Mostly: Classical

[amarksp]

EPM Annual General Meeting Notes

Attended the AGM in London on 6/23/06. EPM had enough coffee and pastries for 50 people, but my daughter and I were the only shareholders that attended the meeting… About 12 people showed up altogether, with most being EPM management, bankers, and Canaccord Investor Relations.

EPM appeared disappointed with the turnout. Besides having enough Danish for 50 people, EPM had a new presentation and was fully prepared to respond to shareholders questions. But I was the only one asking questions and making comments.

1) Debt Facility/SENET - EPM very confident that this debt facility will be finalized and this project debt furnished. With SENET taking over from MDM, all the paperwork and bank review had to be redone completely. Also, my impression is the S African Export Credit for this debt facility may also be slowing down the process (both SENET and MDM are S African firms, so EPM entitled to S Africa export credit on this contract). If you were to put a gun to my head, then I would predict debt facility to be finalized before 2Q06 financials are out (around Aug 15).

2) In the unlikely event the debt facility is not finalized, then EPM will issue $30M of more stock via a PP and finance the mine 100% equity. One way or the other, this mine will be brought into production in early 2007.

3) In hindsight, EPM somewhat regrets not going 100% equity finance in the first place. Not having the debt facility in place has delayed mine completion by 4 months or so, primarily by not timely ordering some certain capex needs like steel for the process plant. EPM is very happy with the Kazakh construction company (JSC Consolidated Development Corporation) performing the work.

4) EPM will be updating 43-101 with new gold and copper prices that will thus show a healthy increase in reserves.

5) Concurrent/after completion of new 43-101 EPM will consider mine expansion to increase annual production by deepening the pit operations or by other means. This would require only marginal capex increase relative to the new gold ounces produced. Thus, I was concerned about a new PP and voiced my opinion that internally financing mine expansion would be much preferable. EPM stated they currently had no plans for any new PP to finance mine expansion and would first have to get results of the 43-101, economics of revised mine plan for expansion, gold prices, EPM share price, etc. Mine expansion economics should be complete about Sept 06. The good news is EPM can likely increase annual production with only a modest capex increase and apparently EPM has no plans for mine expansion financing at current low share price.

6) When asked why Charlemagne Capital not present at AGM, was advised that Charlemagne calls them at least once per week to get an update, they had called this week, and apparently Charlemagne increased their shareholding very recently (not confirmed by London AIM news release as of today).

7) In regard to copper hedging, EPM is actively pursuing hedging its copper production which is quite significant in the early years. Was advised that copper hedges, unlike gold, cannot be rolled forward easily. If you have copper hedge for June 07 delivery, then you bloody well better have the copper delivered in June, since you cannot simply roll over the contract to the next month. My impression is EPM will likely hedge some of its copper if and when copper production delivery is 95+% assured. Personally, I hope EPM hedges some copper and buys $750 gold calls with the proceeds to reduce their gold hedges.

8) In regard to consumables and maintenance, a very key concern of mine given harsh cold winter climate, we discussed tires, consumables, and CAT maintenance contract. This is still a key concern of mine but EPM is aware of the problem and is actively managing this potential problem.

9) When modeling EPM copper concentrate revenue, one can use 80% of the copper price.

The EPM presentation that included many powerpoint slides, lasted about 40 minutes and was interrupted several times (about 15 minutes of the 40) by my questions and comments seeking clarification. Am disappointed that EPM has not put this AGM presentation on their website, as EPM obviously spent a great deal of time on preparing this presentation which included several new slides. Was hoping this AGM presentation would be on website by now to jar my recollection on certain of my other questions. In any event, was happy EPM went to all the trouble to prepare the AGM for my sole benefit and EPM was happy to answer all my questions.

EPM appears to be currently undervalued and I remain very confident that the drawdown of its US$75 million debt facility is a done deal. Just my opinion… Within the next 4 months, we should get news on 43-101 new resource estimate, debt facility being finalized, and the new mine expansion economics.