Green Dragon pockets $50 million; Luna Gold lifts deal; Apollo to issue shares to China Armco

By Stephanie N. Rotondo

Portland, Ore., June 9 - Green Dragon Gas Ltd. wrapped a private placement of a convertible bond on Wednesday, taking in $50 million.

Proceeds from the capital raise will be used for expansion efforts, the company said in a press release.

Among other goings-on in the PIPE market, Luna Gold Corp. said it had upsized a previously announced private placement of units to more than C$33 million from C$20 million. A company spokesperson said the financing was launched as Luna intended to "ramp up to full commercial production."

And, Apollo Minerals Ltd. is selling common shares to investor China Armco Metals Inc., which will generate proceeds of A$4.39 million. Once completed, the investor will hold a nearly 20% stake in Apollo.

Green Dragon pockets $50 million

Green Dragon Gas, a gas production company based in Beijing, raised $50 million via a private placement of a 7% convertible bond.

The bond was sold to funds managed by GLG partners LP.

The bond is initially convertible at $9.10 per share, which represents a 56% premium to the stock's closing price as of June 7. The bond comes due on June 7, 2015, but may be called at par after three years, at the company's discretion, if the share price exceeds 130% of the conversion price.

"The company intends to use the net proceeds from the capital to expand its rig capability to drill directional SIS wells, expand its gas sales and distribution infrastructure including CNG retail stations, expand gas distribution pipelines in line with its 2010 targets and for working capital," according to a press release. "The company has identified opportunities that currently exist in the sale and distribution of gas synergistic to the on-line CBM production of its upstream division."

"Green Dragon has continued to make very significant progress since announcing financial results in March," remarked Randeep S. Grewal, founder and chief executive officer, in the release. "As an aligned shareholder it is my strong belief that GDG has historically issued equity that has demonstrated accretive asset value to shareholders following the related dilution. This issuance is cut from that cloth. The dilution is at a 56% premium to market, the use of capital enables commercial gas sales to the market and complies to our 2010 objectives."

Green Dragon's shares (London: GDG) closed at 5.7p. Market capitalization is £568 million.

Luna deal increased

Luna Gold said it had increased the size of a previously announced private placement of special warrants to C$33.13 million from C$20 million.

The non-brokered deal originally priced may 25.

The company now intends to sell approximately 59.16 million of the warrants at 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.

"We had strong interest from the investment public," Chris DeGroot, manager of investor relations, told Prospect News, explaining why the financing was upsized. He added that the funding would help the company "speed up our growth plans."

The company will use the proceeds "to advance the company's exploration programs at the Aurizona Main and Regional targets, to complete a NI 43-101 compliant resource estimate at the Cachoeira property (which is targeted to be released in the third quarter of 2010) and to provide additional working capital at the Aurizona gold operation," according to a press release.

Both projects are located in Brazil.

Furthermore, DeGroot said that Luna chose to tap the PIPE market as it was "viewed by management to be the quickest and easiest way to raise the proceeds."

Settlement is expected by June 11.

Luna's shares (TSX venture: LGC) closed at C$0.64, unchanged on the day. Market capitalization is C$244 million.

Luna Gold is a Vancouver, B.C.-based gold exploration and development company.

China Armco to get stake in Apollo

Apollo Minerals will receive A$4.39 million from investor China Armco Metals Inc. in a private placement of common stock.

Upon completion of the financing, China Armco will hold a 19.9% stake in Apollo.

The West Perth, Australia-based mineral exploration company will sell 29.25 million of the shares to China Armco at A$0.15 per share. The deal will come in two tranches, with 12.5 coming in the first portion and the remaining 16.75 in the second.

Additionally, China Armco will receive a five-year option to purchase another 5 million shares at A$0.25 per share. Of those options, half expire after one year and the other half after two years.

"We are excited to enter into this agreement to acquire a stake in Apollo," said Kexuan Yao, CEO and chairman of China Armco, in a press release. "Australia is well known for its wealth of iron ore resources and we are confident that Apollo's tenement holdings will provide substantial rewards to us both in return on investment and in future revenue from iron ore distribution through the off-take rights."

Apollo Minerals' equity (Australia: AON) ended at A$0.15.

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