Mustang Resource - Ruby, Graphite & Diamond Neighbors Ruby...

Mustang Resource - Ruby, Graphite & Diamond

Neighbors Ruby (GEM:$450m) + Graphite (Neighbours: $42m-$850m)

Share price: 5.9c
Market cap: $27m


Cash estimated: $2.4m (cash on 31/12/2016: $0.7m + cash raised 25/01/2017: $1.78m)
The Company is well-funded to ramp up production volumes rapidly and achieve first ruby sales in H1-2017.


1. RUBY:
Mustang's licences lie along the established NW-SE ruby mineralisation trend which also transects the Gemfields (GEM:LSE, market cap $450m) licences. Extensive ruby mineralisation can also be found immediately to the Southeast of the Mustang licences, close to the village of Namahaka, where it is mined by local artisanals ("garimpeiros").

MUS has one Primary deposit target (high grade 5.3km lineament) and Two secondary deposit targets.

Mustang currently mines only secondary deposits as sources of higher % gem quality rubies.

Mustang’s research and fieldwork show that ruby mineralisation in the Montepuez Complex can be found along these structural lineaments & contacts (both primary and secondary deposits). Encouragingly, Mustang has identified a 5.3km lineament that transects license 4143L - a very strong target for the planned trenching & bulk sampling program. Starting in June 2016, Mustang will focus on the processing of alluvial material as a source of higher quality rubies during its bulk-sampling program.



Paul Allan, MUS's Independent Consulting Geologist, Former Project Geologist for Gemfields PLC, where he played a key role in the initial development of the Montepuez Ruby Project .

Recently, MUS share price re-rated due to early success, especially find 5 special rare rubies including two rare 24ct ones, imo.
The five rubies, will be cut by renowned cutter, Meg Berry this months. Typical cut yield 30-60%, 24ct rough will yield 7.2ct - 14.4ct, which price could be wild as some extremely high quality rubies were sold around US$1m/ct (ruby sale historical price can be found in recent ASX announcement). However, these five rare rubies are still under cutting and value is unknown at the moment.




From my research, GEM has found three large rare rubies over last four years:
- Rihno Ruby 40.23ct in 2014
- Two matching rubies of total 45ct in June 2015

MUS recently found two 24ct rare rubies and other three smaller special rare rubies.


Some words from MD,

Mustang, like Gemfields, knows it’s got to preserve the ‘purity’ of the product brand in an era of transparent ethical and responsible sourcing. Traditional supply giant Myanmar’s (Burma’s) centuries-old ruby fields are tarnished in most first-world markets, only increasing the focus on Mozambique’s capacity to feed a coloured gemstone market Gemfields says has grown 213% in six years into one with an import value of US$5.9 billion a year (for rubies, sapphires and emeralds).

Jordaan says untreated 4-to-4.99 carat Mozambique rubies are fetching US$18,000-$42,000/ct in the US at a wholesale level, with wholesale reference prices for cut gems larger than 5ct typically negotiated between buyers and sellers due to their rarity. Prices can rise exponentially as rubies get bigger.

“Gemfields has really shown the way, recording upwards of $220 million of sales during exploration,” Jordaan says. “They’re only going into commercial production now. They’ve really been the beacon that we’re following.

“But I think there are opportunities for us to carve our own niche, initially at least by focussing on the sources of material that produce about 70% of the value of Gemfields’ output.

“Our first ruby sales will be transformational for us.
“Gemfields’ first ruby auction netted US$34 million. I’m not saying we’re going to do that. Even half of that number is still larger than our market cap.

“Even if we do $2 million of sales, it’s a good chunk of our market cap.

“What we’re very focussed on now – and we have engaged the services of a leading US gemmologist and his team to this end, and other market experts around the world – is building the market for the product, getting the confidence of customers, and establishing sales channels.”

http://www.miningnews.net/resource-stocks/company-profiles/mozambique-gem-sparkles-anew/


2. GRAPHITE
MUS' exploration graphite target from one license area is matching our neighbour,BAT/MTA's resource. MUS has large graphite tenements, which could be worthy much more.

MUS' graphite neighbours' market cap:
BAT/MTA: $42m
TON: $44m
SYR: $849m





3. SUBSTANTIAL HOLDERS/TRADE DATA:

Lanstead (UK): 40.8m
Directors/Regius: 29m
P. Towell of Queenscliff Partners LP/Andium pty ltd (US): 23m

Lanstead bought 48.5m shares, off-market transferred between its group, the largest holder show 40.8m shares.

Lanstead wades in as a long-term cashed up investor with a stake of 15%

If anything, the retracement of MUS’s share price in recent months could represent a buying opportunity. It would appear that institutional investment house, Lanstead Investors are not only backing management to resolve the teething problems being experienced, but it sees substantial value in the project.

Of course, broker projections and price targets are only estimates and may not be met. Also, historical data in terms of earnings performance and/or share trading patterns should not be used as the basis for an investment as they may or may not be replicated. Those considering this stock should seek independent financial advice.

The global investment firm acquired 48.5 million shares in MUS a day before the company announced its most recent recovery numbers. The investment of circa $1.4 million, representing 15% of issued capital, could be considered as an endorsement of the group’s long-term prospects, as well as perhaps being the source of funding for future developments.
With more than 20 years of international investment experience Lanstead’s philosophy in its own words is to focus on developing long-term relationships with companies with a view to being an ongoing source of capital. The group’s approach seeks to create a partnership as it adopts a long-term investment strategy.

https://finfeed.com/juniors/mus/mustang-ruby-project-advances-havent-gone-unnoticed/20161125/



Over last ten trading days, 968 million shares traded at average price of 5.6c



4. UPCOMING ACTIVITIES/NEWS:

- Investment Battlefield 7 February 2017 Next Tuesday
- Double production capacity from 525t/d to 1,000t/d

- Auger drilling underway to map ruby-bearing ore across the project area
- Graphite: Discussions have commenced with potential strategic partners and will continue during the first half of 2017
- First ruby sales revenue expected March/April 2017.
- Graphite: Metallurgical testing results and process flowsheet expected in Q2-2017
- Ruby Maiden JORC Resource before 30 June 2017
- Graphite Maiden JORC Resource in the first half of 2017.



It's high risk with high return.
Always do your own research and all the best!