Mustang Resources Ltd (ASX: MUS)

MUS Details

Suspension from official quotation: Mustang Resources Ltd (ASX:MUS) sank by 30% on October 30, 2017 while the group released its quarterly report, before being suspended from official quotation pending a response on price and volume query.The group had otherwise reported for rise in inventory from 120,000carats at end of June quarter, 2017 to 352,000carats as at 10 October 2017. The success of the upgraded processing plant at Montepuez helped increase the quantity of rubies that are supplied to Mustang, which attained a new production record in the month of September with the recovery of 27,131 carats from 47,160 tonnes processed with consistent head feed grades of 0.5 to 0.6 carats per tonne.Lately, the stock got a boost with the news relating to taking ~405,000cts to its maiden public tender in October and this figure is more than double its original target.The group expected to have more than 120 people from 42 leading global ruby buyers attending the inaugural tender in Mauritius.The award of first mining concession (upgraded from the previous prospecting & exploration licence) is expectedto allow the group to take the planned processing plant extensions after the maiden tender.The first Mining Concession has been granted at Montepuez and is valid until 13 September 2042, and sets the path for planned processing capacity increases.

Overall, theemerging gemstone developer and producer has reported for an on-track performance to achieve its key objective of becoming a leading global supplier of high-quality rubies through regular closed-bid tenders. MUS also aims to hold at least two tenders totalling one million carats in CY18 and three tenders per year from CY19.

Further, support on activities is coming in from the $8.5m funding package secured from leading institutional investor. MUS has $0.736m cash on hand at 30 September excluding undrawn convertible note facility at end of quarter against 0.399m as at previous quarter.
 

Ruby Inventory (Source: Company Reports)
 
The group’s results from initial beneficiation test work conducted on oxide and fresh samples taken from its 80% owned Caula Graphite Project (Licence 6678L) are also being encouraging given high recovery of jumbo and large flake graphite.

While the group has been making efforts to fast-track its work program on the Montepuez Ruby Project and aims to benefit from its other projects; the recent stock plunge followed by suspension seem to be an adverse development. The stock has otherwise moved up 80.7% in last one month, as at October 27, 2017.It will be crucial to watch out for the stock price movement once the group comes out of suspension.
 

Liquefied Natural Gas Ltd (ASX: LNG)

LNG Details

Positive developments: LNG stock surged up 18.6% on October 30, 2017 at the back of the positive quarterly highlights. The group has secured offtake for Magnolia LNG while progress at the Bear Head LNG project has been decent. An amended and restated equity commitment agreement with Stonepeak Infrastructure Partners for the Magnolia LNG project has been signed along with a dredging servitude agreement with Turners Bay, LLC, to deposit dredge spoils to recreate approximately 100 acres of Louisiana wetlands previously destroyed by hurricanes. The group has also suspended all activity related to the redomicile of the company in the United States in an attempt to focus on current business. The group has also noted for a significant increase in activity and interest in its Bear Head LNG owing to the recent cancellation of the Pacific Northwest LNG project.

LNG’s portfolio expands through Magnolia LNG LLC, Bear Head LNG Corporation, Bear Paw Pipeline Corporation Inc. and LNG Technology Pty Ltd; and looking at the progress with regards to developments in the portfolio and LNG supply and demand trends, we give a “Buy” at the current price of $0.51
 

LNG Supply and Demand Fundamentals (Source: Company Reports)

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