Affymax gets $60 million loan; Pelangio announces bought deal; Hawthorne Gold brings two deals

By Stephanie N. Rotondo

Portland, Ore., Sept. 25 - The mining sector was the dominating force in Friday's private placement market, but it was a biopharmaceutical company that brought one of the day's largest deals.

Affymax Inc. announced it secured a $60 million credit facility. The company said the funds would provide "finance flexibility" as it advances its drug candidates.

In the mining arena, Pelangio Exploration Inc. announced a C$5 million bought deal. The company will sell equity units, and the deal's underwriters have a C$2 million over-allotment option.

Hawthorne Gold Corp. meanwhile said it would raise up to C$4.5 million in two deals, one non-brokered, the other brokered. The brokered placement also includes a greenshoe.

Also, ZEOX Corp. said it hopes to take in C$2.5 million through a non-brokered placement of units. A company spokesperson said the terms of the deal were "fair."

Affymax gets $60 million facility

Affymax secured a $60 million equity facility from Azimuth Opportunity Ltd., the company announced.

Under the terms of the two-year facility, Affymax will sell common shares to Azimuth. The price per share will be issued at a pre-negotiated discount to the volume-weighted average price of the company's stock over a preceding period of trading days.

Proceeds will be used to help launch the company's Hematide drug candidate.

"While our cash position is sufficient to allow us to complete the phase 3 clinical trial program for Hematide, this equity facility provides prudent financing flexibility as we begin preparation for potential commercial launch of Hematide in the renal anemia market," said Paul Cleveland, executive vice president and chief financial officer of Affymax, in a press release.

Affymax's equity (Nasdaq: AFFY) fell 5 cents, or 0.21%, to $23.53. Market capitalization is $441 million.

Affymax is a Palo Alto, Calif.-based biopharmaceutical company.

Pelangio announces bought deal

Pelangio Exploration brought a bought deal private placement financing of C$5 million to market Friday.

The company will issue approximately 13.5 million units at C$0.37 per unit. Each unit will contain one common share and one half-share warrant. Whole warrants are exercisable at C$0.65 for 18 months.

The deal's underwriters also have an option to increase the size of the transaction to C$7 million.

The proceeds will be used for the company's proposed drilling program at its mine in Obuasi, Ghana, West Africa.

Ingrid Hibbard, chief executive officer, said it was an "exciting" time for the company, as it was getting ready to start the first phase of the project, a 7,500-meter drill program that is set to begin in October. She added that the company intended to increase the project by 20,000 meters once everything is in place.

"For a CEO of a junior mining company, it's a dream come true," she said.

Hibbard also said she was pleased with the terms of the deal.

It's a bought deal, so it guarantees we will get the money," she said. "It was within the range we were trading at."

Hibbard added she expected existing investors, as well as possibly new investors, to participate in the deal.

"It's all good," she enthused.

Settlement is expected by Oct. 13.

Pelangio's shares (TSX Venture: PX) slipped a penny, or 2.50%, to C$0.39. Market capitalization is C$33.68 million.

Pelangio Exploration is a Toronto-based gold exploration company.

Hawthorne brings two deals

Hawthorne Gold brought two deals to the private placement market, for proceeds up to C$4.5 million.

The company will raise C$2.5 million through a non-brokered private placement of units at C$0.45. Each unit will consist of one common share and one-half share transferable warrant.

Whole warrants are exercisable at C$0.55 for one year and are subject to an acceleration clause.

Also, Hawthorne plans to take in C$2 million from a brokered private placement of flow-through shares.

Approximately 3.7 million of the shares will be sold at C$0.54 each. The deal also includes a C$1 million greenshoe.

Funds raised through both transactions will be used for the development of Hawthorne's Cassiar Gold Mine and Taurus gold deposit, as well as for general corporate working capital.

Settlement is expected by Oct. 15.

Calls seeking comment went unreturned Friday.

Hawthorne's stock (TSX Venture: HGC) declined 2 cents, or 4.55%, to C$0.42. Market capitalization is C$29.88 million.

Hawthorne Gold is a Vancouver, B.C.-based gold exploration and development company with key properties in British Columbia.

ZEOX to sell units

ZEOX, a Vancouver, B.C.-based mineral resource company, said it would raise C$2.5 million via a non-brokered private placement of equity units.

The company will issue 14.5 million of the units, with each unit containing one common share and one warrant. Each unit will sell at C$0.1725 and each warrant is exercisable at C$0.2725 for one year.

Michael Shea, ZEOX's chief financial officer, told Prospect News that the funds would go toward "two resources that need some investment," the Ash Meadows and Bowie mines.

In recent weeks, the company has undergone some management changes, including the hiring of Shea and the company's chief executive officer and chairman, Garold R. Spindler. Shea said that they were brought on "to turn around the company."

"So as part of that, we are going to be looking at all the assets to see what is strategic and what is not."

The investment into the Ash meadows and Bowie properties is just one of the ways Shea and his team are "working to solve the problem" of the ZEOX's "historically negative cash flow."

And, while Shea concedes that "you would always like to issue stock at a higher price," he said that in working with shareholders and other investors, he believed the deal was "a fair price."

"I think the existing shareholders realize it is a necessity," he said, and that potential new investors would hopefully see the potential of the company and its assets.

ZEOX's stock (TSX Venture: ZOX) gained C$0.005, or 2.22%, to C$0.23. Market capitalization is C$12.65 million.

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