Tombador Iron (ASX:TI1) has officially completed the sale of its namesake iron ore project in Brazil to an affiliate of the project’s local mining contractor.
Under the terms of the sale, Tombador will pocket BRL$10 million (around A$3 million) in staged payments, and it will also receive a 4.25% royalty on gross revenue from iron ore sales of direct shipping ores from the Tombador Iron Ore Project.
Further, the company says it may receive a BRL$5 million tax refund if the Federal Government of Brazil approves its refund request.
On 3 October 2023, Tombador announced that production from its project was constrained over the September quarter following an ‘unexpected geotechnical event’, and the company had forecasted ongoing production constraints for the December quarter.
Later that month, Tombador received and accepted the acquisition offer from PJ Investimentos e Participações, with the company saying at the time its board made the call after considering the risks and costs of a required cutback and increased waste trip ratio necessary for the project.
The sale was then effected on 27 December 2023 after shareholders approved the deal.
Looking ahead, Tombador says its next step will be to continue its work on identifying and acquiring ‘suitable investment opportunities’ to add a new asset to its name.
Shares in Tombador have been voluntarily suspended since early October 2023 when it first announced the ongoing constrained production. The company says given it now no longer owns a project, this suspension will continue until it bags a new asset.
Write to Joshua Smith at Mining.com.au
Images: Tombador Iron