Corsa aims for C$56 million; Rainy River negotiates stock placement; Levon plans sale of units

By Devika Patel

Knoxville, Tenn., Aug. 17 - Tuesday's Canadian private placements were large offerings, as issuers sought to raise cash for exploration.

Two companies said they were ramping up drilling efforts at their respective exploration projects, and one Canadian mineral explorer is offering securities to finance a planned acquisition.

Corsa Capital Ltd. said it will sell C$56 million of subscription receipts in a brokered private placement. The Vancouver, B.C., company will use a portion of the deal proceeds to acquire a Pennsylvania-based coal property owner.

Rainy River Resources Ltd. announced plans for a C$20.04 million private placement of stock Tuesday, which is raising funds for the company's Rainy River gold project in Northwest Ontario. The company hopes to increase confidence and grade continuity in the deposit through an infill drilling program.

North American gold explorer Levon Resources Ltd. said it could raise up to C$11 million for exploration activities on its Cordero project in Mexico through a C$8.5 million brokered and non-brokered offering of units with a C$2.5 million greenshoe. The Vancouver-based company's shares (TSX Venture: LVN) fell 11.7%, or 11 cents, after the announcement on Tuesday, closing at C$0.83.

Corsa plans C$56 million

Mineral explorer Corsa Capital said it will raise C$56 million through a private placement of subscription receipts with a 15% greenshoe. The deal will be conducted to finance the company's planned acquisition of Wilson Creek Energy, LLC, a Somerset County, Pa.-based owner of coal properties.

The acquisition is conditional upon the placement's completion and still needs shareholder approval. The company will issue 50 million common shares and pay $13 million in cash to acquire Wilson Creek.

"The team we have assembled both on the board and management are very experienced in coal production, marketing, acquisitions and capital markets," company director and future chief executive officer and president, Donald K. Charter, said of the acquisition in a press release.

"The acquisition and expansion of Wilson Creek represents a strong first step in the development of a new metallurgical coal producer. The funds raised in the private placement will fund the construction of the Wilson Creek wash plant and provide the funds to bring on multiple mines, with the focus on the production and sale of high margin metallurgical coal," Charter said.

In the placement, Corsa Capital will sell subscription receipts at C$0.50 apiece by Sept. 15. Each receipt will convert into one common share.

The deal is being conducted via lead agents Cormark Securities Inc. and GMP Securities LP. The syndicate of agents also includes Canaccord Genuity Corp. and Haywood Securities Inc.

Proceeds will be used to satisfy the cash portion of the acquisition's purchase price, for construction costs of a coal cleaning plant, to purchase property, for development and general working capital purposes.

The company's share price (TSX Venture: CSO) remained unchanged Tuesday, closing at C$0.50.

Rainy River: C$20.04 million

Rainy River, a metals exploration company based in Vancouver, said it is selling C$20.04 million of flow-through common shares at C$8.18 apiece in a private placement. The deal will be brokered by Wellington West Capital Markets Inc.

Proceeds will be used to continue exploring the company's Rainy River gold project. In July, Rainy River said it had excellent assay results from the project, and its 2010 exploration efforts will focus on an infill drilling program.

The drilling program's purpose is to increase confidence and grade continuity in the deposit in preparation for an updated resource estimate and scoping-level assessment on the economic potential of the project. It recently completed a drill hole extension program, but plans to shift its focus to the infill program.

"Our drill extension program has been very successful in both expanding the 433 Zone at depth and greatly improving the continuity within the zone," president and chief executive officer Raymond Threlkeld said in a recent press release.

"For the remainder of the year, the focus for the company will be the infill program with the objective of increasing the grade and continuity of the deposit in preparation for an updated NI 43-101 resources estimate and the completion of a scoping-level economic assessment."

Company shares (TSX Venture: RR) fell 1.75%, or 11 cents, on Tuesday, closing at C$6.18.

Levon prices C$8.5 million

Levon said it has arranged a C$7.5 million private placement of units through agent Canaccord Genuity Corp. The offering has a C$2.5 million greenshoe. The company also will conduct a C$1 million non-brokered unit sale on the same terms.

The company is selling the units of one common share and one half-share warrant at C$0.75 apiece. Each whole warrant will be exercisable at C$1.20 for 18 months.

Proceeds from the deal, which is expected to settle Aug. 31, will be used to conduct exploration activities at the Cordero project.

Levon is earning a 51% interest in the Cordero project from Valley High Ventures. It must spend C$1.25 million on the project by 2013 and has committed to help explore and develop the property, which is situated in a silver, gold, lead, zinc, and molybdenum producing district of Mexico.

Within the joint venture, Valley High will operate until Levon vests. During the vesting period, Levon will provide technical input and geologic services to complete the data synthesis, integration, targeting and drill testing.

"In Chihuahua and Zacatecas there are a number of new discoveries in an area that is starting to appear to be a major Au, Ag, Pb, Zn, porphyry belt in Mexico," Levon president Ron Tremblay recently said of the project region.

"Cordero covers well mineralized intrusive centers that have not been fully appreciated or explored within this belt. Cordero geology and drill results are comparable to known deposits and discoveries within this emerging belt. Small scale, ongoing underground production on high grade silver, zinc breccias and vein zones at Cordero locally, contain significant gold values and support the broader exploration potential for major deposits with porphyry controls we see at the property."

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