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Mustang acquires 80% of Montepuez to mine Ruby

ASX-listed junior Mustang Resources has signed an agreement with private Australian miner Montepuez Minerals to acquire an 80% share in the unlisted company, giving Mustang access to three highly prospective ruby licences in Mozambique. By acquiring an 80% stake in Montepuez, Mustang would effectively gain a 64%, 56% and 56% interest in the three licences, which jointly cover some 15 800 ha in the Montepuez region, where Aim-listed Gemfields recently discovered the world’s single largest ruby deposit.

“The board is excited about the acquisition of these highly prospective ruby assets in the world-class Montepuez province and we believe it has the potential to add significant shareholder value in the near term,” said Mustang CEO Andrew Law. “Importantly, the acquisition is very closely aligned with Mustang’s vision to develop a portfolio of world-class mining projects in the Republic of Mozambique that have the potential to generate significant cash flows with relatively limited capital outlay.”

Under the terms of the transaction, Mustang would pay an initial $1.5-million on the completion of the deal, of which $150 000 would be in cash and the balance in Mustang shares. A further $2-million payment, payable in performance rights, would be made on the recovery of 500 ct of rubies, while a further $2.5-million would be payable, of which $750 000 would be in cash on the recovery of 10 000 ct of rubies. On the recovery of 50 000 ct of rubies, a further $3-million would be payable, of which $2-million would be paid in cash and the balance settled in performance rights.

The transaction was subject to a number of conditions, including the completion of a due diligence and independent expert report, as well as shareholder approval and Mustang successfully completing a capital raising.

Source: MiningWeekly

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