Quetzal Energy plans C$9.03 million units placement; Yukon-Nevada Gold sells $25 million notes

By Devika Patel

Knoxville, Tenn., Aug. 18 - Wednesday saw very few private placement announcements. Two Canadian companies were among the issuers.

Quetzal Energy Ltd. said it will sell C$9.03 million of its units in a private placement. The energy company recently announced that it will case its Canaguay No. 1 well on the Canaguaro block in Colombia as a potential oil well. The company's chief executive officer said the planned financing should provide enough cash to continue exploration activities in the region, which he said is known to have very large oil fields.

The company's share price (TSX Venture: QEI) fell 10% on Wednesday, or 2 cents, closing at C$0.14.

And Yukon-Nevada Gold Corp. said it completed a $25 million private placement of senior secured notes, which will raise money for the development of the Jerritt Canyon Gold Project. Company shares (Toronto: YNG) jumped 15.69%, or 8 cents, on Wednesday, closing at C$0.59.

Quetzal plans C$9.03 million

Calgary, Alta.'s Quetzal Energy announced it will conduct a C$9.03 million private placement by selling units of one common share and one warrant at C$0.14 apiece. Each of the warrants will be exercisable at C$0.20 until Oct. 26, 2011. The deal is being brokered by Canaccord Genuity Corp. and has a C$1.36 million greenshoe.

CEO Robert Szczuczko told Prospect News that the financing will support the company's operations in Colombia, where its Canaguay No. 1 well was drilled to its final depth of 15,850 feet on Aug. 4.

"This is a major turning point for our company," Szczuczko said. "Our share prices were previously down by 7 cents and we were advised to focus on exploration and drilling in Colombia, rather than Guatemala. This well is surrounded by producing oil and gas fields and is the first well we drilled as part of this program. Well logs indicate in excess of 100 feet of potential net oil pay."

The company has a 25% working interest in the Canaguaro Block and is the operator. Brownstone Ventures (Barbados) Inc. and Condor Exploration Inc. are partners in the project.

Szczuczko said the placement should be successful, raising the full C$9.03 million. He believes that by offering a full warrant with each unit, more investors might be tempted to participate.

The financing is expected to settle on Aug. 31.

Yukon-Nevada: $25 million

Yukon-Nevada, a gold producer, announced it sold $25 million of its senior secured notes due Dec. 31, 2012 on Tuesday through a private placement.

The Vancouver, B.C.-based company said it will guarantee a minimum rate of return of 5% per annum for the notes, which were accompanied by three-year warrants for 25 million shares. Each warrant is exercisable at C$0.40.

Proceeds will be used to assist with the development of the company's gold producing Jerritt Canyon Gold Project in Nevada, which is scheduled to begin a surface exploration drilling program in mid-August.

The company recently recommenced surface and underground exploration at Jerritt Canyon, emphasizing near mine areas, and expects to advance additional drill programs late the third quarter.

The planned drilling programs are designed to provide continuing production from the existing mines and extend the longevity of Jerritt Canyon. Future exploration programs within the property will help the company locate new gold mines.

Jerritt Canyon is operated by Queenstake Resources USA Ltd., a company subsidiary. The mine produced 18,441 ounces of gold in the three months ended June 30, the highest production amount the company has achieved in a quarter since 2008.

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