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ekismal

349 Posts.

28/10/17

09:20

Post #: 28274706
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Originally posted by Tibbs ↑

No problems, as I said it might be semantics that we are arguing about ... they certainly "changed" from the initial view to sell cut stones, but that was decided after the studies were complete.

The quarterly report on April 30 says:

The five ‘special’ stones sent to the US for cutting and polishing by Meg Berry will be sent to Thailand for inclusion in the overall inventory.

These five stones (77cts) were never intended to generate material cashflow and only represent 0.1% of current gem ruby inventory; they were to provide an insight into the value of Mustang’s cut and polished stones for testing and marketing purposes only and to assist in defining the best sales strategy over the medium to long term.

The Company aims to increase this to 200,000cts by October, at which time it intends to sell the entire inventory at an auction. This represents a shift in its formative strategy, which involved the sale of cut and polished rubies as well as rough stones. However, after the end of the quarter, Mustang adopted a revised strategy under which it will sell all its rubies as rough stones.

The revised strategy follows extensive consultation with prospective customers and a market study undertaken during Q1. The strategy is the same as that used by leading ruby miner Gemfields, which generated US$225 million in seven auctions totalling 8.6Mcts (commercial and gem quality rubies from primary and secondary deposits) over 3.5 years.

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MUS Price at posting: 15.0¢ Sentiment: Hold Disclosure: Held
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