Chesapeake wraps $900 million placement; Olympus to sell gold loan notes; BioSante brings deal

By Stephanie N. Rotondo

Portland, Ore., June 21 - Chesapeake Energy Corp. settled its previously announced private placement of convertible preferred shares, the company announced Monday.

The company raised $900 million in the financing, the proceeds of which will be used to retire outstanding debt.

Meanwhile, Olympus Pacific Minerals Inc. said it was planning a $21.96 million placement of units holding gold loan notes. Proceeds will be used for construction of a processing facility in Vietnam.

BioSante Pharmaceuticals Inc. brought a registered direct offering of units to market. The company is seeking to raise $15 million from the transaction and will use the funds to advance its drug candidates.

Elsewhere, Premier Gold Mines Ltd. said it was looking to raise at least C$12 million for exploration activities via a private placement of flow-through shares. According to a company spokesperson, the shares are being sold at about a 15% premium.

Boston Private Financial Holdings Inc. meantime said the Carlyle Group was exercising its option to purchase stock via a private placement to maintain its equity stake in the company. The company will take in more than $6 million from the transaction.

And, Northern Gold Mining Inc. will sell units in an effort to raise C$2.5 million. A company spokesperson said the deal had thus far generated positive responses from investors.

Chesapeake settles preferred placement

Chesapeake Energy wrapped a $900 million private placement of 5.75% cumulative non-voting convertible preferred shares, according to a press release.

The participating investor group included affiliates of China Investment Corp., Korea Investment Corp., Temasek Holdings (Private) Ltd., HOPU Investment Management Co., Ltd. and Li Ka Shing (Canada) Foundation.

The deal settled June 18.

Each of the preferred shares is convertible into approximately 37.037 common shares, based on an initial conversion price of $27.00 per common share.

The conversion price is a 9.7% premium over the company's share closing price of $24.61 on June 18.

The shares are also subject to mandatory conversion after May 17, 2015, based on certain conditions.

And, the shares will pay a quarterly dividend of $57.50 in cash, commencing Aug. 15, 2010.

The financing was done as a "follow-on" to a private placement done in May, according to Jeffrey L. Mobley, senior vice president of investor relations and research. The primary investors in that deal had the option to purchase another $900 million of the preferreds and this financing was done to exercise that option, he said.

Proceeds will be used to retire outstanding debt. Mobley said the funds raised in the previous transaction allowed the company to call $1.3 billion in notes and added that these new funds would be used to call another $600 million of senior notes.

Chesapeake's stock (NYSE: CHK) fell 18 cents, or 0.73%, to $24.43. Market capitalization is $16.3 billion.

Chesapeake Energy is an Oklahoma City-based independent producer of natural gas.

Olympus plans gold loan note sale

Olympus Pacific Minerals is seeking $21.96 million via a private placement of units containing gold loan notes, the company said in a press release.

The units will hold one $10,000 8% senior secured redeemable gold delivery promissory note and one warrant equal to 3,470 common shares.

The warrants are exercisable at C$0.60 per share until May 31, 2013. The strike price represents a 114% premium over the June 18 closing price of C$0.28 on the Toronto Stock Exchange.

The gold promissory notes come due May 31, 2013. Interest on the notes is payable in gold semi-annually, beginning Nov. 30. The company will issue 2,800 ounces of gold for the first and second deliveries, 4,200 ounces for the third and fourth deliveries and 5,200 ounces for the fifth and sixth deliveries, subject to adjustment based on the gold price.

"Olympus is one of the first companies to develop and present a syndicated gold loan offering through a brokerage firm," the company said in the release. "Olympus is pleased with the overwhelming investor support for this brokered private placement and expects the offer to close in the next few days."

Proceeds from the financing will be used to construct a processing facility at Olympus' high-grade Phuoc Son Mine and Bong Mieu Mine in Vietnam, as well as for general exploration and corporate purposes.

The company did not return calls seeking comment on Monday.

Olympus' equity (OTCBB: OLYMF) gained 2 cents, or 5.3%, to $0.30. Market capitalization is $96.3 million.

Olympus Pacific Minerals is a Toronto-based gold exploration company focused on properties in Vietnam and Southeast Asia.

BioSante brings registered deal

BioSante Pharmaceuticals, a Lincolnshire, Ill.-based biotechnology company focused on hormone therapies, said it will conduct a $15 million registered direct offering of units.

Investors participating in the deal include Deerfield Management Co.

