NovaGold, Virtus land investors; Paramount sells to MineralFields; Azteca wraps deal, plans more

By Kenneth Lim

Boston, Jan. 2 - NovaGold Resources Inc. sold $60 million of stock and warrant units to a strategic investor to help repay a bridge loan.

Paramount Gold and Silver Corp. raised C$2 million of flow-through financing from the MineralFields Group.

Virtus Holdings, Inc. raised $45 million from Harris Bankcorp, Inc. as part of its spinoff from parent company The Phoenix Cos., Inc.

Azteca Gold Corp. took in an initial C$1.18 million from a private unit placement to support an Idaho project.

NovaGold to repay debt

NovaGold placed $60 million of stock and warrant units in a private deal to Electrum Strategic Resources LLC.

The company sold about 46.15 million units at $1.30 apiece. Each unit consists of one common share and one warrant, with each warrant exercisable at $1.50 for four years.

NovaGold common stock (TSX: NG) closed at C$1.90 on Friday, higher by 7.34% or $0.13. NovaGold has a market capitalization of C$204.3 million.

Proceeds will be used to repay principal and interest owed under the $20 million bridge loan from Auramet Trading, LLC, to finance continuing exploration and development activities at NovaGold's Donlin Creek gold project in Alaska and the Galore Creek copper-gold project in British Columbia, to study the Rock Creek Mine near Nome, Alaska, and for general corporate purposes.

If completed, the deal will raise New York-based Electrum, a precious metals exploration investor, to NovaGold's largest shareholder with a stake of about 30%. Electrum will have the right to appoint an observer at all NovaGold board meetings as part of the placement.

NovaGold is a precious metals exploration and development company based in Vancouver, B.C.

"We believe that Electrum's strategic alliance with NovaGold recognizes the tremendous value of the company's key assets - its 50% stakes in two of the largest undeveloped gold and copper-gold deposits in the world," NovaGold president Rick Van Nieuwenhuyse said in a statement. "This investment substantially strengthens NovaGold's balance sheet and provides funding for the company's ongoing commitments to advance our key projects toward development. This source of funding will also allow the company to look at new opportunities that can provide future growth for the company."

Electrum chief executive William Natbony added: "We are pleased to enter into a strategic alliance with NovaGold. Our team is looking forward to working with NovaGold's management to develop the company's impressive mineral endowment, one of the largest in the world. The company is exceptionally well-positioned to advance its operations along the value chain and maximize the returns for all shareholders."

Paramount taps MineralFields

Paramount Gold and Silver completed a C$2 million private placement of units to the MineralFields Group.

The company sold about 3.64 million units at C$0.55 per unit. Each unit comprises one restricted flow-through common share and one warrant. Each two-year warrant will be exercisable at C$1 for the first year and at C$1.25 thereafter.

Paramount common stock (TSX: PZG) gained 1.67% or C$0.01 to close at C$0.61 on Friday.

Ottawa-based Paramount is a natural resource company engaged in the acquisition, exploration and development of gold and precious metal properties. The company also announced Friday that it had executed an agreement to buy an interest in the Vidette Lake Gold Mine located in British Columbia.

"We are very pleased to be entering into this relationship with MineralFields Group," Paramount chief executive Christopher Crupi said in a press release. "This is an important milestone in the growth of Paramount Gold and Silver Corp. and we look forward to working with MineralFields Group as we develop our projects in Canada."

Virtus Holdings raises $45 million

Virtus Holdings sold $45 million of 8% convertible preferred stock to Harris Bankcorp as part of its spinning off from The Phoenix Cos.

Harris may buy an additional $25 million in preferreds if Virtus issues new equity over the next two years.

Each preferred pays 8% in dividends.

Virtus common stock began trading on Friday on Nasdaq under the symbol "VRTS." The stock closed at $10.50.

Proceeds were used to repay existing intercompany obligations to Phoenix and to bolster Virtus' working capital.

Private company Virtus' parent, Phoenix, is a Hartford, Conn., manufacturer of life insurance, annuity and investment products. Phoenix spun off Virtus by distributing one Virtus share for every 20 Phoenix shares held.

Azteca Gold raises C$1.18 million

Azteca Gold completed an initial non-brokered private sale of C$1.18 million of units.

The initial tranche comprised about 23.67 million units of one common share and one half-share warrant. Each whole warrant is exercisable at C$0.25 until Dec. 31, 2010.

The company may sell an additional 10 million units for C$500,000 by Jan. 7.

Azteca Gold, a C$10.08 million market capitalization company, saw its common stock (TSX: AZG) close at C$0.075 on Friday, down by 6.25% or C$0.005.

Proceeds will be used for drilling and assaying expenses on the Idaho-based Two Mile Project as well as general working capital.

Spokane, Wash.-based Azteca Gold is a mineral exploration company focused mainly on exploring for gold and silver in Mexico and the United States.

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