JOHANNESBURG (miningweekly.com) – ASX-listed Mustang Resources will delay the planned plant upgrade at its Montepuez ruby mine, in Mozambique, which will reduce the company’s expenditure and allow it to focus on preparations for its second tender.
This decision was taken following the conclusion of a maiden tender, held from October 27 to 30, in Mauritius, during which it sold eight bid schedules, totalling 29 463 ct, for gross proceeds of about A$713 456.
Prices ranged from A$6/ct to A$1 944/ct, and averaged A$24.21/ct.
Mustang had taken 405 000 ct to tender, more than double the initially planned 200 000 ct; however, 13 bid schedules offered for sale did not reach their reserve prices and will be held over to the next tender, which will be held in mid-2018.
The company had initially planned to reinvest a portion of the proceeds from the maiden tender to increase its processing plant capacity to between one-million and two-million tonnes a year, compared with the current processing capacity of about 328 000 t/y.
Mustang MD Christiaan Jordaan on Wednesday said the tender results were clearly disappointing, but noted that the company had gathered valuable market intelligence for future tenders.
“The feedback from buyers and the results make it very clear that we need to offer increased quantities of rubies in each category. This is because buyers and their jewellery customers need to be certain that there are enough similar rubies available to enable them to produce the required number of any particular jewellery item.
“The tender process has also enabled us to identify those categories which are in high demand. We will now focus on building the inventory required by the market,” he said.
As part of the strategy to build the inventory required by the market, 96 000 t of existing surface stockpiles of ruby-bearing gravels will be processed in the coming months.
Further, pitting and exploration activities will focus on areas now identified to host the most sought-after rubies.
Mustang’s bulk sampling has only covered a small part of the licensed areas and the company believes there is potential to identify additional high-value rubies within its 193 km2 project area.
Exploration will focus on areas to the east of the existing bulk sample pits and the company also plans to acquire rights to explore in additional licence areas in the Montepuez ruby field.