Mustang Resources (ASX:MUS) has swelled its gem-ruby inventory to 63,989cts, following strong receipts from prospecting teams and processing.
To help quantify the inventory, it has jumped 172% over just the past 3 weeks.
A growing inventory can then be directly relatable to revenue growth, with Mustang targeting +50,000cts of sales in H2-2017 following initial special stone sales in Q2-2017.
Adding further interest, European investors now have the opportunity to invest in Mustang following the dual listing on the Frankfurt Stock Exchange under the symbol (FRA:GGY).
Mustang is one of only two listed ruby miners in the world.
The company's flagship Montepuez Project in Mozambique is located next to Gemfields (AIM:GEM).
Montepuez ‘Special Stones’
Understanding the ruby market requires experts, and the first Montepuez ‘Special Stones’ have been sent to Meg Berry in the U.S.
Berry is an internationally-recognised gemstone cutter and polisher.
The stones are being prepared for certification at the Gemological Institute of America (GIA) Laboratory for their sale in the second half of this year.
Adding further merit to the potential of the gems from Montepuez, world-renowned gemmologist Vincent Pardieu (representing GIA on a July 2016 site visit to Montepuez) said of Mustang's rubies:
"Mustang’s rubies are of high quality with some gemstones showing variety of colour, size and clarity.
"Work done to date by Mustang is very encouraging and indicative of a secondary ruby deposit similar to some other deposits GIA has studied in the Montepuez area."
Analysis
Sales revenue from special stones will be a proof of concept but could be quite significant considering that value of 5ct untreated Mozambique ruby (cut, wholesale in US) is estimated at US$18,425ct to US$42,000ct.
Now moving back to Mustang.
The company has 2x 24ct stones being cut at the moment with an expected yield between 30% to 60%.
Stones larger than 5cts are very rare and will be priced exponentially higher than the 5ct example above.
Taking a macro view of the market, the global polished ruby market was estimated at circa US$2 billion annually in 2014.
Consumer demand is also driving the price of rubies higher.
Therefore, with only two listed ruby companies in the world, Mustang provides a unique opportunity for investors at a valuation around A$40 million.
The other listed ruby producer, Gemfields which is next door to Mustang, has a valuation of A$400 million with rough ruby sales of US$225million over the last four years of exploration & bulk sampling.
Gemfelds scaled up to full commercial mining capacity of ~150tph in December 2016 after the successful conclusion of its bulk sampling phase.