ASX-listed Mustang Resources is hoping to raise nearly A$6-million through a share placement and converting loan to fast-track its graphite, diamond and ruby assets.
The company reported on Monday that nearly 30-million shares would be issued, at a price of 20c each, to raise the capital. Some 25-million of these shares would be issued to Lanstead Capital, a UK institutional investor.
Mustang chairperson Ian Daymond told shareholders that the company was pleased with the outcome of the capital raising.
“With the additional capital raised through converting loans Mustang is now well funded to rapidly develop the Montequez ruby project, which is conservatively targeting revenues of $60-million from a 12 to 15-month bulk sampling programme.”
Mustang in October this year acquired the Montepuez project, in Mozambique, for an initial $1.5-million. 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.
Daymond said that funds raised would also be used for working capital on the exploration and further bulk sampling of the Save River diamond project, as well as for further exploration and drilling work at the Balama graphite project. Both projects were located in Mozambique.
“Investor interest in Mustang continues to grow and we remain in discussions with other potential cornerstone investors that could provide further funding to advance our precious gemstone and graphite projects,” he added.
Source: Mining Weekly