Mozambique Mining: Mustang Resources to focus on graphite/vanadium assets, after gemstones deal
The A$10-million merger of Mustang Resources’ ruby assets with that of TSX-V listed Fura Gems will allow the Australia-listed company to focus on its graphite/vanadium assets in Mozambique.
Under the agreement, Fura will issue Mustang with A$10-million in shares over a 20-month period, giving the ASX-listed company an 8% stake in Fura.
Furthermore, Fura has also committed to invest A$25-million over the next 36 months on the combined Montepuez ruby licences to further develop them, subject to continued exploration success.
Mustang said on Tuesday that the transaction would 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.
The merger would also allow Mustang to focus solely on its Caula graphite-vanadium project, where a host of high-grade drilling results were recently generated. Production from a pilot plant at Caula is scheduled for the June quarter next year.
“Both Montepuez and Caula are outstanding assets in their own rights with substantial growth prospects. But the reality is that they don’t sit together comfortably in a publicly-listed company, where investors tend to have an interest in one or the other of these very different businesses,” said Mustang MD Bernard Olivier.
“In simple terms, this 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.”
Olivier said that in addition to spending A$25-million on exploration and resource definition at the combined project area, Fura will also bring the critical mass required to compete with established players in the ruby market.
Fura has also struck a merger deal with Regious Resources Group, which combined with the Mustang transaction, would give the company controlling ownership over nine mineral exploration licences in Mozambique. The assets cover some 711 km2.source:miningweekly.com
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