BlackWatch plans bought deal; Extract aims for $91 million; China Security announces offering

By Stephanie N. Rotondo

Portland, Ore., Aug. 25 - It was a mixed bag day for the private placement arena Tuesday, as several large and small deals came to market.

BlackWatch Energy Services Corp. brought one of the day's biggest deals, announcing a C$75 million bought deal placement of common stock. The financing also includes a C$11.25 million greenshoe.

Extract Resources Ltd. also announced a big deal. The company said it would raise about A$40 million in a private placement of special warrants. In addition, the company will raise another A$50 million from an entitlement offer.

In other double-digit financings, China Security & Surveillance Technology Inc. said it would pocket $25.35 million from a registered direct offering of stock.

Meanwhile, Metals Creek Resources Ltd. said it would take in up to C$3 million from a private placement of flow-through shares and units. The company plans to use proceeds for exploration.

Lysander Minerals Corp. also said it was planning a C$3 million deal. The company will issue equity units in its financing effort, which its top executive believes is "good for investors."

Elsewhere, Raptor Pharmaceuticals Corp. settled a $5 million financing transaction that included a $2.4 million private placement of units and the exercise of $2.6 million in warrants.

BlackWatch plans bought deal

BlackWatch Energy Services announced a C$75 million bought deal with a C$11.25 million option.

The company plans to sell 75 million common shares at C$1.00 per share. The underwriters - which include Peters & Co. Ltd., Cormark Securities Inc., FirstEnergy Capital Corp. and Scotia Capital Inc. - also have the option of purchasing another 11.25 million shares, also at C$1.00 each.

Upon completion of the deal, BlackWatch will have 217.3 million shares outstanding. If the option is fully exercised, then the outstanding shares will increase to 228.5 million.

Proceeds from the financing will be used to "fund future acquisitions and capital expenditures, temporarily reduce indebtedness and for general corporate purposes," according to a press release.

The company did not return calls seeking comment on Tuesday.

BlackWatch's equity (Toronto: BWT) dropped 1 cent, or 0.87%, to C$1.14.

BlackWatch Energy Services is a Calgary, Alta.-based diversified energy services company serving the western Canadian sedimentary basin.

Extract aims for A$91 million

Extract Resources is planning a A$40.3 million private placement of special warrants, the company said.

The Sydney, Australia-based company will sell 5.2 million of the warrants at A$7.75 each. Each warrant will be automatically converted to a common share on a one-for-one basis.

Additionally, Extract will also conduct an entitlement offer, allowing current shareholders to apply for one new share per 35 Extract shares held at A$7.75 per share. Total proceeds from this portion of the financing will equal A$50.7 million.

Extract's three largest shareholders - Kalahari Uranium Ltd., Rio Tinto International Holdings Australia Pty and Polo resources Ltd. - have each "provided irrevocable commitments to apply for their full entitlements," according to a press release.

"Rossing South continues to deliver in terms of expanding an already world class resource and the equity raising is expected to allow Extract to significantly accelerate the exploration program," said Peter McIntyre, managing director of Extract, in the release. "This equity raising, together with completion of the Rossing South definitive feasibility study is expected to assist in developing Rossing South through the next phase."

"Extract's fund raising, which is effectively underwritten, represents both the next stage of its development as it advances its world class uranium portfolio and the huge value accretion potential of its assets," said Mark Hohnen, Kalahari's chairman, in another press release. "We maintain the belief that Extract has the ground and potential to ultimately deliver a total resource in excess of 500 M lbs U3O8 from the entire Husab Project, which will easily place it amongst the largest uranium companies in the world. We have supported Extract's development initiatives and will continue to do so as it looks to explore further zones of uranium mineralisation south of Zone 2 at Rossing South and initiates the definitive feasibility study, a pre-requisite for assessing further the production potential of the project."

Extract's shares (Australia: EXT) ended at A$9.73.

Extract Resources is a resource exploration company.

China Security announces direct offering

China Security & Surveillance Technology will conduct a $25.35 million registered direct offering of equity.

The company intends to sell approximately 4.05 million common shares at $6.25 per share. Investors will also receive approximately 1.01 million warrants, exercisable at $8.62 for one year.

Proceeds will be used to repay debt issued to Citadel Equity Fund Ltd., among other things.

China Security's equity (NYSE: CSR) dipped 48 cents, or 6.69%, to $6.70. Market capitalization is $351 million.

China Security & Surveillance Technology is a Shenzhen, China-based provider of security and surveillance products and services.

Metals Creek to sell shares, units

Metals Creek Resources announced it would raise up to C$3 million through a private placement of flow-through shares and units.

