Highlights:

Business Development

• PMI Gold and Keegan Resources Inc. (TSX, NYSE MKT: KGN) announce definitive agreement to combine their respective businesses to create a leading West African gold development company. The combined company will continue under the name "Asanko Gold Inc." - a name which reflects the West Ghana region in which the two companies hold their principal gold projects.
  
  
• Asanko will be led by Peter Breese, the current President and CEO of Keegan, and Collin Ellison, the current Managing Director and CEO of PMI.
  
  
• Each PMI shareholder will receive 0.21 Asanko shares for each PMI share, with the merger creating a combined company with an aggregate market capitalization expected to be in the $700 million range.
  
  
• Asanko set to become the leading gold development company in West Africa with near-term production expected from a unitized project comprised of two nearby gold deposits - Obotan and Esaase.

Obotan Gold Project (SW Ghana, West Africa)

• Merger with Keegan Resources expected to accelerate the commencement of construction at Obotan, with forecast production of approximately 200,000 ounces per year with first gold production expected in H2 2014.
  
  
• PMI received a positive response on its EIS submission in late 2012 and is addressing comments from the Regulator as part of an EIS update. Discussions with the EPA for the finalisation of the EIS are in progress.
  
  
• Obotan Mining Leases formally granted by the Minister of Lands and Natural Resources.
  
  
• PMI has commenced 'Early Engineering' works to progress the project development schedule.
  
  
• Contract for the supply of the SAG and ball mills for the processing plant have been awarded. These were the longest lead items required for construction with a delivery period of approximately 52 weeks.
  
  
• Follow-up Reverse Circulation Drilling at the Kaniago (Adansi) Prospect returns encouraging results, further defining a series of sub-parallel gold zones over a strike extent of up to 800m, open along strike to the south and down dip. Encouraging intersections (>0.5g/t Au) include:
  
  
  • 17m @ 4.58g/t Au from 20m
    
    
  • 11m @ 2.10g/t Au from 39m
    
    
  • 13m @ 1.10g/t Au from 92m
    
    
  • 7m @ 2.43g/t Au from 9m

Corporate and Finance

• Completion of C$115,002,300 equity financing through a public offering of common shares.
• PMI common shares commence trading on the main board of the Toronto Stock Exchange.
• The Company's cash position at the end of the December 2012 Quarter was C$125,259,075 million.

Summary

The December 2012 Quarter represented a defining period in PMI Gold Corporation's (TSX-V: PMV; ASX: PVM) history, with the Company entering into a definitive arrangement agreement with Keegan Resources Inc. ("Keegan") (TSX, NYSE MKT: KGN) under which both companies will combine their respective businesses to create a leading West African gold development company.

The combined company will continue under the name "Asanko Gold Inc." ("Asanko") - a name which reflects the West Ghana region in which the two companies hold their principal gold projects - and is expected to have an aggregate market capitalization in the $700 million range.

PMI's Obotan Gold Project and Keegan's Esaase Gold Project lie within 30km, and is expected to unlock significant synergies, with the potential to ultimately create one of the largest gold mining and exploration districts in Africa.

BUSINESS DEVELOPMENT

Merger with Keegan Resources to create leading West African gold development company

On December 5, 2012, PMI Gold and Keegan Resources Inc. ("Keegan") (TSX, NSYE MKT:KGN) announced a merger of equals between the two companies to be effected by means of a plan of arrangement (the "Arrangement"), to create a leading West African gold development company, which will continue under the name of "Asanko Gold Inc".

Shareholders as of record on January 16, 2013 will receive notice of and be entitled to vote at the special meeting of each company respectively. PMI Shareholders meeting is scheduled to be held at CWA House, 1174 Hay Street, West Perth, Western Australia at 8.30am (Perth time) on February 20, 2013 to consider the Arrangement.

Each company's Board of Directors has unanimously approved the terms of the proposed Merger and recommends that their respective shareholders vote in favour of the Merger. In addition, directors and officers of both companies have entered into voting lock-up agreement to vote in favour of the Merger. A copy of the Arrangement Agreement is posted at www.SEDAR.com and full details are included within the Joint Information Circular available on SEDAR and the ASX.

DETAILS OF THE ARRANGEMENT

If approved by the PMI Shareholders and Keegan Shareholders (the "Shareholders"), and subject to final court approval and the satisfaction or waiver of the conditions to closing, it has jointly been agreed that for the purposes of this transaction, Keegan will be the surviving entity and will acquire all of the outstanding common shares of PMI. The combined company will continue under the name "Asanko Gold Inc.", reflective of the West Ghana region in which the two companies hold their principal gold projects.

