Canadian deals lead private placement action on spike in oil; Gammon Lake plans C$110 million offering

By Sheri Kasprzak

Atlanta, Nov. 23 - Canadian private placements dominated the market Tuesday as oil prices improved.

Oil ended $0.30 higher to close at $48.94 per barrel Tuesday and peaked earlier in the day at $50.25 per barrel.

"Oil does seem to be pushing the market," said one Canadian sell-sider. "There have been a few energy companies in the market today."

Canadian gas and oil companies like Galleon Energy Inc. and Questerre Energy Corp. both wrapped up private placements Tuesday.

Canadian mineral and resources companies were at the forefront of the market Tuesday.

Among those mineral exploration companies was Dartmouth, Nova Scotia-based Galleon Lake Resources Inc., which led private placement news Tuesday with an announcement that it will raise C$110 million.

The company plans to sell special warrants that are exchangeable into common shares. The pricing of the deal, according to a statement from the company, won't be released until regulatory approval is received.

BMO Nesbitt Burns Inc. is the lead placement agent in the offering.

The company has properties in Mexico and plans to use the proceeds from the private placement for its Oscampo gold and silver project.

On Tuesday, Gammon Lake's stock closed up C$0.16 at C$7.03.

Gexa wraps $7.5 million deal

Heading up private placement deals in the United States, Gexa Corp. raised $7.5 million.

The company sold 175,000 units at $43 each to Perry Capital, Zimmer Lucas Partners LLC and Corsair Capital Management, among other investors. The units include 10 common shares and three five-year warrants. The warrants allow for the purchase of an additional share $5.59 each.

"We are very pleased with this offering, which represents a significant advancement towards strengthening our growth platform, as well as continuing our balance-sheet improvement," said Gexa's chairman, chief executive officer and president Neil Leibman in statement. "Through the offering, we have added several strong and well-respected institutional investors."

Oppenheimer & Co. was placement agent in the deal.

Based in Houston, Gexa is an electricity provider for residential and commercial customers. The company will use the proceeds to improve its balance sheet.

Gexa's stock closed up $0.34 at $4.50 Tuesday.

American Oriental wraps deal

American Oriental Bioengineering Inc. wrapped up a $6 million private placement of units of one share, one half-share warrant and one whole warrant.

The company sold 6 million of the units at $1 each.

When whole, the half-share warrants are exercisable at $1.60 each for three years and the whole warrants are exercisable at $0.85 for three years.

"We believe the ongoing process of privatization of state-owned pharmaceutical enterprises in China provide us with excellent acquisition opportunities for corporate growth," said American Oriental's chairman and chief executive officer Tony Liu in statement. "We are exploring several acquisition opportunities and we believe the funds from this round of financing will allow us to expedite our acquisition strategy."

Westminster Securities Corp. was placement agent in the offering.

Based in Hong Kong, American Oriental Bioengineering is a biotechnology company focused on proprietary processes for soybean protein peptide production. The company intends to use the proceeds from the private placement for its acquisition strategy, working capital, new product development and general corporate purposes.

On Tuesday, the company's stock closed down $0.27 at $1.38.

SiVault raises $3 million

SiVault Systems Inc. completed a $3 million private placement of promissory notes and warrants.

The company sold the $3 million in promissory notes and class A warrants for 400,000 shares to institutional investors. The warrants allow for the purchase of an additional share at $3 each.

The promissory notes accrue interest at a floating rate, beginning six months after closing. The notes are convertible into common shares at $2.25 per share.

"We are tremendously pleased to be involved in the capital formation process for this exciting technology company which was introduced to us by one of our key advisory board members, Mr. Gil Amelio," said a statement from James L. Watts, chief executive officer of Pacific Summit Securities Inc., the placement agent in the deal.

"This financing is important to move forward with our business plan," SiVault's chief executive officer Emilian Elefteratos said in a statement. "It will enable SiVault Systems to ramp up our operations to serve our growing base of customers and take advantage of business opportunities."

SiVault, based in San Jose, specializes in retrieving and storing signed documents and biometric signature-based authentication for online transactions.

The company's stock closed down $0.45 at $2.50 Tuesday.

Canadian deals

Elsewhere in Canadian private placement news Tuesday, Galleon Energy Inc. finished a previously announced private placement for C$15 million.

The company sold 1 million class A flow-through shares at C$15 each.

The deal was completed through an underwriting syndicate led by GMP Securities Ltd.

"It was in line with the flow-through market at a 25% premium to market," said Galleon's chief executive officer Glenn Carley in an interview Tuesday. "I would not consider us to be undervalued. The private placement structure allowed a firm bought deal and for the company to take no market risk."

Galleon is an oil and gas exploration, exploitation and development company based in Calgary, Alta. The company plans to use the proceeds from the financing for expenditures related to its Dawson and Calais properties in Alberta and its Two Rivers property in British Columbia.

On Tuesday, the company's stock closed down C$0.25 at C$11.25.

Dia Bras closes C$9 million deal

Dia Bras Exploration Inc. raised C$9.001 million in a private placement, less than the company originally announced.

Dia Bras sold 12,002,068 units at C$0.75 for a total of C$9,001,551. The units consist of one share and one warrant. Each warrant allow for an additional share at C$0.90 for two years.

On Nov. 4, the company announced that it planned to raise C$10.7 million from 14,266,667 units under the same terms.

Based in Montreal, Dia Bras is a precious and base metals exploration company focused on properties in Chihuahua, Mexico. On Tuesday, the company's stock closed down C$0.02 at C$0.66.

Questerre closes tranche for C$3.42 million

Questerre Energy Corp. raised C$3.42 million in the first tranche of a private placement.

The company sold 2,012,500 common shares at C$0.25 each and 9,715,000 flow-through common shares at C$0.30 each.

Dundee Securities Corp. was placement agent in the offering.

Based in Calgary, Alta., Questerre is a resource company focused on the exploration and development of natural gas. The company plans to use the proceeds from the deal for its exploration activities this winter.

On Tuesday, the company's stock closed unchanged at C$0.27.

Nemi Northern upsizes deal

Nemi Northern Energy & Mining Inc. has increased the size of its previously announced private placement to C$31.25 million.

On Nov. 12, the company said it planned to raise C$25 million from the offering.

The company will now sell 1.5 million flow-through units of one flow-through class A share and one warrant at C$2 per unit, and up to 16,142,858 non flow-through units of one non flow-through class A share and one warrant at C$1.75 per unit.

Each warrant allow for the purchase of an additional share at C$2.10 each for 18 months.

Salman Partners Inc. is placement agent in the offering.

Nemi Northern is a Vancouver, B.C.-based coal exploration company. The company plans to use the proceeds from the deal for exploration and development work on its Trend and Saxon coal properties in British Columbia and for working capital.

Nemi Northern's stock closed up C$0.30 at C$2.60 Tuesday.

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