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

Mustang Resources says it has found a “significant” new ruby deposit at its Montepuez project in Mozambique.

The company (ASX:MUS) has been trying to redeem itself after its disastrous maiden auction in Mauritius in October last year.

Shareholders warmed to the news, pushing shares up 12.5 per cent to 2.7c in early Tuesday morning trade.

Shares were trading at 2.5c at 10.30am AEST.

Prior to the Mauritius auction, the company reached a 52-week high of 20c.

Mustang told investors on Tuesday it had found the new “ruby-bearing gravel deposit” just 3.5km from the processing plant at its Montepuez project.

MUS shares hit an intra-day high of 2.7c on Tuesday morning - still a long way from the 52-week peak of 20c in mid-October last year.
MUS shares hit an intra-day high of 2.7c on Tuesday morning – still a long way from a peak of 20c in mid-October.

During the first quarter, the company recovered 29,069.1 carats from stockpiled material at the project.

Mustang achieved an average grade of carats per tonne, which it says is 13.5 per cent higher than the final quarter of 2017.

The company’s “available for sale” inventory now sits at 329,309 carats.

Following a lack of interest for its rubies from buyers in Mauritius, the company shut down its sales and marketing office on the East African island and set up a smaller, cheaper version in Chanthaburi, Thailand.

At the first auction in March, Mustang sold 18,288 carats of largely lower and medium quality stones to Thai buyers for $230,953. The average price was $12.67 a carat.

Mustang is now preparing to restart bulk sampling at Montepuez following the rainy season in Mozambique.