Focused on Sustainability              Sustainability Report 2011
About This ReportWe at Primero are proud to present our first annualSustainability Report*, which highlights our achieveme...
PRIMERO SUSTAINABILITY REPORT 2011   1As we continue along our path to becoming a leading mid-tier gold producer, we are c...
2   PRIMERO SUSTAINABILITY REPORT 2011Our Sustainability PolicyAt Primero, we believe that sustainability is fundamental t...
PRIMERO SUSTAINABILITY REPORT 2011   3                            By maximizing earnings and reducing operating costs, we ...
4   PRIMERO SUSTAINABILITY REPORT 2011Letter from the President and CEOI know I speak for everyone at Primero in saying th...
PRIMERO SUSTAINABILITY REPORT 2011      5                       Joseph F. Conway	                       President & Chief ...
6     PRIMERO SUSTAINABILITY REPORT 2011Focused on Ethical, Transparent GovernanceCorporate Social Responsibility         ...
PRIMERO SUSTAINABILITY REPORT 2011     7Collective Bargaining and Freedom of Association                          Human Ri...
8   PRIMERO SUSTAINABILITY REPORT 2011Focused on Production: the San Dimas MineThe San Dimas mine is located in central we...
PRIMERO SUSTAINABILITY REPORT 2011      9As we continue along our path to becoming a leading mid-tier gold producer, we ar...
10   PRIMERO SUSTAINABILITY REPORT 2011Focused on our PeopleOur people, both employees and contractors, are our greatestas...
PRIMERO SUSTAINABILITY REPORT 2011      11Health and Safety Performance                                             We run...
12       PRIMERO SUSTAINABILITY REPORT 2011Employee and Community Health                                               min...
PRIMERO SUSTAINABILITY REPORT 2011   13Lost time incidents                                                      LTI Index ...
14     PRIMERO SUSTAINABILITY REPORT 2011Focused on our CommunitiesWe at Primero are constantly aware that every action we...
PRIMERO SUSTAINABILITY REPORT 2011    15Local education and training                                               Trainin...
16   PRIMERO SUSTAINABILITY REPORT 2011Focused on the EnvironmentAt Primero, our environmental focus is to act withrespons...
PRIMERO SUSTAINABILITY REPORT 2011   17For years, San Dimas has been “Clean Industry” certified by the          As Mexican...
18     PRIMERO SUSTAINABILITY REPORT 2011Waste Management (process and non-process)                                     Mi...
PRIMERO SUSTAINABILITY REPORT 2011   19 Waste                                                                             ...
20   PRIMERO SUSTAINABILITY REPORT 2011In ClosingAs a relatively new company operating a long establishedmine, Primero fin...
PRIMERO SUSTAINABILITY REPORT 2011   21For the near future, our primary concerns and objectives focus on improving our env...
This report is written for Primero employees and theirfamilies, our host communities, legislators andgovernment officials,...
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Primero 2011 csr final

  1. 1. Focused on Sustainability Sustainability Report 2011
  2. 2. About This ReportWe at Primero are proud to present our first annualSustainability Report*, which highlights our achievementsand challenges in our first full year operating the San Dimasmine. We acquired San Dimas in August of 2010 fromGoldcorp Inc., a company with established and respectedsustainability practices.* The 2010 Sustainability Report reported on the five months in 2010 after Primero’s acquisition of the San Dimas property. All currency is in United States dollars (USD) unless otherwise noted.
  3. 3. PRIMERO SUSTAINABILITY REPORT 2011 1As we continue along our path to becoming a leading mid-tier gold producer, we are committed to supporting sustainable policiesand practices in mine exploration, development and operations. Corporate responsibility is embedded into our daily activities. Ourgoal is to continuously improve workplace health and safety, and environmental performance, and to share the benefits of miningwith our local communities.A key component of our commitment is transparent, accountable sustainability reporting. Our Board of Directors and seniormanagement team have committed to the sustainability reporting process, and are working to improve data collection and toencourage employee engagement in all of our sustainability initiatives.As a public company, Primero’s financial results are audited annually and reported on a regular basis. Our Annual Reports, FinancialReports and Regulatory Filings are posted on our website. Therefore, economic performance is not emphasized in this report.GRI DeclarationThis report is based on the standards of the Global Reporting Initiative (GRI), and is the first step in our target for 2012, which isto achieve a GRI level C standard of sustainability reporting. The GRI is an independent institution that has developed voluntaryguidelines for sustainability reporting. We believe that GRI guidelines help us to maintain a high standard of transparency, clarityand comparability, and that applying GRI standards demonstrates our commitment to transparent reporting, especially in thoseareas that are most important to our stakeholders.
