounts of the cost of previous overhauls are
derecognized. All other maintenance and repair costs are expensed as incurred.

(iii)       Assets under
construction

Assets under construction include
property, plant and equipment in the course of construction for the Companys
own purposes. Assets under construction are carried at cost less any recognized
impairment loss and are not subject to depreciation. The cost comprises the
purchase price and any costs directly attributable to bringing it into working
condition for its intended use. Depreciation of these assets commences when the
asset is available for use, i.e. when it is in the location and condition
necessary for it to be capable of operating in the manner intended by
management.

(iv)        Impairment of
non-financial assets

The carrying amounts of assets
included in mining interests are reviewed for impairment when events and changes
in circumstances indicate that the related carrying amounts may not be
recoverable. If any such indication exists, the recoverable amount of the
relevant cash-generating unit (CGU) is estimated in order to determine the
extent of impairment. A CGU is the smallest identifiable group of assets that
generates cash inflows that are largely independent of the cash inflows from
other assets or groups of assets. The Companys CGUs are its significant mine
sites, represented by its principal producing mining properties and significant
development projects.

The carrying amounts of the CGUs are
compared to their recoverable amounts where the recoverable amount is the higher
of value-in-use and fair value less costs to sell (FVLCS). For mining assets,
when a binding sale agreement and observable market prices are not readily
available, FVLCS is estimated using a discounted cash flow approach for each of
the Companys cash generating units (CGUs) to which the individual assets are
allocated. The assumptions used in determining the FVLCS for the CGUs include
long-term mining plans, long-term commodity prices, discount rates and foreign
exchange rates. If the recoverable amount of an asset (or CGU) is estimated to
be less than its carrying amount, the carrying amount is reduced to its
recoverable amount. An impairment is recognized immediately in the consolidated
statement of operations and comprehensive income (loss).

15

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|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|3. | Significant accounting policies
  (continued)
|-- | ---------------------------------------------

Where an impairment loss subsequently
reverses, the carrying amount of the asset (CGU) is increased to the revised
estimate of its recoverable amount (however, the increased carrying amount shall
not exceed the net carrying amount that would have been recognized should no
impairment loss have been previously recognized for the asset (or CGU) in prior
years).

(v)Derecognition

Upon disposal or abandonment, the
carrying amounts of mining properties and plant and equipment are derecognized
and any associated gains or losses are recognized in the consolidated statement
of operations and comprehensive income (loss).

| | (g) | Provisions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | General                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | Provisions are recognized when the Company has a present
      obligation (legal or constructive) as a result of a past event, it is
      probable that an outflow of resources embodying economic benefits will be
      required to settle the obligation and a reliable estimate can be made of
      the amount of the obligation. Where the Company expects some or all of a
      provision to be reimbursed, for example under an insurance contract, the
      reimbursement is recognized as a separate asset, but only when the
      reimbursement is virtually certain. The expense relating to any provision
      is presented in the consolidated statement of operations and comprehensive
      income (loss) net of any reimbursement. If the effect of the time value of
      money is material, provisions are discounted using a current pre- tax rate
      that reflects where appropriate, the risks specific to the liability.
      Where discounting is used, the increase in the provision due to the
      passage of time is recognized as finance expense in the consolidated
      statement of operations and comprehensive income (loss).
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | Asset retirement provisions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | An obligation to incur restoration, rehabilitation and
      environmental costs arises when environmental disturbance is caused by the
      exploration, development or ongoing production of a mineral property
      interest. The Company records the estimated present value of future cash
      flows associated with site reclamation as a liability when the liability
      is incurred with a corresponding increase in the carrying value of the
      related assets. Discount rates using a pre-tax, risk-free rate that
      reflect the time value of money are used to calculate the net present
      value. The liability is accreted over time to reflect the unwinding of the
      discount with the accretion expense included in finance costs in the
      consolidated statement of operations and comprehensive income (loss).
      Changes in estimates or circumstances include changes in legal or
      regulatory requirements, increased obligations arising from additional
      mining and exploration activities, changes to cost estimates, changes to
      the discount rate and changes to the risk-free interest rates.         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (h) | Revenue recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | Revenue is derived from the sale of gold and by-products.
      Revenue is recognized on individual contracts when there is persuasive
      evidence that all of the following criteria are
met:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

| | - | the significant risks and rewards of ownership have been
      transferred to the buyer;                                                                           
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | - | neither continuing managerial involvement to the degree
      usually associated with ownership nor effective control over the goods
      sold have been retained;
| | - | the amount of revenue and costs to sell can be measured
      reliably;                                                                                            

16

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|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|3. | Significant accounting policies
  (continued)
|-- | ---------------------------------------------

| | - | it is probable that the economic benefits associated with
      the transaction will flow to the Company and collectability of proceeds is
      reasonably assured.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |     | Revenue from gold is generally recorded at the time of
      physical delivery of the refined gold, which is also the date when title
      to the gold passes to the customer. Revenue from saleable gold produced
      during the testing phase of production activities is deducted from
      capitalized mine development costs.                                                                                                                                                                                                                                                      
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (i) | Royalties and mining taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | Payments to governments that are based on a measure of
      income less expense are accounted for in accordance with the Companys
      income tax accounting policy. Payments to governments which are based on
      gross amounts such as revenue are classified in accordance with the
      substance of the transaction; this means that for royalties calculated
      based on revenues, the royalty is presented as a reduction of revenues and
      that for royalties calculated based on production costs, the royalty is
      presented as an increase in production costs.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (j) | Financial instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

| | (i) | Financial assets                                                                                                                                                                                                                                                                     
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                      
| |     | Recognition                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                      
| |     | All financial assets are initially recorded at fair value
      plus directly attributable transaction costs and designated upon inception
      into one of four categories: held-to-maturity, available-for-sale, loans
      and receivables or fair value through profit or loss.
| |     |                                                                                                                                                                                                                                                                                      
| |     | Subsequent to initial recognition, the financial assets
      are measured in accordance with the following:                                                                                                                                                                         

| | - | Held-to-maturity investments, and loans and receivables,
      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 less any impairment. Cash and cash equivalents, receivables, VAT
      receivable, and the reclamation deposit are classified as loans and
      receivables.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | Available-for-sale financial assets are measured at fair
      value, with unrealized gains and losses recorded in other comprehensive
      income until the asset is derecognized, at which time they are
      reclassified to net earnings (loss). Other than temporary impairments on
      available-for-sale financial assets are recorded in net earnings (loss).                                                                                               
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | Financial assets classified as fair value through profit
      or loss 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.                                                                                                                                                                                                                   

17

---

|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|3. | Significant accounting policies
  (continued)
|-- | ---------------------------------------------

Derecognition

A financial asset (or, where
applicable, a part of a financial asset or part of a group of similar financial
assets) is derecognized when:

| | - | The rights to receive cash flows
      from the asset have expired, or                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | - | The Company has transferred its rights to receive cash
      flows from the asset or has assumed an obligation to pay the received cash
      flows in full without material delay to a third party under a
      pass-through arrangement; and either (a) the Company has transferred
      substantially all the risks and rewards of ownership of the asset, or (b)
      the Company has neither transferred nor retained substantially all the
      risks and rewards of the asset, but has transferred control of the asset.

| | (ii)  | Financial liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |       | Recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |       | All financial liabilities are initially recorded at fair
      value and designated upon inception as fair value through profit or loss
      or other financial liabilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |       | Subsequent to initial recognition, other financial
      liabilities are measured at amortized cost using the effective interest
      method. The effective interest method is a method of calculating the
      amortized cost of a financial liability and of allocating interest expense
      over the relevant period. The effective interest rate is the rate that
      discounts estimated future cash payments through the expected life of the
      financial liability, or, where appropriate, a shorter period. The
      Companys accounts payable and accrued liabilities and long-term debt are
      classified as other financial liabilities.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |       | Fair value changes on financial liabilities classified as
      fair value through profit or loss are recognized in the consolidated
      statement of operations and comprehensive income (loss).                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (iii) | Embedded derivatives                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |       | The Company may enter into derivative contracts or
      financial instruments and non-financial contracts containing embedded
      derivatives. Embedded derivatives are required to be accounted for
      separately at fair value as derivatives when the risks and characteristics
      of the embedded derivatives are not closely related to those of their host
      contract, and the host contract is not designated as fair value through
      profit or loss. These embedded derivatives are measured at fair value with
      changes in fair value recognized in the consolidated statement of
      operations and comprehensive income (loss).

