Vonex cashed up to leverage off 2SG acquisition
Telecommunications innovator Vonex Limited (ASX:VN8) has received a cash inflow of $1.75 million, being the first tranche of consideration for the sale of its entitlements to iron ore production royalties derived from the Koolyanobbing Iron Ore Project.
This follows the successful completion of a CAD$13.75 million fund raising by the purchaser of the Royalty, SilverStream SEZC, a Canadian mining-focused royalty and streaming company, for the purposes of SilverStream listing on the TSXV.
While the iron ore project is no longer a core part of Vonex’s business, receipt of the initial cash consideration has strengthened the company’s cash position, and it now has cash in bank of approximately $3.5 million.
This leaves Vonex significantly funded to continue the highly-successful marketing drive in collaboration with Qantas Business Rewards, while also leveraging off the recent integration of 2SG Wholesale.
Vonex shares push up towards 12 month high
Vonex is entitled to an additional consideration from the Royalty sale of up to $750,000 based on certain production milestones at Koolyanobbing being met.
Highlighting the significance of this development, managing director Matt Fahey said, “This is a milestone event for the company, disposing of the last non-core asset for cash consideration of up to $2.5 million.
‘’These proceeds put Vonex in a very good position, with the ability now to comfortably fund our organic growth of both our direct and recently expanded wholesale businesses following the purchase of 2SG Wholesale.”
Vonex has weathered broader market volatility in good fashion for a smaller company with its shares having doubled since March, and they are now trading not far shy off their 12 month high of 15 cents.