Gulf Resources to raise $25 million; China North plans deal; Mirabela to sell special warrants

By Stephanie N. Rotondo

Portland, Ore., Dec. 14 - The private placement market remained active Monday, even as the year was quickly coming to a close.

A couple of deals from China-based U.S.-listed companies were announced during the session, including a $25 million private placement of equity brought by Gulf Resources Inc.

China North East Petroleum Holdings Ltd. meanwhile announced a $13.5 million registered direct offering of equity and warrants.

Mirabela Nickel Ltd. said it was seeking more than C$12 million from a private placement of special warrants. The financing is in addition to a previously announced private placement, as well as a planned share purchase plan for existing investors.

Elsewhere, GetFugu Inc. arranged a $10 million private placement with Hutton International Investments Ltd. The company will either sell convertible preferred shares or debentures convertible into preferred shares.

In completed transactions, Sylvania Resources Ltd. said it raised £10 million from a placement of stock. Cereplast Inc. also wrapped a stock deal, taking in more than $2 million.

Gulf seeks $25 million

Gulf Resources, a Shenzhen, China-based crude salt mining company, is planning to raise $25 million via a private placement of equity.

The company will issue approximately 2.94 million common shares at $8.50 per share, according to a regulatory filing.

"[The company] plans to use the proceeds of the private placement to acquire additional bromine and crude salt production assets, as well as for general corporate purposes such as working capital," a company representative told Prospect News. Settlement is expected by Jan. 1.

Gulf's stock (Nasdaq: GFRE) fell 7 cents, or 0.68%, to $10.29. Market capitalization is $324 million.

China North plans direct offering

Among other China-based U.S.-listed companies, China North East Petroleum brought a $13.5 million registered direct offering of equity to market.

According to the terms of the deal, the Harbin, China-based company will sell approximately 1.96 million common shares at $6.875 per share. Investors will also receive warrants for 392,728 additional shares. The warrants are exercisable at $8.10 for 30 months.

Proceeds will be used, in part, to repay an 8% debenture issued to Lotusbox Investments ltd in February 2008.

Chao Jiang, senior vice president of corporate finance, told Prospect News that the repayment of the debt would allow the company to "reshape its capital structure."

"Right now, our debt to asset ratio is too high," he said. "So it doesn't make sense" to keep the note on the books. By repaying the debt, "it puts the company in better shape for 2010."

As such, Jiang said the company is looking at the opportunities the New Year might bring as China North looks to grow.

Jiang also noted that the price per share was based on Friday's closing level, which was a 52-week high. "So we are pleased" with the terms.

Settlement is expected by Dec. 17.

China North's equity (Amex: NEP) declined 25 cents, or 3.65%, to $6.60. Market capitalization is $195 million.

Mirabela to sell special warrants

Mirabela Nickel announced a C$12.27 million private placement of special warrants.

The Perth, Australia-based mineral exploration company will sell 5.5 million of the warrants at C$2.23 each. The warrants are convertible into ordinary shares on a 1 for 1 basis.

Mirabela also said that it had completed a book build with respect to another private financing. The company is selling 16.4 million ordinary shares to investors outside of Canada - principally in Australia - at A$2.30 per share. The deal is expected to allocate tomorrow.

Also, the company is planning an A$10 million share purchase plan for existing investors. Mirabela will issue up to 4,350 new shares at A$2.30 per share.

Proceeds will be used for working capital. Settlement is expected by Jan. 8.

Mirabela's shares (Toronto: MNB) dipped 5 cents, or 2.07%, to C$2.36. Market capitalization is C$795 million.

GetFugu inks $10 million deal

GetFugu is seeking $10 million from a private placement arranged with Hutton International Investments Ltd.

The company will sell either 10% redeemable convertible perpetual preferred shares or debentures convertible into preferred stock. The deal could come in multiple tranches.

"Our ability to obtain a significant capital commitment on favorable terms during a tough economy is a testament to the quality of our product and service offering and the strength of our team," stated Michael Jay Solomon, chairman of GetFugu, in a prepared statement. "We are excited about our cross-platform launch, and confident GetFugu will transform the mobile search space. We look forward to helping consumers and content providers fully realize the advantages of our application."

"Implementation of the GetFugu application will be one of the most important mobile search technology initiatives of the coming decade," commented Wan-Chun Huang, managing director of Hutton. "GetFugu has emerged as one of the Mobile Vision Recognition pioneers and our investment will help them recognize their full potential."

GetFugu's stock (OTCBB: GFGU) finished unchanged at $0.22. Market capitalization is $35.56 million.

GetFugu is a Rowayton, Conn.-based developer of next generation mobile search tools.

Sylvania pockets £10 million

Sylvania Resources took in £10 million from a private placement of equity, according to a press release.

The company issued 25 million ordinary shares to M&G Recovery Fund at 40p per share.

Sylvania intends to use the funds to further its Grass Valley project, as well as for capital expenditures and acquisitions, and working capital.

"This equity raising further strengthens Sylvania's balance sheet and will provide a strong platform for the company to pursue its growth initiatives at Grass Valley and Tweefontein whilst the Lonmin dumps acquisition will underpin strong production at Mooinooi," said Terry McConnachie, managing director, in the release.

Sylvania's equity (London: SLV) closed at 43.09p. Market capitalization is £86.1 million.

Sylvania Resources is a West Perth, Australia-based resource exploration company.

Cereplast settles stock sale

Cereplast wrapped a $2.23 million private placement of common stock, the company said in a regulatory filing.

The deal settled Dec. 11.

The Hawthorne, Calif.-based company sold 44.6 million shares at $0.05 per share.

"The company is pleased with the funding as it strengthens their balance sheet and allows them to move forward some solid business development plans," Andrew Haag of IRTH Communications - Cereplast's investor relations manager - said in an e-mail to Prospect News. "Stock is up slightly so public response has been positive so far."

Haag said the funds would not only strengthen the bottom line, but also would be used "to advance previously announced business developments including the development of bio-plastics from Algae and specific customer relationships that can add to revenues and growth of the company."

"The capital markets were in turmoil the first half of the year and this time last year," Haag added, remarking on the company's decision to do the financing at this time. "Things seem to have settled down a bit and more corporate funding are being completed. Additionally, in the past several months Cereplast has cut costs and positioned itself for growth in 2010. The company has many new and exciting business developments in the works including ramping up of current customer agreements, new customers coming on line, potential business developments with other companies and new and exciting products (bioplastics from algea and more).

"Cereplast feels that all this will add to shareholder value and wants to deliver for the market and its shareholders."

Cereplast's stock (OTCBB: CERP) slipped $0.004, or 4.04%, to $0.095. Market capitalization is $34.3 million.

Cereplast is a manufacturer of bio-based renewable plastics.

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