Apollo completes $70 million deal; Queenston to raise C$18 million; Po Valley to issue stock

By Stephanie N. Rotondo

Portland, Ore., Feb. 23 - The mining sector once again controlled the PIPE market Monday, with Apollo Gold Corp. bringing the biggest deal.

Apollo announced that it completed a $70 million project financing deal Monday. The company plans to use proceeds from the transaction to, among other things, develop its Black Fox mine.

Meanwhile, Queenston Mining Inc. said late Friday it was looking to raise C$18 million. The company said it would issue both stock and units consisting of one common share and one-half warrants, under the terms of the deal.

Australian Po Valley Energy Ltd. wrapped an A$10 million stock placement, according to a press release. Funds from the deal will be used, in part, to further production and development at some of the company's gas fields.

Aradigm Corp. is planning to issue more than 40 million shares in a stock placement. The deal will total about $4.1 million.

Apollo wraps $70 million deal

Apollo Gold wrapped a $70 million project financing deal with Macquarie Bank Ltd. and RMB Australia Holdings Ltd., according to a press release.

Under the deal, Apollo will make quarterly payments on the debt due March 31, 2013. Upon closing, the company can begin drawing down the facility until June 30. The financing includes an interest rate of Libor plus 7%.

Also, Apollo will give the banks a total of 34.8 million warrants, exercisable at C$0.252 for four years.

Proceeds from the transaction will be used to repay a $15 million bridge loan that settled in December. The remainder will be used to develop the company's Black Fox Project and for other corporate expenditures.

"I am happy that we now have the finances to complete our Black Fox mine and mill and that we have done it with two banks who understand mining projects and are very supportive of our company," said R. David Russell, president and chief executive officer, in the release. "I now look forward to the commencement of mining in the Black Fox open pit in March and the commissioning of the mill in April 2009."

Apollo's stock (TSX: APG) closed at 39.5 cents, a gain of 1.5 cents, or 3.95%. Market capitalization is $71.2 million.

Apollo is a Denver-based is a gold exploration company.

Queenston to raise C$18 million

Queenston Mining announced late Friday that it had entered into an agreement to sell stock and units in a C$18 million placement.

The deal, syndicated through a group of underwriters led by Primary Capital Inc., includes C$10 million raised on a brought-deal basis, while the remainder will be raised on a best-efforts basis, according to a press release.

Queenston will issue flow-through common shares a C$4.40 per share and units at C$3.85 per unit. Each unit consists of one common share and one half-share warrant. A full warrant is exercisable at C$5.00 for one year following the closing date.

Charles E. Page, Queenston's president and chief executive officer, said that the deal is fairly "typical" in the sector.

"It's just a lot faster and less expensive for the company," he said in an interview with Prospect News. "It's a quicker way to finance [than a public offering] and you are dealing with sophisticated investors. And, we know where the shares are going."

Page added that the company saw a "window of opportunity" in a tight credit market to raise the funds, which will be used to further explore the company's Kirkland Lake gold mine.

"We saw the opportunity at this gold price to raise some money," he explained.

Though Queenston's stock (TSX: QMI) was down some on Monday - "That could be function of the gold price today," Page noted - Page seemed upbeat about the overall reaction to the deal.

"When anybody is willing to finance a company, it means they like the story," he said.

Queenston's equity dropped 18 cents, or 4.70%, to $3.65.

Queenston is a Toronto-based gold exploration company.

Po Valley raises A$10 million

Po Valley Energy completed an A$10 million private placement of stock, the company said Monday.

The Perth, Australia-based oil and gas exploration company sold a total of 8.33 million shares for A$1.20 per share, according to a press release. Petra Capital Pty. Ltd. acted as placement agent.

Furthermore, subject to shareholder approval, Michael Masterman, Po Valley's director and chief executive officer, will contribute up to A$1 million in new shares.

"Our access to these new funds has been achieved despite the uncertainty and volatility across global share markets. It will allow us to maintain low debt levels and drive production growth," Masterman said in a statement. "Investors are attracted to the low costs and high margins of our projects - a defensive investment with significant leverage to future energy price recovery."

Funds from the deal will be used to maintain low debt levels, as well as to further production at the company's Castello and Sillaro gas fields.

Po Valley's stock (ASX: PVE) ended the day stable at $1.275.

Aradigm to issue 40.7 million shares

Aradigm, a Hayward, Calif.-based developer of non-invasive delivery systems for biopharmaceuticals and small molecules, is planning a $4.1 million direct offering of stock.

The company will issue about 40.7 million common shares at 10 cents per share, according to a press release.

Aradigm's stock (OTCBB: ARDM) closed steady at 12 cents. Market capitalization is $6.61 million.

Igor Gonda, Aradigm's chief executive officer, said that the company chose to do a direct offering, versus a private placement or straight public offering, because it already had a registered shelf, which it obtained in 2007.

"It's usually much more straightforward than a pipe because the shares are registered and ready to go," he said.

PIPE pieces

Cluff Gold plc is planning to raise up to $10 million to fund an accelerated drilling program and to increase production at the company's Kalsaka Mine.

Elsewhere, Pharmacyclics Inc. completed a $1.4 million placement of stock on Feb. 19, the company said in a regulatory filing. The report stated that 1.5 million shares were sold at $0.93 per share.

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