Mustang Resources (ASX: MUS)
Mustang Resources (ASX:MUS) is already extracting commercially viable rubies in the start-up stage at the Montepuez ruby project in Mozambique.
A total of 460.43 carats were recovered in the initial bulk sampling, and the coming weeks should see volumes pick up and marginal costs dropping.
The rubies are logically expected to be larger and of high grade as MUS digs deeper, and that is what it is doing right now…
Neighbour company Gemfields held six rough ruby auctions in 2014 and 2015 that saw values range between US$317 and US$688 per carat for medium to high quality rubies respectively, generating a total of USD$195.1M in revenues from their auctions to date.
Gemfields is currently capped at A$433 million.
Should MUS deliver even a fraction of those returns the current market cap of $9M would likely multiply.
In addition to the Montepuez ruby project, MUS is currently diamond drilling at its Balama graphite project which sits along strike from Metals of Africa (ASX:MTA) and Syrah Resources (ASX:SYR), market cap $960M.
Seven diamond drill holes are being carried out in areas showing high grades as identified by previous RC drilling at Balama.
It seems the market has not really valued MUS’ graphite project, given the results of its neighbours, this could change quickly as MUS firms up its JORC resource.
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With $1.68M cash on hand at the end of the September quarter, MUS is fast-tracking both its Montepuez Ruby Project and Balama Graphite Project.