Northern Energy terminates C$36 million private placement

By Sheri Kasprzak

Atlanta, June 29 - Northern Energy & Mining Inc. has cancelled its previously announced C$36 million private placement.

The company said in a statement Wednesday that its lead underwriter, Salman Partners Inc., was unable to market the offering at the price announced.

Northern Energy said on June 24 that it had arranged an offering for up to 20 million units at C$1.80 each. The units include one share and one half-share warrant. The full warrants would have provided for the purchase of an additional share at C$2.10 each for five years.

After the offering was first announced June 24, the company's stock gained C$0.20 to close at C$1.70, but dropped for two straight sessions after that. The company's stock dipped C$0.20 to end at C$1.50 on Monday and slipped C$0.12 to close at C$1.38 on Tuesday. On Wednesday, the company's stock closed up C$0.09 at C$1.47.

"The company believes that an equity financing at current price levels and the resulting dilution that would be suffered by its existing shareholders do not justify the benefits that may be derived from the acceleration of the Trend property full mine development," said the company's statement. "As a result, the financing will not be proceeding."

The proceeds from the deal would have been used to accelerate the development and production of the company's Trend coal property.

Based in Vancouver, B.C., Northern Energy is a coal exploration company.

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