Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 12 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past ninety days.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer.  See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

In this Annual Report, (i) references to “we”, “us”, “our”, the “Company” or “Keegan” mean Keegan Resources Inc. and its subsidiaries, unless the context requires otherwise; (ii) we use the Canadian dollar as our reporting currency and, unless otherwise specified, all dollar amounts are expressed in Canadian dollars and references to “CDN$” or “$” mean Canadian dollars; and (ii) our financial statements are prepared in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”) and Note 15 to these financial statements provides a reconciliation of our financial statements to United States generally accepted accounting principles (“U.S. GAAP”).

Certain statements in this document constitute “forward-looking statements”.  Forward-looking statements can be identified by the use of words such as “anticipate”, “believe”, “plan”, “estimate”, “expect”, and “intend”, statements that an action or event “may”, “might”, “could”, “should”, or “will” be taken or occur, or other similar expressions.  Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Registrant, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the risks associated with outstanding litigation, risks associated with project development; the need for additional fin ancing;financing; operational risks associated with mining and mineral processing; fluctuations in metal prices; title matters; uncertainties and risks related to carrying on business in foreign countries; environmental liability claims and insurance; reliance on key personnel; the potential for conflicts of interest among certain officer, directors or promoters of the registrant with certain other projects; the absence of dividends; currency fluctuations; competition; dilution; the volatility of the Company’s common share price and volume; and tax consequences to U.S. Shareholders; and other risks and uncertainties set out under “Risk Factors” in this Annual Report.  Except as required by applicable law, we do not intend to update any of the forward-looking statements included herein to conform those statements to actual results.

Accordingly, information contained in this report containing descriptions of the Company’s mineral deposits may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder.  

Not Applicable.

ITEM 3

KEY INFORMATION

The following table presents selected financial data derived from our audited financial statements for the fiscal years ended March 31, 2011, 2010, 2009, 2008 2007 and 2006.2007.  You should read this information in conjunction with our audited financial statements and related notes, as well as Item 4: “Information on the Company” and Item 5: “Operating and Financial Review and Prospects” of this annual report.

Our financial statements have been prepared in accordance with Canadian GAAP in Canadian dollars.  Note 1516 to the annual financial statements included herein provides descriptions of material measurement differences between Canadian GAAP and US GAAP as they relate to us and a reconciliation of our financial statements to US GAAP.

We have not declared or paid any dividends in the past and also do not expect to do so in the foreseeable future.

The following tables present for the periods indicated, certain rates of exchange for Canadian dollars in terms of U.S. dollars (based on the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York):

The rate of exchange for the Canadian dollar to the U.S. dollar on June 25, 2010May 31, 2011 was US$1.00 = 1.040.97 Cdn$.

No disclosure required.

No disclosure required.

As more particularly described under “Item 8.A.7 Legal Proceedings – Esaase Lawsuit”, Sametro Company Limited (“Sametro”), a predecessor in interest of Keegan Ghana to the Esaase Concession, has commenced a lawsuit in Ghana seeking to recover Sametro’s interests in the Esaase Concession.  While Keegan Ghana is confident in its legal position, lawsuits are inherently uncertain, an unfavourable ruling in the lawsuit could deprive Keegan Ghana of its most material asset, which would have severe adverse consequences on the value of the Company.

Should Sametro succeed with the interlocutory application, Keegan Ghana would be required to halt exploration activities on the Esaase Property, delaying Keegan’s exploration program.  Such delay could have a material adverse effect on the value of the Company.

Capital market disruptions, as recently experienced in 2008 and 2009, have a significant material adverse impact on companies in many sectors of the economy and can significantly limit access to capital and credit.  These disruptions could, among other things, make it more difficult for the Company to obtain, or increase the Company’s cost of obtaining, financing for its operations.  Failure to raise capital when needed or on reasonable terms may have a material adverse effect on the Company’s business, financial condition and results of operations.

Additionally, these factors, as well as other related factors, may cause decreases in asset value and create solvency concerns, which may result in impairment losses.

The Company is also exposed to liquidity risks in meeting its operating and capital expenditure requirements in instances where cash positions are unable to be maintained or appropriate financing is unavailable. These factors may impact the ability of the Company to obtain loans and other credit facilities in the future and on favourable terms.

While there are bodies of mineralization on the Esaase Property, and although Keegan has completed core drilling programs within, and adjacent to, the deposits to determine measured, indicated and inferred mineral resources there are currently no known reserves or body of commercially viable ore and the Esaase Property must be considered an exploration prospect only.  Extensive additional work will be required before Keegan can ascertain if any mineralization may be economic and hence constitute “ore”.  Engineering, socioeconomic and environmental studies are ongoing.  Exploration for minerals is a speculative venture necessarily involving substantial risk.  If the expenditures that Keegan incurs on the Esaase Property do not result in discovery and development of commercial quantities of ore, the value of exploration and acquisition expenditures will be totally lost and the value of Keegan stock negatively impacted.

