Former market darling Mustang Resources (ASX: MUS) is moving further away from its notorious ruby past after the reshuffled board proposed a rename to New Energy Minerals (ASX: NXE) to reflect the company’s altered direction into the battery minerals sector.
Mustang claims the move allows it to focus on its 80%-owned Caula vanadium-graphite project in northern Mozambique, where a scoping study is due to be released before the month is out.
As part of this direction change, Mustang reported in July it was merging its ruby assets with Fura Gems (TSXV: FURA).
In return for the merger Fura is to pay Mustang $10 million in Fura shares via three tranches, while committing to spending $25 million on advancing the project, which is also in Mozambique.
Mustang’s step away from its Montepuez ruby asset comes after a botched maiden tender in late October last year when the company sold less than 8% of its ruby inventory leaving a sour taste for investors.
In the lead up to the tender, the company’s share price rocketed 400% from $0.05 in early August to $0.20 in mid-October.
The poor sales led to the company’s share price diving and the then managing director Christiaan Jordaan resigning.
Since then, Mustang has appointed new directors and focused its attention on its Caula asset.
New Energy Minerals at Caula
Mustang will put the name change to New Energy Minerals to shareholders at an upcoming meeting on 2 October.
The company pointed out its focus has “increasingly been directed to fast-tracking” Caula, with a maiden vanadium resource of 22Mt grading 0.37% vanadium pentoxide for 81,600t of contained vanadium released in July.
Mustang also boosted its graphite resource for Caula in July, with the updated measured resource currently sitting at 21.9Mt grading 13.4% total graphitic carbon for 2.93Mt of contained graphite.
Caula lies along strike from Syrah Resources’ (ASX: SYR) recently commissioned Balama graphite operation, which has a measured resource of 75 million tonnes grading 16.2% total graphitic carbon.
Balama production guidance for 2018 is expected to reach between 135,000t and 145,000t.
Mustang’s board said the “company has a unique opportunity to deliver a world-class project to serve the new energy market”.
Shares in Mustang were up more than 11% to $0.01 by late morning trade.