18

---

|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|3. | Significant accounting policies
  (continued)
|-- | ---------------------------------------------

| | (k) | Share-based compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | The fair value of the share-based compensation awards is
      determined at the date of grant using the Black-Scholes option pricing
      model. The fair value of the award is charged to the consolidated
      statement of operations and comprehensive income (loss) and credited to
      the Equity reserve (within equity in the consolidated statement of
      financial position) rateably over the vesting period, after adjusting for
      the number of awards that are expected to vest.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | Expenses recognized for forfeited awards are reversed.
      For awards that are cancelled, any expense not yet recognized is
      recognized immediately in the statement of operations and comprehensive
      income (loss).                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | Where the terms of an equity-settled award are modified,
      as a minimum an expense is recognized as if the terms had not been
      modified over the original vesting period. In addition, an expense is
      recognized for any modification which increases the total fair value of
      the share-based payment arrangement as measured at the date of
      modification, over the remainder of the vesting
period.                                                                            

| | (l) | Income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     | Income tax on the profit or loss for the periods
      presented comprises current and deferred income tax. Income tax is
      recognized in the consolidated statement of operations and comprehensive
      income (loss) except to the extent that it relates to items recognized
      directly in equity, in which case it is recognized in equity.                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     | Current income tax expense is the expected tax payable on
      the taxable income for the year, using tax rates enacted or substantively
      enacted at period end, adjusted for amendments to tax payable with regards
      to previous years.                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     | Deferred income tax is recognized in respect of unused
      tax losses, tax credits and temporary differences between the carrying
      amounts of assets and liabilities for financial reporting purposes and the
      amounts used for taxation purposes. Deferred tax is measured at the tax
      rates that are expected to be applied to temporary differences when they
      reverse, based on the tax rates that have been substantively enacted at
      the reporting date.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     | A deferred income tax asset is recognized only to the
      extent that it is probable that future taxable profits will be available
      against which the asset can be utilized. To the extent that the Company
      does not consider it probable that a future income tax asset will be
      recovered, it does not recognize the asset.                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     | Deferred income tax assets and liabilities are offset
      when there is a legally enforceable right to set off current tax assets
      against current tax liabilities and when they relate to income taxes
      levied by the same taxation authority and the Company intends to settle
      its tax assets and liabilities on a net basis.                                                                                                                                        

19

---

|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|3. | Significant accounting policies
  (continued)
|-- | ---------------------------------------------

| |     | The Company records foreign exchange gains and losses
      representing the impacts of movements in foreign exchange rates on the tax
      bases of non-monetary assets and liabilities which are denominated in
      foreign currencies. Foreign exchange gains and losses relating to the
      translation of the deferred income tax balance from local statutory
      accounts to functional currency accounts are included in deferred income
      tax expense or recovery in the consolidated statement of operations and
      comprehensive income (loss).                                                                                    
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (m) | Income (loss) per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | Basic income (loss) per share is computed by dividing net
      income (loss) by the weighted average number of common shares outstanding
      during the period. The computation of diluted income (loss) per share
      assumes the conversion, exercise or contingent issuance of securities only
      when such conversion, exercise or issuance would have a dilutive effect on
      income (loss) per share. For this purpose, the treasury stock method is
      used for the assumed proceeds upon the exercise of stock options and
      warrants that are used to purchase common shares at the average market
      price during the period.

|4. | Changes in accounting standards                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Accounting standards and amendments issued but not yet
      adopted.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Revenue recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | In May 2014, the IASB issued IFRS 15  Revenue from
      Contracts with Customers ("IFRS 15") which supersedes IAS 11 
      Construction Contracts; IAS 18  Revenue; IFRIC 13  Customer Loyalty
      Programmes; IFRIC 15  Agreements for the Construction of Real Estate;
      IFRIC 18  Transfers of Assets from Customers; and SIC 31  Revenue 
      Barter Transactions involving Advertising Services. IFRS 15 establishes a
      single five-step model framework for determining the nature, amount,
      timing and uncertainty of revenue and cash flows arising from a contract
      with a customer. On July 22, 2015 the IASB confirmed a one-year deferral
      of the effective date of IFRS 15 to January 1, 2018. The Company is
      currently evaluating the impact the final standard is expected to have on
      its consolidated financial statements.                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Financial instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | In July 2014, the IASB issued the final version of IFRS 9
       Financial Instruments ("IFRS 9") to replace IAS 39  Financial
      Instruments: Recognition and Measurement. IFRS 9 provides a revised model
      for recognition and measurement of financial instruments and a single,
      forward-looking 'expected loss' impairment model. IFRS 9 also includes a
      substantially reformed approach to hedge accounting. The standard is
      effective for annual periods beginning on or after January 1, 2018, with
      early adoption permitted. The Company is currently evaluating the impact
      the final standard is expected to have on its consolidated financial
      statements.                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Leases                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | In January 2016, the IASB issued IFRS 16  Leases ("IFRS
      16") which replaces IAS 17  Leases and its associated interpretative
      guidance. IFRS 16 applies a control model to the identification of leases,
      distinguishing between a lease and a service contract on the basis of
      whether the customer controls the asset being leased. For those assets
      determined to meet the definition of a lease, IFRS 16 introduces
      significant changes to the accounting by lessees, introducing a single,
      on-balance sheet accounting model that is similar to current finance lease
      accounting, with limited exceptions for short-term leases or leases of low
      value assets. Lessor accounting remains similar to current
      accounting practice. The standard is effective for annual periods
      beginning on or after January 1, 2019, with early application permitted
      for entities that apply IFRS 15. The Company is currently evaluating the
      impact the final standard is expected to have on its consolidated
  financial statements.

20

---

|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|5. | Significant accounting judgements and
    estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The preparation of financial statements in conformity
      with IFRS requires management to make estimates and assumptions that
      affect amounts reported in the financial statements and accompanying
      notes. Management believes the estimates and assumptions used in these
      consolidated financial statements are reasonable, however, actual results
      could differ from those estimates and could impact future results of
      operations and cash flows. The significant accounting judgements and
      estimates which have the most significant effect on these financial
      statements are as follows:
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

Reserves and Resources Estimates of the quantities of proven and probable mineral reserves and
mineral resources form the basis for the Companys life-of-mine plans, which are
used for a number of key business and accounting purposes, including: the
calculation of depreciation expense, the capitalization of stripping costs and
the forecasting and timing of payments related to the asset retirement
provision. In addition, when required, the life-of-mine plans are used in
impairment tests for mineral properties, plant and equipment. To the extent that
these estimates of proven and probable mineral reserves and resources varies,
there could be changes in depreciation expense, stripping asset and asset
retirement provision recorded.

Depletion of mineral interests estimates are made of recoverable ounces in the Companys mining properties
which are depleted based on recoverable tonnes contained in proven and probable
reserves. To the extent that changes are made to the estimate of proven and
probable reserves, the depletion charge may change. In addition, mineral
properties, plant and equipment are depreciated to their estimated residual
value over the estimated useful life of the asset. Should the actual useful life
of the mineral properties, plant or equipment vary, future depreciation charges
may change.