Keegan has disclosed mineral resource estimates that have been made in accordance with NI 43-101.  These resources estimates are classified as “measured resources”, “indicated resources” and “inferred resources”.  Investors are cautioned not to assume that any part or all of mineral deposits classified as “measured resources” or “indicated resources” will ever be converted into ore reserves.  Furthermore, “inferred resources” have a great amount of uncertainty as to their existence, and economic and legal feasibility.  It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category.  Estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases.  Investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legal lylegally mineable.

All amounts of mineral resources are estimates only, and Keegan cannot be certain that any specified level of recovery of metals from the mineralized material will in fact be realized or that the Esaase Property or any other identified mineral deposit will ever qualify as a commercially mineable (or viable) ore-body that can be economically exploited.  Mineralized material that is not mineral reserves does not have demonstrated economic viability.  In addition, the quantity of mineral reserves and mineral resources may vary depending on, among other things, metal prices and actual results of mining.

Keegan will need to raise additional financing to fund the costs of developing the Esaase Property into commercial production if warranted.  If the costs of Keegan’s planned exploration programs are greater than anticipated, Keegan may have to seek additional funds through public and private share offerings, arrangements with corporate partners, or debt financing.  There can be no assurance that Keegan will be successful in its efforts to raise these required funds, or that it will be able to raise the funds on terms that do not result in high levels of dilution to shareholders.

Keegan has a long history of losses and there can be no assurance that Keegan will ever be profitable or be able to secure funds to develop profitable mining operations.  Keegan has paid no dividends on its shares since incorporation.  Keegan presently has no ability to generate earnings as its mineral properties are in the exploration stage.  If Keegan is successful in developing the Esaase Property, Keegan anticipates that it will retain cash resources for the future operation and development of its business.  Keegan does not intend to declare or pay any cash dividends in the foreseeable future.  Payment of any future dividends is solely at the discretion of Keegan’s Board of Directors, which will take into account many factors including Keegan’s operating results, financial conditions and anticipated cash needs.  For these reasons, Keegan may never achieve profitability or pay dividends.

4

The ability of Keegan to raise financing to fund its activities and, if warranted, development of the Esaase Property, will be significantly affected by changes in the market price of the metals it mines or for which it explores.  The price of gold is volatile, and is affected by numerous factors beyond Keegan’s control.  The level of interest rates, the rate of inflation, the world supplies of and demands for gold and the stability of exchange rates can all cause fluctuations in these prices.  Such external economic factors are influenced by changes in international investment patterns and monetary systems and political developments.  The price of gold has fluctuated in recent years, and future significant price declines could cause investors to be unprepared to finance exploration of gold.

Keegan must comply with stringent environmental legislation in carrying out work on the Esaase Property.  Environmental legislation is evolving in a manner that will require stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors and employees.  Changes in environmental legislation could increase the cost to Keegan of carrying out its exploration and, if warranted, development of the Esaase Property.  Further, compliance with new or additional environmental legislation may result in delays to Keegan’s exploration and, if warranted, development activities.

Government regulations relating to mineral rights tenure, permission to disturb areas and the right to develop and operate a mine can adversely affect the operations of Keegan.  Keegan may not be able to obtain all necessary licenses and permits that may be required to carry out exploration and, if warranted, development of its projects.  Any changes in regulations or shift in political attitude are beyond the control of Keegan and may adversely affect its business.

Hazards such as unusual or unexpected geological formations and other conditions are involved in mineral exploration and development.  Keegan may become subject to liability for pollution, cave-ins or hazards against which it cannot insure.  The payment of such liabilities could result in a material adverse effect on Keegan’s financial position and its results of operations.  Although Keegan maintains liability insurance in an amount which it considers adequate, the nature of these risks is such that the liabilities might exceed policy limits and the liabilities and hazards might not be insurable against.

Gold exploration, including the exploration of the Esaase Property and other projects, involves a high degree of risk.  Exploration projects are frequently unsuccessful.  Few prospects that are explored are ultimately developed into producing mines.  The Company cannot be certain that its gold exploration efforts will be successful.  The success of gold exploration is dependent in part on the following factors:

•

unanticipated adverse geotechnical conditions;

•

incorrect data on which engineering assumptions are made;

•

costs of constructing and operating a mine in a specific environment;

•

cost of processing and refining;

•

availability of economic sources of power;

•

availability of qualified staff;

•

adequacy of water supply;

•

adequate access to the site including competing land uses (such as agriculture and illegal mining);

•

unanticipated transportation costs and shipping incidents and losses;

•

significant increases in the cost of diesel fuel, cyanide or other major components of operating costs;

•

government regulations (including regulations relating to prices, royalties, duties, taxes, permitting, restrictions on production, quotas on exportation of minerals, as well as the costs of protection of the environment and agricultural lands);

Substantial expenditures are required to determine if a project has economically mineable mineralization.  It could take several years to establish Proven and Probable Mineral Reserves and to develop and construct mining and processing facilities.  As a result of these uncertainties, the Company cannot guarantee that current and future exploration programs will result in the discovery of Mineral Reserves, the expansion of existing Mineral Reserves and the development of mines.