The Toronto-based mineral resource company will issue approximately 11.76 million flow-through shares at C$0.17 per share, for proceeds of C$2 million. The remaining C$1 million will come through the sale of approximately 6.67 million units containing one common share and one warrant. Each unit will sell at C$0.15 and each warrant is exercisable at C$0.30 for two years.

Alexander "Sandy" Stares, president and chief executive officer, told Prospect News that the company had been looking to raise capital. When Dundee Securities Corp. - the deal's agent - heard Metals Creek's story, it asked to "help [the company] out" with the fundraising.

"This gives us the opportunity to raise cash and do some more drilling on our projects," Stares said.

Stares said he was happy with the negotiated terms and that it was not the first time the company entered the private placement market.

"This is basically the only way we raise capital for exploration," he explained.

Metals Creek's shares (TSX Venture: MEK) dropped C$0.015, or 8.82%, to C$0.155. Market capitalization is C$3.65 million.

Lysander deal 'good for investors'

Lysander Minerals will conduct a private placement of units for proceeds of C$3 million, according to a press release.

The company will sell 15 million of the units - which hold one common share and one half-share warrant - at C$0.20 each. Each whole warrant is exercisable at C$0.30 for two years.

"I think it's a good deal for investors," said Bryce M. A. Porter, president and CEO, in an interview with Prospect News. The funds will help the company develop its Verticalnaya anthracite coal mine in the Donbass Coal Basin of the Ukraine. Porter noted that, based on technical reports, the project has shown a "high return on investment."

"It's actually a very good project," Porter said. "It's very unusual."

Porter explained that, typically, "developing major mines takes years" to get off the ground.

"This one is ready," he said. "Everything is in place to commence construction."

Porter also added that the company's share rice has not yet reflected the potential volumes in the mine.

"We're hoping that in the future the market will realize that volume," he said.

Settlement is expected by Sept. 15.

Lysander's stock (TSX Venture: LYM) improved C$0.025, or 11.11%, to C$0.25. Market capitalization is C$5.76 million.

Lysander Minerals is a Vancouver, B.C.-based mineral exploration company.

Raptor settles unit sale

Raptor Pharmaceuticals took in $2.4 million from a private placement of units, the company announced.

The deal originally priced at $2.24 million on June 23.

The Novato-, Calif.-based company issued approximately 7.45 million units, each of which contained one common share and one half-share warrant. The units sold at $0.32 each and each whole two-year warrant is exercisable at $0.60 for the first year and at $0.75 in the second year.

In addition to the private placement, Raptor also concluded a warrant exchange for warrants issued in its May/June 2008 private placement. Under the terms of the exchange, warrant holders subscribed for new warrants equal to 10 million common shares. The new warrants are exercisable at $0.75 for the first year and at $0.90 for the second.

The exchange was conditional upon holders exercising the new warrants by July 17. From that, the company took in $2.6 million.

Proceeds will be used to funds programs for raptor's late-stage drug candidates, as well as to "execute its corporate strategy," including closing its merger with TorreyPines Therapeutics Inc., which is expected to be completed in the fourth quarter.

"We appreciate the continued support of our 2008 private placement investors demonstrated through their warrant exercise and extend an enthusiastic welcome to our new stockholders who participated in this private placement," said Christopher M. Starr, Ph.D., Raptor's co-founder and CEO, in an e-mail to Prospect News. "In three short years, Raptor has advanced from a preclinical start-up into a late-stage biopharmaceutical company through a risk-mitigating development strategy that allows us to leverage new formulations of currently approved drugs while advancing our novel preclinical drug-targeting platforms.

"We anticipate the proceeds will provide us sufficient capital resources to move our DR Cysteamine clinical programs forward while we explore partnering opportunities for TorreyPines' NGX426, a compound that has demonstrated promise in treating acute pain in early clinical studies," Starr added.

As for the merger, Kim Tsuchimoto, Raptor's chief financial officer, said things were moving along smoothly.

"We are pleased with our steady progress towards closing our proposed merger with TorreyPines Therapeutics, which would enable Raptor to restructure as a Nasdaq-listed biopharmaceutical company in a manner that will support future growth of the company and add a potentially valuable asset to our clinical stage pipeline," he said in the e-mail. "Being on the OTC for three years has instilled a public company discipline at Raptor, and with the Nasdaq listing resulting from this merger, we expect the combined company will be able to tap into a new set of biotech institutional investors and funds."

Raptor's shares (OTCBB: RPTP) gained $0.061, or 21.03%, to $0.351. Market capitalization is $22.3 million.

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