Canyon Resources wraps $5.1 million PIPE; stocks plummet, oil prices creep higher

By Sheri Kasprzak

New York, June 5 - Canyon Resources Corp. wrapped up a $5.1 million private placement of 5.1 million shares even as PIPE activity crawled Monday as stocks in the broader markets fell through the floor.

The price per share represents a 15% discount to the 20-day volume weighted average price from May 2 to May 30. The price is a 20% discount to the company's $1.26 closing stock price on Friday.

The stock ended the day down 11.9%, or 15 cents, to settle at $1.11 (Amex: CAU).

The company had 38,320,533 outstanding common shares as of May 2.

The company issued series A warrants for 2.55 million shares to the group of institutional investors that purchased the shares. The warrants are exercisable at $1.50 each for three years.

Kuhns Brothers, Inc. was the placement agent.

"We appreciate the confidence that this seasoned group of investors has shown in our management team and current business plan," said Canyon chief executive officer James Hesketh in a news release from Monday morning. "Many of our investors are repeat investors who have had a long-term stake in Canyon.

"We are pleased that our progress in moving our business plan forward is reflected in the terms of this private placement of equity.

"A portion of the funds will be used for engineering, feasibility work and initial capital costs for the re-start of operations at our Briggs Mines, in Inyo County, California. Additional funds will be allocated to drilling, permitting and engineering work at our Reward project near Beatty, Nev., and to general corporate purposes.

"Our goal is to reach 100,000 ounces per annum of gold production within the next two years from Briggs and Reward. We continue to work on advancing our other properties and we are targeting property acquisition opportunities to continue production growth beyond our near-term target."

Hesketh did not return calls Monday for further comment on the offering.

Looking to the company's latest earnings report, Canyon incurred a net loss of $382,100 for the quarter ended March 31, compared with a net loss of $2.31 million for the same quarter of 2005.

Golden, Colo.-based Canyon is a gold exploration company.

Meanwhile, in the broader market, PIPE activity slowed substantially as stocks took a hit on higher oil prices and worries that the Federal Reserve will lift interest rates again.

The Dow Jones Industrial Average closed the day down 199.15 to end at 11,048.72; the Nasdaq composite index fell 49.78 to close at 2,169.62; and the Standard & Poor's 500 composite index slipped 22.93 to settle at 1,265.29.

Oil prices crept up by 27 cents to end at $72.60 per barrel after climbing as high at $73.00 per barrel. Oil had advanced $1.99 on Friday to close at $72.33 per barrel.

"Nothing's getting done today," said one sellside market source when asked about the small trickle of PIPE deals Monday. "Stocks are taking a beating; oil's up. We're kind of sitting on our hands for now."

Elephant Talk's $3 million deal

Looking to the communications sector, Elephant Talk Communications, Inc. announced the settlement of a $3 million private placement of a 10% convertible promissory note.

Rising Water Capital AG bought the note, which is due in 30 months.

The note is convertible into common shares at $0.07 each. If the note is fully converted, Elephant Talk will issue 42,857,143 common shares.

Elephant Talk completed a similar offering with Rising Water on Dec. 16, 2005. That note also bears interest at 10% annually, matures in 30 months, but is convertible at $0.035 each.

Based in Orange, Calif., Elephant Talk is a long-distance communications carrier.

BrazAlta prices C$5 million PIPE

In Canada, BrazAlta Resources Corp. arranged a C$5,000,600 private placement of 4,546,000 shares at C$1.10 each.

The shares are being offered at a 12% discount to the company's C$1.25 closing stock price on Friday.

At the end of the day Monday, the stock sank 8%, or 10 cents, to end the session at C$1.15 (TSX Venture: BRX).

Westwind Partners Inc. is the placement agent for the offering, which is expected to close June 21.

The proceeds will be used for exploration and development.

Calgary, Alta.-based BrazAlta is an oil and natural gas exploration company.

Elsewhere in Canada, Wyn Developments Inc. settled its previously announced C$4.15 million private placement for a much-lower C$1,962,640.

The company sold 1,056,000 flow-through units at C$0.45 each and 3,914,315 non flow-through units at C$0.38 each.

The flow-through units are comprised of one share and one half-share warrant with each whole warrant exercisable at C$0.50.

The non flow-through units also consist of one share and one half-share warrant with each whole warrant exercisable at C$0.50.

The deal priced on April 4 as a C$4.15 million offering of up to 5 million units and 5 million flow-through units.

The deal settled Monday morning and by the end of the session, the stock gained 3 cents, or 8.82%, to end at C$0.37 (TSX Venture: WL).

Proceeds will be used for exploration on the company's Prophet River Slave Point test well and for working capital.

Based in Vancouver, B.C., Wyn is an oil and natural gas exploration company.

Jed Oil stock dips

After wrapping a $34,325,000 private placement of notes, Jed Oil Inc.'s stock dropped on Monday.

The stock settled down 1.23%, or 19 cents, to end at $15.22 (Amex: JDO).

On Friday, when the offering was announced, the stock gained 6.13%, or 89 cents, to close at $15.41.

In the placement, Jed sold 10% notes due Feb. 1, 2008 that are convertible at $16.00 each, a 10.2% premium to the company's $14.52 closing stock price on Thursday.

Calgary, Alta.-based Jed is an oil and natural gas exploration company.

In other energy news, Fair Sky Resources Inc.'s stock sank by 13.8%, or 40 cents, to close at C$2.50 (TSX Venture: FSK) after the company priced a C$6 million offering.

On Friday, when the non-brokered deal priced, the company's stock closed unchanged at C$2.90.

Under the terms of the deal, Fair Sky intends to sell flow-through shares at C$3.75 each.

Fair Sky is also based in Calgary, Alta.

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