Management Team and Board of Directors of Asanko

• Peter Buck and Shawn Wallace, the respective Chairman of PMI and Keegan will become Co-Chairmen.
• Peter Breese, Keegan's Chief Executive Officer, and Collin Ellison, PMI's Managing Director and Chief Executive Officer, will respectively assume the offices of Chief Executive Officer and President of Asanko Gold.
• The board of directors of Asanko Gold will be comprised of three directors from each of PMI and Keegan with a seventh director to be appointed thereafter. Peter Buck, Ross Ashton and Dr. John A. Clarke from PMI and Shawn Wallace, Colin Steyn and Gordon Fretwell from Keegan.

Share Exchange Ratio

Under terms of the Arrangement, each PMI Shareholder will receive 0.21 Asanko shares for each PMI share exchanged (the "Exchange Ratio"). In addition, all outstanding options and warrants of PMI that have not been duly exercised prior to the effective time of the Arrangement (the "Effective Time") will be exchanged for options and warrants, as the case may be, of Asanko that will entitle the holders to receive, upon exercise thereof, Asanko shares based upon the Exchange Ratio and otherwise on the same terms and conditions as were applicable to such PMI options and warrants immediately before the Effective Time. As Keegan is the surviving corporate entity, existing Keegan security holders will not need to exchange their securities.

Market Capitalization and Share Ownership

The Arrangement will create a combined company with an aggregate market capitalization expected to be around $700 million. Existing Keegan and PMI Shareholders will each own approximately 50% of Asanko, inclusive of currently in-the-money dilutive securities.

Listing

Asanko will be listed on the TSX, NYSE MKT and the ASX stock exchanges (with the ASX listing being a condition of closing).


BENEFITS TO PMI AND KEEGAN SHAREHOLDERS

The key anticipated benefits of the Arrangement to PMI and Keegan Shareholders is summarized below but not limited to the following:

• Asanko Gold is set to become the leading gold development company in West Africa with near term production expected from a unitized project comprised of two nearby gold deposits - the Obotan Gold Project and Esaase Gold Project;
  
  
• Asanko Gold will have an enlarged, more diverse resource base;
  
  
• Asanko Gold will be strongly capitalized with approximately $340 million in cash on hand and no debt outstanding;
  
  
• The Obotan Gold Project can proceed to construction quickly - approximately 200,000 ounces per year for more than 11 years;
  
  
• The development of the Esaase Gold Project can be funded from cash flow - additional 150,000 to 200,000 ounces per year;
  
  
• Asanko Gold will be run by an experienced mine development and operational executive and management team;
  
  
• Asanko Gold will have an enhanced capital markets presence - Asanko Gold is expected to appeal to a broader shareholder base, increase analyst following and have improved share liquidity; and,
  
  
• The Arrangement is expected to be tax neutral or deferred for substantially all participants.

PROJECT DEVELOPMENT

Obotan Gold Project

The Obotan Gold Project is an advanced gold development project in south-west Ghana, with established resources located within the Company's Abore-Abirem and Adubea concessions. These concessions lie within the northern 15km of the total 70km strike length of contiguous concessions the Company holds in the Asankrangwa Gold Belt (Figure 4).

The Obotan Project comprises four known deposits (see resource estimates below) - the larger Nkran Deposit and the smaller satellite deposits at Abore, Adubiaso and Asuadai. The Obotan Project was previously operated by Resolute Mining Ltd; mining ceased in 2002 after producing a total of 730,000oz at an average grade of 2.2g/t, when the gold priced averaged about US$350/oz. Unlike the other Obotan deposits, the Asuadai deposit has not previously been mined.


Grant of Mining Leases

On November 21, 2012, the Mining Leases covering the Obotan Gold Project were formally granted by the Minister of Lands and Natural Resources, marking another key milestone towards development of a substantial new gold mining operation in West Africa. The formal grant of the three Mining Leases (renewable under the terms of the Minerals and Mining Act, 2006) follows the favorable recommendation by the Minerals Commission of Ghana in September.

The Mining Leases cover a total area of 93.24 sq km, encompassing the four key deposits at Obotan, the main Nkran deposit and the smaller satellite deposits, Abore, Adubiaso and Asuadai.

Project Financing

The Company is to finalise the $30M standby funding facility and security agreement with Macquarie Bank in Q1 2013 which will provide the Company with additional operating flexibility.

