TOWER RESOURCES AGM 18TH JULY 202419 Jul 2024 08:47
The following post is NOT intended to give nor imply investment advice, and, represents my opinion only.
I perceive this stock to be a gambling fun stock, everyone should have one in their otherwise sensible portfolio. Under the right circumstances, you could make a lot of money, or, lose it!
Around five shareholders attended the above AGM yesterday. Firstly, no agreement for finance has been agreed in writing to date, however, there have been a number of talks with financiers. Twenty years ago investors would salivate at the opportunity to raise money for such an opportunity, indeed times have changed. Initially alarm bells were ringing since I deemed the schedule to be somewhat tight, however, there is no point in having the money and no rig! Furthermore, like a card game, you don’t wish to show your hand too soon, unless you prefer an inferior deal. This should be weighted by the facts, which are, it is not a buyers market for risk capital. However, Tower are in talks with a number of financiers, and, at this juncture I am unconcerned. Mezzanine finance (debt for equity swap) being acute; this has become slightly better but still notoriously challenging.
We know that there is oil in the vicinity, however, we don’t know if it is commercially viable, there is only one way to find out. For this reason the drilling could be defined as an appraisal/exploration and potentially a production well. Data from five years ago suggests where oil could be. Total drilled a deep well within this area, then, they side tracked and eventually ran out of time. Additional complexities were caused by a fault at the edge.
Drilling could take place in November or December, dependent on rig availability, however, I would be concerned if the start date went beyond February 2025. Initially rig availability was non existent, however, a couple more rigs are now located within this area of Africa, therefore the market for this service being slightly less tight. Remember, contracts have to be flexible for the exploration company since it would be inconceivable to finish only 90% of a drill, only for the rig to move, them come back and continue such an important function.
There are back up plans for both the finance and rig, however, remember, it is important to have competitive tension between such parties, ensuring the optimum deal for shareholders.
Funds have already been spent on surveys, sight surveys, engineering, various drilling equipment, explosives, storage etc.
Prior to attending the AGM I would not invest any further, however, knowing the updated investment case I would purchase further shares, but not too many! Finally, I would remind readers JA has over 9% of the company, which is quite unusual. He is putting his own money into this venture, something which is quite rare.
Gordon Gekko of Wall Street Fame, stated “Don’t get emotional about stock!”, good luck.
Sign In
Follow the stocks