Inventory valuation of production
costs- the Companys management makes estimates of quantities of ore on
stockpiles and in process and the recoverable gold in this material to determine
the cost of inventories and the average costs of finished goods sold during the
period. To the extent that these estimates vary, production costs of finished
goods may change.

Net realizable value of inventory- in order to determine the net realizable value of gold-in-process and
stockpiled ore, the Company estimates future metal selling prices, production
forecasts, realized grades and recoveries, timing of processing, and future
costs to convert the respective inventories into saleable form. Reductions in
metal price forecasts, increases in estimated future costs to convert,
reductions in the amount of recoverable ounces, and a delay in timing of
processing can result in a write-down of the carrying amounts of the Companys
stockpiled ore inventory.

Current and deferred Income taxes
- in assessing the probability of realizing income tax assets recognized,
management makes estimates related to expectations of future taxable income,
applicable tax opportunities, expected timing of reversals of existing temporary
differences and the likelihood that tax positions taken will be sustained upon
examination by applicable tax authorities. Levels of future taxable income are
affected by, among other things, market gold prices, production costs,
quantities of proven and probable gold reserves, interest rates and foreign
currency exchange rates.

21

---

|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|5. | Significant accounting judgements and estimates
      (continued)
|-- | -----------------------------------------------------------------

Where applicable tax laws and
regulations are either unclear or subject to varying interpretations, it is
possible that changes in these estimates could occur that materially affect the
amounts of deferred income tax assets and liabilities recorded in the financial
statements. Changes in deferred tax assets and liabilities generally have a
direct impact on earnings in the period that the changes occur.

Deferred stripping in order
todetermine whether stripping costs incurred during the production phase
of a mining property relate to reserves and resources that will be mined in a
future period and therefore should be capitalized, the Company makes estimates
of the stripping activity over the life of the component of reserves and
resources which have been made accessible. In addition, judgement is involved
when allocating production costs between inventory produced and the stripping
asset; the allocation is based on the volume of waste extracted compared with
the expected volume, for a given volume of ore production. To the extent that
these estimates and judgements change, there could be a change to the amount of
production costs which are deferred to the statement of financial position.

Estimated assets retirement
provisions -The Companys provision for reclamation and closure cost
obligations represents managements best estimate of the present value of the
future cash outflows required to settle closure cost liabilities. Significant
judgements and estimates are required in forming assumptions of future
activities, future cash outflows and the timing of those cash outflows. These
assumptions are formed based on environmental and regulatory requirements or the
Companys environmental policies which may give rise to constructive
obligations. The Companys assumptions are reviewed at the end of each reporting
period and adjusted to reflect managements current best estimate and changes in
any of the above factors can result in a change to the provision recognized by
the Company. Changes to these estimates and judgements may result in actual
expenditures in the future differing from the amounts currently provided for.

Judgements

Arrangements containing a lease -the Companys management assessed its mining contract under IFRIC 4 
Determining whether an Arrangement contains a Lease, to assess whether the
contract contains a finance or operating lease. In order to determine whether
the lease was an operating or finance lease, management had to make judgements
with respect to the useful economic lives of the equipment identified in the
lease as well as how much of the costs associated with the mining contract
related to use of the equipment and how much related to personnel charges.
Should some of these judgements change, the conclusion as to whether an
arrangement contains a lease may change, which would result in a materially
higher asset value on the consolidated statement of financial position and an
associated periodic depreciation charge.

22

---

|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|5. | Significant accounting judgements and estimates
      (continued)
|-- | -----------------------------------------------------------------

Commercial production -the
Companys management determined that Phase 1 of the AGM was in commercial
production effective April 1, 2016. The development phase ends and the
production phase begins when the mine is in the condition necessary for it to be
capable of operating in a manner intended by management. The Company uses a
number of criteria to assess whether the mine has reached the commercial
production phase. These criteria include, but are not limited to:

| | (i)   | Completion of operational commissioning of each major
      mine and plant component;                                                                     
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                           
| | (ii)  | Demonstrated ability to mine and mill consistently and
      without significant interruption at a pre-determined average rate of
      designed capacity;
| |       |                                                                                                                                                           
| | (iii) | The passage of a reasonable period of time for testing of
      all major mine and plant components;                                                      
| |       |                                                                                                                                                           
| | (iv)  | Gold recoveries are at or near expected steady-state
      production levels;                                                                             
| |       |                                                                                                                                                           
| | (v)   | Level of capital expenditure is within 90% of the
      forecast final construction cost; and                                                             
| |       |                                                                                                                                                           
| | (vi)  | A significant portion of available funding is directed
      towards operating activities.                                                                

Impairment of mining interest -the Company considers both external and internal sources of information in
assessing whether there are any indications that mining interests are impaired.
External sources of information the Company considers include changes in the
market, economic and legal environment in which the Company operates that are
not within its control and affect the recoverable amount of mining interests.
Internal sources of information the Company considers include the manner in
which mining properties and plant and equipment are being used or are expected
to be used and indications of economic performance of the assets. The estimates
and judgements are subject to risk and uncertainty; hence, there is the
possibility that changes in circumstances will alter these projections, which
may impact the recoverable amount of the assets. In such circumstances the
carrying value of the assets may be impaired or a prior periods impairment
charge reversed (with the exception of goodwill for which impairment charges are
not reversed) with the impact recorded in the consolidated statement of
operations and comprehensive income (loss).

Functional currency -the
determination of a subsidiarys functional currency often requires significant
judgment where the primary economic environment in which an entity operates may
not be clear. This can have a significant impact on the consolidated results of
the Company.

|6. | Revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company sold 147,950 ounces of gold to Red Kite
      during the nine months ended December 31, 2016 (being the period post
      commercial production), in accordance with an Offtake Agreement (note
      16(c)). Sales proceeds earned in the first quarter of 2016, prior to the
      commencement of commercial production, were recorded as an offset to pre-
      commercial production costs and included in development costs (note
      15(b)). Sales proceeds earned since the commencement of commercial
      production on April 1, 2016 are included in revenue in the consolidated
      statement of operations and comprehensive income (loss).
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Included in revenue is $0.6 million relating to
      by-product silver sales for the year ended December 31, 2016.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | All of the Companys concessions are also subject to a 5%
      gross revenue royalty payable to the Government of
Ghana.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

23

---

|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|7. | Production costs by
nature
|-- | --------------------------

| |                                               |  | YearendedDecember31, |  
| | --------------------------------------------- |  | -------------------- | -
| |                                               |  | 2016                 |  
| | *(in thousands of US dollars)*                |  | $                    |  
| | Raw materials and consumables                 |  | 36,182               |  
| | Salary and employee benefits                  |  | 17,375               |  
| | Contractors                                   |  | 43,515               |  
| | Change in inventories                         |  | (11,417              | )
| | Insurance, government fees, permits and other |  | 3,033                |  
| | Total Production costs                        |  | 88,688               |  

|   | The Company is party to an operating lease for mining
      services performed at the AGM by a contractor. The lease term is until
      December 31, 2020 and there are no specific renewal terms attached to the
      lease.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                
|   | Salaries and employee benefits in production costs
      excludes $4.7 million of salaries and employee benefits included in
      corporate general and administrative expenses for the year ended December
      31, 2016.   
|   |                                                                                                                                                                                                                                
|8. | General and administrative expenses                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                
|   | The following is a summary of general and administrative
      expenses incurred during the years ended December 31, 2016 and
  2015.                                                                                          

YearendedDecember31,2016
    
    
    2015*(in thousands of US dollars)*
    
    $
    
    
    $Wages and benefits
    
    4,711
    
    
    2,189Office and rent
    
    2,272
    
    
    1,620Professional fees
    
    1,500
    
    
    837Sharebased payments
    
    536
    
    
    1,322Travel and marketing
    
    843
    
    
    803Corporate reorganisation
    
    1,585
    
    
    Other
    
    1,091
    
    
    749Total
    
    12,538
    
    
    7,520


|9. | Write-off of deferred stripping asset                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Subsequent to year-end, the Company announced a reserve
      and resource update for the AGM. The results of this update led the
      Company to re-evaluate the ore tonnes within each identified component of
      the AGM for deferred stripping purposes. The analysis performed by
      management showed that one of the six identified components for deferred
      stripping purposes, had less ore tonnes remaining as at December 31, 2016
      as compared to the previous estimate, whereas the value associated with
      the other five components was considered to be fully supportable. The
      updated reserve tonnes in this one component did not support the
      capitalized value of this deferred stripping asset which is recorded as
      part of Mineral properties, plant and equipment, and accordingly, the
      Company has recorded a $7.1 million write-down related to this component
      of the deferred stripping asset. This write-down forms part of the Ghana
      operating segment (note 23). See also note 15(c).

