Mustang Resources to Raise up to $4.4 Million to Advance Its Ruby and Graphite Projects

Sydney - Further to an announcement on 8 January 2018 of a proposed entitlement share issue, Mustang Resources (ASX:MUS) (OTCMKTS:GGPLF) is pleased to announce that it now proposes revised terms to raise up to $4,435,742 by a one-for-four non-renounceable entitlement issue at 2.3 cents per share.

The offer price represents a 23% discount to the 15-day VWAP and a 11.5% discount to the last closing price.

The proceeds will be used primarily to fund bulk sampling and exploration at the Company's Montepuez Ruby Project and exploration at its Caula Graphite Project (see Table 1), both of which are in northern Mozambique.

Mustang's largest shareholder (with 7.74% of issued capital) and operator of its Mozambican ruby and graphite projects, Regius Resources Group Ltd, has confirmed it will take up A$200,000 of its entitlement in the raising (representing 8,695,652 shares, being a majority of its entitlement). Non-Executive Chairman Ian C Daymond has also confirmed his intention to take up his full entitlement.

The record date for the offer is Tuesday, 27 February 2018.

Mustang Managing Director Dr. Bernard Olivier said: "This entitlement offer provides shareholders with a further opportunity to participate in Mustang's growth.

"We believe we are well on track to establishing Montepuez as a world-class ruby project.

"The ongoing ruby bulk sampling and exploration campaign in coming months will be funded predominantly by this raising as we continue to refine our ruby marketing strategy with increasing market intelligence.

"Equivalent funds will be dedicated to xploration at the high-grade Caula Graphite Project aimed at increasing the JORC Resource and fast-tracking feasibility studies as part of our strategy to supply the global lithium battery market."

As the entitlement issue is non-renounceable, the rights cannot be transferred or sold. Up to approximately 192,858,347 fully paid ordinary shares may be issued pursuant to the entitlement issue. Shares issued under the entitlement issue will rank equally with fully paid ordinary shares currently on issue.

The entitlement issue is not underwritten and Directors retain the right to place any shortfall on the same terms within 3 months after the closing date.

Full details of the offer can be found in the accompanying Offer Document to be dispatched to eligible shareholders on the record date.

The timetable of the offer is set out in Table 2 below.

Table 1. Use of Entitlement Offer Proceeds

 
---------------------------------------------------------------------
Items of Expenditure              Amount ($)          Percentage (%)  
---------------------------------------------------------------------
Bulk sampling and 
exploration activities 
on the Montepuez 
Ruby Project(1)                   $1,800,000            40.58% 
---------------------------------------------------------------------
Exploration activities 
on the Caula Graphite Project(2)  $1,800,000            40.58% 
---------------------------------------------------------------------
Working capital(3)                $772,742              17.42% 
---------------------------------------------------------------------
Expenses of the Offer             $63,000               1.42% 
--------------------------------------------------------------------- 
TOTAL                             $4,435,742            100% 
--------------------------------------------------------------------- 

Note:

1. Bulk sample mining and processing using the Company's processing plant. Pitting and sampling by the geological team to identify ruby mineralisation. Test sales and market development of current and future rubies available for sale through the Company's offices in Thailand or other sales channels.

2. Diamond drilling and sampling on licences 6678L and 5873L. Chemical and metallurgical testing and assaying by laboratories in South Africa and Australia. Feasibility studies including concept and definitive feasibility studies inclusive of plant and process flow designs, capital and operating cost estimates and financial modelling.

3. Funds allocated to working capital will be used for administration expenses of the Company over the short term, including Director's remuneration, office and administration costs and general corporate overheads.

Table 2. Entitlement Offer Timetable

Action Item: Company announces Rights Issue
Date: 22 February 2018

Action Item: Lodgement of Offer Document, Appendix 3B and s708AA Cleansing Notice with ASX
Date: 22 February 2018

Action Item: Notice sent to Option holders
Date: 22 February 2018

Action Item: Notice sent to Shareholders
Date: 23 February 2018

Action Item: Ex-date
Date: 26 February 2018

Action Item: Record Date for determining Entitlements
Date: 7.00pm (Sydney time) on 27 February 2018

Action Item: Offer Document and personalised Entitlement and Acceptance Forms sent out to Eligible Shareholders & Company announces this has been completed
Date: 2 March 2018

Action Item: Last day to notify ASX of an extension to the Closing Date
Date: 16 March 2018

Action Item: Closing Date
Date: 5.00pm (Perth time) on 21 March 2018

Action Item: Shares quoted on a deferred settlement basis
Date: 22 March 2018

Action Item: ASX notified of under subscriptions
Date: 26 March 2018

Action Item: Issue date/Shares entered into Shareholders' security holdings
Date: 28 March 2018

Action Item: Quotation of Shares issued under the Offer
Date: 29 March 2018

To view the release with tables, please visit:
http://abnnewswire.net/lnk/5EU94L15

To view the Non-Renounceable Issue - Offer Document, please visit:
http://abnnewswire.net/lnk/BQ89MY54

About Mustang Resources Ltd:

Listed on the Australian Securities Exchange, Mustang Resources Ltd. (ASX:MUS) (FRA:GGY) is an emerging gemstone developer and producer focused on the near-term development of the highly prospective Montepuez Ruby Project in northern Mozambique.

The Montepuez Ruby Project consists of three licences and now one mining concession covering 19,300 hectares directly adjacent to the world’s largest ruby deposit discovered by Gemfields Plc in 2012. Since supply of rubies from sources outside Mozambique has become fractured and unreliable, Mustang stands to capitalise on the current high demand around the world for ethically produced rubies by becoming a reliable, consistent supplier of high-quality rubies.

The Company is currently fast-tracking its work program on the Montepuez Ruby Project with extensive secondary deposits discovered and low-cost bulk sampling well underway. First rough ruby sales are scheduled for 27 to 30 October 2017 in Port Louis, Republic of Mauritius under a closed bid tender of more than 350,000 cts gem quality rubies.

Visit the Mustang website at http://www.mustangresources.com.au for more information.

Source: [wp=3308]Mustang Resources Ltd.[/wp



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