10 weeks to October
We are all here for October, why worry about post October if auction fails?
If auction turns out to be $10/ct = we will all be leaving MUS for sure #secondary deposit =LOL
Why mine only secondary deposit rubies?
If they cant delivery minimum $100/ct ?
($60/ct is still massive for current MC as a tiny cap company)
So dont need to talk about tranche 3 and 4.
Dont bait downrampers
Now we have fund to get to October, only matters are below...
1. Quality of rubies
A: worst case $60/ct = $12M
Pretty much same grading system as GEM also buyers know how much they worth for..
They are the experts.
GEM auction : commercial quality ($4) + mid to higher quality ($300+) = average $60
Majority of rubies were commercial quality as they started focusing on mining secondary deposit since Dec'16 due to client's request for higher volume of good quality stones.
(Refer to GEM Dec'16 auction report)
Majoirty of mid to higher quality rubies come from Mugloto deposit.
*They had 6mths to focus on secondary deposit before June auction
Gemfields June auction
This is my rough take.. (total 900,000 cts)
Mid to higher rubies: 150,000ct x $345 = $51.75M
Commercial rubies : 750,000ct x $4 = $3M
Total $54.75M
B: Only 50% is gem quality scenario ( not 80%)
CJ said lower quality gem rubies are around $55/ct at AGM + Based on my research too.
However we should better be very conservative ..
Say, only 50,000cts are mid to higher quality and another 50,000cts are lower quality and rest of 100,000cts are rubbish like primary deposit rubies.
Total 200,000cts of secondary deposits rubies ;
Mid to higher: 50,000cts x $350 = $17.5M
Lower: 50,000cts x $55 = $2.75M
Commercial: 100,000cts x $4 = $100,000
Total US $20.35M
Now what would happen to share price?
Case A: US $12M revenue = 15c
Case B : US $20M revenue = 20c+
I believe 2 major news would kick SP to 9~15c range by end of August.
* Graphite news (soon)
Mozambique graphite explorers
$BAT = 30M MC
$TON = 34M MC
$MUS = currently Zero value added current MC ( CJ has mentioned about this too)
* Grading data ( Aug, only 2 weeks away, because you need data to attract buyers to come)
= game- over actually as we will know the bottom price for an auction.
We all have seen the photos of rubies..
we might see much upside than $20.35M because I dont think we have 100,000cts of commercial grade rubies in the inventory but..
In case of clearance rate is below 70%,
I think it is safe to say that minimum $20M is achievable in Oct auction. (+Special stones)
2. Closed Tender
"The process of selling a product by inviting a select group of potential buyers to provide their highest written offers"
We all know that the global demand is strong especially China and at recent interview CJ has said 90 buyers (companies) had been identified for an auction and short listed to 22 big buyers as a main group.
Now... Closed Tender comes into play..
Say 30 buyers invited ...then how about rest of 60 buyers ? How about thousand of dealers and cut and polish manufacturers?
There are more than 2,000 manufacturers in China alone. How about India and Thai manufacturers? ( German, South Korea and US...)
Who supplies rough rubies for them?
Answer: Selected group of buyers who attend an auction.
(They need to supply rough rubies for themselves too)
My question..
Do you think carefully selected buyers for an auction, they pay less than what they paid for Gemfields? Or they pay best price to compete each other (auction) to get best quality bags?
Getting selected for MUS / Gemfields auction = making money by supplying rough rubies to their global clients
Thats why they spend millions of dollars in Gemfields auction.
For your research, one single buyer
(Gemstone manufacturer and supplier, Indian company based in Hongkong) bought US $10M worth of items in the last auction of Gemfields.
Good Luck and always DYOR
Everything will be revealed within 4 weeks time imo. #Graphite & Grading results
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