Mozambique : Disappointing maiden tender on Montepuez rubies for Mustang in Port Louis

Mustang Resources Ltd sold 29,463 carats of rubies from its Montepuez project, in Mozambique, at its maiden tender from 27 to 30 October in Port Louis, in Mauritius.

This represents eight bid schedules from a total of 21 schedules offered, the ASX listed company reported on 1st November. It explained bids for the remaining 13 bid schedules offered for sale did not reach their reserve prices and will be held over to the next tender, which is scheduled for mid-2018. The eight bid schedules were sold at prices ranging from A$6 a carat to A$1,944 a carat. An average price of 24.21 A$ per carat has been realized and “gross sales proceeds of approximately 713,456 A$ will be received”, the company reported.

Commenting on the achievement, Mustang’s Managing Director, Christiaan Jordaan, said the tender results were clearly disappointing but the company has 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”, he declared. He explained that 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.”Mr. Jordaan also said. The company will now focus on building the inventory required by the market and as part of this it has decided to delay the planned plant upgrade at Montepuez so as to reduce expenditure and allow focusing on preparations for second tender.

Some days earlier, Mustang, now the only publicly-listed ruby miner said it would take 405,000 carats of rubies to the tender and that a total of 42 leading ruby buyers from Thailand, India, Sri Lanka, Hong Kong, the United States and Europe registered to attend. The republic of Mauritius was selected above other short-listed global locations as the most suitable jurisdiction for the Mustang ruby auctions owing to its proximity to both the Montepuez project located in Northern Mozambique as well as key customer locations in Asia.

Mustang Resources, an emerging Australian gemstone developer and producer, is focused on the near-term development of the highly prospective Montepuez Ruby project, Cabo Delgado province in northern Mozambique. The Montepuez Ruby project consists of three licences and one mining concession covering 19,300 hectares in total directly adjacent to the world’s largest ruby deposit discovered by Gemfields PLC in 2012.