silverblizzard888
06-10-2017, 12:44 PM
Thought you guys might be interested in a ruby miner who is about to make substantial revenue in their upcoming auction.
Below is some information prepared by Wombat777 from Hotcopper who probably in my view has summed it up in the best way.
For a $60 million Mcap company about to bring in anywhere between 15-100 million in revenue based on what they get from auction pricing.
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We are now only 3 weeks to commencement of the auction on 27 October. Mustang are expected to commence the critical phase of carefully grading and parcelling their rubies in Mauritius from the end of next week.
My post here (https://hotcopper.com.au/threads/5-weeks-to-auction-mustang-resources-lays-their-carats-on-the-table.3706086/#.WdaeqWiCzmE)is good for a general intro to Mustang, however CJ's recent video interview is perhaps the best intro you will get.
Now for a few other thoughts.
Inventory
Without an inventory update there has not been much reason for me to post detailed figures, however I am expecting Mustang to take 330,000 to 400,000 carats to auction. IMO Mustang will have been working the plant at maximum capacity since the last inventory update and likewise with the Artisanal work supported by Mustang's Gemologists. I'm still going to be running projections at 330,000 carats until we get an update. I'll post an update to my numbers next week.
Expectations
Keep your expectations balanced. I'm now zeroing in on the USD $100/ct to USD $200/ct range due to the significant proportion of inventory brought in by Artisanals. Qualities are reportedly more mixed than that processed by plant ( Artisinals bring in a mix of High, Low and Commercial qualities albeit I understand from the 8245L License Area ). Gemfields have changed their plans for their next auction. This could impact clearance rate. I'm still assuming they'll achieve 85% as CJ has been very busy networking with potential suppliers. They have over 20 buyers confirmed to attend and CJ has recently spent time in Asia and London building interest for both buyers and investors.
@ekismal (https://hotcopper.com.au/members/23737/) is doing a great job of tracking inventory expectations in terms of USD $/ct here (https://hotcopper.com.au/threads/average-us-per-carat-at-auction.3733503/#.WdafymiCzmE).
Risk
Independent Investment Research (http://www.mustangresources.com.au/irm/PDF/2335_0/IIRMustangResearchReport24May2017) risked their share price estimates down by 80%. We can assume half of that risk is gone now. Given progress to date ( auction confirmed, buyers booked in, quality rubies / deposits, grading system done, insurance/security arrangements in place, Ruby demand, forward strategies announced ) let's assume only 40% risk post-auction.
Once we hit peak I'm therefore anticipating the share price could fluctuate up to 40% post-auction so be prepared for some volatility. The volatility should reduce as Mustang get closer to their second auction. We may also see the maiden JORC for the rubies in that timeframe. I'm thinking 30% risk in 2018 and then reducing to 20% risk from 2019.
For something different, please see my extrapolations (https://hotcopper.com.au/threads/share-price-in-leadup-to-auction.3713352/page-326?post_id=27653217#.WdaaAWiCzmE) of IIR's share price figures against a 12-month scenario of 660,000 carats.
Finance
If you're new to Mustang make sure you read @ozemania (https://hotcopper.com.au/members/37462/) fabulous post (https://hotcopper.com.au/threads/the-convertible-note-broken-down.3733530/#.WdabjGiCzmE) on the Convertible Note finance facility. It was a necessary evil to get us through to the first auction. It's causing some volatility in the share price as Mustang convert notes but that should soon pass. Arena have actually been quite cautious in their approach.
Below is some information prepared by Wombat777 from Hotcopper who probably in my view has summed it up in the best way.
For a $60 million Mcap company about to bring in anywhere between 15-100 million in revenue based on what they get from auction pricing.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
We are now only 3 weeks to commencement of the auction on 27 October. Mustang are expected to commence the critical phase of carefully grading and parcelling their rubies in Mauritius from the end of next week.
My post here (https://hotcopper.com.au/threads/5-weeks-to-auction-mustang-resources-lays-their-carats-on-the-table.3706086/#.WdaeqWiCzmE)is good for a general intro to Mustang, however CJ's recent video interview is perhaps the best intro you will get.
Now for a few other thoughts.
Inventory
Without an inventory update there has not been much reason for me to post detailed figures, however I am expecting Mustang to take 330,000 to 400,000 carats to auction. IMO Mustang will have been working the plant at maximum capacity since the last inventory update and likewise with the Artisanal work supported by Mustang's Gemologists. I'm still going to be running projections at 330,000 carats until we get an update. I'll post an update to my numbers next week.
Expectations
Keep your expectations balanced. I'm now zeroing in on the USD $100/ct to USD $200/ct range due to the significant proportion of inventory brought in by Artisanals. Qualities are reportedly more mixed than that processed by plant ( Artisinals bring in a mix of High, Low and Commercial qualities albeit I understand from the 8245L License Area ). Gemfields have changed their plans for their next auction. This could impact clearance rate. I'm still assuming they'll achieve 85% as CJ has been very busy networking with potential suppliers. They have over 20 buyers confirmed to attend and CJ has recently spent time in Asia and London building interest for both buyers and investors.
@ekismal (https://hotcopper.com.au/members/23737/) is doing a great job of tracking inventory expectations in terms of USD $/ct here (https://hotcopper.com.au/threads/average-us-per-carat-at-auction.3733503/#.WdafymiCzmE).
Risk
Independent Investment Research (http://www.mustangresources.com.au/irm/PDF/2335_0/IIRMustangResearchReport24May2017) risked their share price estimates down by 80%. We can assume half of that risk is gone now. Given progress to date ( auction confirmed, buyers booked in, quality rubies / deposits, grading system done, insurance/security arrangements in place, Ruby demand, forward strategies announced ) let's assume only 40% risk post-auction.
Once we hit peak I'm therefore anticipating the share price could fluctuate up to 40% post-auction so be prepared for some volatility. The volatility should reduce as Mustang get closer to their second auction. We may also see the maiden JORC for the rubies in that timeframe. I'm thinking 30% risk in 2018 and then reducing to 20% risk from 2019.
For something different, please see my extrapolations (https://hotcopper.com.au/threads/share-price-in-leadup-to-auction.3713352/page-326?post_id=27653217#.WdaaAWiCzmE) of IIR's share price figures against a 12-month scenario of 660,000 carats.
Finance
If you're new to Mustang make sure you read @ozemania (https://hotcopper.com.au/members/37462/) fabulous post (https://hotcopper.com.au/threads/the-convertible-note-broken-down.3733530/#.WdabjGiCzmE) on the Convertible Note finance facility. It was a necessary evil to get us through to the first auction. It's causing some volatility in the share price as Mustang convert notes but that should soon pass. Arena have actually been quite cautious in their approach.