Tower Resources reports that Northland Capital Partners Limited (Northland) has raised £5.41 million before expenses through a conditional placing (the "Placing") of 180,333,334 new ordinary shares of 0.1p each in the Company (the "Placing Shares") at a price of 3p per Placing Share.

Approximately £5 million is being raised from new institutional investors, with the balance being subscribed for by Directors of the Company.

In addition, the Company announces that it is to issue 15,789,472 new ordinary shares to YA Global Master SPV Ltd, an investment fund managed by Yorkville Advisors LLC ("Yorkville"), pursuant to its Standby Equity Distribution Agreement ("SEDA"), details of which were announced on 6 January 2012 (the "SEDA Shares"). The SEDA Shares are being issued conditional on Admission (as defined below) at a price of 3.8p per share to raise £600,000 for the Company.

In view of the Placing, the Company is presently reviewing its standby equity distribution agreement arrangements, and proposes to make a further announcement in due course.

It is intended that the proceeds of the Placing and the issue of the SEDA Shares will be applied to redeeming the principal and accrued interest of the loan provided by YA Global Master SPV Ltd to commence the Mvule-1 well, to complete the drilling of the well, and to general working capital requirements over the balance of 2012. As previously announced, the Mvule-1 well, which is the third and final commitment well on Tower's EA5 license in Uganda in which Tower holds a 100% working interest, is testing an estimated recoverable resource potential of 80 million barrels.

The Company is also pleased to announce that the Mvule-1 well is expected to spud during the course of Thursday 9 February or Friday 10 February, and a further announcement of the actual spud will follow.

The Placing is not being underwritten by Northland or any other person. The Placing and the issue of the SEDA Shares are being effected under the Company's existing share authorities. The Placing Shares will represent 12.8per cent. of the Company's enlarged issued share capital.

Application has been made for the Placing Shares and the SEDA shares to be admitted to trading on AIM ("Admission"). It is expected that Admission will occur on or around 16 February 2012. The Placing Shares and the SEDA shares will, when admitted, rank pari passu in all respects with the existing ordinary shares.

The Placing is conditional on Admission. The Placing is also conditional upon a placing agreement made between the Company and Northland becoming unconditional and not being terminated prior to Admission in accordance with its terms.

Tags: Tower Resources plc