Mustang Resources Ltd (ASX:MUS) has received strong shareholder support in its recently closed rights issue which has secured $2.45 million in funding.
Shareholders subscribed for 106.8 million shares priced at 2.3 cents.
As well as developing the Montepuez Ruby Project in Mozambique, funding will also be used to fast-track the Caula Graphite and Vanadium Project also in Mozambique.
READ: Mustang Resources drill result shows large potential for Caula vanadium graphite project
Mustang’s managing director Dr Bernard Olivier said: “The company and its management team is highly encouraged by the strong support shown by our shareholders in the entitlement offer and we are confident in placing the shortfall quickly.
“Exploration and development work is currently underway on both our projects with multiple catalysts and milestones in the coming months.”
The shortfall from the rights issue is 86 million shares representing $1.97 million, and can be placed over the coming three months.
Should the shortfall be placed, the total funds raised will be $4.4 million.
Ruby market is strengthening
Mustang produces gemstones from its Montezpuez Ruby Project in Mozambique and the company’s ruby inventory recently totalled 333,184 carats.
After a recent review, Mustang decided to close its sales facilities in Mauritius to establish a sales and marketing office in Chanthaburi, Thailand.
Olivier added: “In the near term, we will continue exploration and market development work on our Montepuez Ruby Project with test sales through our Thailand office in step with fieldwork and bulk sampling.
“We are encouraged by the continued growth of the ruby market and Mustang’s enviable position as the only publicly listed revenue-generating ruby supplier and believe that there is substantial value to be realised for our shareholders.”
A fast-tracked strategy at Caula can deliver cash flow from mid-2019
Mustang recently concluded from a strategic review that its Caula Graphite Vanadium Project in Mozambique could achieve first production by mid-2019.
The review’s key recommendation was to establish trial mining and processing operations for completion during the June quarter of 2019, which the board accepted.
Olivier added: “Furthermore, recent drill results on the Caula Graphite and Vanadium project have prompted the board to approve its fast-tracked development with first revenues from stage I trial mining of high-grade graphite and vanadium targeted for 1H2019.
“This will place Mustang in a unique position amongst its peers in both the graphite and vanadium sectors as the company leverages off its in-house technical and operational abilities to become a leader in the fast-growing battery commodity markets.”