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Tower Resources to seek new deals

Last updated: 06:42 19 Mar 2015 GMT, First published: 07:42 19 Mar 2015 GMT

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Tower Resources (LON:TRP) has refined its strategy following recent exploration projects, which did not result in discoveries.

The company said it has a portfolio of assets with limited financial exposure and no drilling commitments, and at the same time discretionary spending has been cut.

After paying for the recent Badada exploration well, in Kenya, the company will have around US$4mln of cash.

It now intends to farm-out projects where commitments cannot be deferred.

Tower will also seek new deals – either at asset or corporate level – to optimise the portfolio and reduce costs.

In a stock market statement chairman Jeremy Asher said: “exploration is a long-term activity and rarely lacks painful moments. We will continue to work our way through this downturn to achieve success.

“We have been through cycles before, and we are confident that the sector sentiment will change in due course.

“This is a time of especially rapid change and volatility, which we think has, led to a short-term under-valuation of exploration assets.”

Asher added: “We believe that underlying market conditions will improve over the next couple of years, and sentiment will follow; the question is how best to position our company for this environment, not merely to manage through it but also to take advantage of the opportunities it creates.”

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