Let's reasonably look MUS post its recent marketing strategy dramatic change:
(a) Short term:
-no income until October unless it gets a bank loan, pre-sells auction lots or flogs the
graphite tenement.
-does a CR
Comment: If MUS' prospects pass the Bank DD, then this is the best option,IMO.
If MUS can't get a Bank loan,however, then this will likely send a signal to the market to beware
Pre-auction sales would seem unlikely given the CEO's comment that a handful of powerful
families control the gem cutting and polishing wholesale market and that it has been a result
of canvassing these wholesale buyers that MUS has dropped its previous marketing strategy
and opted for rough stone auctions
The sale of the graphite tenement would require further money spent on drilling to qualify
the resource; a cost that MUS cannot afford at present because of future liquidity requirements
should a sale not be possible.
The CEO has lost credibility with Instos & SIs due to his last CR spruik.
A CR at these levels and company short term prospects would have to be around 2c + options,
IMO, which would mean flogging over 270 million shares to raise $5 mil net. This, IMO, would
massively dilute current retail share holders and doom the SP to be sub 2c until post October.
(b) Long Term Prospects:
-due to (a) the fundamentals of MUS longer term will have to contend with:
-risk of a cheap takeover by either GEM* or Regius
- risk of oversupplying the ruby market thereby knocking the bottom out of price
-risk of artisanal miners' revolt.
The EGM due in a few weeks should flesh out MUS's options and if management is on top of its game,
strategies to counter both short term and long term risks.
In the interim, I would be interested in hearing views of long term holders on the short & long term prospects of MUS.
* IMO, if the extra supply by MUS severely threatens GEM's income, then it would be in GEM's interest
to buy out MUS cheaply and restore supply to pre MUS levels thereby maintaining current price.
MUS Price at posting:
3.7¢ Sentiment: None Disclosure: Not Held
