Mining firms set financing record; Gleichan sets deal terms; Donner Metals ups unit placement

By Stephanie N. Rotondo

Portland, Ore., Nov. 4 - Canadian mining companies came out en masse Wednesday, bringing the bulk of the day's private placements to market.

That follows a trend seen by TMX Group. According to data compiled by the Toronto stock exchanges, mining companies accounted for C$17 million in financings as of Sept. 30, above full-year levels for 2008.

Gleichen Resources Ltd. had one of the day's largest deals as the company finalized terms of a $200 million private placement of special warrants. The funds from the transaction will be used to fund an acquisition.

Meanwhile, Donner Metals Ltd. increased a previously announced private placement of units. The company now intends to raise C$3.21 million, up from C$3.1 million.

Geodex Minerals Ltd. also announced a deal, a C$2.25 million placement of equity units. Proceeds will be used to advance a feasibility study, according to a company spokesperson.

Also, Bellamont Exploration Ltd. said it would raise exploration funds via a private placement of flow-through shares. The company is also looking to take in C$10 million from a bought deal financing.

And Allana Resources Inc. said it had secured a strategic investment from China Mineral United Management Ltd. Allana will pocket C$2 million by privately placing shares with the investor.

Mining companies set record

It has been a record year for mining companies listed on the Toronto Stock Exchange, according to date compiled by TMX Group.

As of Sept. 30, C$17 billion has been raised by the sector in 264 deals. That exceeds full-year totals for 2008, according to a press release.

Total deals from all sectors were 530.

In addition, 60 of the financings have exceeded C$50 million each.

"I would say that it is because Toronto Stock Exchange is the world's leading mining market. Precious metals have led the way in the 2009 surge in mining financing," Carolyn Quick, director of corporate communications, said when asked why the mining sector had come out so strongly.

Australian mining companies have also been completing deals, representing a growing market for the exchange. As of Sept. 30, a total of 31 deals have come from Australian Toronto Exchange-listed issuers, for total proceeds of C$1.8 billion.

"Our exchanges are in Perth today with a simple message - we lead the world in the mining sector," said Ungad Chadda, senior vice president of the Toronto Stock Exchange, in the statement. "International interest in our markets continues to grow with mining companies of all sizes and with investors."

Currently, 123 international mining companies are listed on the Toronto Stock Exchange and TSX Venture Exchange. Also, there are 26 Australian mining companies listed on the exchanges.

Gleichen sets terms

Gleichen Resources finalized the terms of a $200 million private placement of special warrants.

The deal was originally announced Oct. 14.

Under the terms of the financing, Gleichen will sell special warrants at C$1.00 each. The warrants are convertible into units containing one common share and one quarter-share warrant. Whole warrants are exercisable at C$1.30 for two years.

The deal also includes a 15% greenshoe.

Proceeds from the transaction will be used to fund the company's previously announced acquisition of 78.8% of the Morelos Project from Teck Resources Ltd. Settlement is expected by Nov. 12.

Gleichen's equity (TSX Venture: GRL) fell 14 cents, or 11.2%, to C$1.11. Market capitalization is C$32.5 million.

Gleichen Resources is a Vancouver, B.C.-based resource exploration company.

Donner upsizes unit placement

Donner Metals announced that it had increased a previously announced private placement of units to C$3.21 million from C$3.1 million.

The deal originally priced Oct. 19.

The company intends to issue 3.65 million common share units at C$0.22 per unit. Each unit will consist of one common share and one half-share warrant.

Also, Donner will sell 9.62 million flow-through units at C$0.25. Each unit will hold one flow-through share and one half-share warrant.

Whole warrants are exercisable at C$0.35 for one year.

According to Andrea Magee, investor relations for Donner, the increase in the financing was due to holders of nearly C$500,000 of debt agreeing to convert their holdings for approximately 2.26 million common share units.

Magee said proceeds would be used for exploration efforts, as well as a feasibility study. The results are expected in June 2009.

"If [the study] is positive, we will break ground in July," she said.

Donner's stock (TSX Venture: DON) gained C$0.005, or 2.56%, to C$0.20. Market capitalization is C$13.5 million.

Donner Metals is a Vancouver, B.C.-based mineral exploration company.

Geodex seeks C$2.25 million

Geodex Minerals negotiated a C$2.25 million private placement of equity units, according to a press release.

The company will sell 15 million units at C$0.15 per unit. Each unit will contain one common share and one half-share warrant. Whole warrants are exercisable at C$0.25 for two years.

"We wanted to do a financing to go forward with our pre-feasibility study," Liana Shahinian, investor relations, told Prospect News. She was referring to work on the company's Sisson Brook project.

Shahinian added that the study is expected to take six to eight months. She also noted that some proceeds would be used for working capital.

Geodex's equity (TSX Venture: GXM) dropped C$0.005, or 3.33%, to C$0.145. Market capitalization is C$12.3 million.

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

Bellamont to raise exploration funds

Bellamont Exploration will raise C$2 million via a private placement of flow-through shares, the company announced.

Bellamont will sell 2.8 million flow-through class A shares at C$0.714 per share.

Proceeds will be used for exploration. Settlement is expected by Nov. 6.

Also, Bellamont said it negotiated a C$10 million bought deal financing of subscription receipts and the flow-through shares. Approximately 13 million of the receipts will be sold at C$0.62 each and 2.75 million of the shares will be issued at C$0.75 per share.

The bought deal includes a greenshoe of 1.95 million receipts.

Settlement of that portion is expected by Nov. 26.

Calls seeking comment were not returned Wednesday.

Bellamont's shares (TSX Venture: BMX-A) increased by 1 cent, or 1.54%, to C$0.66. Market capitalization is C$31.3 million.

Bellamont is a Calgary, Alta.-based oil and gas exploration and development company.

Allana arranges strategic investment

Allana Resources entered into a strategic offtake/financing agreement with China Mineral United Management Ltd. and, as a result of that agreement, will conduct a C$2 million private placement of equity.

The company will sell 8 million common shares to the investor at C$0.25 per share.

In addition, China Mineral will acquire 20% of the company's potash production at a discount to market price and equal to Allana's full operating and shipping costs plus a profit margin for Allana. Once the investor has recovered its initial investment, "it is proposed that the pricing will then be negotiated in good faith, based on international potash market price benchmarks."

China Mineral will also contribute 35% of construction costs for the project.

"We are delighted to be forming a strategic relationship with China Mineral as this marks an important milestone in the development of our potash project," said Farhad Abasov, president and chief executive officer, in a press release.

"We believe that this approach will result in near-term value creation for Allana shareholders while at the same time, preserve long-term shareholder value going forward. China Mineral is a strong mining group and we were particularly impressed with the professionalism, enthusiasm and speed with which they pursued and concluded negotiations. We look forward to working with China Mineral in developing this outstanding potash project."

Settlement is expected by Nov. 5.

Allana's stock (TSX Venture: AAA) declined C$0.035, or 10.61%, to C$0.295. Market capitalization is C$22.65 million.

Allana resources is a Toronto-based mineral exploration company.

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