Overview
Tower Resources plc is into oil and gas exploration. The Company has various exploration projects predominantly in the African region. The Company operates in two divisions namely- Africa and Head Office. The Company has a strong focus on African projects and is an operator of international licenses. The company has high potential projects in Cameroon, South Africa and Namibia. The Company as of now has no revenues.

Recent developments
The Company is successful in placing 15,000,000 new common shares; which resulted in gross proceeds amounting to £150,000 at a Subscription Price of 1.00 pence per share. Cameroon Financing Update-Tower Resources plcshort term focus remains the financing and drilling of the NJOM-3. The Company is in negotiations with several parties to finance some or all the NJOM-3 well, on which the company is positive.

The Company continues to explore longer-term options for debt, equity or any other possible method of financing of the remainder of the first phase development of the Njonji structure. The Company's preferred route of financing is to collaborate with an industry partner on terms that are agreeable to shareholders, the need for further equity financing is minimised. However, depending on the magnitude of the deal achieved, further raising of corporate equity may be required.   

Financial Highlights for Financial Year 2018 (US$)  

(Source: Annual report, Company’s website)
 
Total group’s operating loss totalled at $3.8 million in FY18 as against a loss of $1.6 million in FY17. The Cash balance of the company at year-end was $331k as against $2.2 million in FY17. The loss after tax stood at $3,821,683 in FY18 as against the loss (after tax) of $1,615,477 in FY17. The company made an investment in oil and gas assets of $1,345,833 in FY18 as against $649,009 in FY17. The company’s Year-end share price stood at 1.28 pence in FY18 as against 0.78 pence in FY17. The company also opted for Interim financing by bridging loan of $750,000. The company’s loss before impairment has reduced to $1.0 million this year as against a loss of $1.6 million in FY17. The net assets of the company stood at $18,709,281 this year as against $22,337,461 in FY17.
 
Share price performance

Daily Chart as at June-24-19, before the market close(Source: Thomson Reuters)

On 24 June 2019, at the time of writing (before market close, GMT 3:42 PMTower Resources plcshares were trading at GBX 0.869, down by 0.68 per cent against the previous day closing price.

Stock's 52 weeks High and Low is GBX 1.78/GBX 0.66. The company’s outstanding market capitalisation was around £4.95 million.

The stock’s volume (before the market close, at the time of writing) stood at 2,571,100. Stock's average traded volume for 5 days was 1,645,510.20; 30 days- 1,473,103.60 and 90 days - 2,260,720.89. The average traded volume for 5 days was up by 11.7 per cent as compared to the 30 days averagetraded volume.

Conclusion
The company was in a development phase for the Financial Year 2018. Hence, was not able to generate revenue, the profitability margins have remained stagnant or declined. Moreover, the company is trading near its 52-week low, raising doubts at its upside potential at current prices. The company operates in a challenging environment which requires continuous investment, sometimes at the cost of profitability, to stay ahead of competitors. 

Keeping in mind the weak relative valuation of the company and weak financial performance, we recommend the investors to “Avoid” taking fresh positions at the closing price of GBX 0.875 (as at June 21, 2019).

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