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Primero brigus acquisition presentation
1. Acquisition of Brigus Gold:
Building a Strong Intermediate Producer
December 16, 2013
2. Cautionary Statement
This presentation may contain “forward-looking” statements within the meaning of Canadian securities legislation and the United States
Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to future events or the anticipated performance of the
Company and reflect management’s expectations or beliefs regarding such future events and anticipated performance. In certain cases,
forward-looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”,
”estimates”, ”forecasts”, ”intends”, ”anticipates” or “believes”, or variations of such words and phrases or statements that certain actions,
events or results “may”, ”could”, “would”, ”might”, or “will be taken”, “occur” or “be achieved”, or the negative of these words or
comparable terminology. By their very nature forward-looking statements involve known and unknown risks, uncertainties and other
factors which may cause the actual performance of the Company to be materially different from any anticipated performance expressed or
implied by the forward-looking statements. Such factors include various risks related to the Company’s operations, including, without
limitation, fluctuations in spot and forward markets for gold, silver and other metals, fluctuations in currency markets, changes in national
and local governments in Mexico and the speculative nature of mineral exploration and development, risks associated with obtaining
necessary exploitation and environmental licenses and permits, and the presence of laws that may impose restrictions on mining. A
complete list of risk factors are described in the Company’s annual information form and will be detailed from time to time in the
Company’s continuous disclosure, all of which are, or will be available, for review on SEDAR at www.sedar.com.
This presentation uses the terms “measured resources”, “indicated resources” and “inferred resources”. The Company advises readers
that although these terms are recognized and required by Canadian regulations (under National Instrument 43-101 Standards of
Disclosure for Mineral Projects (“NI 43-101”), the United States Securities and Exchange Commission does not recognize them. Readers
are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted in to reserves. In
addition, “inferred resources” have a great amount of uncertainty as to their existence, and economic and legal feasibility. It cannot be
assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of
inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, or economic studies, except for a Preliminary
Assessment as defined under NI43-101. Investors are cautioned not to assume that part or all of an inferred resource exists, or is
economically or legally mineable.
Although the Company has attempted to identify important factors that could cause actual performance to differ materially from that
described in forward-looking statements, there may be other factors that cause its performance not to be as anticipated. The Company
neither intends nor assumes any obligation to update these forward-looking statements or information to reflect changes in assumptions
or circumstances other than required by applicable law. There can be no assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ materially from those currently anticipated. Accordingly, readers should not
place undue reliance on forward-looking statements.
Unless otherwise indicated, all dollar values herein are in US$.
2
3. Primero + Brigus Management Participants
Joseph F. Conway
Primero President & Chief Executive Officer
Wade K. Dawe
Brigus Chairman & Chief Executive Officer
3
4. PRIMERO + BRIGUS:
A New Mid-Tier Gold Producer
o
Creates a new Americas focused mid-tier gold producer
o
Critical production scale and superior growth profile
o
1.
2.
3.
4.
Two mines producing a total of 250,000 to 270,000 gold equivalent ounces1 in 2014E
Potentially increasing to roughly 400,000 ounces in 2017E2 with 2 development projects and M&I
resources of 4.6 million gold equivalent ounces3
Below industry average cash costs resulting in superior cash flow
Significant exploration upside at all mines and projects
Strong balance sheet and financial performance
o
Diversified production base in prospective, proven historic mining districts
Mining friendly jurisdictions with low geopolitical risk
Sufficient capital to repay all debt and invest in organic growth
Strong balance sheet and pro forma market capitalization of approximately $720 million will promote
liquidity, increased analytical following and access to capital
Combined entity expected to generate approximately $760 million operating cash flow over the next 5
years2,3
Creates compelling valuation re-rating opportunity
“Gold equivalent ounces” include silver and copper production converted to a gold equivalent based on consensus estimated commodity prices; accounts for the San Dimas
silver purchase agreement; and uses both Companies publically disclosed production estimates.
Assumes San Dimas operates at least at 2,500 tpd from Q1 2014; 100% ownership of Cerro Del Gallo and that it begins production at the end of 2015, with full year production
estimated at 95,000AuEq. oz in 2016 and Primero management estimates for Black Fox production, based on 2,200-2,300 tpd operation.
Refer to slides 11, 34, 35, 36, 37 of this presentation.
