Beleaguered ruby miner Mustang Resources (ASX: MUS) has revived its board, ruby mining strategy and edged deeper into the graphite space after a review of its Caula graphite project revealed it could be brought online in just over 12 months.
Mustang’s new managing director Dr Bernard Olivier led the review in conjunction with non-executive director Dr Evan Kirby who has “significant” graphite and vanadium experience.
High grade graphite averaging about 13% total graphitic carbon (TGC) has been identified at the Mozambique-based Caula project.
Additionally, around 55% of the flake graphite found was classified as large, jumbo and super jumbo sizes.
As well as the graphite, the project is prospective for vanadium. The study identified the potential to produce a vanadium concentrate in stage one that could be sold or stockpiled for further processing into a purer vanadium product under an anticipated stage two development.
Under the proposed stage one development, Mustang would produce around 100,000 tonnes per annum of ore to generate up to 15,000tpa of 97% TGC graphite concentrate. The vanadium would be extracted and stockpiled.
Mustang would then leverage off the stage one operation to fund the stage two development which would involve growing the operation up to 600,000tpa to produce up to 75,000tpa of 97% TGC graphite concentrate.
In this second stage, a vanadium processing plant would be constructed to produce a 99.9% pure vanadium pentoxide for aerospace and vanadium battery markets.
The study hypothesises about 2,000tpa of the high purity vanadium could be produced as a by-product and offer up to U$60 million a year in additional value.
Caula neighbours Mustang’s flagship Montepuez ruby operation and according to the company, it could draw on this mine’s infrastructure for Caula.
The company claims it has operational experience in the region with proven capability in building and running a mine.
Caula has a maiden JORC-compliant resource of 5.4 million tonnes grading 13% TGC for 700,000t of contained graphite.
Ruby sales and marketing strategy
The new ruby sales strategy follows the company’s failed maiden ruby tender late last year, which saw the company sell only 8% of its entire ruby inventory.
Under a new plan, the company has moved its sales and marketing office from Mauritius to Thailand to reduce costs and ensure it was on doorstep of its primary market.
Additionally, Mustang claims the move will offer the company a better understanding of it main buyers.
The market reacted positively to the graphite news, with Mustang’s share price rocketing more than 33% to A$0.032 in early morning trade.