Tombador Iron Limited reports a modest cash increase and ongoing progress toward acquiring the Colomi Iron Project in Brazil, while managing royalty income from its sold Tombador project.
- Cash holdings rose slightly to AUD 10.825 million by December 2024
- Received AUD 112,000 in royalty payments from former Tombador Iron Project
- Entered binding agreement to acquire 100% of Colomi Iron Mineração S.A.
- Extensive due diligence and ASX re-listing preparations underway
- Corporate and board costs increased due to transaction-related activities
Quarterly Financial Snapshot
Tombador Iron Limited closed the December 2024 quarter with a slight increase in cash reserves, ending the period with AUD 10.825 million on hand. This modest AUD 25,000 rise came despite net cash outflows of AUD 317,000 from operating activities, offset by favorable exchange rate movements. The company also collected AUD 112,000 in royalty income from the sale of direct ship ores under the agreement for its previously owned Tombador Iron Project in Brazil.
Strategic Shift: From Tombador to Colomi
Having sold its main asset, the Tombador Iron Project, in December 2023, Tombador Iron is now focused on acquiring the Colomi Iron Project, also located in Brazil. The company entered into a binding agreement in October 2024 to purchase 100% of Colomi Iron Mineração S.A., which holds a world-scale magnetite resource with promising potential for producing high-quality blast furnace and direct reduction iron concentrates.
The acquisition marks a significant strategic pivot, positioning Tombador to re-enter the iron ore market with a project that could offer substantial scale and quality advantages. The company has been conducting extensive technical, commercial, legal, and environmental due diligence to validate the project's suitability and value.
Regulatory and Re-listing Preparations
Tombador remains in voluntary suspension from the ASX as it works through the complex requirements for re-listing. The December quarter saw detailed communications with the ASX to address Listing Rules 1.1 condition 1 and 1.19, which govern re-listing protocols. The company has also been preparing key documentation, including an Independent Technical Assessment Report and an Independent Evaluation Report, alongside drafting a prospectus and notice of meeting to support shareholder engagement and regulatory compliance.
Operational and Corporate Costs
Corporate expenditure rose during the quarter, reflecting the heightened activity around the Colomi acquisition. Legal and due diligence costs amounted to AUD 162,000, while technical and consulting fees were AUD 108,000. Board and staffing costs increased to AUD 174,000, partly due to payment timing. Despite these outlays, the company maintains a strong cash position and no bank debt, providing a solid financial foundation for the next phase of growth.
Looking Ahead
Preliminary planning for the organisational structure and staffing of the future Tombador business is underway to ensure compliance with Brazilian regulatory requirements ahead of re-listing, expected in early 2025. The company is also preparing for project scoping and prefeasibility studies, signaling a methodical approach to unlocking the Colomi project's potential.
Bottom Line?
Tombador Iron’s careful groundwork on the Colomi acquisition sets the stage for a pivotal re-listing and renewed growth trajectory.
Questions in the middle?
- What are the detailed terms and valuation metrics of the Colomi Iron Project acquisition?
- How will Tombador finance the next stages of development and operational ramp-up at Colomi?
- What timeline is expected for the ASX re-listing and how might market conditions impact it?