Estimated five-year after-tax operating cash flow estimated at consensus metals prices (as shown in appendix) and a 63:1 gold:silver ratio and includes recent tax reforms in
Mexico
Creating Value Through Consolidation
4
5. Transaction Summary
o
o
Proposed Transaction
o
o
o
o
o
Consideration
o
o
o
Other Terms
o
o
o
Conditions
o
o
o
Proposed Timing
o
o
Acquisition of all of the outstanding common shares of Brigus via Plan of Arrangement
All outstanding options to purchase Brigus common shares will be exchanged for options to purchase
Primero common shares based upon the exchange ratio1
Each outstanding warrant to purchase a Brigus common share will be exercisable to purchase 0.175 of
a Primero common share and 0.1 of a SpinCo common share1
Total equity value of approximately C$220 million2
Pro forma ownership of 73.4% Primero/ 26.6% Brigus2
0.175 Primero shares per Brigus share, representing total consideration of C$0.91 per share2
Represents a 45% premium over the December 13, 2013 closing price of C$0.63 and a 43% premium
calculated on the 20-day volume weighted average price (VWAP) of each respective company2,3
Brigus shareholders will also receive 90.1% of the common shares of newly incorporated SpinCo
which will assume Brigus’ non-Ontario assets and will be capitalized with C$10 million
Customary non-solicitation covenants, subject to normal fiduciary outs
Right to match
Reciprocal termination fee payable in certain circumstances
Unanimous support for the transaction and lockup agreements from the Board and Officers of Brigus
and a voting support agreement from Goldcorp
Brigus shareholder vote (66 2/3% of voting shareholders)
Primero shareholder vote (majority of voting shareholders)
Customary regulatory and court approvals
Mailing of Primero management information circular and Brigus proxy circular as soon as pracitcal
Shareholder meetings: February 2014
Closing: Late-February 2014
1. For further information efer to the Company’s News Release of December 16, 2013, “Primero to Acquire Brigus Gold and
Create a Diversified, Americas Based Mid-tier Gold Producer”, available on the Company’s website.
2. As at December 13, 2013, equity value and pro forma ownership on a fully diluted in-the-money basis, before ascribing
any value to SpinCo.
5
3. Volume weighted average prices based on TSX trading data only.
6. Benefits to Primero Shareholders
Asset
Diversification
o Adds a high quality producing gold mine in a proven and mining
friendly jurisdiction
Accretive
Cash Flow
o Provides immediate accretion to cash flow
Enhanced
Growth
o Increases and diversifies production profile
Increases
Reserves
o Significantly increases reserves and resources
Leverages
Technical Skills
o Leverages Primero’s underground mining technical strength
Re-Rating
Opportunity
o Improves market presence and provides multiple re-rating opportunity
Delivers on strategy of growth and diversification
6
7. Benefits to Brigus Shareholders
Attractive
Premium
Exposure to
Strong
Balance Sheet
Improved
market
presence
Re-Rating
Opportunity
o Attractive premium of 45%, before ascribing any value to SpinCo, to
the closing price on December 13, 2013
o Provides cash and cash flow to repay debt and fund growth
o Improved market presence and liquidity
o Provides opportunity to participate in multiple re-rating as the
combination diversifies production and cash flows
Leverages
Technical Skills
o Leverages combined technical expertise in underground mining
Participation
in SpinCo
o Ongoing participation in funded non-Ontario exploration assets
Transforms into a multi-mine producer
7
8. Pro Forma Capitalization
As at December 13, 2013
Units
TSX Share Price (C$)
Primero
2
Brigus
Pro Forma
$5.22
$0.63
n.a.
1
115.7
232.1
158.0
1
116.9
241.6
159.2
1
$570
$138
$709
1
$576
$144
$720
$125.7
$21.1
$146.8
$32.2
$74.6
$106.8
$1.7
$1.0
$2.7
$481
$196
$678
Shares Outstanding - Basic (mm)
Shares Outstanding - FDITM (mm)
Market Capitalization - Basic (US$ mm)
Market Capitalization - FDITM (US$ mm)
2
Cash and Cash Equivalents (US$ mm)
2,3
Total Debt
(US$ mm)
Investments (US$ mm)
1
Enterprise Value (US$ mm)
Source: Public market disclosure as at December 13, 2013; US/CAD exchange rate of 0.9447 assumed.
1. Based on closing prices as of December 13, 2013 on the TSX and share capital as of September 30, 2013, not adjusted for subsequent events.
2. Based on Balance sheet data as of September 30, 2013, not adjusted for SpinCo cash of approximately C$10 million or subsequent events.
3. Face amount of Brigus debt at Q3 2013 is $74.6 million, not including $20.3 million capital lease assumption - financial statements disclose debt of $82.9
million which is net of derivative liabilities.
