Graphite and vanadium are proving to be much better prospects for ruby miner Mustang Resources.

Its shares put on 37 per cent in Thursday morning trade after a favourable strategic review.

The shares (ASX:MUS) were up 0.9c at 3.3c by 12pm AEDT.

That’s still down a long way from a 52-week high of 20c before an October ruby auction went haywire and moved only just 7 per cent of the rubies on offer.

Mustang today told shareholders a strategy review of its new Caula graphite project in Mozambique showed the project was on track for production by the middle of next year.

The Caula project contained an exceptional combination of graphite in both high-grade and large flake sizes. And there was potential for the vanadium content of the ore to give an additional cash flow.

Graphite flakes are rated by size as small, medium, large or jumbo. Bigger flakes tend to be higher in purity and attract higher prices. Battery grade is the most expensive at 99.9 per cent purity.

Mustang (MUS) shares over the past six months.

Mustang (MUS) shares over the past six months.The company will develop the project in two stages.

First a low-cost mining operation would produce 10,000 to 15,000 tonnes per year of high-grade (97 per cent carbon) graphite concentrate, with vanadium extracted as concentrate and sold to producers.

Following that, a second stage would see an expansion of operations and construction of a full-scale vanadium concentrate processing plant.

Mustang plans to use existing infrastructure and operations camp from its neighbouring ruby project to fast-track the new graphite focus.

The news comes after the appointment of new managing director Dr Bernard Olivier in January, with targets to double the company’s market value.

First announcement of the graphite project halted the haemorrhaging stock price in November, which has been trading between 2-3c ever since.