SulphCo puts $27.22 million PIPE to bed; special warrants make comeback in Canadian market

By Sheri Kasprzak

New York, March 30 - SulphCo, Inc. led private placement activity Thursday, closing a $27.22 million unit deal.

The company's stock advanced by 5.91%, or 44 cents, Thursday to end the day at $7.88 (Amex: SUF) after the settlement of the deal was announced Thursday morning.

A group of investors, including investors in Europe, bought 4 million units at $6.805 each, the average unit price between March 8 and March 22. The price per unit is an 8% discount to the company's $7.44 closing stock price Wednesday.

Half of the units, which include one share and one warrant, were sold to investors of a July 2004 private placement and the other half to investors in Europe. The warrants associated with the units are exercisable at $6.805 each.

SulphCo, based in Sparks, Nev., develops technologies to upgrade sour heavy crude oil into sweeter, lighter crudes.

The placement comes as oil prices climbed 70 cents to close at $66.43 per barrel after slipping 34 cents on Wednesday. On Tuesday, oil prices jumped $1.91 to settle a $66.07 per barrel.

In other oil-related offerings, Vero Energy Inc. priced a C$13,000,015 stock deal.

The offering includes 2,131,150 shares at C$6.10 each, a 5.3% discount to Vero's closing stock price on Wednesday of C$6.44.

The deal is being placed through a syndicate of underwriters led by GMP Securities LP and FirstEnergy Capital Corp.

On Thursday, Vero's stock slipped 14 cents, or 2.17%, to end at C$6.30 (Toronto: VRO).

The placement is scheduled to close April 13.

Proceeds will be used to fund a portion of the company's 2006 capital expenditure program.

Calgary, Alta.-based Vero is an oil and natural gas exploration company.

Special warrants return

An influx of special warrants among Canadian PIPE issuers may be traced to changes in securities law in Canada.

One Canadian sellside source said Thursday that certain changes in Canadian securities regulations may be forcing companies with market capitalization of below C$75 million to look to special warrants. The investors also may demand less of a discount for the special warrants compared to other securities.

The sellsider pointed out that in Canada, issuers must file a short-form prospectus under the country's prompt offering prospectus system. Under that system, issuers must announce their offering, take four business days to file a preliminary prospectus, take five days for the Securities Commission to review the prospectus and close five days later, making 14 days from start to finish.

"To be eligible to use the POP system, you have to have filed - and cleared - something called an annual information form [AIF]," said the market source. "That AIF has to have your reserve information and other stuff in it. If you have never filed one of these before, it is quite onerous to do."

Canadian authorities on Dec. 31 changed the rules, dropping the minimum C$75 million market float test. As a result, many smaller issuers are now so-called "POP eligible" and now must file the AIF.

"Many of the smaller issuers never had the C$75 million market float in the past so never have filed an AIF and are madly trying to get one cleared so they can do a public offering rather than a private," the source said. "A private placement in Canada has a four-month hold so buyers typically demand a discount to buy these securities.

"A special warrant is a hybrid in that you initially sell the securities on a private placement basis with the company undertaking to clear the special warrant with the Securities Commission under a specified timeframe. Then you file and madly clear the AIF, which is followed by the POP prospectus. This can take, say, a month, in total. Therefore, a private placement buyer has freely tradable securities in about a month versus four months, so demands less of a discount to buy."

Among the offerings structured as special warrants this week were a C$22.5 million offering from Endeavour Silver Corp., a C$4 million deal from Gateway Gold Corp. and a C$4 million placement from Alturas Minerals Inc.

The Endeavour deal included 5 million special warrants at $4.50 each, a 9% discount to the company's C$4.95 closing stock price on Tuesday. On Thursday, Endeavour's stock advanced 6.02%, or 28 cents, to close at C$4.93 (Toronto: EDR).

The Gateway Gold offering includes 3.2 million special warrants at C$1.25 each, a 13.2% discount to the company's C$1.44 closing stock price on Wednesday.