The market price of a publicly traded stock, especially a resource issuer like Keegan, is affected by many variables in addition to those directly related to exploration successes or failures.  Such factors include the general condition of market for resource stocks, the strength of the economy generally, the availability and attractiveness of alternative investments and the breadth of the public market for the stock.  The effect of these and other factors on the market price of Keegan’s common shares suggests Keegan’s shares will continue to be volatile.  Therefore, investors could suffer significant losses if Keegan’s shares are depressed or illiquid when an investor seeks liquidity and needs to sell Keegan shares.

Keegan has focused its operations on the properties in Ghana.  Nearly all mining projects require government approval regardless of the country.  There can be no certainty that these approvals will be granted in a timely manner, or at all.  The laws in foreign countries tend to differ significantly from North America and are subject to change.  Mining operations, development and exploration activities are generally subject to extensive laws and regulations governing prospecting, development, production, exports, taxes, labour standards, occupational health, waste disposal, environmental protection and remediation, protection of endangered and protected species, mine safety, toxic substances and other matters.

Mining is also subject to potential risks and liabilities associated with pollution of the environment and the disposal of waste products occurring as a result of mineral exploration and production.  The costs of discovering, evaluating, planning, designing, developing, constructing, operating and closing mines and other facilities in compliance with such laws and regulations are significant.

Acquisitions of properties in foreign countries are subject to the risks normally associated with conducting business in foreign countries.  Some of these risks are more prevalent in countries which are less developed or have emerging economies, including uncertain political and economical environments, as well as risks of war and civil disturbances or other risks which may limit or disrupt a project, restrict the movement of funds or result in the deprivation of contract rights or the taking of property by nationalization or appropriation without fair compensation, risk of adverse changes in laws or policies of particular countries, increases in foreign taxation, delays in obtaining or the inability to obtain necessary governmental permits, limitations on ownership and repatriation of earnings and foreign exchange controls and currency devaluations.

In addition, Keegan may face import and export regulations, including restrictions on the export of gold, disadvantages of competing against companies from countries that are not subject to Canadian and U.S. laws, including foreign corrupt practices legislation, restrictions on the ability to pay dividends offshore, and risk of loss due to disease and other potential endemic health issues.  Although Keegan is not currently experiencing any significant or extraordinary problems arising from such risks in the foreign country that we have properties in, there can be no assurance that such problems will not arise in the future.

Keegan operates in a competitive industry and compete with other more well established companies which have greater financial resources.  Keegan faces strong competition from other mining companies in connection with exploration and the acquisition of properties producing, or capable of producing precious metals.  Many of these companies have greater financial resources, operational experience and technical capabilities than us.  As a result of this competition, Keegan may be unable to maintain or acquire attractive mining properties on terms we consider acceptable or at all.  Consequently, our operations and financial condition could be materially adversely affected.

Keegan maintains most of its working capital in Canadian dollars with a reserve of six months of projected expenditures in US dollars.  Keegan converts Canadian funds to foreign currencies in anticipation of foreign currency denominated obligations.  Accordingly, Keegan is subject to fluctuations in the rates of currency exchange between Canadian dollar and these foreign currencies, and these fluctuations could materially affect the Company’s financial position and results of operations. A significant portion of the operating costs at Esaase and Asumura is based on the US dollar and the Ghanaian currency, the Cedi.

Because the success of Keegan is highly dependent upon its respective employees, the Company has granted to some or all of its key employees, Directors and consultants options to purchase common shares as non-cash incentives.  To the extent that significant numbers of such options may be granted and exercised, the interests of the other stockholders of the Company may be diluted. There are 2,984,5076,213,750 share purchase options outstanding as at March 31, 2010,2011, which, if exercised, would result in an additional 2,984,5076,213,750 common shares being issued and outstanding. (See “Table No. 8 Stock Option Grants under Item 6.B Compensation”).

While engaged in the business of exploring mineral properties, the nature of Keegan’s business, its ability to continue its exploration of potential exploration projects, and to develop a competitive edge in the marketplace, depends, in large part, on its ability to attract and maintain qualified key management personnel.  Competition for such personnel is intense and the Company may not be able to attract and retain such personnel.  Keegan’s growth will depend, on the efforts of its Senior Management, particularly its Executive Chairman, Shawn Wallace, its Chief Executive Officer and President, Maurice Tagami, its Chief Financial Officer, Tony RicciGreg McCunn and its Board of Directors that includes Marcel DeGroot, Daniel McCoy, Robert McLeod, and Gordon Fretwell, and Keith Minty in addition to Shawn Wallace Mr. McCoy and Maurice Tagami. Keegan does not carry key-man insurance on any individuals.

As a foreign private issuer, Keegan is exempt from the Sectionproxy solicitation rules promulgated under section 14 proxy rulesof the Exchange Act, and Sectionits insiders are exempt from the requirement to file statements of beneficial ownership of the Company’s securities under section 16 of the 1934 Securities Act ResultsExchange Act.  Although Keegan is required to prepare proxy materials in Shareholders Having Less Completeconnection with meetings of its shareholders under applicable Canadian securities laws, the disclosure in such materials may not be comparable to disclosure required to be included proxy statements prepared by U.S. domestic issuers on Schedule 14A.  Any proxy materials prepared by Keegan are required to be filed with applicable securities commissions or similar regulatory authorities in Canada on the System for Electronic Document Analysis and Timely Data.

