Show Me the Money: 8 of 2014′s Graphite Private Placements

When Graphite Investing News (GIN) spoke with Industrial Minerals’ Simon Moores last June, one topic that came up was “serious” graphite companies, which he described as those that have managed to stick it out past graphite’s “flavor of the month” phase. 

Speaking yesterday with Brent Nykoliation, senior vice president of corporate development at Energizer Resources (TSX:EGZ,OTCQX:ENZR), the same topic came up. Specifically, Nykoliation told GIN that in today’s markets, it’s serious graphite companies that are receiving funding.

His company, he believes, proves that there’s truth behind that idea. Energizer has consistently been able to deliver on key milestones, he said, and in part for that reason has been able to raise a significant amount of money since 2014 began. Specifically, early in February, the company completely closed a private placement brokered and non-brokered offering of subscription receipts of the company, bringing in C$7,486,088 from the sale of 62,384,067 subscription receipts.

That money will go mainly towards funding a feasibility study for the company’s Madagascar-based Molo flake graphite project, “to satisfy in part the due-diligence requirements of certain financial institutions that have expressed an interest in providing mine and equipment financing during development,” as per last month’s press release. It will also be put toward general working capital purposes.

Wondering which other graphite companies have raised money this year? Here’s a look at five more that have closed private placements since the beginning of 2014.

Big North Graphite

Mexico- and Canada-focused Big North Graphite (TSXV:NRT) has already closed two private placements in 2014. The first came early in the year, on January 9, when the company closed a non-brokered private placement “of $250,000 aggregate principal amount of unsecured convertible notes.”

The notes, which are convertible into units consisting of one common share in capital of Big North and one common share purchase warrant, will mature on January 9, 2015. Proceeds of the private placement will go towards general working capital, as per a company press release.

More recently, on February 24, Big North closed the first tranche of a private placement announced on January 10, issuing 5,058,332 units and garnering gross proceeds of $303,500. Again, the money will be put toward general working capital.

Saint Jean Carbon

Saint Jean Carbon (TSXV:SJL), which is developing lump/vein graphite deposits in Sri Lanka and Quebec, is another graphite company that has closed two private placements this year. Like Big North, its first came early in 2014, when on January 6 it closed a non-brokered private placement of 1,500,000 units for gross proceeds of $75,000.

Explaining the transaction, a company press release states that it “result[ed] from the exercise by a certain investor of a further tranche under an agreement … with the investor” and gives the investor the right, “but not the obligation, to purchase up to $825,000 in additional units over a 12-month period, at an issue price that is a 20% discount from the 30-calendar-day volume weighted average price of the Common Shares.” Net proceeds will be used for working capital and general corporate purposes.

On February 26, Saint Jean announced a more substantial financing, completing the first of a series of closings for a non-brokered private placement of flow-through units. That first closing placed 8,000,000 flow-through units for total gross proceeds of $400,000. The money will go towards exploration at the company’s Walker, Saint Jovite and Wallingford projects, as well as “general corporate purposes including the completion of the Clot acquisition.”

Alabama Graphite

Exploration and development company Alabama Graphite (CNSX:ALP) has closed just one private placement in 2014, but aside from Energizer, it has brought in the most money. That happened on January 31, when it raised C$2,150,000 via a private placement financing led by First Republic Capital. A flow-through offering of $150,000 had originally been considered.

Proceeds will be used for airborne geophysics, drilling and metallurgical testing at the company’s flagship Coosa project, located in Alabama. It will also be put towards general working capital and airborne geophysics and exploration work at the Ontario-based Hearst graphite project, located near Zenyatta Ventures‘ (TSXV:ZEN) Albany discovery.

Mason Graphite 

Also in January, Mason Graphite (TSXV:LLG,OTCQX:MGPHF) completed a non-brokered private placement financing by issuing 875,000 common shares for gross proceeds of $700,000. The company said it plans to use the money for general corporate purposes, as well as to fund an investment in Group NanoXplore.

Great Lakes Graphite

February saw Shield Gold (TSXV:SHG), now carrying out business as Great Lakes Graphite, close a non-brokered private placement, raising $475,999.96 through the sale of 3,758,833 flow-through units at a price of $0.12 each and 250,000 non-flow-through units priced at $0.10 each. Initially, the company’s intent was to raise just $440,000.

Funds from the private placement will be used to start the company’s 2014 program on its Quebec graphite properties, one of which is the Lochaber property, where historical exploration work has been completed.

Nouveau Monde Mining Enterprises

Also in February, Nouveau Monde Mining Enterprises (TSXV:TSS.P) entered into a share exchange agreement with Global Resources Investment. That deal saw it acquire 348,579 ordinary shares of Global in exchange for 3,000,000 common shares of Nouveau Monde for a transaction value of C$630,000.

The expectation, according to the company’s press release, is that Nouveau Monde will sell its shares of Global on the London Stock Exchange “for cash to finance its exploration activities and to fund its working capital” if its board of directors deems it necessary. That activity should include advancing the Quebec-based Matawinie graphite property, one of the company’s 2014 priorities.

Standard Graphite

Capping off the list is Standard Graphite (TSXV:SGH), which closed a non-brokered private placement for 8,000,000 units for total gross proceeds of C$400,000 on February 13. The company is currently developing the Quebec-based Mousseau East graphite deposit, and will put the money raised towards additional exploration there and at its Ontario operations, which include the past-producing Black Donald graphite mine.

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article. 

Editorial Disclosure: Energizer Resources, Big North Graphite, Saint Jean Carbon and Alabama Graphite are clients of the Investing News Network. This article is not paid-for content. 

Related reading: 

Simon Moores Talks Prices and “Serious” Graphite Companies