Queste’s Operating Cash Outflows Persist Despite $3M Royalty Windfall

Operating Cash Flow and Royalty Receipt

Queste Communications Ltd released its monthly cash flow report for May 2025, revealing a modest net cash outflow of $28,000 from operating activities for the month. Year to date, the company has recorded a net operating cash outflow of $323,000. Despite these outflows, the company’s liquidity position remains robust, largely due to a significant one-off cash inflow.

In May, Queste’s controlled entity, Orion Equities Limited (OEQ), received $3 million from the termination of an iron-ore royalty. This inflow has materially strengthened the consolidated cash position, with cash and cash equivalents standing at approximately $4.12 million at the end of the month.

Investment Holdings and Financing Facilities

Queste holds a 59.9% interest in OEQ, which itself maintains a portfolio of listed investments including stakes in Strike Resources Limited and Bentley Capital Limited. These investments, valued at over $600,000, are considered liquid assets that supplement the company’s cash reserves.

Additionally, Queste benefits from an unsecured loan facility of $400,000 provided by OEQ, accruing interest at 10% per annum and maturing in December 2025. As of May, only $102,000 of this facility was drawn, providing further financial flexibility.

Liquidity and Funding Outlook

Combining cash reserves and available financing facilities, Queste estimates total available funding of approximately $4.22 million. Based on current operating cash flows, this translates to an estimated funding runway of over 147 months, indicating a strong liquidity buffer to support ongoing operations and strategic initiatives.

The company did not report any significant changes in production activities or board composition during the period, suggesting operational stability as it manages its cash flow dynamics.

Looking Ahead

While the one-off royalty payment has provided a welcome boost, Queste’s ongoing operating cash outflows highlight the importance of monitoring future cash flow trends. The company’s investment portfolio and loan arrangements offer additional financial support, but sustaining positive operating cash flow will be critical for long-term resilience.