Tower Resources’ farm-out deal in final stage

Tower Resources says it expects a ministerial decision on its Namibian farm-out agreement with Prime Global Energies within days, potentially clearing the final hurdle before the transaction can be completed and fresh exploration funding unlocked. The AIM-listed company announced that discussions with Namibia’s Ministry of Industries, Mines and Energy have intensified, with management now engaging the ministry daily following earlier meetings with the Upstream Petroleum Unit in the Presidency in March and May. According to the company, officials informed Tower this week that the approval letter could not be issued immediately due to the minister’s schedule, but committed to responding by 1 July 2026. The approval is the final outstanding condition precedent required to complete the Namibian farm-out transaction first announced in January 2025. Tower said all other licence holders have already been formally notified of the deal and allowed to exercise pre-emption rights, which were not taken up. Once ministerial approval is received, the company will issue a notice of completion to all parties, after which the transaction is expected to close. Following the issue of the Broker Warrants, the total number of warrants in issue will be 1,854,063,908 equating to 3.9% of the Company’s enlarged share capital assuming full exercise of all warrants, options and restricted shares. Tower Resources Chairman & CEO, Jeremy Asher, said it is important to remember that even a straight-forward farm-out proposal requires substantial government due diligence involving multiple departments. “We are not the only company to have experienced delays in approval processes in Namibia, in particular, for reasons I explained in our preliminary results statement. However, it is clear to us that the new organisation at the Ministry and the Upstream Petroleum Unit is much improved and we believe this reorganisation will be to the benefit of the whole industry in the longer term,” he said. Asher said in Cameroon, the approvals sought have not only been for the farm-out, which itself required a normal due diligence process just as in Namibia, but also the further extension of the initial exploration period of the Thali license, which as in the case of previous extensions requires Presidential assent. “It therefore requires more steps as it rises to the level of the President. While it has taken a long time to get the file to the Office of the Presidency, it is now there and they are aware of the urgency of it. However, we are still reluctant to predict how long it will take for a Presidential decision to be documented and sent back down the chain, even though we hope it will be very soon,” he added. The development is significant for Tower because the Prime deal is expected to provide the funding needed to advance exploration activities in Namibia while reducing Tower’s financial exposure. The company has not disclosed the exact timetable for drilling following completion, but securing the farm-out would strengthen its position as it seeks to advance its Namibian acreage alongside other African assets. The latest update suggests that administrative rather than technical issues are now delaying completion. Tower revealed that, in response to the ministry’s requests, it recently submitted proof of payment of the required transfer fee and provided copies of documents missing from the ministry’s file. The company said those requests have now been addressed and that it is awaiting the formal approval letter. The Namibian transaction forms part of a broader strategy by Tower and Prime to partner on selected African exploration assets. In Cameroon, where Prime is also acquiring an interest in Tower’s Thali licence, the approval process is progressing separately through the Office of the President following the country’s prime minister’s intervention earlier this year. While expressing confidence that both the Namibian and Cameroonian transactions could be completed during July, Tower said the prolonged approval processes have prompted it to raise additional working capital. The company announced a £400,000 capital raise through the issue of 2.5 billion new shares at 0.016 pence each, a 6% discount to the previous closing bid price. Tower said the funding would provide sufficient liquidity while it waits for substantially larger funding commitments expected to follow the completion of the Prime farm-out agreements. The update indicates that one of the country’s smaller offshore licence holders is edging closer to securing external funding at a time when international interest in the Orange Basin and broader offshore petroleum sector remains strong. If approval is granted by the beginning of July as anticipated, the Prime transaction would mark an important milestone in Tower’s efforts to monetise and advance its Namibian exploration position without shouldering the full cost of future work programmes.