Grove Energy prices $15 million convertibles; Targeted Genetics stock sinks on $4.98 million offering

By Sheri Kasprzak

New York, March 10 - Grove Energy Ltd. priced a $15 million subordinated convertible note offering to head up private placement activity at the close of the week, despite a drop in oil prices Friday.

Grove plans to sell 8.75% notes to investors through underwriter RAB Capital plc. The five-year notes are convertible at C$1.00 each, a 42.8% premium to the company's closing stock price of C$0.70 on March 9.

After the deal was announced Friday morning, Grove's stock advanced 7.14%, or 5 cents, to end at C$0.75 (TSX Venture: GRV). On March 6 the company's stock slipped 4 cents to close at C$0.73, and on Tuesday the stock gained 2 cents to close at C$0.75. The company's stock lost 1 cent on Wednesday and lost another 4 cents on Thursday.

"This financing will allow Grove to pursue its exploration and development objectives for the foreseeable future," said Glenn Whiddon, the company's chief executive officer, in a statement. "We are extremely pleased that RAB, a respected investor in the international market, is demonstrating its support for our team, property interests and strategy and we welcome RAB's continued involvement with Grove."

Grove intends to use the proceeds from the placement for exploration and development and for working capital.

Grove recently reported a net loss of C$1,465,822 for the quarter ended Sept. 30, 2005, compared with a net loss of C$328,947 for the same quarter of 2004.

Based in Vancouver, B.C., Grove is an oil and natural gas exploration company.

Meanwhile, oil prices dipped $0.51 Friday to close at $59.96 per barrel after advancing $0.45 on Thursday to end at $60.47 per barrel.

Moving to the biotech sector, Targeted Genetics Corp. saw its stock dive after the company announced the closing of a $4,988,728 direct placement.

The company sold 12,791,611 shares at $0.39 each under its shelf registration to a group of institutional investors. The price per share is a 25% discount to the company's closing stock price of $0.52 on March 9.

Targeted Genetics' stock lost 12.5%, or 7 cents, in premarket trading Friday morning after the deal was announced. By the end of the day, the stock had lost 10 cents, or 19.23%, to end at $0.42 (Nasdaq: TGEN).

Proceeds will be used for working capital and general corporate purposes.

The placement comes a day after the company released its lackluster fourth-quarter earnings report.

For the quarter ended Dec. 31, 2005, Targeted Genetics reported a net loss of $3.5 million, compared to a net loss of $2.2 million for the same quarter of 2004. For the year ended Dec. 31, 2005, the company reported a net loss of $19.2 million, compared to a net loss of $14.3 million for the year ended Dec. 31, 2004.

Revenue for the year ended Dec. 31 was $6.9 million, down from revenue of $9.7 million for the 2004 year.

Located in Seattle, Targeted Genetics develops gene therapies used to treat acquired and inherited diseases.

Higher gold prices spark PIPE activity

An increase in gold prices on Thursday caused a small influx of gold offerings priced despite a drop in gold prices Friday.

Gold prices lost $5.60 on Friday to close at $539.90 per ounce. However, gold advanced by $3.00 on Thursday to end at $545.50 per ounce.

"There's enough demand that once [gold] prices go back up, [issuers] scramble to get something out there," said one market source based in Vancouver. "Gold has been off for quite some time now so it's important for these guys to price when they can."

Aurizon Mines Ltd. led the charge Friday, pricing a C$15,125,000 offering of 5.5 million flow-through shares. The offering is being placed through a syndicate of agents led by Wellington West Capital Markets Inc.

The company expects the deal to close March 30.

The placement was announced Friday afternoon, sending the company's stock up 10.22%, or 23 cents, to close at C$2.48 (Toronto: ARZ). The gain is the biggest move the company's stock has experienced so far this year.

Proceeds will be used for exploration on the company's Casa Berardi gold project and for other exploration expenses.

Aurizon is based in Vancouver, B.C.

Another gold explorer, Gryphon Gold Corp., priced a C$6.25 million offering.

That deal includes 5 million units at C$1.25 each. Each unit consists of one share and one half-share warrant and each whole warrant is exercisable at C$1.65 for one year.

The deal is scheduled to close March 31.

Proceeds will be used for exploration and development on the company's Borealis gold project.

The company's stock remained unchanged Friday at C$1.40 (Toronto: GGN).

Gryphon is also based in Vancouver, B.C.

Universal Uranium in market

Elsewhere in Canadian private placements, perennial private placement issuer Universal Uranium Ltd. has priced another offering, this one for C$2,000,025.

The company intends to sell 2,666,700 units at C$0.75 each.

The units consist of one share and one half-share warrant, with each whole warrant exercisable at C$1.00 for two years.

Placement agent Blackmont Capital Inc. has a greenshoe for up to 15% of the offering size.

Proceeds will be used for exploration, working capital and general corporate purposes.

Universal's stock slipped 5.41% on Friday, or 4 cents, to settle at C$0.70 (TSX Venture: UUL).

On Tuesday, Universal settled a C$4,601,750 private placement of 6,135,667 units at C$0.75 each. Those units also included one share and one half-share warrant with each whole warrant exercisable at C$1.00 for one year. Haywood Securities Inc. was the placement agent for the Tuesday offering.

In October 2005, Universal closed a C$1,001,000 private placement of 2,275,000 units at C$0.44 each. That offering was non-brokered.

Vancouver, B.C.-based Universal is a uranium exploration company.

Allied Defense stock dips

A day after announcing a $30 million private placement of senior convertible notes and the imminent completion of a senior secured facility for up to $20 million, Allied Defense Group, Inc.'s stock dipped slightly.

The stock fell 7 cents, or 0.3%, to end at $22.93 Friday (Amex: ADG).

When the deal was announced Thursday, the stock slipped 5 cents, or 0.22%, to finish at $23.00.

Trading volume of the company's stock, however, remained well above average with 177,700 shares traded compared to the average 12,141 shares. Volume on Thursday was 48,800 compared to the then-average volume of 11,419 shares.

In the placement, Allied Defense will issue senior convertible notes convertible at $26.46 each, a 14.8% premium to the company's closing stock price of $23.05 on Wednesday.

The Allied Defense Group, based in Vienna, Va., develops ammunition marketed to defense departments and also designs electronic and microwave security systems.

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