Prime Mining (TSX-V:PRYM & OTCMKTS:EPWMF) – In it to win it

By James Moore


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“The goal – $25 million a year in profit within 24 months.”

For a company valued at just $21 million today, this is a bold statement of intent. However, Prime Mining’s (TSX-V:PRYM & OTCMKTS:EPWMF) chief executive Andy Bowering speaks with the confidence of a man who could have found the project of a lifetime.

The Los Reyes gold mine in Sinaloa, Mexico.

Meaning “The Kings” in Spanish, Los Reyes presents one of the best near-term opportunities in the junior gold-mining space globally.

The numbers are extremely compelling.

The 65,000-hectare Los Reyes district already boasts resources of 530,000 ounces of gold and 10 million ounces of silver in deposits that are close to surface.

To date, 17.5 kilometers of gold mineralization strike has been identified through exploration drilling at the project, but so far only seven kilometers have been drilled to build its resource model.

Encouragingly, the Los Reyes gold resource model is based on an average gold recovery rate of 76% and an average grade of 0.5 grams per tonne (“g/t”). Better yet, the average grade of the 380,000 ounces in the indicated category is 1.73 g/t – nearly double the average of similar Mexican projects and around three times the average of comparable North American ones.

Not only does this mean the gold found at Los Reyes can be mined using low-cost, open-pit mining methods, but there is also plenty of potential to discover a great deal more of the precious metal.

Applying modern drilling techniques, and assuming that 20% of the geological structures are mineralized (a useful ballpark figure), this could mean thatLos Reyes holds 1.5 million to 2 million ounces of readily-recoverable gold.

This is already convincing, but when you consider that Bowering and the expert team he has assembled at Prime (TSX-V:PRYM & OTCMKTS:EPWMF) believe that Los Reyes can be brought into full production within 18 months, with a capital requirement of just $20 million, the outlook for this company becomes exceptionally exciting.

Los Reyes has a capital payback period of just six months

That’s right.

Within six months of commencing operations, Los Reyes could have repaid IN FULL the principal spent on its development.

Every dollar made after that would flow back into the company. Given that the initial life of mine is anticipated to be seven years, Prime’s (TSX-V:PRYM & OTCMKTS:EPWMF) ability to repay $20 million in such a short period of time really emphasises how far advanced this opportunity is.

And that is just based on mining the current resource.

If further exploration at Los Reyes meets expectations, then Prime (TSX-V:PRYM & OTCMKTS:EPWMF) could be looking at generating a phenomenal return for shareholders over the next decade.

It is no wonder that Bowering is so self-assured that he will raise the money he needs. There just are not that many mining projects out there that can claim such favourable economics and promise to deliver such quick returns.

So far, the market has not woken up to what is happening at Prime (TSX-V:PRYM & OTCMKTS:EPWMF), but when it does expect the share price to re-rate hard and fast. As Bowering put it to us:

“Prime (TSX-V:PRYM & OTCMKTS:EPWMF) is going to build a mine. It is going to make it profitable. It is going to figure out how to pay back the shareholders quickly. I own 17% of the company and everyone senior involved swapped out their first year’s salary for stock in the last financing round at 30 cents. We are definitely all in this to win it.”


As powerful as the economics for Los Reyes are, the real force behind Prime (TSX-V:PRYM & OTCMKTS:EPWMF) is the people who run it.

Prime’s (TSX-V:PRYM & OTCMKTS:EPWMF) leadership team has as impressive a collective track record as any other mining company of this size. They are also fully financially committed to the business, having invested a great deal directly into this start-up company.

Chief executive Andy Bowering has founded six public resources companies during his 30-year career, all of which continue to trade today. Bowering has built his fortune by focusing on quality over quantity.

Meticulous in his research, Bowering has only ever chosen to work on the best projects. He applies the highest standards to his selection. The fact that three of the six companies he founded (Caldera Environmental, Doublestar Resources, and Pinnacle Mines) were bought by much larger players reflects how successful his approach has been.

