Tower Resources PLC - Proposed Placing and Subscription
THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN, INTO OR FROM
This announcement does not constitute a prospectus or offering memorandum or an offer in respect of any securities and is not intended to provide the basis for any decision in respect of
15 October 2019
Extension and Restructuring of the Bridging Loan Facility
Proposed Placing and Subscription to raise approximately £1,500,000
Proposed issue of
The Company has signed Letters Of Intent ("LOIs") regarding the NJOM-3 well on the Njonji structure within the Company's Thali license with both COSL, in respect of its Seeker jack-up drilling rig (as previously notified), and also Geoquip Marine, in respect of its MV Investigator technical services vessel. The MV Investigator, which is now in
Restructuring and Extension of the Bridging Loan Facility
As previously noted, the Facility announced on
The repayment date of the Facility will be extended to
In consideration for the Extension, it has been agreed that Pegasus will receive a possible additional consideration from Tower contingent upon Tower itself receiving cash flow arising from the Thali license. The Company is presently seeking to put in place a royalty to be paid to Tower comprising up to 10% of the contractor's share of production from Thali, and such a royalty also forms part of the farm-in terms being discussed with prospective partners. At present, the Company does not have agreements in place to receive any such royalties, but provided such agreements can be put in place, then Pegasus will receive a quarter share of any such royalties. Such an uncertain royalty share is difficult to value but it cannot exceed 2.5% of the value of the contractor's share of production arising from Thali, and if there is no such production then there will be no royalties. The purpose of this is to provide a success-based and profit-related incentive to Pegasus to extend the Facility as required in order to secure financing for the Thali license, that is substantially less than the return which a similar investment in the Company's equity today may be expected to achieve in the case of success at Thali, but which reflects the risk of the extended Facility and without issuing further warrants or incurring any further cost to the Company unless the Thali license can be successfully put into production.
The Extension constitutes a related party transaction in accordance with AIM Rule 13. Accordingly,
Whilst financing negotiations continue regarding the Thali license, the Company is proposing to raise approximately
In order to provide Pegasus and
● the first tranche of
● the second tranche of
(i) the receipt by the Company of the further advance by Pegasus of
(ii) completion of the subscription by
Completion of the First Tranche is expected on or around
The warrants to be issued in respect of the Placing are contingent on the Company receiving an increase in the authority of the Board to allot shares that is sufficient to cover these warrants at its next AGM or EGM.
The Placing funds will allow the Company to cover ongoing operational costs, pay creditors and also secure the services of Geoquip Marine's MV Investigator to undertake the site survey and drill boreholes, which is the final operational step needed prior to being able to bring the drill rig itself to the site.
In addition to the Placing, the Company expects to issue additional equity, comprising approximately 50,784,000 shares on the same terms and with the same attached warrants as the Placing (the "
Finally, as in previous quarters, the Company has asked certain directors to accept warrants in lieu of a portion of their director fees, totalling
A further announcement is expected to be made shortly in connection with the proposed Placing,
Note regarding forward-looking statements
This announcement contains certain forward-looking statements relating to the Company's future prospects, developments and business strategies. Forward-looking statements are identified by their use of terms and phrases such as "targets" "estimates", "envisages", "believes", "expects", "aims", "intends", "plans", "will", "may", "anticipates", "would", "could" or similar expressions or the negative of those, variations or comparable expressions, including references to assumptions.
The forward-looking statements in this announcement are based on current expectations and are subject to risks and uncertainties which could cause actual results to differ materially from those expressed or implied by those statements. These forward-looking statements relate only to the position as at the date of this announcement. Neither the Directors nor the Company undertake any obligation to update forward looking statements, other than as required by the AIM Rules for Companies or by the rules of any other applicable securities regulatory authority, whether as a result of the information, future events or otherwise. You are advised to read this announcement and the information incorporated by reference herein, in its entirety. The events described in the forward-looking statements made in this announcement may not occur.
Neither the content of the Company's website (or any other website) nor any website accessible by hyperlinks on the Company's website (or any other website) is incorporated in, or forms part of, this announcement.
Any person receiving this announcement is advised to exercise caution in relation to the Placing. If in any doubt about any of the contents of this announcement, independent professional advice should be obtained.
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.
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+44 20 3470 0470
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+44 20 3657 0050
+44 20 7659 1234
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+44 20 3735 8825
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Tower Resources Cameroon S.A, a wholly-owned subsidiary of
The Thali PSC covers an area of 119.2 km², with water depths ranging from 8 to 48 metres, and lies in the prolific
An independent Reserve Report conducted by
§ Gross mean contingent resources of 18 MMbbls of oil across the proven Njonji-1 and Njonji-2 fault blocks;
§ Gross mean prospective resources of 20 MMbbls of oil across the Njonji South and Njonji South-West fault blocks;
§ Gross mean prospective resources of 111 MMbbls of oil across four identified prospects located in the Dissoni South and Idenao areas in the northern part of the Thali licence;
§ Calculated EMV10s of
In accordance with the guidelines for the AIM market of the
This information is provided by RNS, the news service of the
Quick facts: Tower Resources PLC
Market Cap: £4.9 m
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