24

---

|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|10. | Finance expense                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------
|    |                                                                                                                 
|    | The following is a summary of finance expenses incurred
      during the years ended December 31, 2016 and
2015.

| |                                                             |  | YearendedDecember31, | 
| | ----------------------------------------------------------- |  | -------------------- | 
| |                                                             |  | 2016                 | 
| | *(in thousands of US dollars)*                              |  | $                    | 
| | Interest charges on Red Kite
      loan (Note 16(a))        |  | 13,451               | 
| | Accretion charges for asset retirement obligation (Note 17) |  | 398                  | 
| | Total                                                       |  | 13,849               | 

|11. | Income tax
|--- | ----------

a) Tax expense

| |                                      |  | YearendedDecember31, |  
| | ------------------------------------ |  | -------------------- | -
| |                                      |  | 2016                 |  
| | *(in thousands of US dollars)*       |  | $                    |  
| | Current tax (expense)
      recovery |  | (1,531               | )
| | Deferred tax (expense) recovery      |  | (9,907               | )
| | Total                                |  | (11,438              | )

Income tax expense differs from the
amount that would result from applying the Canadian federal and provincial
income tax rates to earnings from continuing operations before taxes. These
differences result from the following items:

| |                                                                  |  | YearendedDecember31, |  
| | ---------------------------------------------------------------- |  | -------------------- | -
| |                                                                  |  | 2016                 |  
| | *(in thousands of US dollars)*                                   |  | $                    |  
| | Average statutory tax rate                                       |  | 26.00%               |  
| |                                                                  |  |                      |  
| | Loss before incom etaxes                                         |  | (1,778               | )
| |                                                                  |  |                      |  
| | Expected income tax recovery                                     |  | 462                  |  
| |                                                                  |  |                      |  
| | Increase (decrease) in income
      taxr ecovery resulting from: |  |                      |  
| | Permanent differences                                            |  | 22                   |  
| | Trueup prior year balances                                      |  | 1,372                |  
| | Effect of differences in tax rate in foreign
      jurisdictions |  | (180                 | )
| | Change in unrecognized tax
      assets                          |  | (11,117              | )
| | Withholding tax                                                  |  | (1,531               | )
| | Foreign exchange and other                                       |  | (466                 | )
| | Incometax( expense)recovery                                      |  | (11,438              | )

25

---

|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|11. | Income tax (continued)b) Deferred tax liabilities
      and assets                                   
|--- | -----------------------------------------------------------------------------------------------------
|    |                                                                                                      
|    | The significant components of the Companys deferred tax
      liabilities and assets are as follows:

| |                                          |  | December31,2016 |   |  | December31,2015 |  
| | ---------------------------------------- |  | --------------- | - |  | --------------- | -
| | *(in thousands
      of US dollars)*     |  | $               |   |  | $               |  
| | Property and equipment                   |  | (91,021         | ) |  | (1,890          | )
| | Embedded derivative                      |  |                |   |  | 2,290           |  
| | Mineral interests                        |  | 67,202          |   |  | (12,360         | )
| | Asset retirement provision               |  | 4,812           |   |  | 2,860           |  
| | Unrealized foreign exchange              |  | (1,266          | ) |  |                 |  
| | Noncapital losses
      carried forward |  | 1,266           |   |  |                |  
| |                                          |  | (19,007         | ) |  | (9,100          | )
| | Deferredtaxassets                        |  | 73,281          |   |  | 5,150           |  
| | Deferredtaxliabilities                   |  | (92,288         | ) |  | (14,250         | )
| | Netdeferredtaxbalance                    |  | (19,007         | ) |  | (9,100          | )

The Company has losses in Ghana of
$29.8 million, which expire between 2017 and 2021, and a loss of $25.9 million
in Canada which expires between 2028 and 2036.

Deductible temporary differences and
unused tax losses for which no deferred tax assets have been recognized are
attributable to the following:

| |                                          |  | December31,2016 |   |  | December31,2015 |  
| | ---------------------------------------- |  | --------------- | - |  | --------------- | -
| | *(in thousands
      of US dollars)*     |  | $               |   |  | $               |  
| | Property and equipment                   |  | (91             | ) |  | (650            | )
| | Share issuance costs                     |  | 619             |   |  | 1,090           |  
| | Investment in associate                  |  | 248             |   |  | 240             |  
| | Mineral interests                        |  | 23,159          |   |  | 18,560          |  
| | Asset retirement provision               |  |                |   |  | 3,700           |  
| | Unrealized foreign exchange              |  |                |   |  | (2,080          | )
| | Foreign exchange loss carried forward    |  | 709             |   |  |                |  
| | Noncapital losses
      carried forward |  | 15,630          |   |  | 8,300           |  
| | Total                                    |  | 40,274          |   |  | 29,160          |  

The aggregate amount of taxable
temporary differences associated with investments in subsidiaries for which
deferred taxes have not been recognized, as at December 31, 2016 is $58.8
million (2015 - $33.3 million).

26

---

|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|12. | Inventories
|--- | -----------

YearendedDecember31,2016
    
    
    2015(inthousandsofUSdollars)
    
    $
    
    
    $Gold dore on hand
    
    5,968
    
    
    Goldinprocess
    
    4,461
    
    
    Ore stockpiles
    
    14,361
    
    
    1,001Materials and
      spare parts
    
    7,584
    
    
    178TotalInventories
    
    32,374
    
    
    1,179


|    | No inventory has been recognized at fair value less cost
      to sell as at December 31, 2016 or 2015.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|13. | VAT receivable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | On April 1, 2016, the Company announced that the AGM was
      in commercial production and in addition, in April 2016, the Company
      received a letter from the Ghana Revenue Agency stating that the Company
      was entitled to a VAT refund to a total of $20.5 million with respect to
      the period July 2013 to December 2015. The Company considers these two
      events to be key triggers with respect to the recognition of all VAT
      receivable on the purchase of goods and services in Ghana. Effective April
      1, 2016, with the commencement of commercial production, the Company
      recognizes a VAT receivable for the total of all VAT returns filed with
      the Ghana Revenue Agency less associated refunds. Prior to March 31, 2016,
      the Company had provided a full allowance against the VAT receivable with
      an offsetting charge to deferred development costs. The Company has
      received total VAT refunds of $26.0 million as of December 31, 2016, which
      includes the vast majority of VAT claimed by the Company relating to the
      Phase I development of the AGM up to and including the commencement of
      commercial production.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | As of December 31, 2016, a total current VAT receivable
      of $22.9 million has been recognized (December 31, 2015 - $nil).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|14. | Reclamation deposit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The Company is required to provide security to the
      Environmental Protection Agency of Ghana (EPA) for the performance by
      the Company of its reclamation obligations in respect of the Abriem, Abore
      and Adubea mining leases. The initial security totaled $8.5 million and
      was made up of a Reclamation Deposit in the amount of $1.7 million and a
      bank guarantee of $6.8 million. The reclamation deposit accrues interest
      and is carried at $1.8 million at December 31, 2016 (December 31, 2015 -
      $1.7 million).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | During the year ended December 31, 2015, the Company
      deposited the Reclamation Deposit in a Ghanaian Bank in the joint names of
      the Company and the EPA. The Reclamation Deposit matures annually, but the
      Company is required to reinstate the deposit until receiving the final
      completion certificate by the EPA. The Company is expected to be released
      from this requirement 45 days following the third anniversary of the date
      the Company receives a final completion
certificate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

27

---

|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|15. | Mineral properties, plant and equipment and
      exploration and evaluation assets
|--- | -----------------------------------------------------------------------------------



Depreciation and depletion for the year
ended December 31, 2016 includes $19 (2015 - $59) of depreciation included in
general and administrative expenses. The total asset cost includes capitalized
borrowing costs incurred during the year ended December 31, 2016 of $3.6 million
(2015 - $10.7 million); these were capitalized at a rate of 11.12% (2015
11.36%) .

