According to the law firm press release, the lawsuit alleges throughout the Class Period defendants made false and/or misleading statements and/or failed to disclose that: (1) Asanko Gold’s Mineral Resource Estimates are flawed; (2) some of Asanko Gold’s resources models exhibit signs that they have been “smeared,” which would cause estimates of their ore contents to be inflated; and (3) as a result, Asanko Gold’s public statements were materially false and misleading at all relevant times.
On June 30, 2016, hedge fund K2 & Associates published a report asserting, among other things that Asanko Gold’s gold resources “don’t add up” and appear to be over-inflated by a factor of two. On this news, shares of Asanko Gold fell $0.15 per share or over 3% to close at $3.81 per share on June 30, 2016, damaging investors. On May 31, 2017, research firm Muddy Waters published a report asserting, among other things, that: (1) Asanko Gold made investments based on flawed geology in Nkran, its satellite pits and Esaase that Muddy Waters believes “will never be recovered”; and (2) there are indicia that some of Asanko Gold’s resources models have been “smeared”, which would cause estimates of their ore contents to be inflated. On this news, shares of Asanko Gold fell $0.58 per share or over 31% to $1.29 per share during intraday trading on May 31, 2017 and were halted, further damaging investors.