Genelabs secures $8.66 million from stock sale; Miramar Mining leads slate of gold offerings

By Sheri Kasprzak

New York, June 27 - Heading up PIPE action on Tuesday was an $8,974,500 private placement offering from Genelabs Technologies, Inc.

A group of institutional and accredited investors have agreed to buy 6.1 million shares at $1.42 each and warrants for 2.5 million shares at an extra $0.125 each.

The company had 17,817,649 outstanding common shares as of April 21.

The warrants are exercisable at $1.42 each.

"We don't even look at Genelabs," said one buyside source. "We don't really like their products and they have some substantial problems."

Even so, one trader felt the offering would provide a lift for the company's stock - at least for now.

"This should provide a nice lift in the short term for the stock," said the sellside trader. Of the warrants, he said, "Effectively it means that additional 2.5 million shares can be purchased at a net price of $1.42 plus $0.125, or $1.435 per share. Sounds like a good deal for Genelabs shareholders to me."

The stock did rise on Tuesday, gaining 6.34%, or 9 cents, to end at $1.51 and gained another 4 cents in after-hours trading (Nasdaq: GNLB).

According to the company's latest earnings statement, Genelabs sustained a net loss of $3.39 million for the quarter ended March 31, compared with a net loss of $2.84 million for the same quarter of 2005.

"If we do not increase our cash or significantly reduce our expenditures by the third quarter of 2006, we may need to begin the process of ceasing operations, which may result in a complete loss of value for our shareholders," said the earnings statement. "In addition, Genelabs does not currently satisfy the listing requirements of the Nasdaq Capital Markets, requiring a minimum shareholders' equity balance of $2.5 million or market capitalization of at least $35 million along with a price per share of at least $1.00, which could result in the de-listing of Genelabs from that exchange."

Located in Redwood City, Calif., Genelabs is a biopharmaceutical company focused on treatments for diseases like hepatitis C and lupus.

PIPE volume remains light

In the broader market, PIPE volume remained rather light as stocks fell and oil prices continued to climb.

One sellside market source said Tuesday that PIPE activity has been light lately because of stocks but also because volume is a cyclical thing.

"Nothing lasts forever," he said. "Stocks certainly aren't making this the best time to put stuff out there, but it's partly that surges [in volume] come and go."

When asked about investor interest in PIPEs, the sellsider said he feels investors are still interested, but dipping stocks are making reasonable terms hard to come by.

Looking to stocks, the Dow Jones Industrial Average gave up 120.54 to close at 10,924.74 after making gains earlier in the session. The Nasdaq composite index fell 33.42 to settle at 2,100.25 and the Standard & Poor's 500 composite index dropped 11.36 to end at 1,239.20.

Meanwhile, oil prices climbed by 12 cents to close at $71.92 per barrel on Tuesday.

Miramar's C$15.08 million PIPE

Heading up a group of gold offerings on Tuesday, Miramar Mining Corp. priced a C$15.08 million private placement as gold prices dipped after a few sessions of gains.

Gold prices ended down $3.30 to close at $584.40 per ounce Tuesday.

The Miramar offering includes up to 2.9 million flow-through shares at C$5.20 each.

The deal is being placed through a Canadian underwriter.

The placement is scheduled to close July 12.

The stock fell 39 cents, or 8.7%, to end the day at C$4.10 (Toronto: MAE).

Proceeds will be used for exploration on the company's work program at Hope Bay.

Vancouver, B.C.-based Miramar Mining is a gold exploration company.

Another Vancouver-based gold company, Alridge Minerals Inc., negotiated a C$3.5 million unit offering.

The non-brokered placement consists of up to 1,944,444 units at C$1.80 each. The units consist of one share and one warrant. Each warrant is exercisable at C$2.00 for two years.

Proceeds will be used for exploration on the company's mineral properties in Turkey. The rest will be used for working capital.

The company's stock remained unchanged at C$2.00 on Tuesday (TSX Venture: AGM).

Aldridge mines for both gold and base metals.

Skyline's C$1.12 million deal

In other gold offerings, Skyline Gold Corp. arranged a private placement of flow-through shares for C$1.12 million.

The deal includes up to 4 million shares at C$0.28 each.

Skyline's stock ended the day down a penny, or 3.33%, to close at C$0.29 (TSX Venture: SK).

Proceeds from the non-brokered placement will be used for drilling on the company's Bronson Slope property in British Columbia.

Skyline is based in Vancouver, B.C.

Ipix stock loses 5.7%

Ipix Corp. watched its stock lose another 5.75% on Tuesday, a day after the company completed a $5 million private placement of convertible notes.

The stock closed down 5 cents to end at $0.82 (Nasdaq: IPIX) after losing 11.22%, or 11 cents, to close at $0.87 on Monday when the deal was announced.

The notes are convertible into a total of 5,208,338 common shares.

The investors in the offering include Iroquois Master Fund Ltd.

C.E. Unterberg, Towbin LLC is the placement agent.

Proceeds will be used for general corporate purposes.

Based in Reston, Va., Ipix develops imaging technologies used for surveillance and high-resolution digital still photography.

Brownstone stock slips

Moving to the energy sector, Brownstone Ventures Inc.'s stock fell 3.33% on Tuesday after pricing a C$12 million private placement Monday.

The company's stock slipped 5 cents to end at C$1.45 (TSX Venture: BWN).

On Monday, when the deal priced, the stock fell 10 cents, or 6.25%, to close at C$1.50.

The non-brokered placement includes units of one share and one half-share warrant at C$1.50 each.

Toronto-based Brownstone is an investment company focused on uranium, oil and gas companies.

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