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Mustang to scale up ruby hunt
2 minute read
Ruby-hunter Mustang Resources (ASX:MUS) has flagged a scaling up in a ruby sampling program after bagging $1 million in a placement.
It told its shareholders that it had issued 25 million shares at 4c each to professional and sophisticated investors, with Hartleys acting as the brokers on the deal.
MUS said that the funds would be used “principally” to scale up its bulk sampling program at its Montepuez project in Mozambique – planned for the third quarter.
The bulk sampling program is often where ruby and precious stone miners are able to gather the requisite stones for sales – providing early cashflow.
A signal that MUS is moving to beef up its sampling program therefore signals the possible beefing up of early cash into MUS.
Investors should note that early cashflow is not guaranteed – nor is the discovery of rubies. Always consult a professional financial advisor before deciding whether or not to invest.
MUS will be relatively confident of success, with direct neighbour Gemfields PLC raking in cash from sales of rubies dug up during bulk sampling.
Gemfields realised a total of US$150.8 million in 5 auctions for 5.98 million carats of the 18.8m carats recovered during their bulk sampling phase (2012 – 2015) over which period its market capitalisation has grown to over $A450m.
News of the increased sampling program also comes just over a week since MUS discovered its first rubies at the project as part of preliminary works.
About Mustang Resources (ASX:MUS)
Rubies sourced from the Montepuez region are estimated to account for 40% of the total global ruby trade, making it a hot spot for the rare gemstone.
MUS’ Montepuez Ruby Project is situated next door to Gemfields PLC (GEM:LSE) who’s ruby deposit is one of the largest in the world.
The close proximity of MUS’s project to Gemfields is likely to draw attention from investors should bulk sampling return favourable results.
MUS is well positioned to piggy back on the success of Gemfields and bring any finds to market at a rapid pace by following the Gemfields playbook.