Coates International obtains $10 million equity line; Gilman + Ciocia pens $4 million stock deal

By Sheri Kasprzak

New York, May 1 - Coates International, Ltd. led U.S. PIPE news on Tuesday while gold continued to dominate the Canadian market with several offerings priced and closed.

In the Coates deal, the company received a $10 million equity line of credit from Dutchess Private Equities Fund, Ltd.

The offering sent the company's stock up 8.77%, or 3 cents, to end at $0.31 (OTCBB: COTE).

Coates may sell shares to Dutchess over the next three years at 93% of the lowest closing bid price for the five consecutive trading days immediately after notice of a draw.

"This financing will provide us with access to substantial capital over a period of time and will help to ensure that we have the funds necessary to implement the initial phase of our business plan," said George J. Coates, the company's chief executive officer, in a statement. "The structure of the agreement also provides us with a measure of flexibility by allowing us to access this capital at our option, thus protecting our investors from any unnecessary dilution."

Coates, based in Wall Township, N.J., develops spherical rotary valve systems used in piston-driven internal combustion engines.

In the broader market, a sellside market source located in New York said he remained puzzled by the continued low volume.

"I really can't point to anything that should be keeping things down," he said. "Stocks are pretty good. I guess time will tell. From everything I'm seeing, volume as a whole should be picking up."

Stocks were up on Tuesday with the Dow Jones Industrial Average gaining 73.23 to end at 13,136.14 and the Nasdaq composite index up 6.44 at 2,531.53. The Standard & Poor's 500 composite index ended the day up 3.93 at 1,486.30.

Gilman + Ciocia secures $4 million

Elsewhere in the U.S. PIPE market, Gilman + Ciocia, Inc. said it entered into agreements to raise $4 million from a stock sale.

The offering includes 40 million shares sold to Wynnefield Small Cap Value Offshore Fund, Ltd.; Wynnefield Partners Small Cap Value, LP; Wynnefield Partners Small Cap Value, LP I; and WebFinancial Corp.

Completion of the deal is contingent upon the company's shareholders approving an increase in the capital stock by 500 million shares. The closing must take place by Oct. 31.

Once the deal closes, the company will repay a loan for $2.375 million with Met Life Insurance Co.

The stock remained unchanged at $0.05 on Tuesday (Pink Sheets: GTAX).

Based in Poughkeepsie, N.Y., Gilman + Ciocia is a financial planning company.

Gold dominates Canada

Moving to the Canadian PIPE market, gold continued to grab headlines there, even as prices fell more than $6.00 Tuesday.

Prices fell $6.20 to end at $677.30 an ounce.

Still, according to one sellside market source, that's not likely to stop issuers.

"Prices are moving toward record highs right now and we expect that to happen," he said. "I don't think one down day is going to keep [gold] issuers out of the market. So far we've seen there is a great deal of investor interest."

Heading up the slate of deals from Tuesday was a C$20 million offering from San Gold Corp. The deal has not yet been priced but is expected to include units of one share and one half-share warrant exercisable for two years.

The deal is being placed through a syndicate of agents led by CIBC World Markets Inc, and the syndicate has a greenshoe for up to C$5 million.

Proceeds will be used for development on the company's Manitoba gold mine, the new Cartwright Mine, the development of high-grade gold zones in the Rice Lake Mine, the continued development of San Gold #1 Mine and the expansion of the milling capacity above the current 1,250 ton per-day limit. The rest will be used for general corporate purposes and working capital.

The company's stock fell 8 cents, or 7.21%, to settle at C$1.03 (TSX Venture: SGR).

San Gold is based in Bissett, Man.

Goldex plans deal

In other gold news, Goldex Resources Corp. negotiated the terms of a C$2 million placement.

The company plans to sell 7,407,407 units at C$0.27 each. The units consist of one share and one warrant. Each warrant is exercisable at C$0.35 for one year.

Placement agent Bolder Investment Partners, Inc. has a greenshoe for up to C$500,000.

Proceeds will be used for exploration and for working capital.

Goldex's stock edged up by a penny, or 3.45%, to close at C$0.30 (TSX Venture: GDX).

Goldex is a Vancouver, B.C.-based gold explorer.

Another Vancouver-based gold company, Sargold Resource Corp., priced a C$1 million private placement.

The non-brokered deal includes up to 5 million units of one share and one warrant at C$0.20 apiece. The warrants are exercisable at C$0.25 each for two years.

Proceeds will be used for conducting a trial on the leaching sulphide ore from the Sa Perrima open pit as part of the restart of the company's Furtei facility. The rest will be used for working capital.

The stock gave up a penny on Tuesday to close at C$0.20 (TSX Venture: SRG).

In other news at Sargold, the company named Monty Reed to chairman of Sardinia Gold Mining SpA, a 90%-owned subsidiary of the company. Reed was also named senior vice president and chief operating officer of Sargold.

Stellar stock dips

In other gold-related news, Stellar Pacific Ventures Inc. saw its stock slip slightly on Tuesday, a day after the company sold C$1 million in flow-through units to MineralFields Group Ltd.

The stock gave up half a cent, or 2.7%, to end at C$0.18 (TSX Venture: SPX).

On Monday, the stock lost 7.5%, or a penny and a half, to end at C$0.185.

In the placement, the company sold units of one flow-through share and one warrant at C$0.25 each to MineralFields. The warrants are exercisable at C$0.25 each for the first year and at C$0.30 each for the second year.

Proceeds will be used for Canadian exploration expenses on the company's Quebec-based properties.

Laval, Quebec-based Stellar is a gold exploration company.

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