Global Alumina secures $50 million from stock deal; Canyon Resources' stock dives

By Sheri Kasprzak

New York, Nov. 29 - Global Alumina Corp.'s planned closing of a $50 million stock offering led PIPE activity Tuesday.

IDB Infrastructure Fund LP intends to buy 22,222,222 shares from Global Alumina at $2.25 each to finance Global Alumina's proposed aluminum refinery.

Once the deal is settled, IDB will hold 12.54% of Global Alumina's outstanding shares.

Upon the completion of the deal, Global Alumina will have secured $488 million, or 70%, of the objective of $700 million needed to complete construction on an aluminum refinery. The company is also conducting a $200 million private placement with Dubai Aluminium Co. Ltd. The closing of that deal is contingent upon the completion in two tranches of a $100 million stock deal with Emirates International Investment Co. LLC.

After the offering was announced Tuesday afternoon, Global Alumina's stock gained 4 cents, or 2.41%, to close at $1.70.

"With our third subscription agreement, Global Alumina has now secured $488 million, or 70% of our objective of $700 million in subscribed equity," said Bruce Wrobel, the company's chief executive officer, in a statement. "The combination of the addition of another strategic equity partner, escalation of construction activities for the proposed refinery and expansion of our operational management team gives Global Alumina significant momentum as we continue to aggressively pursue our corporate and financial goals."

"The IDB Infrastructure Fund's approximately $50 million investment in Global Alumina will add value to Guinea's bauxite reserves by producing, in Guinea, alumina for export," said Ahmad Mohamed Ali, president of the Islamic Development Bank, in a statement. "The investment is a prime example of the fund's private equity investments supporting commercially attractive projects which promote the economic development of member countries of the Islamic Development Bank."

Toronto-based Global Alumina is a bauxite exploration company.

In the broader PIPE market Tuesday, one sellside source said volume dipped slightly in the United States because the backlog from the holiday weekend is finally over.

"It's not like there's been this great bubble bursting," he said. "There's still demand out there, but we did have this huge overload of things coming in late last week, early this week. Stocks were off a bit yesterday, so that also kept things pretty light."

In fact, stocks were up most of the day on Tuesday, but the Dow Jones Industrial Average and the Nasdaq composite index ended the day lower.

The Dow gave up 2.56 to close at 10,888.16, and the Nasdaq composite index fell 6.66 to end at 2,232.71. The Standard & Poor's 500 composite index gained 0.02 to finish at 1,257.48.

Canyon Resources prices $4 million deal

Heading to the natural resources sector, Golden, Colo.'s Canyon Resources Corp. negotiated a $4 million stock deal on Tuesday.

The offering includes up to 5.25 million shares at $0.76 each targeted to a group of institutional investors. The price per share is a 15% discount to the company's 20-day volume weighted average price.

The investors will receive series A warrants for half of the shares purchased in the offering and series B warrants for a quarter of the shares purchased in the offering. The series A warrants are exercisable at $1.30 each for three years and the series B warrants are exercisable at $1.08 each for one year.

Proceeds will be used for working capital and general corporate purposes.

The offering from the gold explorer comes at a time when gold prices are heading toward record highs, moving closer to $500 per ounce.

Even so, one market source in Vancouver, B.C., who saw the deal said it priced surprisingly low.

"They said it was a 15% discount [to the 20-day VWAP]," he said. "Gold is going through the roof and it just seems odd to price something that low."

Indeed, the company's stock took a beating on Tuesday, losing 15.74%, or $0.17, to finish the day at $0.91.

MDwerks's $1.6 million offering

Looking to the health care sector, MDwerks, Inc. announced the completion of its $1.6 million private placement as part of its reverse takeover of MDwerks Global Holdings, Inc.

The Deerfield Beach, Fla.-based company issued 64 units, each comprised of 10,000 common shares and a warrant for 10,000 shares.

The warrants are exercisable at $2.50 each.

The company has the option to sell up to 130 units in total.

Once the company's merger closed, certain shareholders sold 1,275,000 of their shares of MDwerks, Inc.

"We are extremely pleased to begin trading as a public company," said Howard Katz, the company's chief executive officer, in a statement released Tuesday. "We believe that our proprietary products provide unique solutions to daily cash flow issues that health care providers have been looking for. At the same time, our products benefit financial institutions by reducing lending risk and increasing access to an important business sector.

"To our knowledge, we are the first to offer these comprehensive integrated solutions over the internet. We are addressing a large vital market, and our initial private placement indicates that investors recognize the huge potential of this opportunity."

Mdwerks provides web-based claims processing services to health care providers and funds health care providers through lines of credit secured by insurance claims receivables.

On Tuesday, the company's stock gained almost a nickel, or 1.6%, to end the day at $3.20.

Eurocontrol leads Canadians

PIPE action in Canada was led by a C$5 million non-brokered deal priced by Eurocontrol Technics Inc.

The Toronto-based company announced its intention to sell up to 7,142,857 units at C$0.70 apiece.

The units are composed of one share and one half-share warrant. The whole warrants are exercisable for two years at C$1.00 each.

Proceeds will be used to accelerate the earn-in of the company's 51% interest in Global Fluids International SA. The rest will be used for research and development.

The company completed a C$1.5 million unit offering of 6 million units at C$0.25 each back in September. Those units included one share and one warrant. The warrants were exercisable at C$0.26 each for two years.

Eurocontrol makes devices to monitor and control electrical signals.

The company's stock lost C$0.03, or 3.41%, to close at C$0.85 Tuesday.

Hollywood Media stock gains 1.4%

Hollywood Media Inc.'s stock made slight gains on Tuesday after wrapping a $7 million note deal with warrants on Monday.

The company's stock rose 6 cents to close at $4.35 Tuesday.

On Monday, when the closing was announced, the company's stock slipped $0.0301 to end the day at $4.2899.

A group of institutional investors who purchased 8% notes from Hollywood Media received warrants for 700,000 shares. The warrants are exercisable at $4.29 each for five years.

Based in Boca Raton, Fla., Hollywood Media provides entertainment-related content to businesses in the internet, media and entertainment sector.

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