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Highlights
- Tombador acquires 100% of Colomi Iron Mineracao, gaining full control of the Colomi Iron Project in Brazil.
- Colomi Project hosts over 5 billion tonnes of JORC-compliant itabirite iron ore.
- Company to raise up to AU$7 million via public offer to fund acquisition and development.
- The company to change name to Colomi Metals Limited and ASX code change to CM1.
Tombador Iron Limited (ASX:TI1) has announced a major strategic shift with the acquisition of 100% of Colomi Iron Mineracao S.A. (CIM), which holds the expansive Colomi Iron Project in Bahia, Brazil. The acquisition, which is subject to certain conditions, aims to strengthen Tombador’s position in the iron ore market and re-align its future business direction. As part of this transaction, the company will undergo a name change to Colomi Metals Limited and seek re-admission to the ASX under the new ticker ASX:CM1.
Key Details of the Acquisition
Under the terms of the agreement, Tombador will acquire 100% of CIM from its substantial shareholder, Colomi Singapore Pte Ltd (CIS), securing full control of the Colomi Iron Project. This project is notable for its substantial JORC (2012) compliant itabirite iron ore resource, which exceeds 5 billion tonnes at a 15% Fe cut-off grade. This acquisition is seen as a transformative step for Tombador, allowing it to gain access to a large-scale resource with potential near-term development opportunities.
The acquisition is still subject to several conditions, including shareholder approvals and re-compliance with Chapters 1 and 2 of the ASX Listing Rules. A shareholder meeting is expected to take place in November 2024 to secure the necessary approvals to complete the transaction.
Capital Raising and Rebranding
To fund the acquisition and comply with ASX listing rules, Tombador plans to raise up to $7 million through a public offer of 35 million shares at $0.20 per share. The minimum subscription for the offer is $5.5 million. The funds raised will help support the company’s transition and the advancement of the Colomi Iron Project.
As part of the acquisition, Tombador will also change its name to Colomi Metals Limited to reflect its new direction. The company will apply for reinstatement of its shares under the new ticker ASX: CM1.
Strategic Rationale
The acquisition of CIM and the Colomi Iron Project aligns with Tombador’s goal of tapping into the growing demand for high-quality iron ore products. The Colomi Iron Project offers a unique opportunity to produce Direct Reduced Iron (DRI) grade concentrate, which is crucial in the decarbonization of the iron and steel industry. This shift toward greener steel production is driving global demand for premium-grade iron ore, positioning the Colomi Iron Project as a significant asset for the future.
Key Features of the Colomi Iron Project
The Colomi Iron Project boasts several key investment highlights:
- Large-Scale Resource: The project has a JORC (2012) compliant itabirite iron ore resource exceeding 5 billion tonnes at a 15% Fe cut-off grade.
- Capital Efficiency: The project benefits from existing third-party rail and port infrastructure, reducing the need for extensive capital investment in transportation.
- Advanced Exploration: The project is at an advanced stage of exploration, with approximately 20km of drilling already completed in partnership with mining giant Vale S.A.
- Product Quality: Metallurgical test work suggests the potential to produce premium blast furnace (BF) concentrate as well as high-quality DRI grade concentrate.
- Sustainability: The project’s environmental focus includes access to renewable energy sources such as hydro, wind, and solar power, alongside dry processing technologies that minimize environmental impact.
Environmental Stewardship and Market Demand
The Colomi Iron Project is designed to meet the growing global demand for environmentally responsible iron ore production. By utilizing renewable energy and dry processing technologies, Tombador aims to minimize the environmental footprint of the project. This aligns with the broader industry trend toward sustainable mining practices, which is becoming increasingly important as steel manufacturers seek ways to reduce carbon emissions.
Moreover, the demand for premium-grade iron ore concentrates, particularly those suitable for DRI production, continues to rise globally, driven by efforts to decarbonize steel production. The Colomi Iron Project is well-positioned to capitalize on this trend, offering a long-term growth opportunity for the newly rebranded Colomi Metals Limited.
