LONDON (ShareCast) - (Sharecast News) - Tower Resources announced on Tuesday that it has expanded its bridge loan facility by £0.25m to £0.75m. to provide additional working capital as it prepared to drill the NJOM-3 well on the Thali licence in Cameroon.
The AIM-traded firm said the unsecured, fixed-price convertible loan was originally announced in March and provided by Gibraltar-based Prime Resources, which is not connected to Tower's prospective farm-in partner, Prime Global Energies.

It said the loan carries a 15% annual interest rate, a 5% cash implementation fee, and is convertible into shares at 0.05588 pence per share - a 100% premium to the average of the five daily volume-weighted average prices prior to the loan's initial issue.

"The purpose of the bridge loan remains to provide the company with working capital flexibility in preparation for the drilling of the NJOM-3 well on the Thali license in Cameroon," said chairman and chief executive Jeremy Asher.

"We are now expecting completion of the Cameroon farm-out shortly, however, with the Admarine 510 rig scheduled to be in Cameroon in October, we need to proceed with the contracting of other services.

"We are also making progress towards completion of the Namibia farm-out, and will update investors with concrete news on both projects when appropriate."

The loan includes prepayment rights, allowing the company to repay with accrued interest if the share price remains below the conversion price, but repayment is subject to the lender's discretion if the share price is higher.

Tower said the loan contains no warrants or additional equity-linked instruments beyond the standard conversion rights.

At 1253 BST, shares in Tower Resources were up 6.18% at 0.03p.

Reporting by Josh White for Sharecast.com.

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE