Mozambique-focused emerging mining company Mustang Resources (Mustang), has just agreed to merge their ruby interests with gemstone mining and marketing company, Fura Gems Inc (Fura). The agreement between the two companies was made for approximately A$10 million in Fura shares.
Under the agreement, shares will be given in three tranches, over 20 months, and will give Mustang around an 8 per cent stake in the Canadian-based company, Fura, with this agreement excluding the percentage equity dilution from capital raised from today onwards. Fura is set to give Mustang shareholders a significant exposure to the rapidly growing ruby market via a specialist gem company with extensive experience and a diversified asset base in the coloured gemstone industry.
This merger will also allow Mustang to focus solely on the company’s Caula Graphite-Vanadium Project. Mustang has recently generated a ‘host of high-grade drilling results’ and well-received graphite metallurgical results from this project. The company has also announced that they will continue to commence production from their pilot plant at Caula in the June quarter of 2019.
“This asset merger will benefit Mustang shareholders by giving them ongoing exposure to the ruby assets and Fura’s other ruby and gemstone assets via the shares in Fura,” commented Mustang Managing Director Dr. Bernard Olivier, earlier today.
“At the same time, the ruby assets will be managed by some of the world’s leading gem mining and marketing specialists, whose company has committed to spending A$25 million on their exploration and resource definition work program,” he said.
Fura has committed to investing up to A$25 million in further exploration and resource definition, subject to exploration success of the company’s expanded Montepuez Project over 3 years. The closing of this transaction is subject to ‘satisfaction of customary conditions precedent on or before 30 November 2018’, including Mozambican Government approval.
More information on this can be found here.