Mustang Resources Ltd (ASX:MUS) has completed a review of its sales and marketing strategy, which should see the company realise revenues from its ruby inventory.
The gemstones are produced at the company’s Montezpuez Ruby Project in Mozambique, and the company’s ruby inventory totals 333,184 carats.
Mustang has decided to close its sales facilities in Mauritius and is now establishing a sales and marketing office in Chanthaburi, Thailand.
This measured approach to marketing is intended to generate regular cashflow as it continues to pursue exploration and bulk sampling activities.
Strategy to unlock value
The review was overseen by Mustang’s new managing director, Bernard Olivier, who has more than 18 years’ experience in the exploration, mining and marketing of coloured gemstones.
Olivier said: “Our sales and marketing review has been very productive and creates a clear pathway to unlocking the full value of our outstanding Montepuez Ruby Project.
“We will achieve this end objective in a staged and measured fashion, growing our business by developing strong and close customer relationships, meeting their respective requirements.
“This approach will allow us to place an accurate value on our existing inventory and enable us to assess the project’s longer-term economic outlook."
More aligned with production profile
As a backdrop, the Mauritius facilities were designed to enable Mustang to undertake large-scale auctions from a large production position.
Consequently, the new initiative is very much about right-sizing the company’s business structure to fit with the group's existing early stage smaller production.
Also, Thailand is considered the world-leader in trading and beneficiation of coloured gemstones, especially rubies and sapphires.
Olivier said: “In the near-term, we aim to align our sales volumes with our limited production from what is essentially still an exploration and development project."
Lower cost operation
This facility is markedly smaller and lower-cost than the Mauritius facilities and more in line with the company’s emphasis on project and ruby market development and research.
Mustang sees this as better reflecting the current exploration and development status of its Montepuez Ruby Project in Mozambique.
Mustang continues to see decided development opportunities at Montepuez.
Olivier said: “As part of this exploration phase, we intend to establish a maiden JORC resource.
“In conjunction with the market intelligence we gather from the sales activity, this will form an important basis for determining the project’s economic viability.”