If PMI was to pursue development on a standalone basis, it believes that it will be able to raise between US$175 and US$200 million in project debt based on initial proposals received from short listed international financial institutions. Completion of technical due diligence and negotiations on final loan terms, including hedge levels over a project loan life of approximately 4 years are continuing. On that basis, it is also anticipated that the Company would require approximately an additional $75 to $100 million for working capital to fully fund the Company through construction and commissioning of the Obotan Project and into first gold production which is forecast to occur in H2 2014 and maintaining an aggressive exploration program.

EPA approvals

PMI received a positive response on its EIS submission in late 2012. PMI is addressing issues raised by the EPA including recently introduced changes to the guidelines concerning the design and operation of tails storage facilities. Discussions with the EPA for the finalisation of the EIS are in progress.

Early Engineering

Subsequent to the finalization of the Project Feasibility Study (FS), PMI commenced a number of engineering activities and contract works.

Critical to the timely advancement of the project was the ordering of the longest lead items for the process plant construction. A tender process commenced for the supply of the SAG and Ball Mills leading to contract award in December 2012. Thyssen Krupp Polysius will fabricate and supply the mills to PMI. The SAG mill is a high aspect ratio mill 8.6m in diameter and 4m in length, the ball mill is 5.8m in diameter and 9.1m in length. Both mills will be supplied with 5.6MW drive motors to simplify the commonality of spares, and delivery is locked in for Q4 2013.

With these purchases committed, structure and foundation designs were able to be advanced. Additionally, further geotechnical work was carried out on the plant site and tailings dam wall foundations to confirm ground conditions and enable detailed design.

Work also progressed on the two major contracts required for the commencement of development. Tender prices were received for the EPC/EPCM construction contracts from five experienced engineering contractors and the review process is ongoing. Five mining contract tender prices were also received and are undergoing final analysis. Decisions on both contracts are expected in Q1 2014.

PMI also committed to the refurbishment of the existing Obotan camp facility. The camp was originally built in 1997 by Resolute Resources, and has stood empty since 2003. Early refurbishment of the camp and associated administration buildings will ensure a quick ramp up of construction and pre-strip activities once the final decision to proceed is made by the Board of Directors.

Regional Exploration

During the December 2012 Quarter, the Company continued an extensive regional exploration push focusing on its highly prospective ground holdings at Obotan (15km area of influence to the Nkran Deposit), Asanko (southern half of the Asankrangwa Gold Belt containing strike extensions to Obotan) in the Asankrangwa Gold Belt and Kubi in the Ashanti Gold Belt.

Obotan Gold Project - Exploration Area of Influence

The Obotan Exploration Area of Influence is defined by the economic trucking distance of mined ore to the future Obotan process facility. This distance has nominally been taken as 15km.

Kaniago (Adansi) Prospect

PMI undertook a follow-up reverse circulation (RC) drilling program during the December Quarter, designed to test gold anomalism intersected in previous air core drilling at the Kaniago (Adansi) Prospect. All assay results from this program were received during the Quarter, with the results confirming and further defining known gold anomalies at the recently discovered prospect.

The Kaniago (Adansi) Prospect is strategically located within a 15km area of influence west of the Company's flagship Obotan Gold Project in south-west Ghana (Figure 5).

The prospect was targeted due to the interpreted location of favourable cross-cutting east-northeast structures with the Abore Shear and its close proximity within trucking distance to the proposed processing facility at the Nkran deposit at the Obotan Gold Project, . Early exploration success highlights the potential for the Kaniago (Adansi) Prospect to potentially be a valuable source of shallow oxide mineralisation for additional feed to the mill.


Drilling was designed to test a series of gold anomalies (>0.1g/t Au), extending along strike up to 1,200m, discovered by a first pass air core exploration program completed in June 2012 (refer to ASX/TSX announcement dated 20th June 2012). A total of 56 RC holes were drilled for 5,143m to define and extend these mineralization trends. Holes were drilled on a nominal 200m by 50m grid spacing (Figure 6). Results have been received for all holes from MinAnalytical Laboratory in Perth, Australia. Table 1 lists all intersections >0.5g/t Au.

