The Junior Explorer That Delivers With A Difference

Combining diversified copper-gold discovery potential with ongoing drilling and a drum-tight share structure, tiny Pacific Empire Minerals (PEMC.V; PEMSF.OB) can deliver results like few other exploration companies can.

Dear Fellow Investor,

It’s the foundational metal for the global economy. For that reason alone, the long-term prospects for copper are bright indeed.

But there’s much more. The developing world continues to grow its middle classes, generating demand for copper-intensive goods like housing, appliances and vehicles.

Vehicles, in particular, are projected to goose the copper economy, as more consumers opt for hybrid and electric vehicles, which use between two to three times more copper than gasoline-only vehicles.

Compounding the demand-side is the supply-side for copper. Simply put, new copper projects are not being discovered fast enough to keep up with demand. Moreover, average grades at the world’s established copper mines are dropping.

So, with higher prices due to these economic forces seemingly baked into the cake, the question becomes how to capitalize on these trends.

Well, it helps to have a large portfolio of copper projects located in politically safe jurisdictions. Bonus points accrue to companies that can generate consistent drill results from their projects.

Add in a tight share structure to magnify share price reaction to good news, and you have a recipe for maximizing leverage on rising copper prices.

And, as it happens, you would pretty much be describing Pacific Empire Minerals (PEMC.V; PEMSF.OB).

Many Bites At The Apple

Applying the prospect generator model of junior mining exploration, Pacific Empire has amassed an impressive portfolio of gold-rich copper-gold projects in British Columbia.

For those new to the minerals exploration space, prospect generators are typically companies that use their geologic expertise to acquire projects that they can assess with surface exploration results.

Once a prospect generator has established the potential of a project, it usually looks to form a joint venture partnership. These JV partners agree to pay for the more expensive aspects of exploration (i.e., drilling) in exchange for an interest in the project.

When executed well, this model of operating allows the company to punch above its weight in terms of exploration expenditures. It also allows the company to maintain a low cash burn rate and a tight share structure while it runs through a large number of prospects.

The Prospect Generator That Drills

Pacific Empire has tweaked the traditional prospect generator model by buying and operating a custom-built, reverse-circulation drill.

Most prospect generators stick to simply surveying, sampling and otherwise prospecting their projects before bringing in a JV partner.

Drilling a project brings in valuable information, but it’s expensive. That’s why hardly any prospect generator spends the money to drill their prospects; they prefer to let a deep-pocketed partner spend the big bucks.

Not Pacific Empire. Thanks to their RC drill, they can drill very inexpensively — at far less cost than other prospect generators.

Pacific Empire’s Custom-Built Reverse Circulation Drill

This drilling capability has two benefits:

First, it allows the company to generate news flow on a consistent basis — giving it the chance to make discoveries before it even brings a JV partner in on a project.

Second, drilling cuts risk and builds value in a project, giving Pacific Empire significant leverage when negotiating new JV partnerships. In short, with drill data in hand, the junior is confident it can get a much better deal, retaining more ownership, when it joint-ventures its projects.

And Pacific Empire not only has a lot of projects, but they’re in the right place.

A Compelling Portfolio Of Copper-Gold Projects

In assembling its project portfolio, Pacific Empire focused on British Columbia. That’s because the Canadian province has an impressive endowment of gold-rich copper deposits and the potential to host many more.

Because the company has the rare ability to rapidly drill the most promising targets, and quickly move on if the “truth machine” doesn’t hit, Pacific Empire has assembled an impressive number of highly prospective projects.

Like pearls on a string, they stretch along some of the most promising geological trends in British Columbia.

Some of the company’s most compelling projects in the province include:

•Stars: A partner-funded copper project underwritten by ML Gold, the partners are in the midst of a diamond drill program here. Highlights from earlier drilling include a long, 204-meter intersection grading 0.45% copper.

•Copper King: Recent drilling on this property near Centerra Gold’s Kemess Underground and Kemess East project demonstrated significant potential to host a buried copper-gold porphyry system.

•Moffat: Another 100%-owned project, Moffat is located immediately south of the 1.54-billion-pound copper deposit at Woodjam South. Pacific Empire recently kicked off an RC drill program at Moffat.

Pacific Empire Controls A Large Copper-Gold Portfolio In British Columbia

In all, the company owns or controls 14 projects in British Columbia, giving it a deep bench of potential winners. That’s the beauty of the prospect generator model — it gives investors more “balls in the hopper” for discoveries.

Tight Share Structure + Discovery Potential = Leverage

With a tip of the cap to a strong management team, Pacific Empire has assembled this impressive portfolio without diluting shareholders.

Even with its RC drilling programs and large portfolio, the company maintains an enviable cash burn rate and has a mere 31 million shares issued and outstanding.

Add in the significant discovery potential from both partner-funded and self-funded drilling, and you have the recipe for a superior lever on discovery and rising copper prices.

Drilling is in progress on Pacific Empire’s projects, and news could come at any time. In short, this is the perfect time to build a position in this well-run prospect generator.

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