28

---

|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|15. | Mineral properties, plant and equipment and
      exploration and evaluation assets (continued)
|--- | -----------------------------------------------------------------------------------------------
|    |                                                                                                
|    | (a)                                                                                            
|    |                                                                                                
|    |                                                                                                
|    |                                                                                                
|    |                                                                                                
|    |                                                                                                
|    | (b)                                                                                            
|    |                                                                                                
|    |                                                                                                

| |                                                                  |  | January1,2016March31,2016 |  
| | ---------------------------------------------------------------- |  | -------------------------- | -
| |                                                                  |  | $                          |  
| | Costs incurred during precommercial
      production            |  | 21,222                     |  
| | Revenue during
      precommercial production, net of royalties |  | (10,048                    | )
| | Netcostscapitalized                                              |  | 11,174                     |  

| | (c) | Deferred stripping                                                                                                                                                                                                                                                                                                                                                  
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                     
| |     | During the year ended December 31, 2016, the Company
      deferred a total of $36.0 million (2015 - $nil) of stripping costs to
      depletable mineral interests. Depletion of $11.4 million (2015 - $nil) was
      charged on this asset during the same period and was recorded in
      depreciation and depletion, part of cost of sales. See also note
  9.
| |     |                                                                                                                                                                                                                                                                                                                                                                     
| | (d) | Non-controlling interest                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                     
| |     | The AGM is wholly-owned by Asanko Ghana, and the
      Government of Ghana holds a 10% free carried interest in this subsidiary.
      At December 31, 2016, no amount has been recorded as non-controlling
      interest as Asanko Ghana has a deficit in the pool from which dividends
      can be paid.                                                        

29

---

|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|15. | Mineral properties, plant and equipment and
      exploration and evaluation assets (continued)
|--- | -----------------------------------------------------------------------------------------------
|    |                                                                                                
|    | (e)                                                                                            
|    |                                                                                                
|    |                                                                                                

|16. | Long-term debt
|--- | --------------

(a) Long-term debt

In 2013, the Company entered into a
Definitive Senior Facilities Agreement (DSFA) with a special purpose vehicle
of RK Mine Finance Trust I (Red Kite), which is now fully drawn for a total of
$150 million. The debt is carried at amortized cost and is presented net of
unamortized financing fees of $16.5 million and unpaid interest up to May 2016
(when the loan was modified; see below). Interest on the DFSA is calculated on a
quarterly basis at a rate of LIBOR +6% and there is a 1% minimum LIBOR rate
which creates an interest rate floor. The Company can elect to repay the DSFA,
or a portion thereof, early without penalty. The DSFA is fully secured by shares
of the Companys Ghanaian subsidiaries.

During the second quarter 2016, the
DSFA was amended in order to defer the repayment of the principal for two years
(being the principal deferral period). The amendment provides that the first
principal repayment will now be payable on July 1, 2018 after which the facility
will be repaid in nine equal quarterly instalments, with the last repayment on
July 1, 2020. The Company will continue to pay quarterly interest on the loan
facility during the principal deferral period. There are no other changes to the
existing debt facility terms. A deferral fee of 2% of the loan principal was
paid commensurate with signing the amendment. The amendments are considered to
be a modification of the previous DFSA; the deferral fee of $3.275 million was
paid during the second quarter 2016 and has been deferred to the loan balance
and is being amortized with previously deferred debt financing costs over the
remaining life of the DSFA based on the revised effective interest rate of 10.6%
..

Prior to April 1, 2016, all interest
and accretion costs were capitalized to assets under construction. Commensurate
with the declaration of commercial production all interest and accretion costs
are now charged to the consolidated statement of operations and comprehensive
income (loss). During the year ended December 31, 2016, $17.0 million (2015 -
$10.7 million) of loan accretion and accrued interest was recorded at a weighted
average effective interest rate of approximately 10.6% . Of this balance, during
the year ended December 31, 2016 a total of $3.6 million (2015 - $10.7 million)
was capitalized to assets under construction.

30

---

|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|16. | Long-term debt (continued)
|--- | --------------------------

(b) Embedded derivative

An embedded derivative liability was
recognized upon initial recognition for the loan in relation to the interest
rate floor. The total fair value of the embedded derivative on drawdowns was
estimated to be $1.4 million. During 2016, the Company has changed its
accounting policy in respect of its methodology to assess whether an interest
rate floor embedded derivative is closely related to the host debt contract to
incorporate contractual spread. Based on this change, the Company has determined
that the interest rate floor embedded derivative is closely related to the host
debt contract and as a result, the embedded derivative previously recognized in
respect of the loan has been derecognized. The impact on prior periods or the
current period is not material and therefore the Company has recorded the
adjustment related to this change in the 2016 fiscal year.

(c) Offtake agreement

In addition to the DSFA the Company
entered into an Offtake Agreement with Red Kite with the following details:

| | - | Sale of 100% of the future gold production up to a
      maximum of 2.22 million ounces to Red Kite;                                                                                                                                                                                   
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | - | Red Kite to pay for 100% of the value of the gold ten
      business days after shipment;                                                                                                                                                                                              
| | - | A provisional payment of 90% of the estimated value will
      be made one business day after delivery;                                                                                                                                                                                
| | - | The gold sale price will be a spot price selected during
      a nine day quotational period following shipment of gold from the mine;
      and                                                                                                                                       
| | - | Should the Company wish to terminate the Offtake
      Agreement, a termination fee will be payable according to a schedule based
      upon the total funds drawn under the DSFA as well as the amount of gold
      delivered under the Offtake Agreement at the time of termination.

|    | As of December 31, 2016, 156,660 ounces have been
      delivered to Red Kite under the offtake agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|17. | Asset retirement obligation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | The decommissioning liability consists of reclamation and
      closure costs for the Companys Ghanaian mining properties. Reclamation
      and closure activities include land rehabilitation, dismantling of
      buildings and mine facilities, ongoing care and maintenance and other
      costs. The undiscounted cash flow amount of the total obligation was $35.0
      million as at December 31, 2016 (2015 - $26.1 million) and the present
      value of the obligation was estimated at $25.4 million (2015 - $18.7
      million).
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | The discount rates used by the Company in 2016 and 2015
      are based on prevailing risk-free pre-tax rates in for the USA (given the
      majority of reclamation costs will be incurred in US dollars), for periods
      of time which coincide with the periods over which the decommissioning
      costs are discounted. The inflation rate used in the ARO calculation is
      based on US inflation data again, given the majority of reclamation costs
      will be incurred in US dollars.                                            

