Tower Resources PLC (AIM:TRP) said its subsidiary, Tower Resources Cameroon SA (TRCSA), has had its medium-term loan of roughly US$7mln approved by a Cameroonian bank.
The loan is part of the financing for its Thali Production Sharing Contract (PSC) in the Rio Del Rey sedimentary basin offshore Cameroon.
According to a statement, TRCSA was notified by BGFI Bank Group, the largest bank group in Central Africa, that the loan was approved by its credit committee.
TRCSA had agreed a term sheet with BGFI at the end of June, it said.
Further approval is required at BGFI group level, while “discussions are now turning to the details of the structure and documentation, as well as a potential modest enlargement of the facility", said Tower Resources.
The loan, it said, should cover around 40% of the US$18mln cost of the well, with a further 25% already paid for by TRCSA and the remaining 35% also to be funded by the company through either financing at an asset level or corporate funds.
“As previously announced, long lead items for the well have already been purchased, and the environmental and social impact assessment, site survey and site debris survey are complete. Therefore, we are in a position to move quickly once a rig slot is finalised,” said chairman Jeremy Asher.
"We remain very confident that we will be able to drill the NJOM-3 well in good time and thank our shareholders for their patience while we seek to conclude these discussions."
Discussions surrounding additional financing options are ongoing, including with BGFI, although Tower Resources said its plan is to complete the current loan financing documentation before seeking to conclude any further bank discussions.