Tower Resources plc announces an extension of its Bridging Loan Facility of US$750,000. The terms of the extension include the issue of 3 million of attached five-year 1.0 pence warrants with the Facility now being due for repayment on or before 31 August 2019, representing a two month extension from its original term.

As previously disclosed, the purpose of the Facility is to cover working capital while the Company seeks to finalise funding arrangements for the drilling of the NJOM3 well on the Thali licence. The purpose of the Extension is to allow additional time to progress farm-out discussions and arrange for refinancing of the Facility. The Company continues to manage its limited cash resources carefully as these discussions are progressed.  

Bridging Loan Facility and Issue of Warrants

The Company has agreed an extension of the repayment of the Facility until 31 August 2019 in return for the issue of 3 million five-year warrants with a strike price of 1p per share. The value of these warrants, based on a Bloomberg valuation using Black-Scholes, is approximately 0.4p per warrant, with the aggregate warrant value corresponding to approximately 2% of the value of the Facility, and is intended to compensate the Facility lenders for their additional risk and for the additional default interest that the lenders will forego by granting the extension. The Bridging Loan will continue to have a preferential right of repayment from any future financing in excess of $750,000, and will remain secured by the Company with interest due of 1% per month (accrued and paid on repayment) along with a fixed and floating charge over the Company's assets.

Farm-out discussions

The Company is continuing farm-out discussions with multiple parties and is hopeful of achieving a first term sheet in the near future.

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