8
9. COMBINED OPERATING PORTFOLIO
Diversified, Stable, Mining Friendly Jurisdictions
Builds on Mine
San Dimas Established Presence in Mexico
(AT DECEMBER 31, 2012, MINERAL RESOURCES
INCLUDE MINERAL RESERVES)
Au Reserves (Moz)
Au M&I Resources (Moz)
0.78
Au Inferred Resources (Moz)
0.76
Ag Reserves (Moz)
39.4
Ag M&I Resources (Moz)
46.9
Ag Inferred Resources (Moz)
Black Fox Mine
0.66
64.6
Ventanas Property
(AT DECEMBER 31, 2012, MINERAL RESOURCES
INCLUDE MINERAL RESERVES)
Head Office
(Toronto)
Au Reserves (Moz)
0.77
Au M&I Resources (Moz)
0.96
Inferred Resources (Moz)
0.06
Grey Fox
(AT JANUARY 27 2009)
Ind. Resources (koz AuEq.)
34.0
Inferred Resources (koz AuEq.)
70.0
(AT JULY 2, 2013)
0.51
Au Inferred Resources (Moz)
Cerro del Gallo
Au Indicated Resources (Moz)
0.23
(AT DECEMBER 31, 2012, MINERAL RESOURCES
EXCLUDE MINERAL RESERVES)
Au Reserves (Moz)
0.71
Au M&I Resources (Moz)
0.92
Ag Reserves (Moz)
15.3
Ag M&I Resources (Moz)
20.6
Cu Reserves (M lbs)
56.4
Cu M&I Resources (M lbs)
Producing Mine
Development Project
Exploration Property
103.4
Provides entry to historic Ontario mining district
9
10. Significant Near-Term Production Growth
Estimated Production Profile1
(Attributable Thousand Gold Equivalent Ounces)
Cerro del Gallo
95
Black Fox
San Dimas
120
120
160
165
165
2014E
2015E
2016/17E
2016E
105
100
138
2013E
1 . Based on range of company guidance and estimates. “Attributable gold equivalent ounces” include attributable silver converted to a gold equivalent
based on consensus estimated commodity prices and accounts for the San Dimas silver purchase agreement.
At Below Industry Average Cash Costs
10
11. Increases Reserves & Resources
Pro Forma Reserves and Resources1,2,3
(Attributable Million Gold Equivalent Ounces)
Grey Fox
0.51
Black Fox
Cerro del Gallo
0.93
San Dimas
2.30
0.77
1.00
0.23
0.06
1.20
0.80
Reserves
0.90
M&I Resources 3
Inferred Resources
1. Primero’s gold equivalent reserves and resources are adjusted for the silver purchase agreement and only attributable silver ounces to Primero are included.
Approximately 21% of all silver reserves and resources for San Dimas are considered attributable. Black Fox reserves and resources were estimated using a
gold price of $1,150/oz for 88% of production and $500/oz for the remaining gold production that is sold through the Goldstream Agreement.
2. Gold equivalency based on consensus long-term prices per ounce: Gold $1,300/oz, Silver $22.40/oz, Copper $2.97/lb.
3. M+I Resources include Reserves.
Robust Resource Base
11
12. Pipeline of Assets Drives Organic Growth
Production
San Dimas
Black Fox
Construction
San Dimas Expansion to 2,500 TPD
Development
Cerro del Gallo
Grey Fox
Exploration
Ventanas Property
Black Fox Mine at Depth
Black Fox Complex
San Dimas Regional
12
14. Primero Asset Overview
o
o
o
Located in historical mining
districts in Mexico with histories
spanning hundreds of years
With established infrastructure,
skilled workforce and local
suppliers
Supported by local communities
San Dimas Mine
Gold-Silver Mine
Durango, Mexico
0
400 km
Ventanas Property Cerro Del Gallo Project
Exploration Property
Durango, Mexico
Gold-Silver-Copper Project
Guanajuato, Mexico
Located in proven and low-risk jurisdictions
14
15. Steady Growth Ahead
DEVELOPMENT
PHASE 2 POTENTIAL
EXPANSION
PHASE 1 EXPANSION
PRODUCTION
San Dimas
Platform
San Dimas
2,500 TPD
San Dimas
3,000 TPD
Significant organic growth
Cerro Del
Gallo
15
16. PRIMERO: SAN DIMAS
Proven Long Life Platform Asset
o Located on the prolific Sierra Madre trend
-
Impressive historical performance
-
San Dimas has been mined for over 100 years with a
proven track record of reserve replacement
o Increasing production to ~160 k AuEq oz in 2014
o Mill currently operating at ~2,200 tpd
-
Mill expanding to 2,500 tpd in Q1 2014
-
Potential future expansion to 3,000 tpd
o Low operating costs
-
Expect cash costs to trend below $600/oz on a coproduct basis
o District wide exploration potential
-
Sinaloa Graben and West Block discoveries demonstrate
the potential for the system to provide wide higher-grade
veins
District Produced 11M oz Gold, 600M oz Silver
16
17. PRIMERO: CERRO DEL GALLO
Potential Near Term Production
CERRO DEL GALLO INCREASES PRIMERO’SPRODUCTION BY 60%12
Location:
Guanajuato State
Ownership: 100%1
Metals:
Gold, silver & copper
Mining:
