The Mustang Resources (ASX: MUS) share price has plunged 56% on its return to the ASX boards today after the world's only listed ruby miner disappointed shareholders with the results of its inaugural ruby auction.
On October 16 Mustang shares closed at 18.5 cents yet today change hands for just 4.6 cents with the price falls mainly driven by the results of its sale of 405,000 ruby carats in Mauritius at the end of October.
The ruby auction only raised total proceeds of $713,456, which is below the expectations of the miner and retail shareholders dreaming of striking it rich.
For the quarter ending September 30 2017 Mustang lost $5.7 million in operating cash flows and with its next ruby auction not expected until mid-2018 things look patchy.
Mustang looks a textbook lesson for investors on the dangers of speculating on Boy's Own African gem mining stories and placing too much emphasis on the forecasts of management or other vested interests.