31

---

|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|17. | Asset retirement obligation (continued)                                                                                            
|--- | -----------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                    
|    | The following table shows the movement in the asset
      retirement obligation for the years ended December 31, 2016 and
    2015:

| |                            |  | December31,2016 |  |  | December31,2015 | 
| | -------------------------- |  | --------------- |  |  | --------------- | 
| | (inthousandsofUSdollars)   |  | $               |  |  | $               | 
| | Balance, beginning of year |  | 18,741          |  |  | 12,638          | 
| | Accretion expense          |  | 398             |  |  | 420             | 
| | Change in obligation       |  | 6,235           |  |  | 5,683           | 
| | Balance,endofyear          |  | 25,374          |  |  | 18,741          | 

|18. | Share capital
|--- | -------------

| | (a) | Authorized                                                                                                                                            
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------
| |     | Unlimited common shares without par value or restrictions;
      and              
      Unlimited preferred shares without par value or restrictions.
| |     |                                                                                                                                                       
| | (b) | Issued and outstanding common
shares                                                                                                                  

| |                                                                       |  | Numberofshares |  |  | Amount  |  
| | --------------------------------------------------------------------- |  | -------------- |  |  | ------- | -
| | (inthousandsofUSdollarsexceptforshareamounts)                         |  |                |  |  | $       |  
| | Balance, December 31, 2014                                            |  | 174,075,607    |  |  | 505,469 |  
| | Issued pursuant to bought deal financing(i)                           |  | 22,770,000     |  |  | 36,387  |  
| | Share issuance costs                                                  |  |               |  |  | (2,103  | )
| | Issued pursuant to exercise of sharebased options (note
      19(a)) |  | 150,000        |  |  | 380     |  
| | Balance, December 31, 2015                                            |  | 196,995,607    |  |  | 540,133 |  
| | Issued pursuant to asset acquisition (note
      15(e))               |  | 2,000,000      |  |  | 8,395   |  
| | Issued pursuan tto exercise of sharebased options (note
      19(a)) |  | 2,833,600      |  |  | 7,728   |  
| | Balance,December31,2016                                               |  | 201,829,207    |  |  | 556,256 |  

(i) On February 11, 2015, the Company
closed a bought deal financing of 22,770,000 common shares at C$2.02 for gross
proceeds $36.4 million or C$46.0 million. The Company incurred share issuance
costs of $2.1 million, of which $1.8 million in fees were paid to the
underwriters.

|19. | Equity reserves
|--- | ---------------
|    |                
|    | (a)            
|    |                
|    |                

32

---

|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|19. | Equity reserves (continued)                                                                         
|--- | ----------------------------------------------------------------------------------------------------
|    |                                                                                                     
|    | The following table is a reconciliation of the movement
      in share-based options for the period:

Number
      of Options
    
    
    Weighted
      average exercise priceC$Balance, December 31, 2014
    
    10,594,291
    
    
    2.95Granted
    
    5,121,000
    
    
    2.05Exercised
    
    (150,000
    )
    
    2.12Cancelled/Expired
    
    (778,500
    )
    
    4.35Balance, December 31, 2015
    
    14,786,791
    
    
    2.57Granted
    
    2,915,000
    
    
    2.18Exercised
    
    (2,833,600
    )
    
    2.39Cancelled/Expired
    
    (276,441
    )
    
    1.89Balance,December31,2016
    
    14,591,750
    
    
    2.54


The fair value of the share-based
options granted is determined using the Black Scholes pricing model. For all
grants in 2015, the assumed life, dividend yield and forfeiture rate were 3.11
years, nil and 3.57%, respectively. For all grants during 2016, the assumed
life, dividend yield and forfeiture rate were 3.14 years, nil and 2.89%,
respectively. Other conditions and assumptions were as follows:

Weighted
    
    
    
    
    
    WeightedWeighted
    
    
    average risk
    
    
    
    
    
    averageaverage
    
    
    free
    
    
    Weighted
    
    
    BlackNumber of
    
    
    exercise
    
    
    interest
    
    
    average
    
    
    Scholes valuePeriod
    
    options
    
    
    price
    
    
    rate
    
    
    volatility
    
    
    assignedC$
    
    
    
    
    
    
    
    
    $Year ended December 31, 2015
    
    5,121,000
    
    
    2.05
    
    
    0.71%
    
    
    52.96%
    
    
    0.56Year ended
      December 31, 2016
    
    2,915,000
    
    
    2.18
    
    
    0.55%
    
    
    49.52%
    
    
    0.50


The following table summarizes the
share-based options outstanding and exercisable at December 31, 2016:

Totaloptionsoutstanding
    
    
    TotaloptionsexercisableWeighted
    
    
    Weighted
    
    
    
    
    
    Weighted
    
    
    WeightedRange of
    
    Number
    
    
    average
    
    
    average
    
    
    Number
    
    
    average
    
    
    averageexercise price
    
    
    
    
    contractual life
    
    
    exercise price
    
    
    
    
    
    contractual life
    
    
    exercise price(years)
    
    
    C$
    
    
    
    
    
    (years)
    
    
    C$C$1.00C$2.00
    
    2,753,750
    
    
    3.93
    
    
    1.97
    
    
    1,801,250
    
    
    3.87
    
    
    1.97C$2.01C$3.00
    
    8,533,750
    
    
    2.55
    
    
    2.18
    
    
    8,343,750
    
    
    2.52
    
    
    2.18C$3.01C$4.00
    
    2,557,500
    
    
    0.65
    
    
    3.79
    
    
    2,557,500
    
    
    0.65
    
    
    3.79C$4.01C$5.00
    
    720,500
    
    
    1.20
    
    
    4.50
    
    
    618,000
    
    
    0.64
    
    
    4.51C$6.01C$7.00
    
    26,250
    
    
    0.43
    
    
    6.10
    
    
    26,250
    
    
    0.43
    
    
    6.1014,591,750
    
    
    2.41
    
    
    2.54
    
    
    13,346,750
    
    
    2.25
    
    
    2.57


33

---

|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|19. | Equity reserves (continued)
|--- | ---------------------------
|    |                            
|    | (b)                        
|    |                            
|    |                            
|    |                            
|    |                            

|20. | Commitments and contractual obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | As at December 31, 2016, the Company had contractual
      obligations totaling $198.0 million, relating to long-term debt (December
      31, 2015 - $185.5 million). Contractual obligations related to the
      long-term debt are subject to changes in the three-month LIBOR rate.
      Prepayment terms allow the Company to prepay the long-term debt, with no
      penalty, in whole or in part at any time. As at December 31, 2016 the
      long-term debt had a face value of $163.9 million (December 31, 2015 -
      $158.1 million).
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | In addition, the Company is a party to certain
      construction and engineering contracts relating to the construction of the
      Asanko Gold Mine Phase 1.                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | The following table shows the Companys contractual
      obligations as they fall due as at December 31,
2016:                                                                                                                                                                                                                                                                                                                                                                                                                                        

(inthousandsofUSdollars)
    
    Within1year
    
    
    15years
    
    
    **Over 5 years**
    
    
    Total2016
    
    
    Total
      2015Longterm debt and related interest and withholding tax
      payments
    
    12,610
    
    
    185,418
    
    
    
    
    
    198,028
    
    
    185,509Accounts payable
      and accrued liabilities
    
    46,934
    
    
    
    
    
    
    
    
    46,934
    
    
    34,789Decommissioning liability (undiscounted)
    
    
    
    
    
    
    
    34,977
    
    
    34,977
    
    
    26,094Mine operating/construction and other service contracts, open
      purchase orders
    
    23,381
    
    
    4,588
    
    
    
    
    
    27,969
    
    
    37,200Total
    
    82,925
    
    
    190,006
    
    
    34,977
    
    
    307,908
    
    
    283,592


|21. | Contingencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Except as set forth below, there are no material legal
      proceedings to which the Company is a party or, to the best of the
      Company's knowledge, to which any of the Company's property is or was
      subject to.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Godbri Datano Claim                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | During September 2012, Godbri Mining Limited (Godbri),
      a private Ghanaian company, lodged a statement of claim in the High Court
      of Justice, Accra, Ghana, seeking a declaration that, among other things,
      that the sale of the Datano concession to Adansi Ghana is null and void.
      Godbri claims to be the owner of 38% of the issued share capital of Midras
      Mining Limited and states that it did not consent to the acquisition of
      the Datano concession by Adansi Ghana. Adansi Ghana filed a defense on
      November 12, 2012. Godbri subsequently amended its claim in January 2013
      and in March 2013, after which both the Company and Adansi Ghana filed
      further defenses. The matter is currently awaiting trial but the Company
      considers the claim made by Godbri to be spurious and without any merit.
      Godbri has taken no further steps in the suit since June
  2013.

