Tower Resources (LON:TWR) is now suitably capitalised to execute a new strategy focussing on lower risk exploration, City broker Peel Hunt highlights.
Peel Hunt, in a note today, repeated a ‘buy’ recommendation though the price target was reduced to 0.33p from 0.5p; nevertheless it still implies some 65% upside to the current price of around 0.2p per share.
The lower price target factors in some uncertainty over the timing and ultimate outcome of exploration drilling, meanwhile, the broker’s valuation (RENAV, or ‘risked exploration net asset value) of 0.49p per share indicates the significant additional upside.
Importantly, Peel Hunt highlights that as a result of the placing Tower now has a stronger balance sheet.
“Tower’s recent £5.2mln placing paves the way for the company to make material progress across its asset base,” said analyst James Carmichael.
“It is now funded for entry costs and early-stage work on the Thali PSC (previously Dissoni), offshore Cameroon, as well as the initial stages of a new Namibian strategy and work commitments across the rest of the portfolio.”