Able Energy prices $65 million of convertibles; surging gold prices spark PIPE activity

By Sheri Kasprzak

New York, March 24 - Able Energy, Inc. priced $65 million of convertible notes as oil prices continued to rise for the second straight session.

In the offering, Able plans to sell 8% notes due in seven years. The notes are convertible into common shares at the market price on the 10th day after the deal closes.

A rise in oil prices and the private placement pushed Able's stock upward Friday. The stock gained 1.04%, or 8 cents, to end at $7.80 (Nasdaq: ABLE). The company's stock had gained 5 cents on Wednesday to close at $7.72 and 7 cents on Tuesday to end at $7.67.

Able, which has looked to the PIPE market before for funding, plans to use the proceeds from the deal to acquire real property from All American Plazas Inc., which operates a chain of convenience stores and gasoline stations.

Back in February, Able signed an agreement with TransMontaigne Inc., a supply chain management company. The agreement was intended to accelerate the distribution of the company's biodiesel fuel product.

Looking back to another of Able's PIPEs, the company raised $2.5 million from a convertible debentures offering on July 15, 2005. The debentures have a two-year term and bear interest at Libor plus 400 basis points. The debentures are convertible at $6.50 each.

Able recently reported a net loss of $1,900,507 for the quarter ended Dec. 31, 2005, compared with a net income of $53,881 for the same quarter of 2004.

Friday's private placement comes a day after oil prices jumped by more than $2.00 per barrel and as oil advanced by another 35 cents Friday to settle at $64.26 per barrel. On Thursday, oil prices gained $2.14 to close at $63.91 per barrel coming back from losses earlier in the week.

Based in Rockaway, N.J., Able Energy distributes heating oil to retail customers.

Elsewhere in natural resources, gold prices continued to rise, causing a surge in PIPE offerings from gold exploration companies.

Gold prices gained $9.70 on Friday to close at $560.20 per ounce.

"Gold has been up, down and all around these past few weeks," said one Vancouver, B.C.-based sellside source. "When it's up, there are more [PIPE] deals. When it's down, they back off a bit. I've heard the talk that it [gold prices] could get up to $600 [per ounce], but we'll see. There are so many factors to consider, including what oil does."

StrataGold Corp. led the charge, pricing a C$15 million stock deal of 16,666,668 shares at C$0.90 each. The shares were priced level with the company's closing stock price on March 23.

Newmont Canada Ltd. will buy 3,333,334 of the shares. The rest of the offering will be placed through agent Paradigm Capital Inc.

The offering is scheduled to close April 5.

The deal was announced Friday afternoon, and by the end of the day, the company's stock advanced 2 cents to end at C$0.92 (Toronto: SGV). The stock advanced 1 cent on Tuesday to close at C$0.90, where the stock remained until Friday.

Proceeds will be used for exploration and development on the company's Tassawini and other properties in Guyana, for the completion of the company's acquisition of Sterlite Gold Ltd. for C$3.7 million and for working capital.

Vancouver, B.C.-based StrataGold is a gold exploration company.

Cusac's C$6 million PIPE

Another gold deal Friday came from Cusac Gold Mines Ltd.

Cusac plans to raise C$6 million from the sale of 11% convertible debentures, as well as flow-through and non flow-through units.

The deal was announced Friday morning, and by Friday evening, Cusac's stock advanced 25%, or 6 cents, to end the day at C$0.30 (Toronto: CQC). On Wednesday, the stock gained 2 cents to end at C$0.24. The stock remained unchanged on Thursday.

The company plans to issue 1,000 debentures at C$3,750 each.

The 18-month debentures are convertible into common shares at C$0.35 each for the first six months and at C$0.40 each for the remaining six months.

The initial conversion price is a 45.8% premium to the company's C$0.24 closing stock price on March 23, and the final conversion price is a 66% premium to the same closing stock price.

