American Creek to raise C$1.25 million in unit sale; Centenario Copper arranges $12.5 million loan

By Stephanie N. Rotondo

Portland, Ore., March 26 - American Creek Resources Ltd. announced plans to raise C$1.25 million through a private placement of units on Thursday.

Proceeds from the financing will be used, in part, to complete a joint venture agreement on its Treaty Creek project. Additionally, the company closed a C$500,000 private placement of shares. Those funds will be used for general corporate purposes.

Fellow mining company Centenario Copper Corp. said it arranged a $12.5 million convertible loan with Quadra Mining Ltd. The interim financing will be used to complete development of the company's Franke mine, which will then allow Quadra to proceed with a buyout of Centenario.

American Creek to sell units

American Creek Resources is planning to raise C$1.25 million in a private placement of units.

The units will consist of four flow-through common shares, one non-flow-through share and 2½ non-transferable warrants. The units will be sold at C$1.25 per unit and each whole warrant is exercisable at C$0.40 for one year.

Kelvin Burton, speaking on behalf of American Creek, told Prospect News that the company set the terms of the non-brokered deal and was able to do so because the "vast majority" of shareholders are long-term investors. Those investors have "been through the highs and lows" with the company, he said, and remain committed to its vision.

Also, Burton noted that the breakdown price of each share in the unit price came out to 25 cents, a premium over the company's current market value. He said that the company priced the units thusly "because we feel confident that we can fill the placement."

"A lot of people who will be participating are already long-term supporters for us," he added.

Burton said he believes the deal will be attractive to investors, as it includes flow-through shares - which can be written off by said investors - and warrants.

"There is a number of attractive things [associated with the deal] even if we are offering it at a higher stock price," he said.

American Creek, which went public in 2006, has used both the private and public markets to raise funds, Burton said. All told, he said that the amount of dollars raised was about equal on both sides. However, the company is attracted to the private market because of the relationships it creates with investors.

About C$1 million of the funds will go toward completing the company's joint venture agreement with Teuton Resources Corp., which owns the claim on the Treaty Creek property. Once the agreement is satisfied, American Creek will hold a 51% stake in the project and be the main operators of the project.

Furthermore, American Creek closed on a C$500,000 private placement of shares. The company issued 10 million common shares at C$0.05 per share. Insiders purchased 4.4 million of the shares, while so-called "friendly hands" purchased the remaining portion, Burton said.

"That is significant to us because our market cap is so low," he said, adding that it deters any potential hostile takeovers. Burton placed the market cap around C$12 million.

Proceeds from the financing will be used for overhead expenses, Burton stated.

American Creek's equity (TSX Venture: AMK) gained a dime, or 83.33%, to close at C$0.22.

American Creek is a Raymond, Alta.-based junior mineral exploration company.

Centenario arranges loan

Toronto-based Centenario Copper arranged a C$12.5 million convertible loan with Quadra Mining Ltd., according to a press release.

The unsecured loan carries an interest rate of Libor plus 4.75% and is convertible into common stock at C$1.03 per share. The new financing replaces an existing $3.5 million loan and a $6.5 million private placement previously arranged by the copper mining company.

Centenario said the funds would allow the company "to continue the work necessary to move the Franke Mine towards completion of construction and commence commissioning and ramp-up, pending completion of the proposed acquisition of Centenario by Quadra."

In early February 2009, Centenario agreed to be acquired by Quadra. Under the terms of that deal, Quadra will give Centenario shareholders 0.28 of its own shares in exchange for one of Centenario's shares.

"The original interim financing arrangement was conditional upon achieving satisfactory restructuring of Centenario's existing loan facilities," Paul Blythe, Quadra's president and chief executive officer, said in a statement. "Now that we have in place alternative financing and more clarity with respect to overall funding requirements, we are comfortable advancing these interim funds which will allow progress to continue at the Franke Mine and in particular, for mining to commence."

Quadra expects that an additional $30 million will be needed to complete development at the Franke project, the release said.

Centenario's stock (Toronto: CCT) increased 13 cents, or 8.50%, to C$1.66.

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