Asanko/PMI

Overview

Pursuant to a B.C. plan of arrangement, Keegan (to be renamed Asanko) will acquire all the PMI shares, so that each PMI shareholder will receive 0.21 common shares of Asanko (held through CDSs), and PMI will become a wholly-owned subsidiary of Asanko. On completion, the former Keegan and PMI shareholders will each own approximately 50% of Asanko inclusive of in-the-money dilutive securities, and the Asanko shares will be listed on the TSX, ASX and NYSE MKT Equities Exchange. The Asanko shares are being issued to the PMI shareholders in reliance on the s. 3(a)(10) exemption in the U.S. Securities Act of 1933.

Keegan/Asanko

Keegan is a TSX-listed and NYSE MKT-listed B.C. company holding the Esaas gold project in Ghana through a 90%-owned Ghana subsidiary (held through two wholly-owned Barbados subsidiaries).

PMI

PMI is a TSX- and ASX-listed B.C. company, with a registered and records office in Vancouver, and an office in West Perth, Australia, which holds the Obatan gold project in Ghana through subsidiaries.

Break fee

$13M (mutual termination fee triggered by: entering into of agreement to effect a "Superior Proposal;" the making of a "Change in "Recommendation;" or failure of the applicable shareholder group to approve).

MI 61-101

As a result of the payment of fees to Macquarie as a financial advisor, Macquarie will be considered to receive a collateral benefit. The 13.29% of the PMI shares held in the Macquarie group will be excluded from the minority approval vote conducted pursuant to MI 61-101.

Directors/CEOs

The Osanko board will consist of three directors from each of Keegan and PMI, with the seventh appointed thereafter. The Keegan CEO will continue as CEO and the PMI CEO will be president.

Plan of Arrangement

Under the Plan of Arrangement:

• PMI shares of dissenters will be transferred to PMI for their fair value

• each outstanding PMI share will be transferred to Keegan for 0.21 of a Keegan share "without any act or formality on the part of the holder"

• each outstanding option to acquire PMI shares will be exchanged for an option to purchase Keegan common shares, with the number of subject shares and exercise price adjusted in accordance with the exchange ratio (so as to ensure that the in-the-money value stays the same)

• there will be a similar exchange of PMI warrants

Canadian tax consequences

Under s. 85.1, the exchange of PMI shares for Asanko shares will not give rise to capital gain (or loss) to a resident shareholder unless such shareholder elects to report such gain (or loss). Dissenters will be deemed to receive a dividend to the extent, if any, that the cash payment exceeds the paid-up capital of their shares.

Standard disclosure re taxable Canadian property rules to non-residents.

US tax consequence

S. 368(a) rollover. Subject to the PFIC rules, an exchange of PMI shares for Asanko shares should qualify as a tax-deferred reorganization under Code s. 368(a). If so, a U.S. holder will not realize gain or loss on the exchange.

PFIC rules

PMI believes that it was a PFIC for one or more of its prior tax years and expects to be a PFIC for its current tax year. Accordingly, the arrangement may be classified as a taxable exchange even if it qualifies as a reorganization, with gain allocated rateably over the holding period, taxed as ordinary income as to the amount allocated to the current tax year and any year prior to the first year in which PMI was classified as a PFIC, with the amount allocated to each of the other tax years being subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year and with interest charges for a deemed deferral benefit being imposed with respect to the resulting tax attributable to each of the other tax years.

These consequences can be mitigated or avoided with a QEF election.

However, Asanko expects to be classified as a PFIC for the current tax year, so that the exception (under proposed Regulations) for transfers of PFIC stock in exchange for stock of another PFIC may apply - so that no gain is recognized on the exchange.

Australian tax consequences

PMI shareholders who make a capital gain on the disposal of their PMI shares generally will be eligible for rollover relief in respect of that gain, claimed by not including the gain in their assessable income. Where rollover relief is elected, the cost base of the PMI shares becomes that of the acquired Asanko shares. A PMI shareholder who makes a capital loss on the disposal of PMI shares cannot choose rollover relief.