It has agreed to sell 45.9mln new shares, priced at 2.25p, to what it referred to as ‘certain investors including some of our shareholders and directors’ through a non-brokered placing. The new shares represent some 60% of the group’s equity, after the placing, and the price is a 59% discount to Wednesday’s closing price in London.
The AIM quoted explorer is also launching an open offer to allow other qualifying shareholders to limited dilution through the purchase of new shares, and that would raise up to £560,000 of additional new capital for the company.
Tower is selling the new equity on hopes that the company can deliver a farm-out deal to bring in a partner for its Thali licence offshore Cameroon.
“Market conditions for exploration companies continue to be difficult, however Tower is fortunate in having generally low forward licence commitments and we are focusing the major part of our activity on our 100% owned Thali licence in Cameroon,” said Jeremy Asher, Tower Resources chairman.
“This licence offers genuinely low risk and near-term appraisal and development opportunities.
Asher also revealed that that the farm-out process is advancing as planned, with several parties showing interest.
“We are hoping to bring those discussions to a conclusion quickly,” he said.
“Our objective is naturally to achieve the best value, and we believe that this is likely to come from obtaining the maximum possible level of forward funding for the licence, including for the seismic programme planned to be acquired in early-mid 2017, with the best strategic partner.”
According to Asher the cash raised through the share placing will see Tower through to the first quarter of 2017.