7

The submissionRetrieval (commonly known as “SEDAR”), an electronic database maintained on behalf of proxy and annual meeting of shareholder information (preparedthe Canadian provincial securities regulators, but are only required to Canadian standards)be furnished to the SEC on Form 6-K results6-K.

Keegan’s insiders are required to file insider reports with applicable securities commissions or similar regulatory authorities in Canada on the System for Electronic Disclosure by Insiders (commonly known as “SEDI”), an electronic database maintained on behalf of the Canadian provincial securities regulators.  However, the disclosure in such insider reports may not be comparable to, nor as timely as, disclosure contained in statements of beneficial ownership of securities on Forms 3 and Form 4 prescribed pursuant to section 16 of the Exchange Act.

U.S. shareholders having less completeshould be aware that the Company believes it was classified as a passive foreign investment company (“PFIC”) during the tax year ended March 31, 2011, and timely data.  The exemption from Section 16 rules regarding salesmay be a PFIC in future tax years.  If the Company is a PFIC for any year during a U.S. shareholder’s holding period, then such U.S. shareholder generally will be required to treat any gain realized upon a disposition of common shares, or any so-called “excess distribution” received on its common shares, as ordinary income, and to pay an interest charge on a portion of such gain or distributions, unless the shareholder makes a timely and effective “qualified electing fund” election (“QEF Election”) or a “mark-to-market” election with respect to the common shares.  A U.S. shareholder who makes a QEF Election generally must report on a current basis its share of the Company's net capital gain and ordinary earnings for any year in which the Company is a PFIC, whether or not the Company distributes any amounts to its shareholders.  However, U.S. shareholders should be aware that there can be no assurance that the Company will satisfy record keeping requirements that apply to a qualified electing fund, or that the Company will supply U.S. shareholders with information that such U.S. shareholders require to report under the QEF Election rules, in the event that the Company is a PFIC and a U.S. shareholder wishes to make a QEF Election.  Thus, U.S. shareholders may not be able to make a QEF Election with respect to their common shares.  A U.S. shareholder who makes the mark-to-market election generally must include as ordinary income each year the excess of the fair market value of the common shares over the taxpayer’s basis therein.  This paragraph is qualified in its entirety by insiders results in shareholders having less data in this regard.

the discussion below under the heading “Certain United States Federal Income Tax Considerations.”  Each U.S. shareholder should consult its own tax advisor regarding the PFIC rules and the U.S. federal income tax consequences of the ownership and disposition of common shares.

On January 2, 2008, the Company’s common shares began trading on the American Stock Exchange (now the NYSE Amex Equities Exchange). On December 22, 2008, the Company graduated from the TSX Venture Exchange (the “TSX-V”) to the Toronto Stock Exchange (the “TSX”) and commenced trading under the trading symbol “KGN”.

For the purposes of the United States regulatory requirements and United States Generally Accepted Accounting Principles, Keegan is considered to be an exploration stage company.

As at March 31, 2010,2011, the Company has mining interests in West Africa (see “Item 4.D Property, Plant and Equipment”).

Financings

The Company has financed its operations through funds raised in public/private placements of common shares and shares issued upon exercise of stock options and share purchase warrants. Over the past three fiscal years, the Company raised funds through the issuance of the following common shares:

Fiscal Year		Nature of Share Issuance	Number of Shares	Amount
	Fiscal 2008	Private Placement, net of share issue costs	3,300,000	$12,358,089
		Exercise of share purchase warrants	1,115,470	$2,033,528
		Exercise of share purchase options	200,000	$184,000
	Fiscal 2009	Exercise of share purchase warrants	773,000	$1,982,700
		Exercise of share purchase options	263,905	$242,793
	Fiscal 2010	Bought deal share offering, net of share issue costs	8,000,000	$18,059,533
		Brokered private placement, net of share issue costs	7,015,000	$39,003,739
		Exercise of share purchase warrants	162,667	$504,268
		Exercise of share purchase options	1,289,903	$2,301,880

8

Capital Expenditures

The Company’s principal capital expenditures (there have been no material divestitures) over the three fiscal years ended March 31, 2009 are as follows:

Year	Resource property acquisition costs	Deferred exploration             costs	Furniture, equipment and leasehold improvements	Total
2008	$1,515,725	$9,861,207	$110,459	$11,487,391
2009	$237,161	$10,901,528	$119,631	$11,258,320
2010	$nil	$9,368,626	$214,751	$10,979,934

Item 4.B

Business Overview

Keegan became a public company on June 22, 2001 as a “Capital Pool Company”.

Under the TSX-V Policy 2.4, a company with only minimal working capital is allowed to list on the TSX-V for the purposes of negotiating an acquisition of, or the participation in, assets or businesses, known as a Qualifying Transaction (“QT”). Such companies are classified as a “Capital Pool Company”, or “CPC”, and are governed by a specific set of rules and regulations.