Open pit, heap leach, and/or
conventional mill
Excellent Infrastructure: Active mining district,
skilled local workforce, grid power, water,
sealed roads, equipment suppliers and
established transport routes
Supportive Community: District has produced
1.14 billion ounces of silver and 6.5 million
ounces of gold over its 450 year mining history
Construction Decision: Contingent on project
achieving a double digit IRR at $1,100/oz gold
1. Subject to agreement to acquire remaining 30.8% from Goldcorp closing.
17
20. BRIGUS: BLACK FOX
Open for Expansion at Depth
Location
Ownership
Metals
Mining
Capacity
Recovery
Mine Life
Timmins, Ontario
100% (8% gold stream at $504/oz)
Gold
Open pit & Underground
2,200 TPD
94%
Open Pit: ~3 years, U/G: ~7 years
Mineral Resources and Mineral Reserves
(DECEMBER 31, 2012, MINERAL RESOURCES INCLUDE MINERAL RESERVES)
TONNAGE
(M TONNES)
GOLD GRADE
(G/T)
CONT. GOLD
(K OUNCES)
5.2
CLASSIFICATION
4.6
764
Mineral Reserves
Proven & Probable
Mineral Resources
(includes Mineral Reserves)
Measured & Indicated
5.4
5.3
925
Inferred
0.5
3.9
60
20
21. BRIGUS: BLACK FOX
Open for Expansion at Depth
RESERVE/RESOURCE
DEPTH (m)
SHAFT/RAMP DEPTH
(m)
Holloway Mine
900
864
Doyon
1,040
1,040
Holt Mine
1,200
1,075
Timmins West
1,200
1,200
Hoyle Pond
1,290
2,200
McIntyre
1,300
1,300
Lapa
1,600
1,400
Dome
1,665
1,665
Kirkland Lake
1,750
1,750
Hollinger
1,800
1,800
Westwood
2,650
2,650
LaRonde
3,200
2,860
Average
1,633
1,651
Black Fox
510
390
MINE
21
23. BRIGUS: GREY FOX
Promising Development Project
CERRO
Location: DEL GALLO INCREASES Timmins, ON
4 km from Black Fox - PRIMERO’SPRODUCTION BY 60%12
Ownership:
100% (No gold stream)
Metals:
Gold
Mining:
Open pit & Underground
Exploration:
3 rigs on site
Permitting:
Currently underway
Mineral Resources and Mineral Reserves
(July 3, 2013)
CUT-OFF
GRADE
(g/t Au)
POTENTIAL
MATERIAL
TONNES
(M)
CAPPED
Au (g/t)
CONTAINED
Au (oz)
>2.84
Underground
1.3
6.2
255,000
>0.72
CLASSIFICATION
Open Pit
3.0
2.6
252,400
4.3
3.7
507,400
Indicated Resources
Total Indicated Resources
Inferred Resources
>2.84
1.0
5.6
184,800
>0.72
Total Inferred Resources
Underground
Open Pit
0.5
2.8
43,800
1.5
4.7
228,600
23
25. Creates Re-Valuation Opportunity
EV/2014E Production 1
(US$/oz Au Eq.)
$5,746
$4,674
$4,133
$4,059
$3,422
$2,925
$1,957
Alamos
New Gold
AuRico
B2Gold
$71
Primero
Brigus
$49
1.
Argonaut
$65
$47
Brigus
Argonaut
Source: Bloomberg, BMO Capital Markets, Company Filings
EV/Resource Ounce2
(US$/Au Eq. oz)
$95
AuRico
2.
$93
Alamos
$84
Primero
New Gold
B2Gold
Source: Bloomberg, Company Filings
25
26. Creates Re-Valuation Opportunity
2014E Gold Equivalent Production 1
(Thousand Au Eq.oz)
709
405
272
New Gold
1.
B2Gold
MergeCo
238
182
AuRico
Alamos
$110
$104
165
154
Primero
Argonaut
$77
$73
Primero
Argonaut
Based on Analyst Consensus
2014E Cash Flow 2
(US$millions)
$356
$191
$133
New Gold
2.
