Meridian Minerals to issue equity; Sino Clean sells converts; Forte Energy wraps upsized sale

By Stephanie N. Rotondo

Portland, Ore., July 22 - Mining and energy companies came out to dominate the private placement market Wednesday and many deals were in the neighborhood of $10 million.

Meridian Minerals Ltd., for example, said it would raise A$10.5 million by selling more than 130 million common shares. The shares were sold to a single investor and were raised for the purpose of exploring the Lennard Shelf.

Sino Clean Energy Inc. meanwhile announced it had raised $11.6 million through a convertibles sale. The company hopes to use funds to increase its production capacity.

Among other completed deals, Forte Energy NL closed on an A$12 million placement of stock.

In North American issuers, VG Gold Corp. and Lexam Explorations Inc. announced a deal in which VG Gold would sell common share units to Lexam. Proceeds will be used for exploration of the company's Timmins properties.

Meridian Minerals to issue equity

Meridian Minerals plans to raise A$10.5 million by issuing common shares in a private placement.

Approximately 131.25 million shares will be sold at A$0.08 per share. The shares will be sold to a single investor, Northwest Mining and Geology Group Co. Ltd.

The price per share in the placement represents a 78% premium over the price per share in the company's last financing and a 23% premium over the current price per share. The price is also a 28% premium over the volume average weighted price.

"We feel that the involvement of such a strong development partner will prove to be a key milestone in the successful development of Lennard Shelf," said Jeremy Read, managing director of Meridian, in a press release. "Northwest Mining and Geology Group Co., Ltd. for Nonferrous Metals has proven technical and financial capabilities developed on the world stage over an extensive period of time.

"We believe they are the perfect partner for this project and both boards are moving as quickly as possible to complete the transaction," he added.

Meridian's equity (Australia: MII) closed at A$0.072.

Meridian Minerals is a West End, Australia-based mineral exploration company.

Sino Clean sells convertibles

Xi An, China-based Sino Clean Energy raised $11.6 million through a private placement of 10% senior secured convertible notes, the company announced.

The deal came in two tranches, with the first settling on July 1 for proceeds of $5.42 million and the second on July 20 for the remaining proceeds.

The notes come due June 30, 2012 and are convertible into common stock at $0.19 per share. The conversion price could be altered should Sino Clean not reach $40 million in revenue and $10 million in net income for fiscal 2009. In such a case, the conversion price will be reduced by 25%. Additionally, the price will be reduced 20% if $70 million in revenue and $15 million in net income is not achieved in fiscal 2010.

Interest is payable in cash each quarter beginning Oct. 1. Subsequent payments will be made Jan. 1, April 1, July 1 and Oct. 1 until maturity.

The financing also included warrants for 30.5 million additional common shares. The three-year warrants are exercisable at $0.285.

The notes are secured by a personal guarantee from Sino Clean's chairman and chief executive, Baowen Ren, as well as by a pledge of 35 million shares from Ren and other shareholders of the company, according to a press release.

"The capital raised affords us the opportunity to move forward on increasing our production capacity, currently at 350,000 metric tons annually," commented Ren in the release. 'With more companies turning to coal-water mixture for their energy needs, we want to be in a position to meet the anticipated increase in demand."

Upon closing of the first tranche, Sino Clean also redeemed or converted all of its outstanding 18% senior convertible debentures, which were issued September 2008.

Sino Clean's shares (OTCBB: SCLX) fell $0.002, or 0.47%, to $0.42.

Sino Clean researches, develops, produces and sells coal water mixture, which is a substitute for oil, gas and coal.

Forte closes upsized deal

Forte Energy said it took in A$12 million from a private placement of ordinary stock.

The company sold 120 million shares at A$0.10 per share. The deal originally priced for A$10 million on June 1.

Proceeds will be used to develop uranium projects under the company's current portfolio of properties in West Africa.

Forte's stock (Australia: FTE) ended at A$0.11.

Forte Energy is a Perth, Western Australia-based emerging uranium mining company.

VG Gold plans unit placement

VG Gold arranged a C$3 million private placement of equity units with Lexam Explorations Inc., according to a press release.

The company will issue 37.5 million units containing one common share and one warrant. Each unit will sell at C$0.08 per unit and each warrant is exercisable at C$0.15 for 18 months.

The first tranche of the deal already settled, with approximately 12.59 million units being sold. The second tranche is expected to close in early September once regulatory and shareholder approval has been secured.

Additionally, investor Lexam has the right to nominate a director to VG Gold's board, as well as the right to participate in future financings.

Proceeds will be used to fund exploration and other activities at the company's Timmins, Ont. properties.

"VG Gold's properties are situated in the heart of the Timmins gold camp where 67 million ounces of gold have been produced," said Rob McEwen, chairman and CEO of Lexam, in the release. "The company's drill results have encountered attractive grades and good widths. Companies such as West Timmins Mining and Lake Shore Gold are proving there is much more gold to be found in this historic camp."

"Gold production in the Timmins area totals over 67 million ounces since 1910, making it one of the largest gold producing areas in the world," the release stated. "Recent discoveries by West Timmins Mining and Lake Shore Gold have clearly demonstrated that the area is still highly prospective for large, high-grade gold discoveries."

VG Gold's stock (Toronto: VG) improved by 13 cents, or 100%, to C$0.26. Market capitalization is C$26.2 million.

VG Gold is a Toronto-based gold mining company.

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