The sole purpose of a CPC is to identify and evaluate existing businesses or assets for possible acquisition, which if acquired, would provide the company for a full listing on the TSX-V. The only business a CPC is allowed to conduct prior to its Initial Public Offering and listing on the TSX-V is to prepare for its offering. This typically consists of raising a limited amount of seed capital, establishing a management team and board of directors, as well as hiring professionals to assist in the offering, including an auditor, legal counsel, and an agent for the offering.

On June 11, 2003, Keegan announced that it had entered into a letter of intent to purchase an interest in a property located in Australia. On July 22, 2003, Keegan announced that it had decided not to proceed with this transaction because, upon further examination of the property, management determined that it did not warrant further exploration.

On September 5, 2003, Keegan announced that it entered into another letter of intent to purchase a 100% interest in some mining claims located in British Columbia. This agreement was also terminated during the year ended March 31, 2004 because, upon further examination of the property, management determined that it did not warrant further exploration.

As Keegan had not completed a “QT” by December 2003, the directors of the Company scheduled an extraordinary general meeting of its shareholders to request shareholder approval to the proposed listing of Keegan’s shares on the NEX Exchange. The NEX Exchange is a separate board of the TSX-V for companies previously listed on the TSX-V or the TSX, which have failed to maintain compliance with the ongoing financial listing standards of either of these stock exchanges. Shareholder approval was obtained and Keegan’s common shares began trading on the NEX Exchange on February 12, 2004.

On September 7, 2004, Keegan entered into agreements with the Hunter Dickinson Group, Inc. (“HDG”), Anaconda Gold Corp. and Barrick Gold Exploration Inc. whereby it acquired the right to earn an interest in the Horse Mountain Project located in Nevada.

On January 31, 2005, Keegan announced that the TSX-V had accepted the transaction pertaining to the Horse Mountain Project as the “Qualifying Transaction” for the Company and that it no longer considered Keegan to be a Capital Pool Company.  Keegan was reclassified by the TSX-V as a “Gold Ore Mining” company.  On March 1, 2005, the Company began trading on the TSX-V under the name “Keegan Resources Inc.” with the stock symbol of “KGN”.

9

On March 4, 2005, Keegan announced that it had entered into an option agreement to acquire a 100% interest in the Regent Gold Silver Project located in Mineral County, Nevada.  Keegan terminated its interest in this property in 2007 due to its focus on its properties in Ghana.

On March 11, 2005, Keegan announced that it had entered into an option agreement with GTE Ventures Limited, an unrelated privately held Ghanaian company, to acquire the Asumura gold project located in West Ghana (the “Asumura Property”).  The option agreement allowed Keegan to acquire 100% of the private interest in the Asumura Property, subject to a 3.5% net smelter return (“NSR”) royalty, 50% of which could be purchased by Keegan for US$2,000,000, Keegan’s interest could be earned by performing work expenditures totallingtotaling US$1,000,000, delivering cash payments totallingtotaling US$100,000 and delivering shares of Keegan totallingtotaling US$100,000 in value over a period of three years.  During the year ended March 31, 2008, the Company acquired an option to purchase the remaining 50% of the NSR royalty for an additional US$4,000,000.  Keegan’s interest in the Asumura Property is also subject to the government of Ghana’s 10% ca rriedcarried interest. See “Item 4.D Property, Plant and Equipment - Asumura Property”.

On June 2, 2005, Keegan announced that it had entered into an option agreement to acquire a 100% interest in the Fri Property located in Nye County, Nevada.  During the fiscal year ended March 31, 2006, the Company decided not to pursue its option pertaining to the Fri Property because, after completing preliminary exploration work, management determined that the results did not warrant further exploration work.

On December 7, 2005, Keegan announced that it had entered into an option agreement to acquire a 100% interest in the Black Velvet Gold Project located in Pershing County, Nevada.  Keegan terminated its interest in this property in 2007 due to its focus on its properties in Ghana.

During the fiscal year ended March 31, 2006, management announced that it had decided not to pursue the Company’s option to earn an interest in the Horse Mountain Claims and, as a result, $1,018,587 in acquisition and deferred exploration expenditures associated with the property were written-off. Management took this action because, due to limited financial resources, it determined to concentrate the Company’s efforts on its Ghana properties.

In March 2008, Keegan acquired a 100% interest in the mining lease for the Jeni River Concession for consideration of US$50,000 to the Bonte Liquidation Committee and US$50,000 paid to the Minerals Commission of Ghana to transfer title, subject to a 3.5% NSR royalty and the government of Ghana’s 10% carried interest (see “Item 4.D Property, Plant and Equipment - Esaase Property”).

The Company entered into an option agreement dated March 27, 2008 with Mt. Olives Goldfields, Ltd. to earn a 100% ownership of the Mt. Olives Reconnaissance Concession, which is contiguous to the Asumura Property.  During the year ended March 31, 2009, the Company decided not to pursue its option on the Mt. Olives concession and as a result, $170,596 in acquisition and deferred exploration expenditures were written-off.

