In a recent paper Trofimov, Chernyak and Gevorgyan describe their work with this reaction. They report that it works quite well for aromatic ketones with a tertiary alpha-hydrogen, while other ketones give mixtures of products.
The reaction starts with a deprotonation of the ketone to form the enolate, which performs nucleophilic attack on the alkynyl Bromine. To a beginning student of organic chemistry this might look like a strange version of bromine, but mechanistically it is similar to brominating with Br2. Next, the alkynyl anion attacks the carbonyl carbon. This produces a halohydrin that simply closes to form the final epoxide product. Pretty slick - three reactions all in one go.
Alexander Trofimov, Natalia Chernyak, Vladimir Gevorgyan (2008). Dual Role of Alkynyl Halides in One-Step Synthesis of Alkynyl Epoxides Journal of the American Chemical Society, 130 (41), 13538-13539 DOI: 10.1021/ja806178r