Hawthorne says C$15 million will last a year; Corcept, Star Scientific sell to institutional investors

By Kenneth Lim

Boston, March 17 - Hawthorne Gold Corp. said its C$15 million capital raising should last it for a year as it develops three key mining projects.

Corcept Therapeutics Inc. said it will sell $25.3 million in a private sale of stock and warrants to a number of institutional investors.

Star Scientific Inc. said it raised $12.5 million for general purposes by selling shares and warrants to a number of funds last week.

Hawthorne plans sale

Hawthorne Gold said it is selling C$15 million of stock-and-warrant units in a private placement.

The deal comprises 7.5 million units of one common share and one half-share warrant at C$2.00 per unit. Each whole warrant will be exercisable at C$2.50 for two years.

Hawthorne common stock (TSX: HGC) closed at C$2.23 on Monday, lower by 0.89%, or C$0.02.

Blackmont Capital Inc. is the lead agent of the placement.

Hawthorne Gold is a Vancouver, B.C.-based gold exploration and development company with key properties located in British Columbia. It said the proceeds will be used to fund field work at its Frasergold deposit, definition drilling at its Taurus deposit and development work at the Table Mountain gold project to advance to planned production in 2009. The Table Mountain project will belong to Hawthorne through a concurrent merger plan with Cusac Gold Mines Ltd.

"We have roughly C$7 million going into Frasergold, going into drilling resource definition and ultimately a feasibility study," Hawthorne chief financial officer Patrick McGrath said. "About C$5 million will go into Table Mountain ... and another C$3 [million] to C$5 million is going into Taurus for new development heading for production."

The pricing of the unit sale was arrived at based on current market prices, he said.

"It was between us and our agent, and it was purely in the context of the market," he said. "We were trading around C$2.20 to C$2.30, and there's a four-month hold on the units, so there's usually a small discount to market because of the hold."

The choice to seek equity financing was partly a response to market realities - it is usually easier for junior exploration companies to raise equity than debt - as well as a strategic philosophy, McGrath said.

"We are an emerging producer, so as an emerging producer, usually one scenario is to go through the equity side," he said. "Also, Hawthorne has a pretty conservative capital structure."

McGrath said the placement proceeds should last the company for "about one year." Beyond that, the company will likely seek more financing when the Taurus project is about to enter production.

"We may raise capital again if we are going into production at Taurus," he said. "At that point we may contemplate using debt."

Corcept sells $25.3 million of units

Corcept Therapeutics said it is selling $25.3 million of stock-and-warrant units in a private placement.

The Menlo Park, Calif.-based pharmaceutical company said the deal will comprise about 8.9 million shares at $2.77 each. Investors will also receive warrants for about 4.5 million shares at $0.125 per warrant. Each seven-year warrant will be exercisable at $2.77.

Corcept common stock (Nasdaq: CORT) closed at $2.70 on Monday, lower by 2.53%, or $0.07.

Corcept said the investors of the deal included Longitude Capital Management Co. LLP, Paperboy Ventures LLC, Sutter Hill Ventures and Alta Partners, LLP and various venture capital firms, entities and other accredited investors.

Corcept said it will use the proceeds of the deal to conduct its next phase 3 clinical trial for experimental psychotic depression treatment Corlux. It will also use the proceeds to finance other clinical trials and for general corporate purposes.

Star Scientific raises $12.5 million

Star Scientific said it sold $12.5 million of stock in a private placement on March 13 and 14.

The placement involved 4.84 million common shares at $1.55 per share and 3.31 million shares at $1.51 per share. Investors also received five-year warrants for 8.15 million shares, exercisable at $2.00.

Star Scientific common stock (Nasdaq: STSI) fell by 9.33%, or $0.14, on Monday and closed at $1.36.

Star Scientific, a Chester, Va.-based maker of cigarettes, said it will use the proceeds for working capital and for general corporate purposes.

In a separate filing with the Securities and Exchange Commission, Star Scientific said the investors included PV Partners LP, Tradewinds Master Fund (BV) Ltd., Feehan Partners LP, JMB LLC, Iroquois Master Fund Ltd. and Highbridge International LLC.

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