All of Keegan’s properties are currently in the exploration stage.  Although its Esaase Property has been determined to contain mineral resources, none of the Company’s properties have been determined to contain any known reserves of minerals.  There can be no assurance that any of Keegan’s properties will be determined to contain reserves of any minerals.

The Company’s material properties currently consist of the Asumura Property and the Esaase Property, both in West Ghana, Africa.  See Item 4.D “Property, Plant and Equipment” below for more information relating to these properties.

Our plan of operations for the next 12 months is to:

(a)

undertake additional exploration at the Esaase Property to add to the existing resource estimates and convert additional resources from inferred to measured and indicated resources categories.  Exploration will consist of reverse circulation drilling of current exploration and resource extension targets and core drilling targeting higher grade targets of the deposit down dip and along strike to the north;

 (b)

complete metallurgical and hydrogeological drill programs in conjunction with engineering studies to support the Esaase Property’s pre-feasibility and feasibility studies;

(c)

continue working with local communities, the Ghanaian government and the Ghanaian Enviromental Protection Agency (the “EPA”) to both advance community relations and the permitting of the Esaase Property; and,

(d)

continue exploration of the Asumura Property.

Keegan’s primary source of funds since incorporation has been through the issuance of common shares.

As at March 31, 2010,2011, the Company had cash and cash equivalents of $26,712,372 and short-term investments of $22,000,000.$229,144,989. The Company believes it currently has sufficient working capital on hand to meet its expected capital requirements for fiscal 20112012 and 2012.2013.  Additional funds may be received through the exercise of currently outstanding common stock warrants and options or through the sale of additional common shares either as a private placement or public common stock offering.

Additional capital may also be obtained through the exercise of outstanding share purchase options and share purchase warrants. There is no guarantee, however, that any of these share purchase options and share purchase warrants will be exercised.

Keegan has sufficient funds to pursue its business plans for the next 24 months.  Additional financing will be required going forward.  However, there can be no assurance that any such financing will be obtained.

For the year ended March 31, 2010, Keegan expended $13,640,475 in general and administrative expenses and property development, exploration and evaluation costs. KeeganFiscal 2012, the Company has budgeted $4,300,000$5,800,000 for general and administrative expenses and $20,100,000$29,800,000 for property development, exploration and acquisition costs throughpredominantly on the end of fiscal 2011.

Esaase gold project.

Management of Keegan anticipates no changes to eitheradding employees and facilities or employees in the near future.

11

future as the Company further advances the development of its Esaase Gold project.

The current and anticipated future operations of Keegan including further exploration activities, require permits from various Ghanaian governmental agencies.  Such operations are subject to various laws governing land use, the protection of the environment, production, exports, taxes, labor standards, occupational health, waste disposal, toxic substances, well safety and other matters.  Unfavorable amendments to current laws, regulations and permits governing operations and activities of resource exploration companies, or more stringent implementation thereof, could have a materially adverse impact on Keegan and cause increases in capital expenditures which could result in a cessation of operations by Keegan.  Keegan has had no material costs related to compliance and/or permits in recent years, and anticipates no material costs in the next year.

Keegan competes with other mineral resource exploration companies for financing, for the acquisition of new mineral properties and for the recruitment and retention of qualified employees and other personnel.  Many of the mineral resource exploration and development companies with which Keegan competes have greater financial and technical resources.  Accordingly, these competitors maybe able to spend greater amounts on acquisitions of mineral properties of merit, on exploration of their mineral properties and on development of their mineral properties.  In addition, they may be able to afford more geological expertise in the targeting and exploration of mineral properties.  This competition could result in competitors having mineral properties of greater quality and interest to prospective investors who may finance additional exploration and development.  This competition could have an adverse impact on our ability to finance further expl orationexploration and to achieve the financing necessary for us to develop our properties.

During the three months ended March 31, 2011, the Company incorporated Keegan has two wholly-owned subsidiaries: Quicksilver Ventures (Nevada)International (Barbados) Inc., a Nevada corporation which is currently inactive, and Keegan Resources (Ghana) Limited, a corporation organized underGhana (Barbados) Inc. as its wholly-owned subsidiaries for the lawspurposes of Ghana, Africa.

international tax planning.

Although mineral resources have been determined on the Company’s Esaase Property, Keegan’s properties are only exploration stage properties and a substantial amount of capital will have to be spent on each property before management will know if they contain commercially viable mineral deposits.

Keegan’s executive offices are located in rented premises of approximately 5,18510,000 sq. ft. at Suite 600, 1199 West Hastings Street, Vancouver, British Columbia, Canada, V6E 3T5.  Keegan began occupying these facilities on December 1, 2008.

On May 20, 2010, the Company negotiated the cancellation their existing lease commitment set to expire on November 30, 2013.  In its place, the Company signed a letter of guarantee over the premises and transferred the lease plus an extension of the lease to May 31, 2015 to Universal Mineral Services Ltd. (“UMS”).that includes the 5,000 additional sq.ft. The amount guaranteed are the monthly rent payments of $ 23,767 plus operating costs over the term of the lease.