B2Gold
MergeCo
AuRico
Alamos
Based on Analyst Consensus
26
27. Next Steps for New Primero
o
Integrate personnel and operating philosophies
o
Leverage underground technical expertise to optimize operating mine plans:
Production
o
Black Fox: Accelerate production from underground, advance development in East Zone,
increase exploration drifting and drilling laterally and at depth, define Central Zone, optimize
costs
San Dimas: Deliver San Dimas expansion to 2,500 tpd in Q1 2014, provide update on
potential expansion to 3,000 tpd mid-2014
Optimize potential of development projects:
o
Ensure Cerro del Gallo will provide a double digit IRR down to $1,100/oz gold
Expand resource at Grey Fox through exploration
Consolidate and reduce corporate G&A
27
28. Catalysts & News Flow
January 2014
2013 Production &
2014 Guidance
Plus update on Cerro
del Gallo
Late February 2014
Close Brigus Transaction
Creating a diversified,
Americas based mid-tier
producer
Q1 2014
San Dimas at
2,500 TPD
Expansion increases annual
production capacity to
160,000AuEq.oz
Q2 2014
Black Fox Underground
at ~1,000 TPD
Replacing lower-grade
open pit ounces
March 2014
Reserves Update
Release 2013 Reserves
and Resources
Statement
Q2 2014
San Dimas 3,000
TPD Decision
Expansion decision
announced
Q2 2014
Exploration Updates
Announce drilling results
from San Dimas, Black Fox,
Cerro del Gallo and Grey Fox
28
29. Transformational Combination
o
o
o
Transforms Primero into a
diversified mid-tier gold producer
with portfolio of high-grade assets
Strong financial position with
superior cash flow generation
Growth through two near-term
development projects and
significant exploration potential at
all assets
180%
1
GROWTH planned to
~400,000 AuEq.oz
by 2017 YE1,2
$150M
/yr
1,2
SIGNIFICANT Annual
Operating Cash Flow
1. Assumes San Dimas operates at least at 2,500 tpd from Q1 2014; 100% ownership of Cerro Del Gallo and that it begins production at the end of 2015, with full year
production estimated at 95,000AuEq. oz in 2016 and Primero management estimates for Black Fox production, based on 2,200-2,300 tpd operation.
2. Estimated five-year average after-tax operating cash flow estimated at consensus metals prices and a 63:1 gold:silver ratio, includes recent tax reforms in Mexico.
Producing, profitable and growing
29
31. SAN DIMAS
Silver Stream - Positive Leverage to Silver
Recent Tax Ruling Created Positive Leverage to Silver
Primero sells 50% of annual silver production above 3.5 million ounces at spot
o Remainder sold at ~$4 per ounce under silver purchase agreement
o Threshold commences August 6 to following August 5 each year
o Threshold increases to 6.0 million ounces on August 6, 2014
o Expansion anticipated to generate meaningful silver spot sales post August 6, 2014
SILVER AS PERCENTAGE OF 2013E REVENUE
Silver
Gold
25%
75%
31
32. BLACK FOX
GoldRuling Created Positive Leverage to Silver
Stream
Recent Tax
Black Fox has a gold stream on 8% of annual production at $504/oz
o Sandstorm Resources Ltd. has a gold stream agreement to purchase 8% of the life of
mine gold produced from Black Fox and 6.3% of the life of mine gold produced from
the Black Fox extension (which includes a portion of the Pike River concessions) at
US$504 per ounce of gold (subject to an inflationary adjustment not to exceed 2%
per annum).
32
34. SAN DIMAS
Mineral Resources and Mineral Reserves
(DECEMBER 31, 2012, MINERAL RESOURCES INCLUDE MINERAL RESERVES)
TONNAGE
(MILLION TONNES)
GOLD GRADE (G/T)
SILVER GRADE
(G/ T)
CONTAINED GOLD
(000 OUNCES)
CONTAINED SILVER
(000 OUNCES)
4.579
4.5
267
660
39,377
Indicated
3.748
6.5
389
780
46,877
Inferred
6.144
3.9
327
762
64,637
CLASSIFICATION
Mineral Reserves
Probable
Mineral Resources
Notes to Mineral Reserve Statement:
1.
Cutoff grade of 2.4 grams per tonne (”g/t”) gold equivalent (“AuEq”) based on total operating cost of US$104.73/t. Metal prices assumed are gold
US$1,400 per troy ounce and silver US$25 per troy ounce. Silver supply contract obligations have been referenced in determining overall vein reserve
estimate viability.
2.
Processing recovery factors for gold and silver of 97% and 94% assumed.
3.
Exchange rate assumed is 13 pesos/US$1.00.
The Mineral Reserve estimates were prepared by Mr. Herbert A. Smith P.Eng. of AMC Mining Consultants (Canada) Ltd. and a QP for the purposes of
4.
National Instrument 43-101 (“NI 43-101”).
Notes to Mineral Resource Statement:
1.
Mineral Resources are total and include those resources converted to Mineral Reserves.
2.
A 2.0g/t Au Eq cutoff grade is applied and the AuEq is calculated at a gold price of US$1,625 per troy ounce and a silver price of US$25 per troy ounce.
