Noront reveals investors; TerreStar in $300 million deal; Stereotaxis receives loan; American Tech defaults

By Kenneth Lim

Boston, Feb. 7 - Canadian metal miner Noront Resources Ltd. on Thursday unveiled the list of investors that are injecting C$26 million into its coffers, a list that includes fund managers and industry players.

Meanwhile, TerreStar Networks Inc. announced a massive $300 million investment led by EchoStar Corp., Harbinger Capital Partners Master Fund I and Harbinger Capital Partners Special Situations Fund LP.

Stereotaxis Inc. also got a $20 million loan commitment from two of its shareholders, which gave its common stock a slight boost after the medical device maker's recent lackluster forecasts.

American Technologies Group Inc., however, needs to secure the support of Laurus Master Fund Ltd., which has notified the company that it is in default under its secured convertible term B note in the amount of $2 million, bringing to $13.58 million the total that Laurus is claiming from American Technologies.

Noront closes placement

Toronto-based Noront said Thursday that it has closed a private placement of 6.5 million security units for C$26 million.

The units, which were sold at C$4 apiece and comprise one common share and one-half of one common share purchase warrant bearing a strike price of C$5 and an two-year maturity, were sold to six investors. The investors consist of investment companies Rosseau Asset Management, Pinetree Capital Ltd., Sprott Asset Management and Northfield Capital Corp., as well as mining players Robert McEwen of Evanachan Ltd. and U.S. Gold Corp. and Pierre Lassonde of Franco-Nevada Corp.

IBK Capital Corp was the agent for the deal and JP Morgan was the financial advisor for Noront.

Noront stock (TSX: NOT) closed at C$4.37 on Thursday, up by C$0.14 or 3.31%.

"This financing will provide Noront with the financial strength to develop its assets independent of near-term market fluctuations," Noront president Richard Nemis said in a press release.

In a research note written for Wasserman Morris shortly after the financing deal was announced, Montecito Capital Management managing partner Kipley J. Lytel highlighted that recent surveys suggested that Noront was sitting on property with "immense potential."

"We believe the catalyst for further share price appreciation will be based on the release of results

from additional drill holes, which will likely extend the zone of mineralization to depth," Lytel wrote in the notes. "One also cannot discount the possibility that the company could be a take-over target of an integrated base mineral mining company."

Lytel, who has a speculative buy recommendation on the stock, told Prospect News in a separate interview that he does not foresee a buyout by a private equity group or an asset management firm, but rather a transaction with a mining major after the resource potential is firmed.

"Noront is not geared to move from exploration to commercial production," he said. "There are several majors operating in the Double Eagle region. Also, Noront is sitting on many other high priority geophysical targets."

Lytel expects that the current financing will last Noront for the year.

"Even with the two new drills, we view Noront's approximately $45-50 million in cash resources sufficient to meet exploration & resource calculation objectives for calendar year 2008," he said. "They will also likely establish further shared funding arrangements similar to the recently announced option with Intrinsic Minerals."

TerreStar gets $200 million injection

TerreStar said Thursday that it has sold $300 million of exchangeable notes to a consortium of investors that include communications provider EchoStar and two Harbinger funds.

Lincolnshire, Ill.-based TerreStar, the mobile satellite services company formerly known as Motient Corp., and its subsidiary, TerreStar Networks Inc., received $200 million at closing Thursday and will receive the balance for funding its TerreStar-2 satellite.

The notes are convertible into common shares at $5.57 per share. TerreStar stock (Nasdaq: TSTR) rose 4.63% or 20 cents to end at $4.52 on Thursday.

The investment requires shareholder and government approval.

The deal will also expand TerreStar's board to eight members, with EchoStar and Harbinger each contributing two members.

"These strategic investments will help drive long-term shareholder value and ensure that TerreStar has access to the requisite capital to achieve its operational launch by the end of 2008," TerreStar chief executive Robert H. Brumley said in a company statement.

"Also, the enhanced nationwide spectrum footprint can help TerreStar accomplish its mission to offer reliable, interoperable satellite-terrestrial communications and next-generation applications for the commercial, government, rural and public safety sectors throughout North America."

"We are gratified that Harbinger and our other investors have strengthened their ongoing commitment to the company - and we are excited that EchoStar has become a strategic partner," added Brumley. "Additionally, we look forward to working with EchoStar to identify new and exciting business opportunities between the two companies."

Stereotaxis receives $20 million loan

St. Louis-based Stereotaxis said it had secured $20 million in loan commitments from two of its shareholders, but did not identify them.

The one-year unsecured loans will be subordinated to existing bank debt, and the maker of heart devices has an option to extend the loan's tenor by 90 days.

Stereotaxis also agreed to issue warrants to the investors, equal to 20% of the loan amount, exercisable at $6.99 per share. Additional warrants equal to 5% of the funds drawn will be issued if the company exercises its 90-day extension.

Stereotaxis common stock (Nasdaq: STXS) closed Thursday at $6.79, up by 0.74% or five cents.

"At year end 2007, the company had approximately $24 million of cash and investments, including $5 million drawn on its working capital facility," Stereotaxis chief executive Bevil Hogg said in a statement. "Combined with and subject to the terms of the remaining undrawn facility, this commitment provides Stereotaxis with up to approximately $60 million of liquidity, which we believe is sufficient to execute our growth strategy well into 2009."

American Technologies in default

American Technologies said it has been notified that hit is in default on its $2 million secured convertible term B note by noteholder Laurus Master Fund Ltd.

The company said it received the notice on Jan. 31. Laurus is demanding $13,580,810 in principal, interest and default fees and demanded immediate payment by Feb. 1.

Since the company did not pay that amount, it said in the filing that Laurus may exercise its rights to take possession of the note's collateral in the form of subsidiary stock, goods, inventory and other property, as allowed under the pledge agreement.

But the company said it is negotiating with Laurus to settle the amount owed and it expects a deal in March.

"Although we are hopeful that these negotiations will result in an agreement that is beneficial to the company, we have no commitments or assurances that we will be successful or that Laurus will not pursue any or all of the remedies available to it in light of our default," the company said in an 8-K filing with the SEC.

Based in Monrovia, Calif., American Technologies Group is a technology company focused on the automobile after-market and water purification sectors.

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