GTO lifts receipt placement; NPS gets equity financing; Noront to sell flow-through shares

By Stephanie N. Rotondo

Portland, Ore., Aug. 6 - It was another day of triple-digit deals in Thursday's private placement market.

GTO Resources Inc. announced it had increased a previously announced placement of subscription receipts. The company now plans to raise C$156 million, compared to the original plan of C$100 million. The new deal also includes an over-allotment option.

NPS Pharmaceuticals Inc. meanwhile said it had arranged a $40 million equity financing facility with a single investor. However, the company is not obligated to draw down the funds, management said in a conference call.

Elsewhere, Noront Resources Ltd. said it would raise C$20 million for exploration on its McFauld's project. A company spokesperson said that investors have responded positively to the deal.

Cosalt plc will take in £18.9 million via an equity sale. The funds will be used to reduce debt.

Also, NGAS Resources Inc. will conduct a $10.3 million registered direct offering. The company will issue common shares and warrants in the deal.

GTO lifts receipt placement

GTO Resources increased a previously announced placement of subscription receipts to C$156 million from C$100 million.

The deal originally priced July 15.

GTO now plans to issue 52 million of the subscriptions at C$3.00 each. Each receipt is exercisable into one common share of GTO, after giving effect to a 10-for-1 consolidation.

In addition, the deal has a C$23.4 million, or 7.8 million subscriptions, over-allotment option.

The proceeds will be sued to develop key projects from a new geothermal company GTO plans to create, along with Polaris Geothermal Inc., Western GeoPower Corp. and Ram Power Inc.

GTO's president and director, A. Murray Sinclair, was unavailable for comment.

GTO's stock (TSX Venture: GTR.H) ended unchanged at C$0.36 on Thursday. Market capitalization is C$69.3 million.

NPS arranges equity financing

NPS Pharmaceuticals secured an $40 million 18-month committed equity financing facility with Azimuth Opportunity Ltd., according to a regulatory filing and subsequent press release.

NPS can request draw downs from time to time, requiring Azimuth to purchase common shares over 10 consecutive trading days or over another period of time as agreed by both parties. Each draw is subject to certain limitations based on the current price of the shares and a limit of 2.5% of NPS' market capitalization at the time of the draw. Azimuth is not required to invest more than $7.25 million at any one time.

The price per share will be equal to the daily volume weighted average price on each draw down date, less a 3.25% to 5% discount.

The financing is in keeping with the company's evaluation of opportunities to increase its balance sheet, as its executives stated during its earnings conference call Thursday. Also during the call, management said the company was not obligated to use the facility and is free to seek other financing sources.

NPS' shares (Nasdaq: NPSP) gained 39 cents, or 9.80%, to $4.37. Market capitalization is $212 million.

NPS Pharmaceuticals is a Parsippany, N.J.-based biopharmaceutical company.

Noront to sell flow-through shares

Noront Resources plans to sell flow-through shares to raise funds for its McFauld's Lake project, the company announced.

The Toronto-based mineral exploration company will issue the shares at C$2.80 on a best-efforts basis, for total proceeds of C$20 million.

Joanne Jobin, vice president of corporate communications, said that there was money to be had in the flow-through shares market. That type of security provides a tax benefit to holders.

"By all accounts, there is money to do flow-through shares and we felt there was a good opportunity for us to do it," Jobin told Prospect News.

Jobin said the project is focusing on "high-grade nickel, copper and PGM." Recent work has shown the property has significant resources.

"It's very positive," she said.

In addition, Jobin said the financing allows the company to explore the property, without touching "our hard dollars in the treasury."

Investors have thus far reacted well to the deal, she added.

"Everyone is very pleased and positive about Hole 49, as we call it, and with the assays it definitely delivered," she said. She noted that the company is now on several investment watchlists.

Noront's equity (TSX Venture: NOT) declined a nickel, or 1.99%, to C$2.46. Market capitalization is C$353 million.

Cosalt to issue stock

Cosalt, a Grimsby, England-based marine safety products company, said it would raise £18.9 million via a private placement of equity.

The company will sell ordinary shares at 5p per share.

"Proceeds will be used to enable the group to reduce the group's net financial indebtedness and to provide a more appropriate, stable, long-term funding structure," the company said in a press release.

"The fund raising is a key milestone for Cosalt and represents a new chapter in our development," stated David Hobdey, chairman, in the release. "Above all, it provides the group with the financial stability and security to both conduct business on a normalized basis and to pursue our growth strategy with a strengthened balance sheet.

"The board is confident of the long-term prospects for Cosalt and believes the group is well placed to take advantage of both specific opportunities in its offshore and marine markets and a general upturn in economic activity."

Cosalt's stock (London: CSLT) ended Thursday at 16p. Market capitalization is £8.19 million.

NGAS plans direct offering

NGAS Resources will conduct a $10.3 million registered direct offering of units, according to a press release.

The company will sell 5.4 million units consisting of one common share and one half-share warrant. The units will sell at $1.90 per unit, and each warrant is exercisable at $2.35 for four years beginning six months after issuance.

Proceeds will be used to reduce borrowings under the company's revolving credit facility.

"Completion of the offering will also enable the company to require the exercise of an option issued to Seminole Energy Services, LLC in July 2009 for the purchase of the company's remaining 50% interest in its Appalachian gas gathering system for $22 million," the release said. "The purchase price under the option will be payable by Seminole Energy [in the amount of] $7.5 million upon closing and the balance over 30 months, with interest at 8% per annum."

"The capital raise and proceeds from the sale of our remaining Appalachian gas gathering assets will significantly improve the financial flexibility of the company," remarked William S. Daugherty, chief executive, in the release. "This will enable us to continue growing the company."

Settlement is expected by Aug. 11.

NGAS' equity (Nasdaq: NGAS) dropped 38 cents, or 17.67%, to $1.77.

NGAS Resources is a Lexington, Ky.-based independent natural gas exploration and development company.

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