GTO wraps subscription sale; Poniard arranges equity financing; Cerus to raise $13.2 million

By Stephanie N. Rotondo

Portland, Ore., Aug. 20 - Thursday's private placement market was dominated by mining and biopharmaceutical companies. But it was GTO Resources Inc. that had the day's biggest deal.

GTO said it settled a nearly C$180 million placement of subscription receipts. The funds will be used to develop key projects of a pending business combination, the company said.

Meanwhile, Poniard Pharmaceuticals Inc. announced it inked a deal with an investor for a $60 million equity financing facility. The deal is expected to improve the company's financial position, according to a press release.

Among other biotech names, Cerus Corp. said it would take in $13.2 million from a private placement of units. According to an unnamed source, the deal came about as the company's stock experienced an "interesting day" during Wednesday's session.

Cel-Sci Corp. meanwhile announced a $4.4 million registered direct offering of units. A company spokesperson said the terms of the transaction were better than previous financings.

In the mining sector, First Majestic Silver Corp. wrapped the first tranche of its C$9.2 million placement of units. The remaining portion of the financings is expected to settle by the end of September.

Also, Zincore Minerals Inc. said it would sell common shares in its effort to raise C$5 million.

GTO completes subscription sale

GTO Resources wrapped its C$179.4 million private placement of subscription receipts, the company announced.

The deal originally priced for C$100 million on July 15 and was later upsized to C$156 million on Aug. 6.

GTO sold 59.8 million of the subscriptions at C$3.00 each. About 7.8 million of the subscriptions sold were part of a fully exercised greenshoe.

The proceeds from the financing will be held in escrow pending the completion of a business combination of GTO, Polaris Geothermal Inc., Western GeoPower Corp. and Ram Power Inc. Upon completion of the merger, each subscription will be convertible into one common share of the new combined company.

In addition, if the combination is not completed by Nov. 3, the funds will be returned to investors.

The funds will be used to develop key projects of the new company.

GTO's stock (TSX Venture: GTR.H) was unchanged at C$0.36.

GTO Resources is a Vancouver, B.C.-based natural resource company.

Poniard arranges equity facility

Poniard Pharmaceuticals secured a $60 million equity financing facility with Azimuth Opportunity Ltd, according to a press release.

For a period of 18 months, Poniard can draw down the facility at approximately 6.95 million shares at a time over a period of 10 days or another timeline agreed to by both parties. The price per share will be determined by the daily volume weighted average price of the common stock on each date during the draw down period, less a 4% to 6% discount.

Poniard is not, however, obligated to draw down the facility and is free to seek other financing alternatives.

"This equity line provides us with an important addition to our financing options," said Greg Weaver, Poniard's senior vice president and chief financial officer, in a press release. "The facility has a competitive cost of capital, no warrants and flexible structure and should further strengthen our position as we negotiate with potential global partners for our late-stage differentiated platinum-based chemotherapy agent, picoplatin."

Poniard's shares (Nasdaq: PARD) dropped 17 cents, or 2.27%, to $7.33. Market capitalization is $252 million.

Poniard is a South San Francisco, Calif.-based biopharmaceutical company focused on cancer treatments.

Cerus to raise $13.2 million

Cerus, a Concord, Calif.-based biopharmaceutical company, said it would pocket $13.2 million from a private placement of equity units in a regulatory filing and subsequent press release.

The company will issue 6 million units holding one common share and 0.4 of a warrant at $2.20 per unit. Each whole five-year warrant is exercisable at $2.90.

According to a source familiar with the matter, the financing came about after the company's stock had an "interesting day" on Wednesday.

The source said about 21.3 million shares traded, a significant increase in average volume.

"That gave [the company] an opportunity to finance the company," the source said.

"When the ducks are quacking, you feed 'em," the source quipped.

In addition, the source said the company was pleased with the "very reasonable terms."

"It's better than what companies were getting a few months ago," the source pointed out.

Proceeds will be used for "executing the business plan and commercialization of the Intercept technology."

Cerus' equity (Nasdaq: CERS) slipped 77 cents, or 26.74%, to $2.11. Market capitalization is $72 million.

Cel-Sci aims for $4.4 million

In yet another biopharmaceutical deal, Cel-Sci announced a plan to raise $4.4 million in a registered direct offering of units.

The company will sell 9.7 million units, which will contain one common share and one half-share warrant. The units will sell at $0.45 each, and each five-year warrant is exercisable at $0.55.

"After the financial crisis, anyone who can raise capital is infinitely better off doing so," said Geert R. Kersten, director and chief executive officer, in an interview with Prospect News.

Kersten noted that the deal was "being done at a better price and better terms" than previous financings.

"Doesn't it show strength if you can raise capital at better terms and price?" he asked.

The ability to do the financing therefore put Cel-Sci in an "enviable position," Kersten added.

"The great concern three months ago was hundreds of biotech companies will go out of business," he explained. "In the last few months, things have improved."

Still, he noted that even though the market has in fact improved, there are still not a large number of biotech firms doing financings.

"I couldn't be any happier," he said of the deal.

The funds will help Cel-Sci in "rebuilding the company to start phase 2 clinical trials" on its Multikine cancer drug, as well as to help in the "fast expansion of our swine flu work." Kersten also speculated that the swine flu will hit hard in coming months.

In the end, Kersten said he learned in his 20 years in the field that when one can raise money, it is the "smart thing" to do.

"In biotech, you raise capital when the opportunity presents itself," he said.

Settlement is expected by Aug. 25.

Cel-Sci's shares (Amex: CVM) declined by 8 cents, or 16.0%, to $0.42. Market capitalization is $55.8 million.

Cel-Sci is a Vienna, Va.-based developer of treatments for cancer and infectious diseases.

First Majestic wraps first tranche

First Majestic Silver closed on an C$8.05 million tranche of its C$9.2 million non-brokered private placement of units, the company said in a news release.

The deal originally priced Aug. 12, and the remaining funds are expected to settle by Sept. 25.

In this tranche, First Majestic sold 3.49 million units of one common share and one half-share warrant at C$2.30 each. Each whole two-year warrant is exercisable at C$3.30.

All told, the company will issue 4 million of the units.

Proceeds will be used for general working capital at the company's La Encantada Silver Mine, La Parrilla Silver Mine and the San Martin Silver Mine, all located in Mexico.

Calls made to the company seeking comment went unreturned Thursday.

First Majestic's stock (Toronto: FR) fell a penny, or 0.47%, to C$2.14. Market capitalization is C$179 million.

First Majestic Silver is a Vancouver, B.C.-based silver exploration company.

Zincore plans to issue equity

Also in the mining arena, Zincore Metals said it would take in C$5 million from a private placement of equity.

Under the terms of the non-brokered placement, Zincore will sell 20 million common shares at C$0.25 each.

Proceeds will be used for exploration, among other things. Settlement is expected by Sept. 30.

Zincore's equity (Toronto: ZNC) gained 4 cents, or 25.0%, to C$0.20. Market capitalization is C$13.5 million.

Zincore is a Vancouver, B.C.-based zinc, base and precious metals exploration company.

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