Highlights of the results include:

• KARC12-001 8m @ 1.32g/t Au from 1m
• KARC12-002 10m @ 1.02g/t Au from 79m
• KARC12-004 17m @ 1.58g/t Au from 20m
• KARC12-005 11m @ 2.10g/t Au from 39m
• KARC12-006A 13m @ 1.10g/t Au from 92m
• KARC12-054 7m @ 2.43g/t Au from 9m

The strike of these anomalies have been confirmed over lengths ranging from 200m up to 800m and are all open along strike to the south (Figure 6). Drilling was also designed to test the depth extensions of mineralization, with gold mineralization intersected at depths of up to 75m remaining open, providing valuable exploration targets due to be followed up in 2013.

Gold mineralization is hosted within a stockwork of quartz veins, forming within an interbedded sequence of greywackes and phyllites. This sequence is intruded by a series of feldspar porphyries. Mineralization trends parallel with the Abore Shear, which also hosts Keegan Resources' Esaase Gold Deposit located within 30km north of Obotan.


Asanko Regional Exploration Project

The Asanko Regional Exploration Project is a regionally contiguous group of tenements covering some 55km of strike in the Asankrangwa Gold Belt, and is located immediately south of PMI's Obotan Project. The Company's, exploration approach within the southern Asankrangwa Gold Belt will be to continue the development of the resource targets within 15km of the Nkran Deposit (Obotan Project) and the exploration of other significant resource targets within the Asankrangwa Gold Belt.

Diaso Prospect

Subsequent to the Quarter end, PMI completed an exploration Reverse Circulation (RC) drilling program at the Diaso Prospect, located within the Diaso-Afiefiso Concession, during the Quarter. The Concession is located within the Company's 100%-owned Asanko Regional Exploration Project (Figure 7).

A total of 222 holes for 19,675m were drilled to test three separate target areas highlighted as "Block A", "Block B" and "Block C" (Figure 8). These areas were targeted due to coinciding favourable structural settings, identified from airborne geophysics, with historical gold in soil anomalies. Blocks A and B are located on the Fromenda Shear which also hosts the Fromenda Prospect located directly north of Block A. A total strike length of approximately 12km between Fromenda and Block B has been tested to date. Block C is located on the Nkran Shear which hosts the Nkran and Asuadai Deposits within PMI Gold's Obotan Project.

The Fromenda and Nkran Shears, along with the Abore Shear, form a regional northeast trending structural corridor (the Asankrangwa Gold Belt) interpreted to control the regional distribution of gold mineralization, particularly at the intersections with cross-cutting east-northeast structures, as characterized by the Obotan deposits to the north.

Samples were submitted to MinAnalytical Laboratory in Perth, Western Australia, for 50g Fire Assay treatment with Atomic Absorption Spectrometry (AAS) finish. All assay results have been received and are discussed below.




Block A
A total of 147 holes were drilled for 12,560m into Block A. Drilling was undertaken on a nominal spacing of 400m x 50m and designed to test the intersection of an interpreted east-west structure with the Fromenda Shear, considered a favourable structural setting for hosting gold mineralization in the district, as well as following up high grade historical drilling results. All anomalous intercepts >0.5g/t Au are listed in Table 2. Highlights include:

• DARC12-057 17m @ 0.75g/t Au from 70m
• DARC12-058 12m @ 2.06g/t Au from 8m (including 2m @ 5.02g/t Au from 14m)
• DIRC12-022 11m @ 0.77g/t Au from 106m
• DIRC12-033 5m @ 1.06g/t Au from 20m
• DIRC12-046 3m @ 16.43g/t Au from 55m (including 1m @ 48.41g/t Au from 55m)

Drilling has intersected a zone of steeply dipping gold mineralization, up to 10m in true thickness, over a strike length of 800m. Gold mineralization is associated with a stock work of quartz veins hosted within an intercalated sequence of metavolcanic and sedimentary rocks, similar to the geological setting of the Fromenda Prospect. Numerous other zones of discreet mineralization have also been intersected, providing valuable targets for further follow up drilling.

Block B
A total of 54 holes were drilled for 4,697m into Block B. Drilling was undertaken on a nominal spacing of 400m x 50m and, as with Block A, designed to test the intersection of an interpreted east-west structure with the Fromenda Shear. All anomalous intercepts >0.5g/t Au are listed in Table 3. Highlights include:

• DARC12-092 3m @ 32.89g/t Au from 27m (including 1m @ 73.14g/t Au from 27m)
• DARC12-094 2m @ 4.89g/t Au from 27m
• DARC12-112 1m @ 5.58g/t Au from 60m

Drilling has intercepted a series of discrete, steeply dipping zones of anomalous gold mineralization over the 2km strike length of the target area. Gold mineralization is associated with a stock work of quartz veins hosted within an intercalated sequence of metavolcanic and sedimentary rocks, similar to the geological setting of the Fromenda Prospect.

