TIB Financial lands local investors; Liberty Mines gets cushion; Pan African Mining downsizes

By Kenneth Lim

Boston, March 11 - TIB Financial Corp. received $10.1 million through a private stock placement, but its real catch was not the money but the new investors, its chief executive said.

Meanwhile, Liberty Mines Inc. said its C$21 million placement of units was practically sold and will give the company about three times the capital it needs at the moment.

Pan African Mining Corp. announced a C$5 million non-brokered placement of stock and warrant units but said it could have raised up to C$12 million.

PanWestern Energy Inc. said it will sell up to C$10 million of units to fund an acquisition and to pursue exploration activities.

TIB snags local support

TIB, a Naples, Fla.-based financing holding company, said it sold $10.1 million of stock and warrants to two groups of investors with strong ties to southwest Florida.

The deal consisted of 1.2 million common shares at $8.42 per share, as well as warrants to purchase an additional 1.2 million common shares at $8.40 per share until March 7, 2011. The stock sale price represented a 40% premium to TIB's closing stock price on Monday. TIB common stock (Nasdaq: TIBB) climbed 16.14%, or 97 cents, to close at $6.98 on Tuesday.

The investors in the deal are members and representatives of the Barron Gift Collier family and the Lutgert family, two prominent families in the Naples community.

The Barron Collier Cos. had been seeking investment opportunities in a local bank, TIB said in a statement.

"Like the Lutgerts, we strongly believe in the growth potential of southwest Florida," Barron Collier president and chief executive Paul J. Marinelli said in the statement. "And we strongly believe in the growth potential of TIB."

Lutgert president Howard B. Gutman stated, "We see our interests aligned both with the Colliers and with TIB. This is a strategic partnership that will work well for all of us, and we look forward to helping to take TIB to the next level."

Marinelli and Gutman will join the board of directors at TIB. The stake that each family can control in TIB has been limited to 9.9%.

Edward V. Lett, TIB president and chief executive, told Prospect News that selling stock at a substantial premium is a rare opportunity for most companies.

"The private placement is going at a 40% premium to market," Lett said. "That tells you about their confidence and willingness to make this investment."

But he said the most important aspect of the deal was the involvement of the Colliers and Lutgerts. The deal was a "mutual" arrangement between the families and the bank, with which the families have done "a lot of their business," Lett said.

"Although capital is important and pricing is important, what's really important here is the association with these two families," he said. "We were well-capitalized going into this situation, which is why we priced it the way we did. But this is a serious and long-term commitment by two of the very important families in southwest Florida."

"This is not a takeover," Lett said. "There's no massive reallocation of stock or anything."

TIB chose not to do a public offering.

"We have trust preferred, we can go to New York or Boston or Chicago or we could have a public offering, but they would be in strange hands," Lett said. "We wouldn't have the local support."

TIB does not have any urgent need for capital, but as a bank, to have some money is always useful, he said.

"It's simply a way to raise capital in a very challenging environment," he said. Later, he added, "Capital is king right now. There is never a situation where you have too much of it. We invest it on a short-term basis for liquidity, and we'll deploy it in the long term for the best returns."

Lett noted that TIB had recently applied for trust powers in relation to its acquisition of Naples Capital Advisors, and that will take about $3 million.

But "the bank remains well capitalized, and I intend to keep it well capitalized as long as I'm here," he said.

Existing investors have been positive, Lett said.

"The market reaction has been very exciting," he said. "We've had a lot of calls from investors and from the Street. ... To me the exciting part of it is the local play that this will get, associating with these local organizations. Naples right now doesn't have a leading community bank, and this will help us position ourselves in the market."

Liberty Mines gets cash cushion

Liberty Mines said this week it is selling C$21 million of notes and warrants in a private placement.

Each unit will comprise one unsecured promissory note and 150 transferable warrants. Each three-year C$1,000 note will have a 12% coupon, and each warrant will be exercisable at C$2.50 for two years.

Salman Partners Inc. will lead a syndicate of agents for the deal.

Liberty Mines stock (TSX: LBE) closed at C$1.50 on Friday. The stock finished at C$1.30 on Tuesday.

The Timmins, Ont.-based mineral exploration and development company said it will used the proceeds to bring its Hart nickel mine into production, to fund acquisitions and exploration and for general working capital.

Liberty Mines president and chief executive Gary Nash said the deal was practically sold, and he expects to head to New York next week to "do some face-to-face."

"We've got companies in Canada that would do the whole thing," Nash said.

The deal is significant for Liberty, which is aiming to bring some of its projects into production soon, he said.

"If you want to develop the company at the pace that we want to go on, it is significant because you can't do it if you don't have the money for equipment and drilling," he said. "Every investor wants us to grow like wildfire, but at 200 tonnes per year production that's not going to be possible."

But Liberty is on the verge of a boost in production with its McWatters and Hart mines, and the cost of taking on the debt burden of the financing will be significantly eased soon, Nash said.

"We could have done periodical refinancing, equity financing, but we chose debt because we clearly have cash flow that will become very significant when the McWatters mine begins production later in the year, and if we can make C$18 million a month we can pay it back in a little more than over a month," he said. "Based on the financial statements that you can see from December, we have several million in receivables. We're small but cash flow positive, but you have to have a bridge loan here to make sure McWatters gets into production."

Liberty did not need C$21 million, he said.

"Actually C$5 million would have done the trick," he said. "We'll just leave it in the bank. Sure, we have the interest differential, but we can do stuff like acquisitions, like we have done in the past. In the meantime it looks like we're going to need another shaft at Hart ... and you need cash on hand to be able to do that."

Nash thought that the financing came on favorable terms.

"It's unsecured, it's not convertible so when our stock is up they can't buy it at a discount, they can't pull that on us," he said.

Pan African raises C$5 million

Pan African Mining said it sold C$5 million of units in a non-brokered private placement, less than the indication for up to C$6 million at initial pricing.

Pan African sold 2.5 million units of one share and one half-share warrant at C$2.00 per unit. Each whole warrant will be exercisable for two years, at C$2.25 in the first year and at C$2.50 in the second year. Pan African stock (TSX: PAF) closed at C$2.10 on Tuesday, up by 3.45%, or C$0.07.

The company had planned to sell up to 3 million units.

Proceeds will be used for exploration of the company's African properties.

Pan African is a resource exploration company based in Vancouver, B.C.

"We are grateful for the strong investor support of our activities in Madagascar and Southern Africa," Pan African chief executive Irwin Olian said in a press release. "We were offered up to C$12 million in financing but concluded that it was in our best interest to limit the size of the financing to only C$5 million in order to prevent unnecessary dilution of our shares. At the same time, these additional funds will now ensure that we will be able to carry out all of our anticipated exploration programs for the next 18 months on our portfolio."

PanWestern to sell C$10 million

PanWestern Energy said it will sell C$10 million of units through agents PowerOne Capital Markets and Union Securities.

The deal comprises up to 18 million units of one common share and one warrant at C$0.50 per unit for C$9 million. The company will also sell flow-through units of one flow-through share and one warrant at C$0.60 per flow-through unit for C$1 million.

Each two-year warrant will be exercisable at C$0.75 for the first year and at C$1.00 thereafter.

PanWestern common stock (TSX: PW) rose 16.67%, or C$0.10, to close at C$0.70 on Tuesday.

PanWestern, an oil and gas exploration and production company based in Calgary, Alta., said proceeds will be used for exploration, for general working capital and to fund the company's planned acquisition of Industrial Air Corp.

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