Value Microcaps Junior Miners

[Bobwins]

epk.v C$.36 followup article from Danny Deadlock at Stockhouse.

II. EPM Mining (EPK.V 35 cents) – Large Financing and the Importance of EMR Involvement
www.epmmining.com

On March 23rd I sent out a report on EPK with the title “Time to review EPK.V at 25 cents”.

Last week they announced a large (1st stage) financing for $10.3 million with EMR Capital Resources Fund of Australia. EMR will initially invest at 30 cents plus get a full warrant at 42 cents. In addition, their future commitment would be not less than $60 million BUT this should be staged at higher prices as the Utah project evolves - or is put into production (keeping in mind that India giant Tata is still heavily involved with EPK).

If the 42 cent warrants are exercised, the shares outstanding will go from 112 million to 180 million - a number I would not normally be comfortable with (although that will also put $20 million in the bank).

There is a Very specific reason I am willing to overlook that capital structure and it's Only because of EMR's involvement. EMR is a specialist private equity firm with offices in Australia and the Cayman Islands (and a strong international "network").

The last deal EMR got heavily behind was an Australian potash play called Highfield Resources (HFR $1.70 on the ASX). In mid 2013 EMR did an initial financing with HFR at 22 cents AUD. In the first four months of 2015, HFR was pushed 300% higher to $2 and that run had a LOT to do with EMR's involvement.

http://www.asx.com.au/asx/research/company.do#!/HFR



What borders on the “bizarre” with Highfield – this company is involved in the exploration and development of traditional potash called Muriate of Potash (MOP) or Potassium Chloride. It is extremely difficult to raise capital in this sector YET not only did EMR just raise them $100 million, but they did so at the TOP of that chart. Something I would have said was impossible had I not seen it done.

The MOP industry (dominated by big names like Agrium and Potash Corp of Saskatchewan) has suffered since mid-2013 when prices collapsed (market valuations were huge in the two years prior). But as MOP prices have fallen to about $320 per tonne, SOP or Sulphate of Potash which is a fertilizer for specialty crops, has continued rising to about $700 per tonne. EPM Mining is sitting on one of the largest and most economic undeveloped (dry lake-bed) SOP projects in the world.

You can reference my March 23rd report for further due diligence or review their corporate presentation:

http://epmmining.com/cms/pdf/financials/2014/EPM-Investor-Presentation-2014-10-31.pdf

EMR will initially own 34 million shares or 24% but once they exercise their 42 cent warrants, they would own 69 million shares and 38%. They will also have strong representation on the board and heavy influence over management and future direction.

With such a large vested interest in EPK, this private equity firm will have "significant" motivation to get EPM Mining trading higher over this next year. If EMR can do what they did with Highfield in such a weak potash sector, I am banking they can be just as successful with EPK - we will just need to have patience.

Note: Today I am in Utah touring this project and meeting with the CEO. I will update next Monday.
_______