courtesy of proactiveinvestors . . 27 Mar 2015 12:53
"A sharp rally in Tower Resources (LON:TRP) shares indicates the Africa focussed explorer may have bottomed out.
Tower shares had dropped from around 5p in the past year due in part to disappointing exploration results, and broader sector-wide weakness driven by the collapse of crude oil prices.
Investors will hope the trading in recent weeks will soon resemble something of a nadir for the AIM quoted share, which peaking at 0.49p earlier today marked a near 400% rally.
Tower, in a stock market statement, said it was not aware of any specific new reasons for the movement.
The sharp rally shows Tower had been heavily oversold previously, according to one person familiar with the stock, who also suggested that sellers in the market had now been exhausted.
That contractors recently agreed to receive payment in shares at 0.66p, a big premium at the time, also suggested the stock’s value may have fallen too far.
It is understood the company continues to see support from institutional investors and its core base of shareholders.
Tower’s management, as indicated in a recent strategic update, is seeking new deals to optimise the portfolio and reduce costs.
Such deals could feature at either asset or corporate level, and could potentially see Tower combined with another group. These corporate activities are, however, said to still be at an early stage.
Chairman Jeremy Asher, in last week’s statement, said: “This is a time of especially rapid change and volatility, which we think has, led to a short-term under-valuation of exploration assets.”
“We believe that underlying market conditions will improve over the next couple of years, and sentiment will follow; the question is how best to position our company for this environment, not merely to manage through it but also to take advantage of the opportunities it creates.”
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