In its first ruby update since November, Mustang Resources says it’s still getting “strong” production from its Mozambique ruby mine.

Mustang (ASX:MUS) fell from grace at the end of October when reports began to leak out from its inaugural ruby auction that less than half of the lots sold.

The auction was well-hyped before it took place and the failure saw Mustang’s share price disintegrate by 69 per cent in a single day.

After the resignation of head honcho Christiaan Jordaan and a swift public shift of focus onto its graphite operation, Mustang is now ready to admit it’s still in the ruby business.

The news sent shares up 30 per cent 3.1c on Tuesday morning — still a long way off the dizzying heights of 18.5c before the auction. They closed up 21 per cent at 2.9c.

Rubies recovered in January from Mustang's Montepuez Ruby Project in Mozambique.
Rubies recovered in January from Mustang’s Montepuez Ruby Project in Mozambique.

Mustang’s ruby inventory for sale now stands at 302,028 carats, as of the end of January.

They found 29,983 carats in the last three months of 2017, and 7,495 carats to date in this quarter.

Exploration from the last months of 2017 and into early 2018 developed 69 sampling pits and extracted 14,502 tonnes of material for bulk sampling.

They’re now looking for other targets for excavation.

Mustang is yet to win back investor trust after a much-hyped auction did not go as well as expected.
Mustang is yet to win back investor trust after a much-hyped auction did not go as well as expected, but after today’s share price bounce it might be well on the way back.

“Having spent time on site in recent weeks, I am very pleased to report that exploration, bulk sampling and processing activities on the Montepuez Ruby Project are meeting our targets,” said managing director Dr. Bernard Olivier.

“The Q4 2017 plant optimisation program is generating the intended results with further improvements and upgrades now being implemented. The overall results demonstrate that Montepuez is highly prospective and technically sound.”

He says the company will update investors on their new marketing strategy and sales progress “shortly”.

In November, Mustang laid the blame for the ruby auction failure at the door of its in-house gem-grading system, which lumped different qualities of rubies in the same lots.