Canadian deals fill private placement market; KingThomason obtains $6 million equity line

By Sheri Kasprzak

Atlanta, Oct. 20 - The U.S. private placement market saw few deals Wednesday even as smaller Canadian deals entered the market.

"Volume in Canada is actually pretty good today," said a Canadian sell-side source. "We're getting mostly small deals here and there, but for the most part, volume has been good."

American sell-side sources attributed the sluggish day to companies holding back until deals price with the market.

"I expect to see volume get better as the week goes on," said one source. "Near the end of the week, I think we'll see more deals."

Heading up American private placement deals Wednesday was a $6 million equity line from The KingThomason Group Inc.

The company agreed to sell $200,000 of stock a month to Fusion Capital Fund II over a 30 month period. The price of the shares will be determined upon the market price on the date of each sale without a fixed discount.

KingThomason can also choose to vary the amount of stock each month until it reaches the $6 million.

The San Ramon, Calif.-based company manages overdue medical patient accounts receivable and provides healthcare insurance.

Lynch Corp.'s $1.8 million deal

Providence, R.I. holding company Lynch Corp. raised $1.8 million in a private placement on behalf of subsidiaries M-tron Industries Inc. and Piezo Technology Inc.

The deal, sold to Venator Merchant Fund LP, included 136,643 shares priced at $13.173 per share.

The company also raised $10.5 million in loans and a credit line with First National Bank of Omaha. A term loan of $2 million and a $3 million bridge loan bear an interest of Prime plus 50 basis points. The revolving credit line of $5.5 million bears an interest of 4.5% and is due May 31, 2005.

Lynch's stock closed unchanged Wednesday at $13.50.

RSX Energy's C$6.03 million deal

Leading Canadian deals Wednesday, RSX Energy Inc. announced it is entering the private placement market with a C$6.03 million deal.

The deal consists of 1.8 million common shares at C$1.10 and 2.7 million flow-through shares at C$1.50.

The underwriters in the deal - Raymond James Ltd., Acumen Capital Finance Partners Ltd. and Haywood Securities Inc. - have an option for an additional 450,000 common shares and 325,000 flow-through shares.

Based in Calgary, Alta., RSX is an oil and natural gas exploration, development and production company. The funds from the private placement will partially finance the company's winter drilling program. Its stock closed down C$0.03 at C$1.27.

Portal Resources raises C$1.875 million

Portal Resources Ltd. has raised C$1.875 million in a private placement, the company said early Wednesday.

The deal is comprised of 2.5 million units of one share and a half-share purchase warrant at C$0.75 million per unit.

The whole warrants, good for one year, are for a share at C$0.90.

The company's officers and directors will buy a portion of the deal, according to a statement.

Portal is a Vancouver, B.C.-based base-metal exploration company. The funds from the financing will be used for exploration projects in Argentina and for general working capital.

Portal's stock closed down C$0.01 at C$0.84 Wednesday.

Esperanza Silver enters market

Elsewhere in the Canadian market, Esperanza Silver Corp. unveiled a C$1.5 million private placement.

The deal consists of 3.75 million units of one share and one-half purchase warrant at C$0.40 per unit. The whole warrants will entitle buyers to an additional share for two years at C$0.55.

Vancouver, B.C.-based Esperanza is a silver exploration and discovery company. The proceeds from the financing will fund continued exploration and serve as general working capital.

Esperanza's stock closed up C$0.02 at C$0.465.

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