UMS is a private company which Keegan acquired the sole common share on April 14, 2010. UMS has certain directors in common with the Company and was incorporated to provide geological, corporate development, administrative and management services to, and incur third party costs on behalf of, the Company, its subsidiaries and other publically listed mining companies on a full cost recovery basis pursuant to a service agreement.

lease are approximately $30,000.

The Asumura Property is without known reserves and the work being done by Keegan is exploratory in nature. Keegan’s interest in this property stemmed from earlier exploration work, as described below, that was done in the area.

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Keegan entered into an agreement with GTE Ventures Ltd. (“GTE”), an unrelated privately held Ghanaian company, which allows Keegan to acquire 100% of the Asumura Property by performing work expenditures totaling US$1 million, deliver cash payments adding together US$100,000 and delivering shares of Keegan totaling US$100,000 in value over a period of three years, under the following schedule:

The Asumura Property is located in the southwestern part of Ghana and is divided into two parts by the Bia River. The western part of the property is within the Western Region of Ghana in the Juabeso Bia District and the eastern part is in the Brong Ahafo Region of Ghana.

Asumura Property is accessible from the town of Kumasi by road, the majority of which is asphalt. The last 22 miles is a laterite road. Laterite is a surface formation, found mostly in tropical areas, which is enriched in iron and aluminum. Within the property, there is a good network of laterite roads and foot trails, which provide access for the exploration crews.

Annual rainfall is between 58 inches and 78 inches and temperatures vary between 72 degrees and 97 degrees Fahrenheit with an average of about 84 degrees Fahrenheit. A major rainy season occurs from April to July followed by a minor one from September through October.

The closest town, Goaso, is about 24 miles away. It contains hotels, markets and restaurants, hospitals and medical clinics, a cell phone tower, a network of land phones connected to the Ghana Telephone system via radio, and an internet café with satellite dish.

The Asumura Property is sparsely populated.

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The Asumura Property currently consists of two exploration concessions:  Fosukrom and Asumura, which together equal 279.4 sq km.  Keegan entered into an agreement with GTE , which allows Keegan to acquire 100% of the private interest in the Asumura Property by performing work expenditures totaling US$1 million, deliver cash payments adding together US$100,000 and delivering shares of Keegan totaling US$100,000 in value over a period of three years. GTE will retain a 3.5% Net Smelter Return, 50% of which may be purchased for US$2 million by Keegan.  The Ghanaian government is also entitled to claim a 3-6% NSR5% revenue royalty after the property is converted to a mining license; a 3% has been standard in recent history.  The Ghanaian government is also entitled to participate up to 10% in the project.  During the year ended March 31, 2008, the Company acquired an option to purchase the remaining 50% of the GTE NSR royalty for an additional US$4,000,000.

The exploration license allows Keegan permission to trench and drill on the property, providing Keegan obtains a permit from the EPA.  Keegan obtained its permits for 2006 in January 2006 and has renewed these permits annually from 2007 up to 2011.

The Asumura Property is located in Southwest Ghana which is dominated by the Birmian Supergroup of metasedimentary and metavolcanic rocks with various granitoid intrusions. Within the Birmian Supergroup, northeast striking mafic metavolcanic belts are separated from intervening metasedimentary basins by major faults. The Asumura Property is situated on the NW edge of the Sefwi-Bibiani Greenstone Belt along a well-defined zone of gold occurrences. It covers a 6 kilometer segment of grandiorite-metasediment contact and a 5 kilometer segment of a metavolcanic-metasediment contact.

Through surface geochemistry and aeromagnetic and EM studies, three major gold bearing regional structures have been located on the property, one of which is the belt bounding structure mentioned in the previous paragraph.

The Asumura Property was once licensed by Anglo American Plc., an unrelated public company. Keegan is unaware of any surface exploration that Anglo American carried out in the area.  There are no recorded mineral resources, reserves, or production from this property.  When Keegan entered into the option agreement with GTE, there were no known exploration samples of any kind taken from the property.  Zaknet, Inc.,  a private Ghanaian company unrelated to Keegan, acquired a reconnaissance concession from the Ghanaian government in 2003.  They quit, claimed the property to GTE in 2004 and Keegan entered into an option agreement with GTE in 2005.

Keegan initially explored the concession using stream sediment techniques.  After discovering significant stream sediment anomalies, Keegan conducted reconnaissance soil sampling in the drainages, which showed anomalous gold in the stream sediments.  Keegan subsequently used grid sampling soil techniques at approximately 100 meter line spacing and 25 meter sample spacing together with induced polarization (“IP”) geophysical surveying.  The end result was the discovery of three distinct anomalies in the Twiapasi, Wagyakrom and Mangoase areas. The Twiapasi and Wagyakrom anomalies are on the southern side of a large topographic depression that hosts the Bia River and one of its major tributaries.  The Mangoase anomaly is on the north side of the trough and parallels the east north east trend. The next phase will include further soil sampling, induced polarization geophysical studies and augur drilling.

Keegan received approval from the Ghanaian government during the latter part of 2005 to convert its holdings from reconnaissance to exploration concessions. This conversion allowed exploration trenching and drilling to proceed after successful permitting from the EPA in early 2006.