With this track record, it is no surprise that he has delivered such strong returns for his early shareholders. Every time Bowering has brought an opportunity to market, the original investors have made five to ten times their money.

Every time!

Bowering puts this success down to his ability to find and personally fund a project before building an expert team to bring it into production.

His most recent winner was Millennial Lithium (TSX-V:ML), which he founded and funded in 2015. During his time as the company’s executive director, Bowering used his wide contact base to locate assets in Argentina, attract top personnel in the lithium space, and raise upwards of $100 million in funding. As it stands, the company has taken a five million tonne lithium copper resource through Definitive Feasibility Study (“DFS”) at its Pastos Grandes project in Argentina and a takeout is expected at upwards of $225 million.

Bowering is fully confident that he can extend his stellar run into Prime Mining (TSX-V:PRYM & OTCMKTS:EPWMF):

“Shareholders do very well with me and early investors are going to do very well with Prime (TSX-V:PRYM & OTCMKTS:EPWMF). I find great assets, create great teams, provide funding, see the vision, then make it happen.”

All of this experience has culminated now in Los Reyes.

Bowering personally put the original money up to secure the property and has followed this up with over $3.5 million of his own cash to fund Prime’s (TSX-V:PRYM & OTCMKTS:EPWMF) early development. As he put it to us:

“I do not take a salary from the company, I work for my equity. That means everything because it means that there cannot be any question that my goal is to see all shareholders get paid, through us realizing the vast potential at Los Reyes. I manage this company like it is my own private business. We do not allow waste. We do not want cost overruns. We do not take high risks. Everything we have done is based on careful planning and execution.”

This philosophy filters throughout Prime (TSX-V:PRYM & OTCMKTS:EPWMF), and Bowering is supported in his endeavors by a team of the highest calibre.

Perhaps the most significant coup Bowering made during Prime’s (TSX-V:PRYM & OTCMKTS:EPWMF) early life was to appoint Daniel Kunz as executive chairman.

Another 30-year mining veteran, Kunz made his name in Canada’s mining sector as a professional engineer. Formerly chief executive of Ivanhoe Mines (TSE:IVN), Kunz founded and led US Geothermal, and served as a senior manager at Morrison Knudson and MK Gold Company- an $80 million IPO on the NASDAQ.

Across these roles, Kunz has been involved in the construction of numerous large-scale producing mines. Notably, this includes the American Girl project in California in the 1980s and 1990s. American Girl is an open-pit heap project centered on the exploration of numerous open pit areas, much like Los Reyes.

Importantly, Kunz is also a director at Chesapeake Gold (TSX-V:CKG). Chesapeake owns the 20 million-ounce Metates gold exploration project just 90 kilometers away from Los Reyes, affording him vital local contacts and knowledge to support Prime (TSX-V:PRYM & OTCMKTS:EPWMF) as it pushes forward.

Kunz tells us he was drawn to Prime (TSX-V:PRYM & OTCMKTS:EPWMF) because of the quality of its management team, Los Reyes’ potential, and the project’s similarity to several of those he previously built and brought into production.

Bowering is keen to point out that the significance of Kunz’s involvement “cannot be understated”. According to Bowering, Kunz went through an intense due diligence process prior to agreeing to his appointment:

“Daniel came up here, we met, we got along, then he conducted a deep look into this project over two months. He had his whole team go over the metallurgy, the deposits- everything. I had a feeling that he liked it then because he came back and asked me for all the company’s constitutional documents, including three years of board resolutions, the shareholder lists, everything. He went into every detail and ultimately told me, ‘I like it. I like you. I like what you’re planning on doing. I will come on as executive chair and I will help you build a mine’.

And that is exactly what we are doing now; building a gold mine that could repay $20 million within six months, remain hugely profitable for seven years and still has incredible land yet to explore.


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Author: James Moore

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

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