USEC secures Toshiba, Babcock as investors in $200 million deal; Luna to sell special warrants

By Stephanie N. Rotondo

Portland, Ore., May 25 - USEC Inc. secured the largest financing in Tuesday's PIPE session with a $200 million private placement of convertible preferred stock.

The funds will be used in part to advance its American Centrifuge Plant. Two investors are participating in the transaction.

Meanwhile, Luna Gold Corp. said it was seeking up to C$20 million from a private placement of special warrants. The company will use the funds for exploration activities, furthering its business growth plan.

In settled deals, Touchstone Resources Ltd. pocketed more than $6 million from a private placement of subscription receipts. The proceeds will be used to fund a planned acquisition.

And Waymar Resources Ltd. brought a C$4 million private placement of units to market. The company also announced its intentions to purchase certain mineral assets.

USEC secures two investors

USEC negotiated a $200 million private placement of convertible preferred shares with two investors, according to a regulatory filing.

Toshiba Corp. and Babcock & Wilcox Investment Co. are the investors, contributing $100 million each.

The Bethesda, Md.-based energy company will issue two series of convertible preferreds, a series B-1 12.75% issue and a series B-2 11.5% issue. The investors will also receive warrants for 12.5 million class B common shares or for 12,500 series C preferred shares. The warrants are exercisable at $7.50 or $7,500, respectively, until Dec. 31, 2016.

Also, on Dec. 31, 2016, all of the preferreds will be automatically converted into class B common stock at the then-applicable conversion price. If any of the shares remain outstanding as of Feb. 28, 2017 due to the conversion cap, the company will redeem those preferreds for cash or, if not redeemed by March 15, 2017, the conversion cap will no longer apply and the preferreds will automatically be converted.

The investment will be spread out over "three phases," the company said in a press release. The first phase is expected to close in the third quarter.

USEC will use the proceeds for general corporate purposes and to advance deployment of the American Centrifuge Plant during 2010.

"This is a historic day for USEC," remarked John Welch, president and chief executive officer, in the release. "This agreement will strengthen USEC as a global energy leader that delivers nuclear fuel and related services on a reliable, competitive basis. In addition, the strategic relationship between our companies will create new business opportunities across the entire nuclear fuel cycle.

"We're proud to have support from two of the most successful nuclear energy companies in the world and are excited about what new value this strategic alliance will bring to our customers and shareholders," he added. "By working with Toshiba Corp. and Babcock & Wilcox, USEC will benefit from their vast technical knowledge and experience across the nuclear fuel cycle."

USEC's stock (NYSE: USU) gained 85 cents, or 20.05%, to $5.09. Market capitalization is $577 million.

Luna to sell special warrants

Luna Gold will conduct a non-brokered private placement of special warrants for proceeds up to C$20 million, the company said in a press release.

Vancouver, BC.-based Luna will sell approximately 35.71 million of the warrants are C$0.56 each. The warrants are convertible into units containing one common share and one half-share warrant.

Whole warrants are exercisable at C$0.80 for one year.

Proceeds will help to further exploration programs at Luna's Aurizona Main and Regional targets, as well as to complete an NI-43101 compliant resource estimate at its Cachoeira property and for working capital.

"We are entering an exciting new phase in the company's planned growth strategy," said Jim Bahan, CEO, in the release. "The aim is to quickly expand the size of the gold resource available to the Aurizona plant so that a sustainable increase in gold production can be planned. In addition we are encouraged by the exploration progress at our Regional claims and at Cachoeira. These funds will allow us to move much quicker on these targets than otherwise. All exploration claims have finite times to complete the work and early starts are essential for thorough assessment of potential."

Settlement is expected by June 8.

Luna's equity (TSX Venture: LGC) improved 1 cent, or 1.56%, to C$0.65. Market capitalization is C$233 million.

Touchstone wraps receipt sale

Touchstone Resources took in $6.2 million via a private placement of subscription receipts, the Vancouver, B.C.-based company announced.

The oil and natural gas explorer sold 123.9 million of the receipts at $0.05 each.

The proceeds from the financing - which have been placed in escrow - will be used to fund a previously announced acquisition of certain lease operatorship rights under a lease operator agreement between Territorial Services Ltd., an indirect, wholly-owned Trinidad and Tobago subsidiary of Sandy Cove Energy Ltd., and the Petroleum Co. of Trinidad and Tobago Ltd.

Upon closing of the pending asset purchase, the subscription receipts will automatically convert into one common share.

Touchstone's shares (TSX Venture: TCH) ended unchanged at C$0.08. Market capitalization is C$15.65 million.

Waymar seeks C$4 million

Waymar Resources, a Toronto-based resource company, said it would raise C$4 million from a private placement of units.

The company intends to sell 10 million of the units at C$0.40 each on a best-efforts basis. Each unit will hold one common share and one half-share warrant.

Whole warrants are exercisable at C$0.55 for two years.

In addition to announcing the financing, Waymar also announced it had entered into definitive agreements to acquire 100% interest in the Anzá project comprised of approximately 6,738 hectares of mineral rights located on the eastern-most margin of Colombia's Western Cordillera, as well as a 100% interest in other parts of the project, owned by Continental Gold Ltd.

Waymar's stock (TSX Venture: WYM) held steady at C$0.45. Market capitalization is C$9.97 million.

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