34

---

|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|21. | Contingencies (continued)                                                                                                                                                                                                                                                                                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                   
|    | Matisse and Madison Claim                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                   
|    | During October 2013, Matisse & Madison Co. Ltd.
      lodged a statement of claim in the High Court of Justice, Accra, Ghana,
      seeking compensatory damages of $20.0 million plus interest for breach of
      a verbal contract related to the purchase of the Datano Concessions from
      Midras. In April 2016, this claim was withdrawn by the plaintiff and is no
      longer active.
|    |                                                                                                                                                                                                                                                                                                                                                                                                   
|22. | Supplemental cash flow
  information                                                                                                                                                                                                                                                                                                                                                              

| |                                                                                     |  | YearendedDecember31, |  
| | ----------------------------------------------------------------------------------- |  | -------------------- | -
| |                                                                                     |  | 2016                 |  
| | (inthousandsofUSdollars)                                                            |  | $                    |  
| | Change in asset retirement
      provision included in mineral interest             |  | 6,235                |  
| | Change in accounts payable related to mineral
      property, plant and equipment   |  | (29,903              | )
| | Reclassification from mineral
      property, plant and equipment to VAT receivable |  | (25,013              | )
| | Fair value of shares included in mineral
      property, plant and equipment        |  | 8,395                |  
| | Borrowing costs included in
      mineral properties, plant and equipment           |  | 3,568                |  
| | Sharebased compensation included in mineral properties, plant and
      equipment  |  | 620                  |  

Changes in non-cash working capital
consist of the following:

YearendedDecember31,2016
    
    
    2015(inthousandsofUSdollars)
    
    $
    
    
    $Trade and other
      receivables
    
    (1,313
    )
    
    241VAT receivable
    
    (27,566
    )
    
    Prepaid Expense
    
    (389
    )
    
    (2,661
    )Inventories
    
    (31,195
    )
    
    (1,179
    )Trade and other payables
    
    41,803
    
    
    1,132Total
    
    (18,660
    )
    
    (2,467
    )


|23. | Segmented information                                                                                                                                                                                                                                                                                                                                 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                       
|    | Geographic Information                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                       
|    | The Company has two reportable operating segments
      determined by geographical location. Ghana is the Companys only segment
      with mining operations at present; Canada acts as a head office function.
      All revenues are derived from the mining and sale of precious metals to
      Red Kite under an offtake agreement (note 16(c)).

35

---

|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|23. | Segmented information (continued)                          
|--- | -----------------------------------------------------------
|    |                                                            
|    | Geographic allocation of total assets and
      liabilities

| | December31,2016                         |  | Canada |  |  | Ghana   |  |  | Total       | 
| | --------------------------------------- |  | ------ |  |  | ------- |  |  | ----------- | 
| | (inthousandsofUSdollars)                |  | $      |  |  | $       |  |  | $           | 
| | Current assets                          |  | 17,505 |  |  | 102,213 |  |  | **119,718** | 
| | Mineral properties, plant and equipment |  | 148    |  |  | 541,096 |  |  | **541,244** | 
| | Other noncurrent assets                |  |        |  |  | 1,750   |  |  | 1,750       | 
| | Totalassets                             |  | 17,653 |  |  | 645,059 |  |  | 662,712     | 
| | Current liabilities                     |  | 3,008  |  |  | 44,395  |  |  | 47,403      | 
| | Noncurrent
      liabilities           |  |       |  |  | 198,884 |  |  | 198,884     | 
| | Totalliabilities                        |  | 3,008  |  |  | 243,279 |  |  | 246,287     | 

| | December3 1,2015                        |  | Canada |  |  | Ghana   |  |  | Total       | 
| | --------------------------------------- |  | ------ |  |  | ------- |  |  | ----------- | 
| | (inthousandsofUSdollars)                |  | $      |  |  | $       |  |  | $           | 
| | Current assets                          |  | 87,505 |  |  | 31,415  |  |  | **118,920** | 
| | Mineral properties, plant and equipment |  | 133    |  |  | 503,420 |  |  | **503,553** | 
| | Other noncurrent assets                |  |       |  |  | 1,696   |  |  | 1,696       | 
| | Totalassets                             |  | 87,638 |  |  | 536,531 |  |  | 624,169     | 
| | Current liabilities                     |  | 1,630  |  |  | 48,409  |  |  | 50,039      | 
| | Noncurrent
      liabilities           |  |       |  |  | 159,721 |  |  | 159,721     | 
| | Totalliabilities                        |  | 1,630  |  |  | 208,130 |  |  | 209,760     | 

36

---

|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|23. | Segmented information (continued)                                                         
|--- | ------------------------------------------------------------------------------------------
|    |                                                                                           
|    | Geographic allocation of the Statement of Operations
      and Comprehensive Income (loss)

| | December31,2016                                          |  | Canada  |   |  | Ghana    |   |  | Total    |  
| | -------------------------------------------------------- |  | ------- | - |  | -------- | - |  | -------- | -
| | (inthousandsofUSdollars)                                 |  | $       |   |  | $        |   |  | $        |  
| | Revenue                                                  |  |        |   |  | 185,167  |   |  | 185,167  |  
| | Royalties                                                |  |        |   |  | (9,258   | ) |  | (9,258   | )
| | Net Revenue                                              |  |        |   |  | 175,909  |   |  | 175,909  |  
| |                                                          |  |         |   |  |          |   |  |          |  
| | Cost of sales                                            |  |         |   |  |          |   |  |          |  
| | Production costs                                         |  |        |   |  | (88,688  | ) |  | (88,688  | )
| | Depreciation and depletion                               |  |        |   |  | (52,958  | ) |  | (52,958  | )
| | Total cost of
      sales                                |  |        |   |  | (141,646 | ) |  | (141,646 | )
| |                                                          |  |         |   |  |          |   |  |          |  
| | Writeoff of
      deferred stripping assets             |  |        |   |  | (7,123   | ) |  | (7,123   | )
| | Income from mine operations                              |  |        |   |  | 27,140   |   |  | 27,140   |  
| | Exploration and evaluation expenditures                  |  |        |   |  | (1,425   | ) |  | (1,425   | )
| | General and administrative expenses                      |  | (10,487 | ) |  | (2,051   | ) |  | (12,538  | )
| | Income (loss) from operations                            |  | (10,487 | ) |  | 23,664   |   |  | 13,177   |  
| |                                                          |  |         |   |  |          |   |  |          |  
| | Finance income                                           |  | 200     |   |  | 434      |   |  | 634      |  
| | Finance expense                                          |  | (10     | ) |  | (13,839  | ) |  | (13,849  | )
| | Foreign exchange (loss) gain                             |  | (34     | ) |  | (1,743   | ) |  | (1,777   | )
| | Gain (loss) on derivatives                               |  | 37      |   |  |         |   |  | 37       |  
| | Income (loss) before income taxes                        |  | (10,294 | ) |  | 8,516    |   |  | (1,778   | )
| |                                                          |  |         |   |  |          |   |  |          |  
| | Income tax
      (expense) recovery                      |  |        |   |  | (11,438  | ) |  | (11,438  | )
| | Netincome(loss)andcomprehensiveincome(loss) fortheperiod |  | (10,294 | ) |  | (2,922   | ) |  | (13,216  | )
| |                                                          |  |         |   |  |          |   |  |          |  
| | December31,2015                                          |  | Canada  |   |  | Ghana    |   |  | Total    |  
| | (inthousandsofUSdollars)                                 |  | $       |   |  | $        |   |  | $        |  
| | Exploration and evaluation expenditures                  |  |        |   |  | (3,515   | ) |  | (3,515   | )
| | General and
      administrative expenses                |  | (7,307  | ) |  | (213     | ) |  | (7,520   | )
| | Income (loss) from operations                            |  | (7,307  | ) |  | (3,728   | ) |  | (11,035  | )
| |                                                          |  |         |   |  |          |   |  |          |  
| | Finance income                                           |  | 624     |   |  | 391      |   |  | 1,015    |  
| | Finance expense                                          |  | (11     | ) |  | (513     | ) |  | (524     | )
| | Foreign exchange (loss) gain                             |  | (3,589  | ) |  | 1,944    |   |  | (1,645   | )
| | Gain (loss) on
      derivatives                         |  | (36     | ) |  | 935      |   |  | 899      |  
| | Income (loss) before income taxes                        |  | (10,319 | ) |  | (972     | ) |  | (11,290  | )
| |                                                          |  |         |   |  |          |   |  |          |  
| | Income tax (expense) recovery                            |  |        |   |  | 2,984    |   |  | 2,984    |  
| |                                                          |  |         |   |  |          |   |  |          |  
| | Netincome(loss)andcomprehensiveincome(loss) fortheperiod |  | (10,319 | ) |  | 2,012    |   |  | (8,306   | )