Cusac also intends to raise C$1.5 million from the sale of 5,555,556 flow-through units at C$0.27 each. The unit price is a 12.5% premium to the closing stock price on Thursday.

The units consist of one share and one half-share warrant with each whole warrant exercisable at C$0.35 for one year. The strike price is a 13% premium to the closing stock price on Thursday.

The remainder of the deal will be funded through the sale of 3,125,000 non flow-through units at C$0.24 each. The non flow-through units are priced on par with the Thursday closing stock price.

Those units include one share and one warrant with each warrant exercisable at C$0.35 each for one year.

M Partners Inc. is the placement agent.

Proceeds from the debentures will be used to resume gold production on the company's Table Mountain gold mine in northern British Columbia. The proceeds from the flow-through units will be used for exploration on the company's Taurus II open-pit target near the Table Mountain property and the proceeds from the common units will be used for working capital.

Located in Vancouver, B.C., Cusac is a gold exploration company.

Finally, NioGold Mining Corp. negotiated a non-brokered PIPE for up to C$1.5 million and a brokered deal through Canaccord Capital Corp. for up to C$1 million.

The non-brokered offering is comprised of up to 6 million units at C$0.25 apiece. The units consist of one share and one half-share warrant with each whole warrant exercisable at C$0.35 for one year.

The brokered deal, being offered through agent Canaccord Capital Corp., includes up to 4 million units under the same terms.

Canaccord has a greenshoe for up to 800,000 additional units.

Both deals are scheduled to close April 14.

Based in Vancouver, B.C., NioGold is a gold exploration company.

China Automotive pockets $20 million

Moving away from the resources sector, China Automotive Systems, Inc. concluded a $20 million financing with Cornell Capital Partners, LP comprised of a $15 million equity line and a $5 million stock offering.

Cornell, under the terms of the two-year equity line, agreed to buy shares of China Automotive at 98.5% of the lowest volume weighted average price of the company's stock for the first trading days before a draw.

In the stock deal, China Automotive sold 625,000 shares at $8.00 each to Cornell. The stock price represents a 28.8% discount to the company's closing stock price of $11.25 on March 20.

Cornell also received warrants for 86,806 shares, exercisable at $14.40 each for three years and warrants for 69,444 shares, exercisable at $18.00 each for three years.

Sterns, Agee & Leach, Inc. was the placement agents for the offering.

The company's stock rose 76 cents, or 7.16%, to end at $11.37 (Nasdaq: CAAS) Friday.

"The agreements with Cornell Capital will allow the company to meet the growing demand in China and in the international markets for our systems," said Hanlin Chen, the company's chief executive officer, in a statement. "We are supplying power steering components and systems to more than 50 automotive manufacturers in China. The company is developing electronic power systems, next-generation products and has planned for production expansion in existing products.

"We welcome the financial arrangements with Cornell Capital, which will enable China Automotive Systems to further develop our output capacity, research and development and sales distribution."

"We are pleased and honored to enter into a long-term relationship with China Automotive Systems," said David Andresen, vice president at Cornell, in a news release. "The company is in the unique position as the largest independent supplier of power steering components and systems to the emerging Chinese automotive market. We are looking forward to working with the company's management team."

Based in Wuhan, China, China Automotive provides steering components to automobile manufacturers.

Broadwing stock gains 3.6%

A day after announcing the pending completion of a $36 million PIPE, Broadwing Corp.'s stock gained more than 3.5% to close the day at $14.76.

Broadwing's stock gained 51 cents, or 3.58% (Nasdaq: BWNG). In after-hours trading, the company's stock advanced another 14 cents.

On Thursday, when the deal was announced, Broadwing's stock improved by 10 cents to end at $14.25.

The investors in the deal agreed to buy shares of Broadwing at $12.00 each, a 15.2% discount to the company's $14.15 closing stock price on Wednesday.

Jefferies & Co. was the placement agent for the offering.

Austin, Texas-based Broadwing is a communications products and services company.

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