- VRX Silica Limited (ASX:VRX) has recently announced its inclusion into the MSCI Small Caps Index.
- The Company will gain broader exposure to the Australian and global investment markets following the inclusion.
- The silica sand explorer is tapping promising opportunities emerging in the silica sand market owing to unmet demand and ongoing supply constraints.
In a significant development, silica sand explorer VRX Silica Limited (ASX:VRX) has announced its inclusion into the MSCI (Morgan Stanley Capital International) Small Caps Index.
The global market index provider MSCI has recently declared changes to their Australian Global Micro Cap Indexes, which incorporates the inclusion of VRX Silica. The Company informed that these changes to the Micro Cap Indexes will be effective as at close of business on 27 May 2021.
MSCI provides prominent investment services such as data, research, and technology to the international investment community, allowing clients to better understand and evaluate key drivers of risk and return and create more effective investment portfolios.
Recently, VRX Silica has also completed the sale of its Biranup nickel project to ASX-listed NickelX Limited (NKL) to focus on its stated objective of becoming a global supplier of high-grade silica sand. Following the sale of the Biranup project, the Company now holds a world-class portfolio of silica sand projects in Australia, comprising Arrowsmith North, Muchea and Arrowsmith Central.
Advantages of Inclusion into MSCI Small Caps Index
As part of the changes, VRX Silica will be added to the MSCI Australia Micro Cap Index that has been designed to gauge the performance of the Micro Cap segment of firms trading on the Australian Securities Exchange.
The inclusion of VRX Silica into a global index such as MSCI, will offer the Company with exposure to larger and global institutions, besides providing transparency and research coverage for institutional and retail investors. The Company will also gain broader exposure to the Australian and international investment markets following the inclusion.
Furthermore, the addition into the global index is expected to boost VRX Silica’s liquidity and provide the Company with increased access to capital sources.
Tapping Lucrative Opportunities in Silica Sand Market
VRX Silica is tapping promising opportunities emerging in the silica sand market due to unmet demand and supply constraints.
The Asia Pacific region is experiencing massive demand for silica sand for glass manufacturing and as a component in foundry casting, which is not met by existing production. Besides, the region is facing a significant supply shortfall, propelling the price of silica sand up enough to make mining in Australia as well as shipping to Asia profitable.
Interesting Read: VRX Silica Outlines a Rosy Outlook for its Silica Sand Projects
While silica sand has multiple applications, VRX Silica is particularly targeting the foundry and glassmaking industry for its silica sand products. As per the Company, foundry and glass growth is set to drive the demand for silica sand in the Asia Pacific region.
The emerging economies in the Asia Pacific region are expected to see substantial infrastructural spending in the coming years, driving glass demand. Besides, a significant uptick in demand for casting products for auto components, construction equipment and automobiles is expected to stimulate silica sand demand.
VRX Silica shares are trading at AUD 0.220 as of 1:32 PM AEST.