4pm on Friday 27 October - the auction starts!

DYOR. Not advice.
​

At the end of this week Mustang Resources will initiate their inaugural tender sales of an expected 400,000 cts + of rough ruby from their Ruby leases in Mozambique.

It is a very unique situation for an ASX small-cap to have such a firm and unmovable deadline. This will be a company-making event that is likely to lead to a significant re-rating of the share price due to the significant cashflow expected to be generated from the auction.

Mustang have also announced their forward strategic plans which sets them up for significant income growth in the next 14 to 26 months. The cashflow will drive growth through development of other projects including the Graphite also located in Mozambique. More on the specific events later.

Timeline for the Auction

The timeline below has been constructed from information released by the company in this announcement.




The auction window will occur over 27 October to 30 October.

• Friday 27 October - ASX will close at 4pm AEDT and inventory viewing will commence simultaneously in Port Louis, Mauritius at 9am MST
• Saturday 28 October - Inventory viewing continues from 9am MST to 5pm MST
• Sunday 29 October - Inventory viewing continues from 9am MST to 5pm MST
• Monday 30 October - ASX will close at 4pm AEDT and 1 hr later at 10am MST tender bids will close. Mustang will review the submitted closed bids in order to identify winning bidders for each parcel and add results to a tally.
• Tuesday 31 October - Mustang are anticipated to announce the results to the ASX. Specific date / timing of the announcement could vary if there are delays in the auction programme.

Mustang have indicated that they are not planning to initiate any trading halts during the period of the auction. This will make for an interesting run up to the auction results announcement expected Tuesday 31 October.

Introduction to Mustang

If you're new to Mustang, then to get up to speed quickly:

• Read the latest corporate presentation
• Go long on Mustang (includes links to much of the key information)
• Latest inventory announcement from 10 October (includes announcement of mining concession)
• Latest Research Report from Baker & Young (released 12 October)
• For estimates of auction result ( read the entire thread to get the most up-to-date estimates and importantly a wide range of views )
• The auction as a proof of concept
• Ruby Fever - For some words of caution ( particularly if you are a new investor )

Near-term and Medium-term Rerating of Share Price

Mustang have laid out their forward strategic plans. Each of these are near-term events that are expected to lead to further rerating of the share price.

• 27-30 October 2017 - maiden rough ruby auction in Port Louis, Mauritius
• Scale-up of the plant from 1 Mtpa to 2 Mtpa capacity
• CY 2018 - hold a minimum 2 rough ruby auctions
• CY 2019 - hold a minimum 3 rough ruby auctions
• Establish a minimum 10-year JORC to support a minimum 10 year life of mine for the Ruby assets
• Double the landholdings (through access to tenements held in related companies)
• Implication (i.e. not confirmed) of delivering dividends to shareholders (see my hypothetical analysis here)
• We also have a Maiden JORC being prepared for the Graphite. This is due this quarter but now expected before the Ruby auction is completed.

For those that have been invested long-term it has been an exciting ride to date. Bring on the auction!​