Asanko Gold Inc said it could bolster its liquidity position to over US$100 million by the second quarter of 2018, days after short seller Muddy Waters said the Canadian gold miner would run out of cash by next year.

Asanko (AKG.TO) outlined a plan on Monday for the expansion of its gold mine in Ghana, which includes the large Esaase deposit.

The company's shares tumbled last week when Muddy Waters released a 43-page document saying production at Asanko's Nkran mine in Ghana and other deposits would not meet the company's expectations because the estimates were based on flawed geology reports.

The Muddy Waters report predicted that production shortfalls would cause Asanko to run out of cash next year as it struggles to repay US$165 million in debt.

Deferring the construction of a 27 km overland conveyor connecting the Esaase deposit to existing processing facilities could help improve its liquidity position to over US$100 million in the next 12 months, Asanko said on Monday.

The company also said it expects to generate US$51 million in cash for the rest of 2017 that would result in a cash balance of US$78 million to US$96 million by the end of this year.

Asanko's shares rose as much as 13.2 per cent to US$2.40 before paring gains on Monday. Up to Friday's close the stock had fallen 3.2 per cent since the Muddy Waters report on May 31.