Mustang doubles ruby stocks to 405,000 carats ahead of auction
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The world’s only listed ruby miner Mustang Resources will take more than double the number of carats it originally forecast to its maiden auction this week.
A recent ramp-up of production at its flagship Montepuez project had boosted inventory for a public tender in Mauritius this Friday to 405,000 carats, Mustang (ASX:MUS) told investors.
That’s more than twice the 200,000 carats initially targeted when the sale date was set.
The news pushed the stock’s share price up 4 per cent to 18c in Tuesday early afternoon trading.
“It is increasingly clear that Montepuez can generate production and cashflow on a much greater scale,” said Mustang’s managing director Christiaan Jordaan.
“We also believe that our upcoming exploration program will establish that we can sustain increasing production over a considerable number of years,” he said.
“Our timing appears to be impeccable, with the global ruby market enjoying very strong growth, making it a great time to be the world’s only publicly-listed ruby miner.”
A total of 42 leading ruby buyers from around the world have registered to attend this week’s tender, which will be held from October 27 to 30. The buyers come from Thailand, India, Sri Lanka, Hong Kong, the United States and Europe.
Mustang will report the results of the tender when it is completed and sales have been collated.
Rubies recovered at Montepuez from this week will be set aside for sale at Mustang’s first tender next year expected to be held before July 2018.
Following completion of the tender next year, Mustang plans to make the next upgrade to the processing plant at Montepuez which is expected to increase the available processing capacity of the project from 432,000 tonnes a year to 2 million.
The new plant and upgrades to the existing plant are expected to be installed and commissioned by July 2018.
Mustang will have capacity to target 1 milion carats of ruby sales in 2018 via two tenders.
Mustang is also ramping up its exploration program aimed at establishing a JORC-compliant Mineral Resource sufficient to support a 10-year mine life.
JORC compliance refers to the mining industry’s code for reporting exploration results, mineral resources and ore reserves, managed by the Australasian Joint Ore Reserves Committee.