Galaxy Energy wraps $4.5 million debenture sale; Fairquest prices C$34.65 million PIPE

By Sheri Kasprzak

New York, April 26 - Even as oil prices continued to sink, Galaxy Energy Corp. settled a $4.5 million convertible debenture offering.

The 15% debentures were purchased by Eversource Group Ltd., Nicolas Mathys and Bruno Sauter.

The debentures mature in 30 months and are convertible into a total of 2,884,615 common shares at $1.56 each.

The maturity of the debentures will extend until all of Galaxy's senior debt is retired. If this extension is granted, Galaxy will pay an additional amount on the debentures equal to 25% plus 0.75% for each extra month.

The investors also received warrants for 865,383 shares, exercisable at $1.60 each for three years.

The majority of the proceeds will go to reduce debt and the remainder will be used for exploration and development as well as for general corporate purposes.

In other news Wednesday, Galaxy received a notice from the American Stock Exchange that it is in violation of listing requirements. In particular, Galaxy has not sustained sufficient working capital to continue being listed on the exchange.

"Galaxy expects to submit a plan to Amex by May 10, 2006, in which it will advise Amex of action it has taken, or will take, that would bring it into compliance with Section 1003(a)(iv) of the company guide by July 24, 2006," said a statement released by Galaxy Wednesday.

The debenture offering will be listed as one of the actions the company is taking to improve its working capital position.

On Wednesday, Galaxy's stock dropped 4 cents, or 3.77%, to end at $1.02 (Amex: GAX).

Looking at Galaxy's latest earnings statement, released on April 19, the company sustained a net loss of $5,777,600 for the quarter ended Feb. 28, 2006, compared to a net loss of $3,383,470 for the same quarter of 2005.

Denver-based Galaxy is an oil and natural gas exploration company.

In other energy news, Fairquest Energy Ltd. priced a C$34.65 million private placement.

The offering includes up to 3.5 million flow-through shares at C$9.90 each, a 27.9% premium to the company's C$7.74 closing stock price on April 25.

The deal, which is scheduled to close May 11, is being placed through a syndicate of underwriters led by GMP Securities LP and Sprott Securities Inc.

Fairquest's stock gained 1.03%, or 8 cents, to close at C$7.82 on Wednesday (Toronto: FQE).

Proceeds will be used for the company's 2006 capital program.

Fairquest, based in Calgary, Alta., is an oil and natural gas exploration company.

Meanwhile, oil prices dropped on Wednesday, losing 95 cents to end at $71.93 per barrel.

Gold prices jump, pushing gold deals

Even though oil was off, gold prices climbed and a wave of gold offerings followed.

Gold prices advanced $7.80 to close at $642 per ounce.

"It's really starting to look like $700 [per ounce] is a possibility," said one market source focused on natural resources offerings. "We're already seeing a great deal of gold [issuers] and I think that will continue. Look out for copper to push some things as well. Copper is through the roof, so we'll probably be looking at a lot more mineral [companies] out there too."

Closing an offering on Wednesday was Colombia Goldfields Ltd.

Colombia issued 6,500,666 units at $1.50 each for total proceeds of $9,751,000.

The units include one share and one warrant with each warrant exercisable at $2.50 each for two years.

After the deal was announced Wednesday afternoon, Colombia's stock gained 4 cents to close at $2.68 (OTCBB: CGDF).

This is not the first PIPE offering Colombia has completed this year. On Jan. 11, the company sold 3,126,083 shares at $0.60 each for $1,875,650.

Colombia is based in Vancouver, B.C.

Victoria Resources Corp., another gold explorer, priced a C$7.5 million unit deal.

The company plans to sell up to 10 million units of one share and one half-share warrant. The whole warrants are exercisable at C$1.00 each for one year.

Bema Gold Corp., which holds 31% of Victoria's stock, has agreed to buy 3 million units.

The stock slipped 2 cents to end the day at C$0.85 (TSX Venture: VIT).

Haywood Securities Inc. and Canaccord Capital Corp. are the placement agents.

Proceeds from the deal will be used for exploration on the company's Nevada properties and for general corporate purposes.

Victoria is also based in Vancouver, B.C.

Glass Earth Ltd., yet another gold company, negotiated a C$1.5 million placement, also of 10 million units, on Wednesday.

The units are comprised of one share and one half-share warrant. The whole warrants are exercisable at C$0.25 each for two years.

The company's stock gained a penny to close at C$0.20 Wednesday (TSX Venture: GEL).

Proceeds will be used for field programs from July through November. The rest will be used for general corporate purposes.

Located in Toronto, Glass Earth is a gold exploration company.

Lakota's C$1.2 million deal

Lakota Resources Inc. sealed up a C$1,201,200 private placement, selling 3,906,342 units at C$0.3075 each.

The units include one share and one warrant. The warrants are exercisable at C$0.41 each for two years.

Canaccord Adams Ltd. was the placement agent.

After the deal was announced Wednesday morning, Lakota's stock slipped 5 cents, or 6.67%, to finish at C$0.70 (TSX Venture: LAK).

The proceeds will be used for Lakota's prospecting license portfolio in Tanzania. The rest will be used for general corporate purposes.

Based in Toronto, Lakota is a gold exploration company.

Endwave stock gives up 2%

A day after completing a $45 million PIPE, Endwave Corp.'s stock slipped on Wednesday, losing 2.14%.

The stock fell 33 cents to close at $15.10 (Nasdaq: ENWV), but gained 13 cents in after-hours trading.

On Tuesday, when the deal was announced, the stock gained 15.58%, or $2.08, to finish at $15.43. The stock, however, fell 67 cents in after-hours trading Tuesday.

In the placement, Endwave sold shares of series B preferred stock at $150.00 each to Oak Investment Partners XI, LP.

The preferreds are convertible into common shares at $15.00, a 12.35% premium to the company's April 24 closing stock price of $13.35.

Endwave, based in Sunnyvale, Calif., manufactures, on an out-sourced basis, radio frequency modules for telecommunications companies, defense electronics systems and other applications.

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