37

---

|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|24. | Capital management                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | The Companys objectives in managing capital are to
      ensure the Company has the financial capacity to support its operations in
      a low gold price environment with sufficient capability to manage
      unforeseen operational or industry developments, ensure the Company has
      the capital and capacity to support its long-term growth strategy, and to
      provide returns for shareholders and benefits for other stakeholders. The
      Company defines capital that it manages as total shareholders equity,
      being a total of $416.4 million as at December 31, 2016 (2015 - $414.4
      million).                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | The Company is not subject to externally imposed capital
      requirements or covenants.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | The Company manages its capital structure and makes
      adjustments to it in light of general economic conditions, the risk
      characteristics of the underlying assets and the Companys working capital
      requirements. In order to maintain or adjust its capital structure, the
      Company, upon approval from its Board of Directors, may issue shares, or
      undertake other activities as deemed appropriate under the specific
      circumstances; the Company does not currently pay out dividends. The Board
      of Directors reviews and approves any material transactions out of the
      ordinary course of business, including proposals on acquisitions or other
      major investments or divestitures, as well as capital and operating
      budgets. The Companys investment policy is to invest its cash in highly
      liquid short-term interest-bearing investments with maturities of 90 days
      or less from the original date of acquisition.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | The Company has not made any changes to its policies and
      processes for managing capital during the year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|25. | Financial instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | As at December 31, 2016, the Companys financial
      instruments consist of cash and cash equivalents, receivables, VAT
      receivable, reclamation bond, accounts payable and accrued liabilities and
      long-term debt. The Company classifies cash and cash equivalents,
      receivables, VAT receivable and the reclamation bond as loans and
      receivables, and classifies accounts payable and accrued liabilities and
      long-term debt as other financial liabilities. All financial assets and
      liabilities are carried at amortized cost.                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | All of the Companys financial instruments are considered
      to be Level 1 within the fair value hierarchy, with the exception of the
      foreign currency forward contract liability in 2015 which was considered
      to be Level 2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | Level 1  fair values based on unadjusted quoted prices
      in active markets for identical assets or liabilities;
      Level 2  fair values based on inputs that are observable
      for the asset or liability, either directly or indirectly; and
      Level 3  fair values based on inputs for the asset or
      liability that are not based on observable market data.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | The Companys policy for determining when a transfer
      occurs between levels in the fair value hierarchy is to assess the impact
      at the date of the event or the change in circumstances that could result
      in a transfer. There were no transfers between the levels during 2016 or
      2015.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | The carrying value of the Companys debt is $155.0
      million (2015 - $147.1 million) and the fair value is $169.0 million (2015
      - $146.6 million). The fair value of all of the Companys other financial
      instruments approximates their carrying value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

38

---

|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|25. | Financial instruments (continued)                                                         
|--- | ------------------------------------------------------------------------------------------
|    |                                                                                           
|    | The risk exposure arising from these financial
      instruments is summarized as follows:
|    |                                                                                           
|    | (a)                                                                                       
|    |                                                                                           
|    |                                                                                           
|    |                                                                                           
|    |                                                                                           
|    |                                                                                           
|    | (b)                                                                                       
|    |                                                                                           
|    |                                                                                           
|    |                                                                                           
|    | (c)                                                                                       

| | (i)  | Interest rate risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |      | Interest rate risk is the risk that the fair value or
      future cash flows of a financial instrument will fluctuate because of
      changes in market interest rates. The Companys exposure to interest rate
      risk is limited to its loan agreement with Red Kite (note 16), which is
      subject to an interest rate of LIBOR plus 6% with a minimum LIBOR of
      1%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |      | With other variables, unchanged, a 1% change in the
      annualized interest rate would not result in a material change in the
      Companys interest expense for year ended December 31, 2016.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (ii) | Foreign currency risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |      | The Company is exposed to foreign currency risk through
      its foreign currency monetary assets and liabilities. A significant change
      in the currency exchange rate between the US dollar and Canadian dollar
      (C$) and South African rand (ZAR) could have an effect on the Companys
      results of operations, financial position and cash flows. During the year
      ended December 31, 2015, the Company had entered into a series of forward
      contracts to purchase a total of ZAR 346.6 million in exchange for
      Canadian and US dollars at specified exchange rates; all such contracts
      expired by February 2016. The Company at present has not entered into any
      further derivative instruments to reduce its exposure to currency risk,
      however, management monitors differing currency needs and tries to
      reduce its exposure to currency risks through exchanging currencies at
  what are considered to be optimal times.

39

---

|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|25. | Financial instruments
(continued)
|--- | ---------------------------------

| | (iii) | Price risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |       | Other price risk is the risk that the future cash flows
      of a financial instrument will fluctuate because of changes in market
      prices, other than those arising from currency risk or interest rate risk.
      The Company poured its first gold in January 2016 and starting selling
      refined gold during the first quarter 2016. The Companys future cash
      flows fluctuate due to changes in gold and silver prices. The Company has
      not hedged any precious metal sales as part of the Companys overall
      strategy.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |       | A 10% increase or decrease in the gold price as at
      December 31, 2016 and December 31, 2015, with all other variables held
      constant, would have resulted in a $11.4 million increase (decrease) to
      after-tax net income (loss) (2015 - $nil).                                                                                                                                                                                                                                                                                          

| | (d) | Fair values
| | --- | -----------
| |     |            
| |     | (i)        
| |     |            
| |     |            
| |     |            
| |     |            
| |     |            
| |     |            
| |     |            
| |     |            

40

---

|ASANKO GOLD INC.                                                             
|-----------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                               
|FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015                               
|Expressed in
      Thousands of United States Dollars unless otherwise stated

|26. | Related party transactions                                                                                                                                                                                                                                          
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                     
|    | All transactions with related parties have occurred in
      the normal course of operations and are measured at the exchange amount
      agreed to by the parties. All amounts are unsecured, non-interest bearing
      and have no specific terms of settlement.
|    |                                                                                                                                                                                                                                                                     
|    | Transactions with key management personnel were as
      follows:                                                                                                                                                                                                   

YearendedDecember31,2016
    
    
    2015(inthousandsofUSdollars)
    
    $
    
    
    $Salaries and benefits
    
    3,694
    
    
    1,660Sharebased
      payments
    
    313
    
    
    777Total compensation
    
    4,007
    
    
    2,437


Key management personnel consist of
directors and officers of the Company.

No other related party transactions
have taken place during 2016 or 2015.

41

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