Tower Resources Plc has raised GBP1.5mln through a share placing with the proceeds earmarked to repay a loan and support working capital.
It comes after Tower yesterday landed a key and long anticipated farm-out transaction which will enable the drilling of the NJOM-3 well in the Thali production sharing contract area in Cameroon.
Tower is to issue 352.9mln new shares priced at 0.425p each in the placing. Some US$750,000 of the proceeds will repay a loan from Pegasus Petroleum, a facility beneficially owned by Tower chair and chief executive Jeremy Asher, along with US$102,500 of interest.
The remainder will support work programme costs in Namibia and South Africa, whilst in Cameroon funds will support maintenance and planning expenditure as the company seeks to maintain the long-lead items inventory ready for the NJOM-3 programme.
Jeremy Asher said the placing puts Tower onto a much stronger financial footing to continue planning for drilling in Cameroon, and, allows it to progress with work programme commitments for the Namibian and South African licenses.
“While we felt that this placing was timely and necessary, we have sought to minimise share issues and will continue to do so, especially while financing our operations at the asset level remains more cost-effective.
“We are looking forward to providing further updates to shareholders as we move forward with our drilling programme in Cameroon and with 3D seismic data acquisition in South Africa together with our partners.”
The placing was arranged by Novum Securities Limited which will now become joint broker to the company.