Tombador Faces Royalty Income Pressure as Colomi Acquisition Deadline Looms
Tombador Iron Limited reported a solid cash position of AUD 9.549 million as it advances the acquisition of the Colomi Iron Project in Brazil, while navigating royalty income challenges and preparing for a capital raise.
- Cash holdings of AUD 9.549 million as of June 30, 2025
- Ongoing acquisition process for Colomi Iron Project with transaction extended to August 17, 2025
- No royalty income received during the quarter, but a payment of US$45.4k received post-quarter
- Net cash outflow of AUD 1.356 million primarily from operating activities
- Company remains in voluntary suspension after selling Tombador Iron Project in December 2023
Strong Cash Position Amid Transition
Tombador Iron Limited closed the June 2025 quarter with cash reserves of AUD 9.549 million, reflecting a net cash decrease of AUD 1.356 million over the period. This outflow was largely driven by operating expenses, including corporate costs, legal fees, and tax payments related to prior dividends. The company holds no bank debt, providing a clean balance sheet as it navigates its next strategic phase.
Focus on Colomi Iron Project Acquisition
The company’s primary activity during the quarter centered on progressing the acquisition of the Colomi Iron Project in northeast Brazil. Tombador extended its binding transaction agreement with Colomi Singapore Pte Ltd to August 17, 2025, as it works closely with the ASX, major shareholders, and capital advisors to facilitate a re-compliance capital raise. The Colomi project boasts a world-scale magnetite resource with promising potential for producing high-quality iron concentrates suitable for blast furnace and direct reduction iron processes.
Royalty Income and Market Challenges
Following the sale of its main asset, the Tombador Iron Project, in December 2023, the company has been receiving royalty income from iron ore sales. However, no royalty income was recorded during the June quarter itself, with a modest US$45.4k payment received shortly after quarter-end. Tombador has agreed to reduce royalty payments by 50% for the remainder of 2025, reflecting challenging mining economics and lower production volumes at the Tombador mine. This adjustment underscores the volatility and market pressures affecting royalty streams in Brazil.
Corporate and Operational Costs Under Scrutiny
Corporate expenses totaled AUD 308k for the quarter, including legal, consulting, accounting, and insurance costs. Board and staffing expenses were slightly elevated compared to the previous quarter, reflecting timing differences in payments. The company also disclosed payments of AUD 196k to related parties, primarily director fees and consulting services, in line with ASX requirements.
Looking Ahead
With the Tombador Iron Project behind it and the Colomi acquisition underway, Tombador Iron is positioning itself for a new chapter focused on growth through strategic investments. The company’s ability to complete the capital raise and re-listing will be critical to unlocking the potential of the Colomi project and other opportunities under evaluation. Investors will be watching closely for updates on these fronts as well as the evolving royalty income outlook amid Brazil’s mining market conditions.
Bottom Line?
Tombador Iron’s next moves on capital raising and Colomi’s development will define its path forward amid royalty income uncertainties.
Questions in the middle?
- Will Tombador successfully complete the capital raise and re-compliance to resume trading?
- How will fluctuating Brazilian mining conditions impact future royalty income streams?
- What timeline and investment will be required to advance the Colomi Iron Project to production?