The most active equity on the Toronto Stock Exchange, with more than 19 million shares trading hands, Asanko ended at C$2.02, modestly recovering from a 20 percent plunge after markets opened.

"It's just moving all over the place and the volumes are huge," said Raymond James analyst Chris Thompson, who has a 'top buy' rating on Asanko. "I think we're going to see a lot more of this."

Vancouver-based Asanko on Monday will announce a feasibility study on expansion plans that it says will provide a "complete rebuttal" to Muddy Waters' claims and allegations.

Muddy Waters argued in a report on Wednesday that Asanko will run out of cash in 2018, as it services its $165 million debt, amid problems with its Ghana mining operations.

Several analysts said Asanko has already addressed a key operations issue, on remediating the damaged wall of its mine pit, which Muddy Waters said could cost up to $115 million.

Thompson said much of the report's material was already covered by Toronto hedge fund K2 & Associates, which argued that Asanko's gold resources were overinflated. Asanko shares have lost 62 percent of their value since K2 shorted the stock last June.

Asanko will likely demonstrate the mine's long-term viability in its June 5 update, alongside a funding gap toward the end of the expansion program, BMO analyst Andrew Breichmanas said in a note to clients.

"We had expected that requirements for an additional $75-100 million could be addressed through a combination of refinancing current facilities, seeking additional capital, or slowing development plans," he wrote.

Asanko plans to boost output from 230,000-240,000 ounces of gold this year to 450,000 ounces by 2020.

Canaccord Genuity analyst Rahul Paul, in a note maintaining his C$5 stock target, said he does not foresee any operational challenges that could cause material funding shortfalls.

"That said, we acknowledge the negative headlines could continue to weigh on the stock in light of the increased volatility resulting from expected ETF rebalancings."

Van Eck Associates, which oversees VanEck Vectors Junior Gold Miners ETF , holds 41.65 million Asanko shares, according to Eikon data, with a 20.5 percent stake. The VanEck ETF is reshuffling its holdings.

(Reporting by Susan Taylor and Solarina Ho; editing by Jim Finkle and Jonathan Oatis)

By Susan Taylor