Record ruby haul excites Mustang investors
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Shares in listed ruby miner Mustang Resources shot up as much as 9 per cent today thanks to a record month of production from its operation in Mozambique.
The Montepuez project delivered 15,613 carats from 34,561 tonnes processed.
ASX-listed Mustang’s (ASX:MUS) shares closed up 6 per at 8c.
Preparations for the maiden auction of its rubies in October were on track, with inventory rising to 176,522 carats, the company said.
The successful ramp-up of the processing plant means Mustang is comfortably within reach of its 200,000-carat target for its inaugural rough ruby tender, which is scheduled for October 27 in Port Louis, Republic of Mauritius.
“We have been overwhelmed by the interest shown by leading ruby buyers from around the world,” Mustang’s managing director Christiaan Jordaan said.
“We had some initial challenges with the commissioning and ramp-up, however after resolving these teething problems we have made outstanding progress and can now demonstrate the impressive production capacity of Montepuez,” he said.
Montepuez lies within the Montepuez Complex in the Cabo Delgado Province of northern Mozambique. It is located next to Gemfields PLC which has reported $US280 million of rough ruby sales from eight auctions since June 2014.
Mr Jordaan said Mustang expected to generate strong ongoing interest in the tender when he attends trade fairs in Bangkok and Hong Kong in coming weeks.
“The interest in our tender from major rough ruby buyers has been outstanding and they are highly supportive of our entry into the market as a ruby supplier,” he said.
“We are also delighted to see the strong prices which Gemfields received at its latest auction in June this year, which was a record for them and for Mozambique.
“Gemfields netted US$54.5 million from 900,000cts at an average of US$61/ct and the number of participants was higher than previous auctions.
“The feedback we have received is that demand for rubies exceeded supply in many grades, which augurs very well for our forthcoming tender.”
Rubies are the most expensive gemstone in the world after diamonds. The global polished ruby market is worth about $US2 billion per year. The total market for coloured gemstones (ruby, sapphire and emerald) is about $US5.9 billion.
Consumer demand has caused prices of rubies to increase 63 per cent over the past eight years with strong demand mainly from US, Europe, India, Thailand and China.
Mustang is the only listed ruby mining company in the world.