The company will sell 7.1 million units at $2.1025 each. The units will contain one common share and one half-share warrant.

Whole warrants are exercisable at $2.45 for five years. The exercise price is a 17.22% premium over the $2.09 closing price on June 18.

"This additional funding from these high-quality institutional investors provides us with a strong cash cushion ensuring our ongoing focus on our LibiGel phase 3 clinical study program. Our objective is to submit a new drug application to the U.S. Food and Drug Administration in 2011," Stephen M. Simes, BioSante's president and chief executive officer, said in a press release.

"LibiGel remains the lead pharmaceutical product in the U.S. in active development for the treatment of hypoactive sexual desire disorder in menopausal women, and we continue to believe that LibiGel has the potential to be the first product approved by the FDA for this common and unmet medical need."

Settlement is expected by June 23.

BioSante's equity (Nasdaq: BPAX) declined 13 cents, or 6.22%, to $1.96. Market capitalization is $126 million.

Premier publicizes bought deal

Premier Gold Mines announced a C$12 million bought deal private placement of flow-through common shares.

The deal also has a C$6 million over-allotment option.

The Thunder Bay, Ont.-based company will sell 2 million of the shares at C$6.00 per share. The price per share is at an approximately 15% premium, according to Matt Gollat, who handles investor relations for the resource exploration company.

Gollat said Premier elected to do the private financing at this time because "our stock took a good run here." As such, "we thought it was a good time to go to market."

"It is a great deal," Gollat said, adding that it is "well-timed.

"We'll have no trouble spending this money," he remarked, noting that the funding will primarily be used for exploration work at the company's Hard Rock and Red Lake projects.

Gollat said that, "all things being equal," the funds should last through the end of 2011.

And, Gollat opined that the deal was more "anti-dilutive" than dilutive, as "no one has ever paid C$6.00 a share before" for the company's stock.

Settlement is expected by July 15.

Premier's shares (Toronto: PG) slipped 39 cents, or 7.24%, to C$5.00. Market capitalization is C$508 million.

Carlyle exercises option with Boston Private

Boston Private Financial Holdings will sell $6.3 million of common shares to an affiliate of The Carlyle Group via a private placement, according to a regulatory filing.

The deal was inked on June 18.

The company will sell approximately 1.08 million shares in the transaction.

David J. Kaye, chief financial officer, said in an e-mail to Prospect News that the deal with Carlyle was being done to allow the investor to maintain its stake, given that Boston Private just wrapped a $28.8 million public offering of stock last week. The investor - which had participated in previous private transactions - had the option to do so under those prior agreements.

"This action was considered when the capital raise was done earlier this month, so the proceeds [from the private placement] will be used to strengthen the quality of Boston Private's capital base and to repay TARP [funds]," Kaye said. Last week, the company redeemed the final $104 million in stock held by the Treasury Department.

Kaye also said that the Carlyle deal was expected to close by the end of June.

Boston Private's stock (Nasdaq: BPFH) increased by 4 cents, or 0.61%, to $6.63. Market capitalization is $465 million.

Northern Gold to sell units

Northern Gold Mining will raised up to C$2.5 million from a private placement of units, the company announced.

Toronto-based Northern will issue approximately 8.93 million flow-through units at C$0.14 each. The units will hold one flow-through common share and one warrant, which is exercisable at C$0.17 for 18 months.

The company will also sell approximately 10.87 million hard-dollar units at C$0.115 each. Those units will consist of one common share and one warrant. The warrants are exercisable at C$0.15 for 18 months.

"We are pleased with the work Bayfront [Capital Partners Ltd., the placement agent] has done on our behalf," said Martin R. Shefsky, president and CEO, in an interview with Prospect News. "Obviously, we have to do [the financing] within the context of the market."

Shefsky said investor have been "extremely positive" about the deal and he was surprised that there was little concern about dilution.

"Everyone is saying, take the money and build your ounces," he said.

Shefsky added that the "financing is being taken down by a significant number of institutional investors," though he declined to name said investors until the deal was done. He noted that the "closing will be short, I wouldn't be surprised if it is a number of days."

Proceeds from the transaction will be used for exploration at the company's Garrison project in northeastern Ontario, he said.

Northern's shares (TSX Venture: NGM) dipped a cent, or 7.41%, to C$0.13. Market capitalization is C$5.94 million.

Northern Gold Mining is a junior resource company focused on the acquisition and exploration of base and precious metal mineral properties.

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