3.
A constant bulk density of 2.7 tonnes/m3 has been used.
The Mineral Resource estimates were prepared by Mr. Rodney Webster MAusIMM, MAIG and Mr. J. Morton Shannon P.Geo., both of AMC Mining
4.
Consultants (Canada) Ltd. and a QP for the purposes of NI 43-101.
Additional exploration potential estimated at 6-10 million tonnes at grade ranges of 3-5 grams per tonne of gold and 200-400 grams per
tonne of silver. It should be noted that these targets are conceptual in nature. There has been insufficient exploration to define an
associated Mineral Resource and it is uncertain if further exploration will result in the target being delineated as a Mineral Resource.
34
35. CERRO DEL GALLO
Reserves and In-Pit Resources1
Total Resources Within the Gold Domain2
Category
Measured
Indicated
Measured & Indicated
Inferred
M Tonnes
129
80
209
20
Au
(g/t)
0.54
0.38
0.48
0.3
Au
(M ozs)
2.24
0.98
3.22
0.19
Ag
(g/t)
12.0
8.0
11.0
7.0
Ag
(M ozs)
49.8
20.6
70.3
4.5
Cu
(%)
0.09
0.08
0.08
0.09
Cu
(M lbs)
256.0
141.1
396.9
39.7
Au Eq
(g/t)
0.94
0.69
0.83
0.59
AuEq
(M oz)
3.91
1.77
5.58
0.38
1. “Technical Report First Stage Heap Leach Feasibility Study, Cerro del Gallo Gold Silver Project, Guanajuato, Mexico” June 2012 (“Feasibility Study”). Gold equivalent
ounces calculated by Cerro Resources using gold, silver and copper prices of US$1,341/oz, US$25.58/oz and US$7,582/t respectively.
2. These resources are reported using internal cut-off grade of 0.2 g/tAu as per Feasibility Study, 2012 and Golder Associates Technical Report, 2008.
Phase I Heap Leach In-Pit Proven and Probable Reserves3
Category
Proven
Probable
Proven & Probable
M Tonnes
28.2
4.0
32.2
Au
(g/t)
0.71
0.54
0.69
Au
(M ozs)
0.64
0.07
0.71
Ag
(g/t)
15.1
13.2
14.8
Ag
(M ozs)
13.7
1.7
15.3
Cu
(%)
0.08
0.07
0.08
Cu
(M lbs)
50.2
6.2
56.4
Au Eq
(g/t)
1.15
0.93
1.14
AuEq
(M oz)
1.05
0.12
1.18
Au Eq
(g/t)
1.07
0.92
1.06
AuEq
(M oz)
1.37
0.24
1.64
3. These reserves are reported using internal cut-off grades of 0.24 and 0.29 gAuEq/t for weathered and partially oxidized, respectively.
In-Pit Resources (excluding Proven and Probable Reserves)4,5
Category
Measured
Indicated
Measured & Indicated
M Tonnes
39.9
8.0
47.9
Au
(g/t)
0.61
0.55
0.60
Au
(M ozs)
0.78
0.14
0.92
Ag
(g/t)
13.8
11.0
13.3
Ag
(M ozs)
17.71
2.83
20.55
Cu
(%)
0.10
0.08
0.1
Cu
(M lbs)
88.8
14.6
103.4
4. These resources are reported using internal cut-off grades of 0.24, 0.29, and 0.34 gAuEq/t for weathered, partially oxidized, and fresh material resp.
5. See note 7 in January 23, 2013 News Release “Primero achieves 2012 Guidance and Provides 2013 Outlook”.
35
36. BLACK FOX
Mineral Resources and Mineral Reserves
(DECEMBER 31, 2012, MINERAL RESOURCES INCLUDE MINERAL RESERVES)
TONNAGE
(MILLION TONNES)
GOLD GRADE (G/T)
CONTAINED GOLD
(000 OUNCES)
5.2
4.6
764
Measured & Indicated
5.4
5.3
925
Inferred
0.5
3.9
60
CLASSIFICATION
Mineral Reserves
Proven & Probable
Mineral Resources
Notes:
1.
The average gold grade for Proven and Probable Reserves is adjusted for dilution while Measured and Indicated Resources is not. Contained metal in
estimated reserves remains subject to metallurgical recovery losses.
2.
Black Fox reserves and resources are based on US$1,150/oz Au for 88% of production and US$500/oz Au for gold sold through the gold stream
agreement from the NI 43-101 Technical Report prepared by Tetra Tech dated January 2011. The Black Fox open pit reserves and resources are
reported at a 0.88 gpt cutoff and the underground reserves and resources are reported at a 2.54 gpt cutoff. Estimated Black Fox reserves and
resources are shown as at December 31, 2012, net of mining depletion from the October 31, 2010 independent Technical Report.
