The so called research of many HC posters and Brokers, which in turn distorted the market perception.
If you remember, which i'm sure you do, one of the pumps on here was that MUS only mined from secondary deposits basically, the pump then went on to say GEM mines and sells mainly from Primary, (Which is completely false, always has been since MUS got involved), so the Quality of MUS rubies is better than GEM's. (Which has also proven to be completely false) From the link i posted just before you will see that GEM mainly sold Rubies into the Auctions for the Mugloto/Machambla spot which is secondary and higher Iron (Deeper Red) from 2014 onwards. The rubies that GEM sells are far better quality than what MUS digs up, pink is no good and most are <1ct, In that link it also compare MUS to the Glass deposit area of Gem's. In fact in a lot of ways for us investors that link above tells us more about the rubies and areas that the two companies GEM and MUS put together.
You will also find in the GEM auction announcement (Linked Below), and GEM production explanation announcements, not linked below(lazy), that GEM mine about 10 mil carats/year, they only sell 1.5-2.5mil carats/year lately, they also have better plant and machinery for the job than MUS and more experience of whats worth $ and what isn't, you will see in the Auction link below, tables for the Auctions (scroll down further to get the earlier ones), and $65 seems like a good price for the volume and you should note the volume is about 15%-20% of total mined carats by GEM, so they cherry pick the best 20% of the rubies mined and thats what goes to the Auctions, so $65 is a good result, also in the link to back this up is a paragraph or so on how GEM discuss with the bidders what they want. It says The cherry picking Ruby bidders tell GEM the Quantity and the Quality of the Rubies they wish to buy, so off toddles GEM sorting its inventory for the Auction accordingly.
So all this means that MUS inventory is mainly crap in the eyes of the Ruby bidders (Hope i didn't skip too much for that comment). To explain - If you use the same ratio's as GEM, because it's all the same area really, say even 20% of what they mine is saleable, then MUS could have expected to sell 80,000cts at average 65$, however Rubies are not Rubies so MUS has two additional factors to allow for when working out the true numbers, these are MUS is mining more pinks and smaller ones than GEM is putting in the Auctions, MUS not as efficient mining process, MUS hasn't had the time or experience to hone in on or find a spot better or like GEM' Mugloto, Therefore MUS won't achieve 20% sale of inventory, maybe 15% tops, could be even less depending on if we ever get any grading of the MUS inventory, pink not real good price wise.
I hope you can understand why all the estimates were so far out on HC now and the brokers research reports, davisite, Tibbs, Hardcock, Permasinim etc all got extremely carried away, if you believe what they write, they would not even listen or read what i was trying to say, Davisite pumped the ignore on me along with Tibbs, wonder why?,..
There was other pumpers like Old mate CJ with some twitter stuff and some interview when he dream't up $100/ct. You will be able to note though that i never saw any $/carat price estimate issued from the company in ASX announcements, it was just an interview and chitty chat. (AG full of chitty chat too).
Also the change in sales strategy reduced the number of large specials that went to Auction but we all knew Meg's ones weren't going to the Auction because they had been cut and polished and would be in safe storage.
MUS probably thought lets take nearly everything we've got to Auction and then let the Bidders tell us whats good and whats not, GEM did similar in the early days, probably one of the best ways to learn really because its the bidders/buyers that set the market not some person with a geology gong, its like a fashion trend in some ways.
Couple of other things i didn't like were. : When the sales strategy had changed the TAM didn't, MUS kept pumping $2.5bil+ TAM, which to my my is untrue because MUS only sells Rough stones, not cut and polished, so i think MUS should have adjusted that in their announcements at the same time as the sales strategy. I'm not sure what the Rough ruby TAM is but i believe GEM supply 50% of the Ruby market worldwide ( i read it somewhere), so i would guess a TAM of US$300 mil at present time being generous.
I also didn't like in the MUS announcements that it was hard to find the % breakdown of lease ownership and also nothing about a 0% on sales that Moz gov imposes on GEM and i would presume MUS but no clarification of that so far that i can find.
Going forward they have to expand mining rapidly to increase the number of carats, find new areas to increase the quality/color/sizes. If they think or anyone thinks they will be able to sell all they mine they've got rocks in their head, 20% is the best one can hope for imo so if they want to sell 1mil carats they will have to mine at least 5 mil, probably a lot more. The other thing they can do is just forget it, sell it and see what else they can find to re-birth it.
All above Just my opinion, Dyor
http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/GEM/13260922.html
https://www.gia.edu/gems-gemology/fall-2017-gemnews-mozambique-ruby-update