Block C
A total of 21 holes were drilled for 2,418m into Block C. This represents the first phase of drilling to be completed in the target area. Drilling was undertaken on nominal 100m x 50m spacing and designed to test coinciding favourable intersecting structures with an anomalous gold in soil geochemical anomaly and adjacent to artisanal workings. All anomalous intercepts >0.5g/t Au are listed in Table 4.

Highlights include:

• DIRC12-089 20m @ 1.40g/t Au from 46m
• DIRC12-092 7m @ 2.53g/t Au from 140m
• DIRC12-093 23m @ 1.26g/t Au from 120m
• DIRC12-101 11m @ 4.35g/t Au from 133m (including 2m @ 16.87g/t Au from 133m)
• DIRC12-107 3m @ 1.90g/t Au from 96m

Drilling has intercepted a zone of steeply dipping gold mineralization up to 16m thick in true thickness which continues 600m along strike and remains open down dip. In comparison with Blocks A & B, gold mineralization is interpreted to be associated with an east-northeast striking felsic intrusion.

The results of the exploration program at Diaso indicate the high prospectivity of the Asankrangwa Gold Belt to host significant economic mineralization within the Asanko Project area. Further follow-up drilling is planned for 2013 to test known mineralization along strike and at depth, as well as testing new and known target areas.

CORPORATE & FINANCE

C$115 Million Equity Financing

During the Quarter, PMI entered into an underwriting agreement with a syndicate of underwriters led by Clarus Securities Inc. and RBC Capital Markets as joint bookrunners and co-lead underwriters, and including Canaccord Genuity Corp., Euroz Securities Limited, GMP Securities L.P. and Raymond James Ltd. (collectively, the "Underwriters") to sell 119,050,000 Common Shares of the Company at a price of C$0.84 per share for gross proceeds of C$100,002,000.

In addition, the Company granted the Underwriters an over-allotment option to purchase up to that number of additional Common Shares equal to 15% of the Common Shares sold pursuant to the Offering, exercisable at any time up to 30 days after the closing of the Offering. This over-allotment option was exercised in full, resulting in a total of 136,907,500 new Common Shares being issued and resulting in total gross proceeds to the Company of C$115,002,300.

Net proceeds of the Offering will be used to fund the development of the Company's Obotan Gold Project in accordance with its Feasibility Study, for Ghana exploration activities and for general and administrative expenses.

Graduation to Main Board of TSX

During the Quarter PMI completed all the necessary requirements for graduation from the TSX Venture exchange to the Toronto Stock Exchange (TSX) main board, and the Company's common shares commenced trading on the TSX main board from market open on November 30, 2012.

At this time the Company's common shares were also delisted from and ceased trading on the TSX Venture Exchange.

The Company's common shares will continue trading under the symbol PMV.


Collin Ellison
On behalf of the Board,
Managing Director & CEO


For further information please contact:
Investor Relations Canada:
Rebecca Greco, Fig House Communications
P. +1 (416) 822-6483
E. fighouse@yahoo.com

Investor Relations Australia:
Nicholas Read/Paul Armstrong, Read Corporate
P. +61 8 9388 1474
M. +61 419 929 046

PMI Contact Canada:
Marion McGrath, Corporate Secretary
P. +1 (604) 684-6264
Toll-Free: 1 (888) 682-8089

PMI Contact Australia:
Collin Ellison, Managing Director & CEO
P. +61 8 6188 7900


or visit the PMI Gold Corporation website at www.pmigoldcorp.com

Competent Person Statement

Exploration Results:

The information in this announcement that relates to exploration results is based on information compiled by Thomas Amoah, who is employed by Adansi Gold Company (Ghana) Ltd, a wholly owned subsidiary of PMI Gold Corporation. Mr Amoah, who is a Member of the Australian Institute of Geoscientists (MAIG), has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves'. Mr Amoah consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

Scientific and technical information contained in this news release has been reviewed and approved by Thomas Amoah, MAIG, MSEG a "qualified person" as defined under National Instrument 43-101 (NI 43-101). Mr. Amoah is not independent of PMI under NI 43-101. Field work was supervised by Mr Amoah (VP-Exploration). Mr Amoah consents to the inclusion of matters in this announcement based on information in the form and context in which it appears.

