Oil, metals slide puts damper on deal flow; Nevarro, Action top resources activity; MMC bags $10 million

By Ronda Fears

Memphis, May 15 - With crude oil and metal prices free-falling virtually across the board, private placement volume sank Monday.

"It looked really ugly today," said a sellside market source in Canada.

Crude oil futures declined amid concerns about weakening demand and rising inflation. Crude for June delivery fell $2.63 to settle at $69.41 a barrel on the New York Mercantile Exchange, following a drop of $1.42 on Friday.

Metals didn't fare much better, as gold futures plunged $5.80 to $685 an ounce, following a drop of $9.70 to $711.80 on Friday. Copper prices, which have gained 40% in the last two months alone, settled off 8 cents to $3.7465 a pound but retraced a session high of $3.92.

As a result, deal flow from north of the border, where the vast majority of PIPE flow in those sectors originate, was slim Monday with just a couple on the tape. There were three fair-sized mineral deals from down under, though. Platinum Australia Ltd. wrapped up a A$20.9 million share placement. Universal Resources Ltd., a copper and gold mining firm, sold A$22 million of convertible notes. And, Sally Malay Mining Ltd., which refers to itself as one of the new breed of nickel sulphide producers to emerge from Western Australia in recent times prices, closed a A$20 million private placement of stock.

Nevarro plans C$3.5 mln deal

Calgary, Alta.-based oil and natural gas exploration company Nevarro Energy Ltd. said it has arranged a private placement for up to C$3.5 million via Acumen Capital Finance Partners Ltd.

The offering includes common shares at C$2.25 each and flow-through shares at C$2.45 each. There will also be a greenshoe for a further C$1.5 million. The breakdown of common shares versus flow-through shares has not yet been fixed.

Nevarro's stock (TSX Venture: NEL).closed off C$0.04, or 1.71%, at C$2.30 on Monday

Action Minerals deal in works

Vancouver, B.C.-based copper mining concern Action Minerals Inc. said it is working on a private placement of units for up to C$3 million in a non-brokered deal.

Action Minerals stock (TSX Venture: ATM) settled off C$0.03, or 7.69%, at C$0.36

The units will be either common share units, sold at C$0.35 each and made up of one common share and half a share purchase warrant, or flow-through share units, sold at C$0.40 each and made up of one flow-through share and half a share purchase warrant. In each case full warrants will be exercisable for one common share at C$0.45 each for 18 months from closing.

Proceeds will be used for exploration and development and working capital.

In recent press releases, the company has noted that the International Copper Study Group reported in March that "the market balance is expected to remain relatively tight over the course of the year amid limited production growth and signs that demand is picking up outside China. In this environment, copper prices should be supported at relatively high levels during 2006."' In addition, Credit Suisse First Boston said that demand will exceed production this year and that the deficit will be 200,000 tons.

Copper prices have more than quadrupled in the last 2.5 years.

Carpathian, Wildcat slump

After steadily climbing last week and sparking a flurry of activity in the PIPE market, the pullback in oil and metals prices Monday also weakened shares of Carpathian Gold Inc. and Wildcat Exploration Ltd., both of which brought deals to market last week.

Carpathian Gold bagged C$7 million in an offering of up to 11.7 million units at C$0.60 apiece - composed of one share and one half-share warrant, with each whole warrant allows for the purchase of another share at C$0.90 for two years. Carpathian shares (TSX Venture: CPN) lost C$0.02, or 3.23%, to settle Monday at C$0.60 after adding a penny on Friday.

Another miner of gold, along with platinum and other base metals, Wildcat priced a C$1.25 million non-brokered deal that included up to 4,166,667 units at C$0.30 each - consisting of one share and one warrant, with each warrant is exercisable at C$0.40 for one year. Wildcat shares (TSX Venture: WEL) dropped C$0.015, or 4.41%, to close Monday at C$0.325, after ending unchanged Friday.

MMC goes public with PIPE

In the United States, topping a short list of deals Monday was MMC Energy, Inc. closing on a $10 million private placement of common stock, selling 10 million shares at $1.00 per share, via placement agents Sanders Morris Harris Inc. and Canaccord Capital Corp.

The transaction was part of a reverse merger that took MMC Energy public after it merged with High Tide Ventures, Inc., which was already public, and then changed its name to MMC Energy.

MMC Energy shares are listed in the OTC Bulletin Board under the ticker "MMCN" but there were no trades recorded Monday.

New York-based MMC is an energy management company that owns power generating facilities in California and is looking to acquire small and medium-sized facilities primarily in California, Texas and the Mid-Atlantic and Northeastern United States. The company also has operations in London.

It's business plan has been described an, in effect, a power-asset recovery vehicle for power plants in need of financial improvements, aiming to bridge the gap between energy over-capacity and the need to keep as many generation facilities active as possible.

Proceeds will be used to fund operations and possibly to acquire assets. The funds raised will meet MMC's cash requirements for at least three years according to a Securities and Exchange Commission filing.

Avigen steady on deal terms

Outside of oil and metals Monday, there was very little going on in PIPE land. Avigen, Inc. released terms on its deal from last week - a $21.16 million private placement of stock - saying it sold 3,939,760 shares at $5.37 each, and the stock settled thereabouts after a day of trading in a wide band on low volume.

RBC Capital Markets was bookrunner and lead placement agent while CIBC World Markets was co-placement agent. Investors included Biotechnology Value Fund, Apex Capital, Federated Kaufman Fund and Fort Mason Capital LP.

"It looks good for Avigen financially," said an Avigen player, who was not involved in the latest deal. "It amazes me that they raised this amount of money with no warrants and restricted stock priced about 20% below the market when the deal was announced."

Avigen shares (Nasdaq: AVGN) ended unchanged at $5.38 on Monday after trading in a band of $5.29 to $5.53 with just 74,305 shares changing hands versus the norm of 144,265. On Friday, the stock dropped 7.24% to $5.38 after settling at $5.80 on Thursday when the deal emerged.

Alameda, Calif.-based Avigen said net proceeds of $19.36 million will be used for the expansion of planned development programs to pursue additional applications for its current neurologic compounds. The rest will be used to accelerate the development of the non-core compound, AV513, used to treat hemophilia and other bleeding disorders.

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