Gateway's stock gained 5 cents to end at C$1.49 Thursday (Toronto: GTQ).

Acadian's C$10 million deal

Speaking of gold deals, Acadian Gold Corp. priced a C$10 million offering as gold prices jumped.

Gold prices gained $13.70 to close at $586.70 per ounce, a 25-year high.

"It's not just gold," said one Canadian sellsider. "Silver is also taking off. Look for some silver offerings coming up."

In the Acadian deal, the company plans to sell 18 million units at C$0.50 each and 1,538,462 flow-through shares at C$0.65 each. The units consist of one share and one half-share warrant. Each whole warrant is exercisable at C$0.65 for 18 months.

Acadian's stock lost 2 cents, or 3.4%, to end at C$0.57 on Thursday (TSX Venture: ADA).

A syndicate of underwriters led by Northern Securities Inc. will place the deal.

The deal is scheduled to close on April 24.

Proceeds will be used to complete the company's acquisition of ScoZinc Ltd. The rest will be used for exploration and general corporate purposes.

Acadian plans to buy the outstanding shares of ScoZinc from HudBay Minerals Inc. for C$7.5 million.

Acadian, based in Halifax, N.S., is a gold exploration company.

Another gold explorer, Cassidy Gold Corp, wrapped a C$5.3 million offering.

The company sold 8,333,333 shares, including the greenshoe for 4,166,667 shares exercised by Jennings Capital Inc., at C$0.60 each.

The company also issued 500,000 shares in a non-brokered deal at the same price.

Proceeds will be used for exploration on the company's Kouroussa project in Guinea, West Africa and for general corporate purposes.

The company's stock fell 4 cents, or 5.41%, to end the day at C$0.70 (TSX Venture: CDY).

Cassidy, based in Kamloops, B.C., is a gold exploration company.

Goldeye Explorations Ltd. priced a C$1,250,010 offering of 5,882,400 flow-through units at C$0.17 each and 1,470,600 non flow-through units at C$0.17 each. The flow-through units are comprised of one share and one warrant with each warrant exercisable at C$0.25 for the first year and at C$0.35 for the second year. The non flow-through units consist of one share and one warrant. Each warrant is exercisable at C$0.25 for two years.

Thursday, Goldeye's stock gained 11.76%, or 2 cents, to settle at C$0.19 (TSX Venture: GGY).

Proceeds from the flow-through units will be used for exploration on the company's properties in Ontario and British Columbia. The rest will be used for exploration on the company's Sonia and Puma properties in Chile and for general corporate purposes.

Based in Toronto, Goldeye is a gold and copper exploration company.

Pinetree prices C$22.5 million PIPE

Elsewhere in private placements Thursday, Pinetree Capital Ltd. negotiated a C$22.5 million stock deal comprised of 1.5 million shares at $15.00 each.

The price per share is an 11.7% discount to the company's C$17.00 closing stock price March 29.

Placement agent Westwind Partners Inc. has a greenshoe for up to C$7.5 million.

The deal is scheduled to close April 20.

Up to 10% of the financing will be bought by insiders.

After the deal was announced Thursday afternoon, Pinetree's stock gained 4.41%, or 75 cents, to close at C$17.75 (Toronto: PNP).

Based in Toronto, Pinetree is an investment, financial advisory and merchant banking firm focused on the oil, uranium, precious metals and base metals sectors.

Metretek stock closes down

A day after announcing a $28,175,672 stock offering, Metretek Technologies, Inc.'s stock fell on Thursday.

The company's stock dropped $1.09, or 6.8%, to end at $14.93 (Amex: MEK).

On Wednesday, the company's stock fell 5.6%, or 95 cents, to close at $16.02.

The company plans to sell shares to a group of institutional and accredited investors at $14.00 each, a 17.5% discount to the company's closing stock price of $16.97 on Tuesday.

The deal is expected to close in the coming week, and the proceeds will be used for debt repayment, capital expenditures and working capital.

Denver-based Metretek provides data management and energy measurement tools to the natural gas sector.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.