3.
A gold price of US$1,250/oz and an exchange rate of US$1.00=C$1.00 was utilized in the gold cut-off grade calculations of 2.63 gpt for potential
underground at the Contact Zone and 0.65 gpt for potential open-pit 147 Zone mineral resources. Underground and open-pit mining costs, process
costs and G&A costs were estimated using experience gained from Brigus' Black Fox mine. Process recovery was assumed at 95%.
4.
Disclosure of "contained ounces" is permitted under Canadian Regulations; however, the SEC permits resources to be reported only as in place
tonnage and grade.
36
37. GREY FOX
Mineral Resources
JULY 3, 2013
CLASSIFICATION
CUT-OFF GRADE
(g/t Au)
POTENTIAL MATERIAL
TONNES
(MILLION TONNES)
CAPPED Au (g/t)
CONTAINED GOLD
(000 OUNCES)
Indicated Resources
>2.84
Underground
1.3
6.2
255,000
>0.72
Open Pit
3.0
2.6
252,400
4.3
3.7
507,400
Total Indicated Resources
Inferred Resources
>2.84
1.0
5.6
184,800
>0.72
Total Inferred Resources
Underground
Open Pit
0.5
2.8
43,800
1.5
4.7
228,600
Notes:
1. The quantity and grade of reported Inferred resources in this estimation are uncertain in nature and there has been insufficient exploration to define these
Inferred resources as an Indicated or Measured mineral resource and it is uncertain if further exploration will result in upgrading them to an Indicated or
Measured mineral resource category.
2. These Mineral Resources are not Mineral Reserves as they do not have demonstrated economic viability.
3. While the results are presented undiluted and in situ, the reported mineral resources are considered to have reasonable prospects for economic extraction.
4. CIM definitions and guidelines were followed for Mineral Resources.
5. A gold price of US$1,400/oz and an exchange rate of US$1.00=C$1.01 was utilized in the gold cut-off grade calculations of 2.84 g/t for potential underground
and 0.72 g/t for potential open-pit Mineral Resources. Underground and open-pit mining costs, process costs and G&A costs were estimated using experience
gained from Brigus’ Black Fox mine.
6. The Indicated category is defined by combining various statistical criteria, such as a minimum of three drill holes within the search area, a maximum distance
of 15m to the closest composite, and a maximum average distance of 25m to composites. Finally, a clipping boundary was interpreted to either upgrade or
downgrade some of the resource based on confidence and geological continuity.
37
38. Executive Management
Joseph F. Conway | President & C.E.O. 1
o
o
Former CEO, President and Director of IAMGOLD
from 2003 to 2010
Former President, CEO and Director of Repadre
Capital from 1995 to 2003
Renaud Adams | C.O.O.
o
o
o
Former SVP, American Operations for IAMGOLD
Former General Manager of Rosebel Gold Mine
2007 to 2010
Former General Manager El Toqui Mine in Chile
and then the El Mochito Mine in Honduras
David Blaiklock | C.F.O.
Former controller IntraWest
Previously controller for a number of public and
private companies in real estate development
o
o
Tamara Brown | VP, Investor Relations
o
Former Director Investor Relations for IAMGOLD;
Partner of a Toronto based, boutique investment
bank; Professional engineer in mining industry
H. Maura Lendon | VP, Chief General Counsel
and Corporate Secretary
Former Senior Vice President, Chief Legal Officer
and Corporate Secretary of HudBay Minerals Inc.;
Chief Counsel Canada, Chief Privacy Officer Canada of AT&T
o
Gabriel Voicu | VP, Geology and Exploration
25 Years of mining experience, formerly held
senior technical and exploration positions with
Cambior and IAMGOLD
o
David Sandison | VP, Corporate Development
Former VP, Corporate Development of
Clarity Capital ; Director, Corporate Development
Xstrata Zinc Canada ; Director Business Development,
Noranda/Falconbridge; Former EVP, Noranda Chile
o
Louis Toner | VP, Project Development &
Construction
o
Over 30 Years of Engineering and Construction
experience, formerly held Senior Project
Management roles with BBA Inc. and Lafarge
Canada Inc.
38
39. Board of Directors
Wade Nesmith | Chairman
o
o
Founder of Primero
Founding and current director
of Silver Wheaton
David Demers | Director2,3,4,5
Founder, CEO and Director
Westport Innovations
Director of Cummins Westport
and Juniper Engines
o
o
Grant Edey | Director 3,5
o
o
o
President & CEO, Khan
Resources Inc.
