Mustang set to start to start bulk sampling
It is about a month since Mustang Resources (ASX: MUS) announced that the company had located a secondary ruby deposit at its Montepuez project, an event that resulted in its shares surging more than 10%.
This was a significant development as the group is only at the early stages of exploring the highly prospective ruby project located in Mozambique. Importantly, projects being operated by Gemfields plc immediately adjacent to MUS’s tenements have yielded robust volumes of high-quality rubies, a gem that has achieved superior price growth to diamonds in recent years.
However, in what could represent a buying opportunity, the company’s shares have trailed off in recent weeks, trading slightly below where they were prior to the announcement of a secondary deposit.
It should be noted that previous trading patterns are not an indication of future share price movements, and as such shouldn’t be used as a basis for investment. Investors should seek professional financial advice.
Management announced on Monday morning that construction of a bulk sampling plant at the Montepuez project was well advanced and that the bulk sampling pit was open with gravel being stockpiled for wet commissioning within the next fortnight.
Consequently, the company is likely to unveil results of gravel currently stockpiled in the near term, potentially providing share price momentum.
Initially management will be focused on demonstrating the grade of ruby mineralisation over a representative sample size, enabling it to recover sufficient rubies to form a marketable parcel, providing an indication of the quality of rubies within the license area.
Early stage exploration will be centred on areas that have already yielded rubies with a view to expanding the pit area and undertaking further drilling.