DYOR. Not qualified for advice.
Building on my earlier analysis in
this thread, I have revised my estimates for Auction 1 and 2 to take into account today's announcement.
Summary of Results
Note the company statements below which have lead me to revise assumptions for Auctions 1 and 2 as follows:
- Auction 1 (October 2017) - 330,000 carats
- Auction 2 (Q2 2018) - 250,000 on the assumption that the wet season will reduce operational efficiency at the mine site, however increased recovery rates in the last couple of months suggest a more bullish production target than my previous analysis for Auction 2 is feasible.
View attachment 726810
View attachment 726813
Full analysis is here:
View attachment 726822
Background and Core Assumptions
Extract from today's
announcement:
View attachment 726777
Furthermore, I have adapted the core assumptions as follows:
- Auction 1 Inventory - The 330,000 carats for auction 1 was been broken into two inventory segments. For the first segment of 120,000 carats (was 100,000 carats) prior to July 2017 I have assumed 70% of the Rubies are Commercial Quality Ruby and the remaining 30% as High Quality Ruby. For the second segment of 210,000 carats I assumed 90% as High Quality Ruby and 10% as Commercial Quality Ruby.
- Auction 2 Inventory - I assumed 90% as High Quality Ruby and 10% as Commercial Quality Ruby. I’ve assumed Mustang can comfortably recover and process enough Ruby to achieve a 250,000 carat production target for the second auction, based on the recovery rates reported in the 4 September and today's announcement.
The percentage allocations to individual grades remain the same as in the original analysis. These are shown below.
View attachment 726819
@bdell - agreeing with you on the 120,000 quantity for the first portion of inventory for Auction 1. Today's announcement was a convenient time to rerun the numbers to take this into account.
The full analysis:
View attachment 726822
