Mercator plans bought deal; Anglo Swiss to sell units; Continent Resources secures C$6 million

By Stephanie N. Rotondo

Portland, Ore., Aug. 27 - The mining sector came out in full force Thursday to raise money in the private placement market.

Mercator Minerals Ltd. brought a bought deal for C$70 million, with a C$10.5 million greenshoe. The company will sell shares to raise the funds.

Meanwhile, Anglo Swiss Resources Inc. said it will issue common share units in its effort to raise C$2.1 million. A company spokesperson said the funds would help "complete the last steps to get our pilot program going."

Also, Continent Resources Inc. said it took in C$6 million from a unit sale. The company's chief financial officer said the deal generated a lot of investor interest.

Among other names in the mining sector, Paramax Resources Ltd. announced a plan to raise C$4 million from a private issuance of stock.

Away from that sector, GenVec Inc. announced a registered direct offering of stock and warrants, for total proceeds of $6 million. CNS Response Inc. said it concluded a $2.05 million placement of units.

Mercator announces bought deal

Mercator Minerals said it entered into an agreement with a group of underwriters for a C$70 million bought deal financing.

The Vancouver, B.C.-based company will sell approximately 26.92 million common shares at C$2.60 per share. The deal also includes an option for another 4.03 million shares, or C$10.5 million.

Marc Leblanc, vice president of corporate development, said the financing was "similar to what we had done earlier this year; it's the same group of underwriters." The underwriting group includes Jennings Capital Inc., Scotia Capital Inc., Blackmont Capital Inc., Haywood Securities Inc. and Acumen Capital Finance Partners Ltd.

"The demand is certainly there for it," Leblanc added, of interest in the deal, as well as similar deals in the broader marketplace. "There have been a number of large deals that have been announced over the last little while."

Leblanc said that the funds would help the company "complete the second stage of exploration at Mineral Park," which is "one of the largest and most modern copper-moly mining-milling operations in North America," according to a press release. The company has been working on the project for two years.

"Getting the second stage completed will bring the cash costs of production down fairly dramatically," Leblanc said, "given that we're effectively doubling production over the next nine months."

Mercator's equity (Toronto: ML) dropped 17 cents, or 6.12%, to C$2.61.

Anglo Swiss to issue units

Anglo Swiss Resources will conduct a C$2.1 million private placement of equity units, according to a press release.

The company will issue 7 million units at C$0.30 per unit. Each unit will contain one common share and one half-share warrant. The whole two-year warrants are exercisable at C$0.60.

Len Danard, president of the diamond and gemstone exploration company, said that the deal is expected to close Friday or Monday.

"It's basically all spoken for," he said.

Danard said he was pleased with the terms and reaction generated from the transaction.

"Like every other junior out there, we think we're undervalued," he said. But with this financing, the company will be able to complete the "last step to get our pilot program running."

The proceeds will fund exploration and production at the Kenville Gold Mine property.

Anglo's equity (TSX Venture: ASW) gained a penny, or 2.94%, to C$0.35. Market capitalization is C$38.7 million.

Anglo Swiss Resources is based in Vancouver, B.C.

Continent takes in C$6 million

Continent Resources raised C$6 million via a non-brokered private placement of units, the company announced.

Continent sold 12 million units at C$0.50 each. The units held one common share and one half-share warrant. Each whole warrant is exercisable at C$0.80 for two years.

"We're definitely happy" with the raise, Herrick Lau, chief financial officer, told Prospect News. He said the deal was oversubscribed as well.

"We had a lot of interest," he said.

Lau also noted that Continent likes using the private placement market to raise capital.

"We usually deal with sophisticated investors," he said. "A private placement is usually faster and more efficient."

The company will use proceeds "to carry out geological, geochemical and geophysical studies on the properties in Arizona and New Mexico," the press release stated.

Continent's shares (Canada: CTT) improved by 10 cents to C$0.77.

Continent Resources is a Vancouver, B.C.-based copper mining company.

Paramax aims for C$4 million

Elsewhere in the mining space, Paramax Resources said it arranged a C$4 million private placement of equity.

The Vancouver, B.C.-based oil and gas exploration company will issue 50 million common shares at C$0.08 per share.

Proceeds will be used for drilling projects. Settlement is expected by Sept. 15.

Paramax's stock (TSX Venture: PXM) dropped C$0.005, or 5%, to C$0.095. Market capitalization is C$6.03 million.

GenVec plans direct offering

In the biopharmaceutical sphere, GenVec orchestrated a $6 million registered direct offering of common share units.

The company intends to sell 8 million units containing one common share and one half-share warrant at $0.75 each. The whole warrants are exercisable at $0.828 for five years.

"GenVec will use proceeds from the offering for further development of its lead clinical program, TNFerade, and other general corporate purposes," the company said in a press release. TNFerade is being researched as a cancer drug.

Settlement is expected by Aug. 31.

E-mails to the company seeking comment went unreturned Thursday.

GenVec's stock (Nasdaq: GNVC) fell $0.0553, or 6.76%, to $0.7627. Market capitalization is $75.2 million.

GenVec is a Gaithersburg, Md.-based developer of novel gene-based therapeutic drugs and vaccines.

CNS concludes unit sale

CNS Response, a Costa Mesa, Calif.-based developer of new uses for approved drugs and drug candidates, settled a $2.05 million private sale of units.

The company sold 38 units at $54,000 per unit. Each unit held 180,000 common shares and one five-year warrant good for another 90,000 shares. The warrants are exercisable at $0.30.

In addition to the financing, the company said that Tommy Thompson and John Pappajohn had joined its board of directors.

"This private placement and the addition of Tommy Thompson and John Pappajohn to our board represents a significant step forward for CNS Response," said George Carpenter, CEO, in a press release.

"With the health care challenges being faced by patients and payers alike, we think the time has come for objective, personalized medicine in psychiatry," Carpenter said. "We intend to use these proceeds to expand our research and our commercial capability, with the ultimate goal of making referenced-EEG the standard of care in treatment-resistant mental disorders."

CNS' equity (OTCBB: CNSO) closed unchanged at $0.50. Market capitalization is $14.4 million.

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