Junior explorer jumps on energy acquisition

Stockhouse Canadian Small and Micro-cap Stock Report for Wednesday, June 2, 2010

TORONTO (SHfn) – MAX Minerals (TSX: V.MJM, Stock Forum) shares surged 22% to 44 cents on Wednesday after the micro cap explorer reported that it has entered into an agreement to complete the strategic acquisition of Calgary’s Varenna Energy. In consideration of the sale, MAX agrees to issue 11,331,750 of its common shares to the shareholders of Varenna in exchange for all issued and outstanding shares of Varenna. The deal provides MAX with a 51-101 compliant independent reserve of approximately 235,000 boe of proven plus probable reserves, more than over 12,000 acres of undeveloped land, in addition to tax pools of approximately $2.2 million.

As well, shares of Black Marlin Energy Holdings (TSX: V.BLM, Stock Forum) gained 19% to 44.5 cents as the East African oil and gas explorer/producer said it has entered into a definitive agreement to be acquired by Afren plc. Under the terms of the agreement, each Black Marlin shareholder will receive 0.3647 of a common share of Afren for each common share of Black Marlin held, which represents a premium of approximately 42.9% based on the 20-day weighted average trading price of the Black Marlin shares on the TSX Venture Exchange and a Canadian Dollar per British Pound exchange rate of 1.54.

Spitfire Energy (TSX: V.SEL, Stock Forum) and Whitecap Resources, meanwhile, announced that the two companies have entered into a reorganization and investment agreement for the recapitalization and reorganization of Spitfire. Whitecap, currently a private Alberta exploration and production company led by Grant Fagerheim, with oil focused operations in the Valhalla area of the Peace River Arch in Alberta will be combined with Spitfire's southwest Saskatchewan oil-weighted asset base. The agreement provides for each shareholder of Whitecap receiving 8.33 shares of Spitfire in exchange for each share of Whitecap based on a negotiated price of $3.00 per Whitecap share and 36 cents per Spitfire share. The new entity will also raise up to $7.75 million in a non-brokered private placement. Spitfire stock popped 95% to 39 cents.

Shares of Full Metal Minerals (TSX: V.FMM, Stock Forum) added 14% at 20.5 cents after the junior miner reported that drilling has begun at the 40 Mile silver, zinc, lead, copper project in Alaska. The company has scheduled 5,000 meters of drilling using two core rigs targeting high-grade carbonate replacement deposits. Full Metal Minerals has an option to acquire 100% interest in the 40 Mile property from Doyon, Ltd. During the exploration agreement, Full Metal will pay Doyon US$325,000 over six years, make annual scholarship donations of US$10,000 per year, and make exploration expenditures totaling US$3.85 million.

And, Santa Fe Metals (TSX: V.SFM, Stock Forum) Wednesday said it has agreed to sell 40% of the Cuatro Cienegas copper project to Tahoe Resources Group LLC (TGR) of Reno, Nevada for total proceeds of US$5 million. After completion of the sale, Santa Fe will form a joint venture (4CJV) with TRG. SFM will contribute its remaining 60% interest in the project in return for a 60% interest in 4CJV and TRG will contribute its 40% interest in the project in return for a 40% interest in 4CJV. Santa Fe will be the operator of 4CJV and as such will be entitled to fees for services provided. Santa Fe will loan 4CJV US$2 million, minus the amount of any finder's fee payable, for a period of up to 12 months. The funds will be used for 4CJV working capital purposes and to commence construction of a US$3 million production facility on the Cuatro Cienegas property. Santa Fe shares climbed 50% to 12 cents.

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