ONA to raise C$15 million in two deals; AuEx wraps PIPE; Arafura plans A$24 million stock sale

By Stephanie Rotondo

Portland, Ore., March 12 - ONA Energy Inc. announced late Wednesday that it was planning to raise C$15 million through a private placement. On Thursday, a company representative told Prospect News just what the funds would be used for.

ONA is planning to construct a new 60-megawatt power plant in China, a region that is lacking in energy supply, the representative said. The two financing deals - which include the sale of stock and warrant units, as well as convertible debentures - replace an earlier deal that fell through due to the economic crisis.

Meanwhile, AuEx Ventures Inc.'s top executive said that its recently completed C$6.45 million deal will allow the company to "continue its activities," which include an interest in the Long Canyon Venture.

Separately, Arafura Resources Ltd. is planning to raise A$24 million in a private stock sale to one investor. The sale will give the investor a 25% stake in the company.

ONA to raise C$15 million

ONA Energy, a Vancouver, B.C.-based energy producer, announced late Wednesday two private placement deals that will raise C$15 million in total.

The company said it would issue 12.5 million units consisting of one common share and one half-share warrant at C$0.20 each. A whole warrant is exercisable at C$0.30 for 18 months. The company can force shareholders to exercise the warrants if the weighted average trading price of its shares reaches C$0.60 or higher for 20 consecutive trading days.

The total of the deal equals C$2.5 million.

Furthermore, the company will issue the remaining C$12.5 million in three-year 12% convertible debentures. ONA will sell the convertibles - which are convertible into common stock at C$0.30 per share - in denominations of C$1,000.

Warrants are also included in the second part of the transaction, with the company issuing 1,667 three-year warrants exercisable at C$0.40. If the weighted average trading price of the stock is C$0.80 or higher for 20 consecutive trading days, the company can force conversion.

Jean-Francois Meilleur, a consultant at Montreal-based Paradox IR and ONA's investor relations representative, said that funds from the transaction will be used to build a second 60-megawatt power plant in China.

"There's a lack of supply [of energy] in China in the region they are operating," Meilleur said in an interview with Prospect News. The company currently has one 60-megawatt power plant in operation, the Yongxing Power Plant.

Meilleur said the new plant, upon completion, would provide 120 megawatts in total and that there is an option to ramp up production to 390 megawatts.

"The bigger you get, the bigger cash flows you get," he said.

"This is ONA's development plan," he added. "They are putting all their energy into building these plants."

Funding in stages

All told, Meilleur said the company needs to raise C$55 million to complete the project. However, given the "worldwide recession, they want to do it in stages."

"They need this money to get the wheel going," he explained. He declined to give any sort of timeframe when other financings might come to market.

In its press release announcing the new deals, ONA also noted that the new financings replace another deal announced Sept. 9, 2008. However, as the economy fell into the abyss, that deal became "impossible to complete."

As far as the terms of the deal are concerned, Meilleur said the company prefers the private placement market to the public market.

"It's the way the company raises financings every time," he said.

Also, the inclusion of warrants was a way to increase interest, as one interested investor said that his "interest increased if warrants are involved," Meilleur said.

"Every company would prefer to get higher pricing, but this is the market reality right now," he added.

ONA's equity (CNQ: OEE) dropped 18 cents to $0.05.

AuEx wraps deal

AuEx Ventures completed a non-brokered private placement of units, raising C$6.45 million, the company announced.

Under terms of the deal, which was originally priced at C$8.6 million on Feb. 17, the company issued units consisting of one common share and one half-share warrant at C$2.15 per unit. The whole two-year warrants are exercisable at C$2.75 in the first year and at C$3.25 thereafter. However, the warrants may expire sooner than two years should the company's stock trade at C$4.12 or higher for 20 consecutive trading days in the first year or at C$4.87 or higher for 20 consecutive trading days in the second year. The company must then give shareholders 30-days notice.

Ronald L. Parratt, AuEx's president and chief executive officer, told Prospect News that the inclusion of the warrants was a "pretty common practice" and that the company had included them in all of the private placements it had ever done.

"We were able to close what we wanted to and raise the funding we needed to continue our activities," he added.

Also, Parratt said that it was "easier and quicker" to do a private placement rather than a public offering but conceded that it did limit the investors who could participate. He noted that the company might consider a public offering in the future.

Proceeds from the transaction will be used in part to fund AuEx's participating interest in the Long Canyon Venture.

AuEx's stock (TSX: XAU) gained 25 cents, or 11.36%, to $2.45.

AuEx Ventures is a Vancouver, B.C.-based precious metals exploration company with projects in Nevada, Spain and Argentina.

Arafura plans stock sale

Arafura Resources will raise A$24 million through a private stock sale to East China Exploration, according to a press release.

The company will sell 60 million shares at A$0.40 per share. The deal will come in two tranches.

The deal will allow East China to acquire a 25% interest in the South Perth, Australia, company.

"ECE (East China), with a history of 54 years, is a major mineral exploration, development and mining group based in the Jiangsu Province of China and they are interested in assisting Arafura to develop the Nolan's rare earths-phosphate and uranium project in Northern Territory," said Ian Laurance, Arafura's chairman, in a statement. "The ECE capital injection will ensure that Arafura has the cash to progress our feasibility work for the Nolans project this year. ECE will then assist us in project financing for mining and processing for the Nolans project."

The company said that ECE will "enter into a series of relevant joint ventures to explore Arafura's other tenements in the Northern Territory," according to the release.

"ECE has had great success in exploration across China and in many other countries and they are keen to bring their expertise to assist Arafura in developing further opportunities," said Alistair Stephens, managing director of Arafura, in the release.

Arafura's stock (Australia: ARU) closed at A$0.31 on Thursday.

Arafura is a mineral exploration and resource development company.

PIPE pieces

PC Gold Inc. wrapped a C$2 million placement of units, the company said Thursday. The deal included a C$500,000 greenshoe, which was fully exercised.

The Kanata, Ont.-based gold exploration company sold 4 million units consisting of one common share and one half-share warrant at C$0.50. The warrants are exercisable at C$0.70 for one year.

Meanwhile, Leisure Canada Inc., a Vancouver, B.C.-based hotelier with assets in Cuba, announced a C$1 million partially brokered placement of units.

The units include one class A common share and a half-share warrant exercisable at C$0.15 for two years. The units will be sold at C$0.10 per unit.

Enfis Group plc is looking to raise £2 million through a private placement of stock, according to a press release.

The company will sell 5.6 million ordinary shares at 36p per share.

"The board is very pleased with the institutional support we have received for the placing," said Shaun Oxenham, CEO of the Swansea, Wales-based company. "The funds raised will provide the necessary working capital to service our strong sales pipeline in key volume markets such as North America and Europe."

PC Gold's equity (TSX: PKL) held steady at $0.45, while Leisure Canada's (TSX: LCN) shares slipped 3 cents, or 25%, to $0.09. Enfis' (London: ENF) stock ended at 50p.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.