Northern Star upsizes subscription sale; KIG inks equity line with GEM; Melrose to sell stock

By Stephanie N. Rotondo

Portland, Ore., July 14 - Several large deals came to market Tuesday, though no one sector dominated the day.

Northern Star Mining Corp. announced it increased a private placement of subscription receipts to C$25 million from C$20 million. The proceeds from the deal - originally announced July 7 - will be used, in part, to prepay outstanding debt.

KIG Mining plc also announced a bigger-sized deal. The mineral exploration company signed an agreement with an investor for a €10 million equity line of credit. The company will issue common shares at a discount to market price.

Also, Melrose Resources plc is planning a £11.21 million placement of equity. As with KIG, the company plans to sell shares at a discount.

Meanwhile, Quantum Fuel Systems Technology Worldwide Inc. said it sold $3 million of convertible debentures. The company also amended terms on some of its outstanding debt.

MedX Health Corp. will issue units in its effort to raise C$2.5 million. The placement is part of a larger plan to form a limited partnership.

Northern Star increases subscription sale

Northern Star Mining announced it had upsized a July 7 private placement of subscription receipts to C$25 million from C$20 million.

To raise the funds, the company will issue both unit subscription receipts and flow-through subscription receipts. The unit subscriptions will sell at C$0.50 per unit and will automatically convert to one common share and one half-share warrant. Each whole warrant is exercisable at C$0.70 for three years.

The flow-through subscriptions will sell at C$0.65 per unit and will convert to one flow-through share.

Proceeds from the transaction will be placed in escrow and will be released once the company completes a refinancing of its C$42 million senior secured notes, which were sold to Computershare Trust Co. on Aug. 13.

Once the refinancing is done and the private placement proceeds are released, Northern Star plans to use the funds to prepay up to C$15 million of its senior secured notes. Remaining funds will be used for exploration, capital expenditures and working capital.

Settlement is expected by July 23.

Calls made to the company seeking comment went unreturned Tuesday.

Northern Star's equity (TSX Venture: NSM) ended unchanged at C$0.52. Market capitalization is C$61.7 million.

Northern Star Mining is a Vancouver, B.C.-based exploration company focused on the acquisition, exploration and development of mineral assets in Quebec.

KIG Mining inks equity line with GEM

KIG Mining secured a €10 million three-year equity line of credit with GEM Global Yield Fund Ltd., according to a press release.

The company will issue common shares to GEM at a 10% discount to the average closing price over a 15-day period prior to drawdown. GEM also received 2 million warrants at a strike price of €1.00 for four years.

Proceeds from the equity line will be used to expand production of KIG's Silverstreams plant in South Africa.

"[KIG] has recently acquired BRC Diamondcore's alluvial diamond projects in South Africa," the company said in the release. "One of the projects, Silverstreams, is an active productive operation which KIG plans to develop and expand and the remaining projects will be brought into full operation within due time.

"The areas acquired by KIG are known and proven to yield high quality diamonds in excess of 50 carat in weight."

Additionally, GEM has expressed interest in providing financing for KIG's remaining projects, the release stated.

KIG's stock (France: 5KM) closed at €0.754.

KIG Mining is a Pretoria, South Africa-based mining company.

Melrose to raise £11.21 million

Melrose Resources, an Edinburgh-based oil and gas company, said it would take in £11.21 million via a private placement of ordinary shares.

Each share will sell at 250p. Melrose plans to issue approximately 4.48 million new shares. The price per share represents a 5.2% percent discount to the volume weighted average price of 263.67p as of July 13.

Proceeds raised will help to "fund key work program activities, including accelerating the drilling of the Kaliakra appraisal well and its Egyptian field development program," the company said in a news release. "The placing will also provide additional capital headroom while the company completes discussions with its banking syndicate regarding a potential expansion of its existing long term debt facilities."

Melrose's equity (London: MRS) ended at 263p. Market capitalization is £302 million.

Quantum settles convertibles sale

Quantum Fuel Systems completed a $3 million private placement of 11.5% convertible notes on July 10, according to a regulatory filing.

The notes mature Aug. 31, 2010, though that date could be extended to Aug. 31, 2013. Should an extension occur, the interest rate drops to 9.5%.

The notes are convertible into common stock at $0.71 per share.

WB QT LLC, an existing investor of Quantum's, purchased the notes. The parties also amended a previously issued loan and convertible notes held by WB QT.

Calls made to the company seeking comment went unreturned Tuesday.

Quantum's shares (Nasdaq: QTWW) gained 1 cent, or 0.88%, to $0.69. Market capitalization is $67.6 million.

Quantum Fuel Systems is an Irvine, Calif.-based engineering company.

MedX plans placement

MedX Health is planning a C$2.5 million private placement of units, the company said.

Under the terms of the non-brokered deal, MedX will issue 2,500 units at C$1,000 per unit. The units will hold one limited partnership unit, along with 1,000 warrants. The warrants are exercisable at C$0.25 for three years.

Proceeds will be used for the manufacturing and sale of light-related products.

Also, MedX announced that it was forming a limited partnership, MedX Health Finance Partnership, or MedX LP. The limited partnership units sold in the private placement will be under the MedX LP moniker.

The limited partnership is set to terminate on Dec. 31, 2019. Parent MedX has plans to offer to repurchase all outstanding units sometime in 2013.

MedX's stock (TSX Venture: MDX) closed unchanged at C$0.08. Market capitalization is C$2.17 million.

MedX Health is a Mississauga, Ont.-based developer of phototherapy medical devices.

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