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The Company began drilling at the Asumura Property shortly after receiving the approval from the Ghanaian government. Keegan drilled 124 shallow (30-102 meter) reverse circulation holes and 13 core holes.  Keegan discovered from 10-30 meter widths of 0.5-1.68 g/t Au mineralization at the Wagyakrom and Mangoase anomalies.

Subsequent to the initial drilling, Keegan was able to obtain aeromagnetic geophysical data for the entire property that caused Keegan to prioritize the existing Mangoase area and to identify a new potential mineralized structure: the Bia structure, which underlies the previously described topographic depression transcending the length of the property.  This zone had not been previously explored due to alluvial cover.

In July 2007, the Company discovered the NW anomaly, which coincides with a large regional north east trending fault coincident with an aeromagnetic break in the northwestern portion of the property. The anomaly is over 5.5 km long and varies from 300 -- 500 meters wide and is defined very consistently by Au values obtained in the low lying, deeply lateritic soils.   In January of 2008 the company released auger results of up to 5900 ppb Au from the NW zone, following up on the previously mentioned soil anomalies

In March of 2008, the company conducted a small reverse circulation reconnaissance drilling program.  An intercept of 14 meters of 14.48 g/t Au was intersected on the NW structure.

In April of 2008, Keegan obtained the contiguous Mt. Olives reconnaissance concession, which tripled the size of the Asumura Property. The Company completed surface exploration during April and September of 2008 comprising stream sediment and soil sampling on the Mt. Olives reconnaissance concession along with a continuous program of soil and auger sampling on the Asumura exploration concessions. During the year ended March 31, 2009, the Company terminated its option agreement on the Mt. Olives concession.

The fiscal 2010 exploration program consisted of auger sampling and testing of soil anomalies along the NW, Mangoase, Wagyakrom Spur and Bia anomalies and a regional gravity survey (conducted by Newmont Mining Corporation under a confidentiality agreement) in order to obtain a gravity map for the entire concession. These programs identified drill worthy targets and Keegan designed a drill program and has since proceeded to drill.

The Asumura Property is located on the Ahafo structure, a major fault bounding structure on the NW edge of the Sefwi-Bibiani Greenstone Belt, a well-defined aeromagnetic feature along which many gold occurrences occur. Volcanic and granitic rocks dominate the belts, while basin sedimentary rocks occur outboard to the belt. Approximately 15 km of this tectonic-depositional boundary is contained within the Asumura Concession.  Parallel faults that divide sedimentary and metaclastic rocks of the basin, such as the NW fault are also gold bearing.  The geophysical and gravity maps show that these may be outbound basinal faults related to the same event which formed the Ahafo fault.

There are no existing equipment, plants or infrastructure on the Asumura Property.

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The closest town, Goaso, is about 24 miles away from the Asumura Property. It contains hotels, markets and restaurants, hospitals and medical clinics, a cell phone tower, a network of land phones connected to the Ghana telephone system via radio, and high voltage, high tension power lines connected to the national power grid.

The Esaase Gold Property is without known reserves and the work being done by Keegan is exploratory in nature.  However, the property has been determined to contain mineral resources.

Unless stated otherwise, information of a technical or scientific nature related to the Esaase Gold Property contained herein is summarized or extracted from a technical report entitled “Esaase Gold Deposit Resource Estimation” dated April 24, 2009 (the “Technical Report”), prepared by Brian Wolfe, MAusIMM. Mr. Wolfe is independent to Keegan.

On May 3, 2006, the Company entered into an option agreement with Sametro Co. Ltd. (“Sametro”) to purchase a 100% interest in the Esaase gold property in southwest Ghana, subject to the underlying 10% interest, 3% NSR of the Ghanaian government in all mining projects in Ghana, and a 0.5% NSR owed to the Bonte Liquidation Committee. Under the terms of the agreement, the Company was to make a series of cash payments totaling US$890,000, issue 780,000 common shares and incur minimum exploration expenditures of US$2,250,000 over a three year period.

During the year ended March 31, 2008, after having already made cash payments of US$500,000, issued 40,000 common shares and completed the full exploration expenditure requirement, the Company renegotiated the option agreement so that all further cash and share payments were no longer owed. In lieu of these payments, the Company paid $850,000 to a creditor of Sametro and issued 40,000 additional common shares to Sametro. Subsequent to these payments, the Company was granted the full Esaase Mining Lease by the Minerals Commission and Minister of Mines, Lands and Forestry with no further obligation to any party aside from the NSR and government commitments.

During the year ended March 31, 2008, the Company purchased 100% private ownership of the Jeni Concession mining lease and exploration rights. The Jeni Concession lies directly to the southwest and contiguous to the Esaase Gold property. In consideration for the acquisition of the mining lease, Keegan paid US$50,000 to the Bonte Liquidation Committee (“BLC”) and US$50,000 to the Minerals Commission of Ghana for the title transfer. The Ghanaian government retains a standard 10% carried interest and 3% NSR5% revenue royalty and the BLC retains a 0.5% NSR.