Former Director of Breakwater
Resources, former director of
Queenstake Resources, Santa
Cruz Gold
Former CFO, IAMGOLD
Joseph Conway | Director
see Executive Management
Brad Marchant| Director 1
Rohan Hazelton | Director 1,5
o
o
Timo Jauristo | Director 2
o
o
EVP, Corporate Development,
Goldcorp
Former CEO of Zincore Metals
Inc. and Southwestern
Resources Corp.
Eduardo Luna | Director 1
o
o
VP, Strategy, Goldcorp
Formerly with Wheaton River
and Deloitte & Touche LLP
Former EVP & President,
Mexico. Former Chairman and
CEO of Silver Wheaton,
Executive VP of Goldcorp and
Luismin S.A. de C.V. (San
Dimas) and President of
Mexican Mining Chamber and
the Silver Institute
Board Committees:
1. Health, Safety and Environment
2. Human Resources
3. Governance and Nominating
4. Lead Director 5. Audit
o
Co-founder of Triton Mining
Corporation
Founder of BioteQ Environmental
Technologies Inc.
Robert Quartermain | Director 2,3
o
o
o
Founder and President & CEO,
Pretivm Resources
Former President, Silver Standard
Director of Vista Gold Corp.
and Canplats Resources
Michael Riley | Director 5
o
o
Chartered accountant with more
than 26 years of accounting
experience
Chair of Primero Audit Committee,
Chair of Audit Committee of B.C.
Lottery
39
40. Notes to Investors Regarding the Use of Resources
This presentation has been prepared in accordance with the requirements of Canadian provincial securities laws which differ from the requirements of
U.S. securities laws. Unless otherwise indicated, all mineral reserve and resource estimates included in this presentation have been prepared in
accordance with Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining,
Metallurgy and Petroleum classification systems. NI 43-101 is a rule developed by the Canadian Securities Administrators that establishes standards for
all public disclosure an issuer makes of scientific and technical information concerning mineral projects. These standards differ significantly from the
requirements of the United States Securities and Exchange Commission (the “SEC”), and reserve and resource estimates disclosed in this presentation
may not be comparable to similar information disclosed by U.S. companies.
The mineral reserve estimates in this presentation have been calculated in accordance with NI 43-101, as required by Canadian securities regulatory
authorities. For United States reporting purposes, SEC Industry Guide 7 under the United States Securities Exchange Act of 1934, as amended, as
interpreted by Staff of the SEC, applies different standards in order to classify mineralization as a reserve. As a result, the definition of “probable
reserves” used in NI 43-101 differs from the definition in the SEC Industry Guide 7. Under SEC standards, mineralization may not be classified as a
“reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the
reserve determination is made. Among other things, all necessary permits would be required to be in hand or issuance imminent in order to classify
mineralized material as reserves under the SEC standards. Accordingly, mineral reserve estimates contained in this presentation may not qualify as
“reserves” under SEC standards.
In addition, this presentation uses the terms “indicated resources” and “inferred resources” to comply with the reporting standards in Canada. The
Company advises United States investors that while those terms are recognized and required by Canadian regulations, the SEC does not recognize them.
United States investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into mineral
reserves. Further, “inferred resources” have a great amount of uncertainty as to their existence and as to whether they can be mined legally or
economically. Therefore, United States investors are also cautioned not to assume that all or any part of the “inferred resources” exist. In accordance
with Canadian securities laws, estimates of “inferred resources” cannot form the basis of feasibility or other economic studies. It cannot be assumed that
all or any part of “indicated resources” or “inferred resources” will ever be upgraded to a higher category or are economically or legally mineable. In
addition, disclosure of “contained ounces” is permitted disclosure under Canadian securities laws; however, the SEC only permits issuers to report
mineralization as in place tonnage and grade without reference to unit measures.
NI 43-101 also permits the inclusion of disclosure regarding the potential quantity and grade, expressed as ranges, of a target for further exploration
provided that the disclosure (i) states with equal prominence that the potential quantity and grade is conceptual in nature, that there has been
insufficient exploration to define a mineral resource and that it is uncertain if further exploration will result in the target being delineated as a mineral
resources, and (ii) states the basis on which the disclosed potential quantity and grade has been determined. Disclosure regarding exploration potential
has been included in this presentation. United States investors are cautioned that disclosure of such exploration potential is conceptual in nature by
definition and there is no assurance that exploration will result in any category of NI 43-101 mineral resources being identified.
40
41. PRIMERO MINING CORP.
20 Queen Street West, Suite 2301
Toronto, ON M5H 3R3
T 416 814 3160 F 416 814 3170
TF 877 619 3160
www.primeromining.com
Tamara Brown
Vice President, Investor Relations
T 416 814 3168
info@primeromining.com
Trading Symbols
Common Shares TSX:P, NYSE:PPP, ASX:PPM
Warrants
TSX:P.WT
