Liberty Mines to sell C$30 million of stock, preferreds; EnerGulf offers C$3.15 million of units

By Stephanie N. Rotondo

Portland, Ore., April 14 - Private placements have continued to gain popularity in the mining and energy sectors, as illustrated in deals coming to market on Tuesday.

Liberty Mines Inc. announced it was planning to raise C$30 million through a common stock and preferred stock sale. Earlier this year, the company said it did not have the funds to pay its debt obligations and noted in Tuesday's press release that the new financing would serve to solve that problem.

Meanwhile, a spokesperson for Paramount Energy Trust told Prospect News on Tuesday that its recent purchase of special warrants from Profound Energy Inc. was part of a larger acquisition offer. The spokesperson said the funding would act as interim financing until Profound shareholders approve the merger.

In the rest of the PIPE market, EnerGulf Resources Inc. is aiming to bring in C$3.15 million via a private placement of units. Also, Voyant International Corp. negotiated a $5 million two-year equity financing facility.

WaferGen Bio-Systems Inc. is planning to raise $1.5 million through a preferred share sale.

Liberty to raise C$30 million

Liberty Mines is planning to raise C$30 million through a private placement of stock and preferred shares, according to a press release.

The Timmins, Ont.-based company will issue approximately 85.7 million common shares at C$0.11 per share and approximately 187 million preferreds at C$0.11 to Jilin Jien Nickel Industry Co., Ltd. The 8% preferreds are convertible into common stock on a one-for-one basis.

Upon closing of the financing, Jilin Jien will have a 51% equity interest in Liberty, resulting in a change of control. If Jilin were to immediately convert the preferreds, it would own 76.8% of the outstanding equity.

Liberty said that, as of Feb. 19, it did not have sufficient funds to pay upcoming debt obligations. The current financing agreement was one of many reviewed and the only one that would allow the company to resolve its loan payout and other debt obligations.

"Although this financing is dilutive to existing shareholders, we are fortunate to be able to complete a sizeable financing during the current base metal commodity price crisis," said Gary Nash, president and chief executive officer of Liberty, in a statement. "Having JJNICL as a major shareholder and a strategic partner will be an exciting development for Liberty which will firmly put it on the path to become a mid-tier producer of nickel. It is also encouraging to note that, despite the current downturn in the commodity markets, our Chinese partners have a long term interest in nickel and cobalt resources."

Liberty's stock (Toronto: LBE) has ceased trading. The equity last traded on April 8 at C$0.165.

Paramount to acquire Profound

Paramount Energy Trust announced a private placement of special warrants on Monday. The financing was part of "a larger offer," according to Sue M. Showers, Paramount's investor relations and communications advisor.

The issue of the approximately 9.2 million special warrants from Profound Energy Inc. to Paramount was a result of an agreement entered into on March 31, when Paramount agreed to acquire Profound. Showers told Prospect News that the placement was a way to give Profound "interim financing" before the larger acquisition was approved.

Paramount purchased the warrants at C$0.75 per warrant, a premium of more than 15% of Profound's closing price as of March 30. All told, Profound received C$6.9 million.

Should shareholders reject Paramount's bid for the company, the special warrants are convertible into common stock on a one-for-one basis.

Under the terms of Paramount's offer to acquire Profound, Paramount is offering shareholders C$1.34 in cash for each common share tendered, or 0.394 of a Paramount share. Shareholders can also choose a combination of cash and shares.

Showers said Profound shareholders should be receiving the offer by April 24. The offer expires 35 days after that. Paramount must receive 66 2/3% tenders in order for the acquisition to be completed.

Paramount's equity (Toronto: PMT-UN) gained 6 cents, or 1.68%, to C$3.64, while Profound's stock (Toronto: PFX) closed 1 cent better, or 0.75%, at C$1.34.

Paramount is a Calgary-based natural gas-focused energy trust. Profound is a junior oil and natural gas mining company also based in Calgary, Alta.

EnerGulf, Voyant plan deals

Houston-based EnerGulf is looking to bring in C$3.15 million through a non-brokered private placement of units, according to a press release.

The oil and natural gas company will issue up to 9 million units consisting of one common share and one warrant. The units will b sold at C$0.35 and the two-year warrants are exercisable at C$0.50 in the first year and at C$0.75 in the second.

Proceeds from the financing will be used to further the company's Lotshi Block project, among other things.

EnerGulf's equity (TSX Venture: ENG) dropped 2.5 cents, or 6.17%, to C$0.38.

Elsewhere, Voyant International arranged a $5 million two-year committed equity financing facility with Ascendiant Capital Group LLC, the company announced.

Proceeds from the transaction will be used to further Voyant's business plan and key projects in 2009 and 2010.

Voyant's stock (OTCBB: VOYT) ended unchanged at $0.05. Market capitalization is $7.82 million.

Voyant International is a Palo Alto, Calif.-based digital media company.

WaferGen to sell preferreds

WaferGen Bio-Systems will issue 666,666 series B convertible preferred shares to raise $1.5 million, the coampny said.

Each share is convertible into common stock at $2.25 per share, which is a premium over the company's closing share price as of April 13.

Proceeds will be used to manufacture and market the company's SmartChip Real-Time PCR System.

"We are pleased to announce the raising of additional capital to support our ongoing development and commercialization of the SmartChip Real-Time PCR System," said Alnoor Shivji, WaferGen's chairman and chief executive officer, in a statement. "We believe that the fact that we were able to sign definitive financing documents during such a difficult and uncertain economic time provides strong validation for the SmartChip platform and demonstrates the faith that investors have in this revolutionary product. We are happy to welcome Prima Mahawangsa and Expedient Equity Ventures as new investors in WaferGen and are pleased to have the support of these experienced investors as we continue to advance the development of the SmartChip platform toward commercialization."

WaferGen's stock (OTCBB: WGBS) held steady at $1.25. Market capitalization is $31 million.

WaferGen is a Fremont, Calif.-based developer of laboratory analytical instruments.

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