Drill cuttings were logged and sampled on site, with 3kg samples sent to the MinAnalytical prep laboratory on site, and analyzed for gold by fire assay-AA on a 50 gram sample charge or by screened metallics AA finish in MinAnalytical laboratory in Perth. Internal QC consisted of inserting both blanks and standards into the sample stream and multiple re-assays of selected anomalous samples. Where multiple assays were received for an interval, the final value reported was the screened metallic assay if available, or in lieu of that the average of the other results for the interval. Results from the QC program suggest that the reported results are accurate. Intercepts were calculated with a minimum 0.5 g/t Au cut off at the beginning and the end of the intercept and allowing for no more than three consecutive metres of less than 0.5 g/t Au internal dilution. True widths are estimated at from 60% to 70% of the stated core length.

Forward-Looking Statements

This Quarter Activity Update Report contains "forward-looking information", as such term is defined in applicable Canadian securities legislation and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. Such statements concern PMI's and Keegan's future financial or operating performance, the Merger, and other statements that express management's expectations or estimates of future developments, circumstances or results, including without limitation, statements that Obotan can proceed to construction quickly - approximately 200,000 ounces per year with first gold pour expected in 2014 and that Esaase development will be funded from cash flow - additional 150,000 to 200,000 ounces per year by 2017. As well, all statements, other than statements of historical fact, included in this Quarter Activity Update Report, including, without limitation, statements relating to the potential mineralization and geological merits of the Obotan, Kubi and Asanko Projects and the plans, objectives or expectations of the companies with respect to the advancement of these projects and completion of scoping and pre-feasibility studies, are forward-looking statements that involve various risks and uncertainties.

Generally, forward-looking information can be identified by the use of forward-looking terminology such as "expects", "believes", "anticipates", "budget", "scheduled", "estimates", "forecasts", "intends", "plans" and variations of such words and phrases, or by statements that certain actions, events or results "may", "will", "could", "would" or "might", "be taken", "occur" or "be achieved". Forward-looking information and statements are based on a number of assumptions and estimates that, while considered reasonable by management based on the business and markets in which PMI and Keegan operate, are inherently subject to significant operational, economic and competitive uncertainties and contingencies. Forward-looking statements or information involve risks, uncertainties and other factors that could cause actual results, performances, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statement or information.

Assumptions upon which forward looking statements and information relating to the Arrangement have been made include that PMI and Keegan will be able to satisfy the conditions in the arrangement agreement dated December 5, 2012 between PMI and Keegan, that ongoing due diligence investigations of each party will not identify any materially adverse facts or circumstances, that the required approvals will be obtained from the shareholders of each of PMI and Keegan, that all required third party, regulatory and government approvals will be obtained. PMI and Keegan caution that forward-looking information and statements involves known and unknown risks, uncertainties and other factors that may cause PMI's and Keegan's actual results, performance or achievements to be materially different from those expressed or implied by such information, including, but not limited to: gold price volatility and changes in gold price; fluctuations and changes in foreign exchange rates and interest rates; changes in mine plans; changes between actual and estimated reserves and resources or between actual and estimated metallurgical recoveries; costs of production; capital expenditure requirements; the costs and timing of construction and development of new deposits and expansion of existing operations; the success of exploration and permitting activities; parts, equipment, labor or power shortages or other increases in costs; possibility of equipment breakdowns, delays and availability; mining accidents, labour disputes or other adverse events; unexpected increases in costs of equipment, steel, cement and consumables such as diesel and fuel oil; the unknown impact of the 10% windfall profit tax announced by the Government of Ghana; title defects; the failure of contract parties to perform; failure to receive necessary government or regulatory approvals and changes in applicable laws or regulations. In addition, the factors described or referred to in the section entitled "Risk Factors" in PMI's Annual Information Form for the year ended June 30, 2012 or under the heading "Business Description - Risk Factors" in Keegan's Annual Information Form for the financial year ended March 31, 2012, both of which are available on the SEDAR website at www.sedar.com, should be reviewed in conjunction with the information found in this Quarter Activity Report. Although PMI and Keegan have attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in forward-looking information, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate or that management's expectations or estimates of future developments, circumstances or results will materialize. As a result of these risks and uncertainties, the proposed Merger could be modified, restricted or not completed, and the results or events predicted in these forward looking statements and information may differ materially from actual results or events. Accordingly, readers should not place undue reliance on forward-looking information or statements. The forward-looking information and statements in this Quarter Activity Report are made as of the date hereof, and PMI and Keegan disclaim any intention or obligation to update or revise such information, except as required by applicable law.