Rubies have always played second fiddle in the gemstone world to diamonds.

They are not quite as expensive and lack the same allure. But demand for the red gemstones is on the rise with the ruby price soaring over the past few years.

One ASX-listed junior is eyeing near-term cash flow and rapid expansion of its flagship ruby project in Mozambique.

Speaking at the Mining 2017 Resources Convention in Brisbane, Mustang Resources (ASX:MUS) managing director Christiaan Jordan said the company’s focus was its Montepuez ruby project, which had the potential to provide significant early cash flow.

Montepuez lies within the Montepuez Complex in the Cabo Delgado Province of northern Mozambique. It is in a good neighbourhood, located next to Gemfields PLC which has reported $US280 million of rough ruby sales from eight auctions since June 2014.

Mustang is on track for its first sales revenue with 200,000 carats auction of rubies in Mauritius in late October.

“We are near-term cash flow and that is a major milestone for us to get into first sales and grow the business,” Mr Jordan said.

Mr Jordan said Mustang had received overwhelming response with leading global ruby buyers confirming attendance at the auction.

“We have very strong responses from the major ruby buyers in the industry and we are quite confident of favourable result at that auction,” Mr Jordan said.

He added that Mustang’s strategy was unique in the resources space as the company would have a cash flow before a maiden JORC resource.

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.

“We will be defining our resource through bulk sample mining and following first sales with a maiden JORC resource and then growing our resources further sales and then further bulk sampling,” he said.

“It’s a unique proposition for investors to have exposure to a company that is not actually talking about cash flow for five years but actually delivering the commodity on a daily basis and getting into cash flow pretty quickly.”

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.

Shares in Mustang closed yesterday at 6.2c, valuing the company at $35 million.

Vertical Events’ premier flagship event, the Mining 2017 Resources Convention, is being held at the Brisbane Hilton on August 29 and 30.