  4. 4. 2 PRIMERO SUSTAINABILITY REPORT 2011Our Sustainability PolicyAt Primero, we believe that sustainability is fundamental toour success. Our prosperity depends on our performance—at the corporate level and in our relation to our hostcommunities—in the three pillars of sustainability:economic achievement, community engagement andenvironmental stewardship.
  5. 5. PRIMERO SUSTAINABILITY REPORT 2011 3 By maximizing earnings and reducing operating costs, we produce results for ourEconomic achievement shareholders while also contributing to the economic and social development of our host communities. We actively engage in meaningful dialogue with local residents, community leaders and organizations to identify opportunities and priorities for economic improvement,Community engagement better training and social development. We support schools, health care and local infrastructure, and we continually seek development opportunities that will contribute to a self-sustaining economy in the communities surrounding our operations. At all times, we seek to operate in a responsible manner and to minimize the impact ourEnvironmental stewardship operations may cause to the environment. We operate with an awareness of the mine’s life cycle and practice the progressive rehabilitation of areas affected by our activities.
  6. 6. 4 PRIMERO SUSTAINABILITY REPORT 2011Letter from the President and CEOI know I speak for everyone at Primero in saying that growth andprofitability are not at odds with environmental and communitysustainability. In fact, we believe that we can only thrive when ourlocal communities share in the benefits of mining and welcome ourpresence, and when we act with responsibility, transparency andaccountability. Over this past year, we have maintained the high standards set by Goldcorp, and in some areas, improved on previous practices. In our health and safety performance, for example, the number of reportable incidents declined for the sixth consecutive year. As a result of our efforts, the Mexican Centre for Philanthropy named us an ESR (in English, a Socially Responsible Enterprise). To achieve this sought-after designation, we were evaluated against rigorous standards of quality-of-life, business ethics, community engagement, and environmental stewardship. Despite the overall improvement in health and safety, I am sorry to report a worker’s death in 2011, and I extend my personal sympathies to his family. We take this incident very seriously, and initiated a thorough investigation. Our experts reviewed our safety training and ensured that everyone, working directly or indirectly for Primero, had their safety training reviewed and refreshed. For 2012, we have set out a number of CSR objectives. While they are ambitious, I am certain that our teams are capable of meeting every one. Regarding health and safety performance, I want to see the number of workplace accidents reduced by 50%, and of course, zero fatalities. That will only be the first step in making San Dimas a “triple-zero” operation by
  7. 7. PRIMERO SUSTAINABILITY REPORT 2011 5 Joseph F. Conway President & Chief Executive Officer2014: zero lost time incidents, zero work related medical leaves, and efforts in seeking local economic development opportunitieszero staff on modified duties. I also want to see San Dimas win the that show the strongest potential for generating income that isSilver Helmet, an annual award given by the Mexican government to independent of mining.mines with the best safety records in the industry. These objectives indicate our commitment to building a corporateFor environmental performance, I expect us to obtain “Clean culture of continual improvement in Corporate Social Responsibility.Industry” certification from PROFEPA, the Mexican environmental And in the interests of transparency, I would like to add one more:authority, and I have set this as an annual objective. As you will in 2012, our Sustainability Report will build on this year’s report, andsee noted elsewhere, 2012 began with a tailings pipe leak, which seek to achieve level C standards of the Global Reporting Initiativetriggered an overhaul of our tailings containment systems. We are (GRI) 3.1 Guidelines.also investing nearly one-and-a-half million dollars in new pumpsfor the tailings facility, and we are evaluating an expansion of ourhydroelectric power plant that supplies clean, renewable power forour operations and to the Mexican power grid.In the area of community relations, we will maintain the highstandards that won us the ESR designation, while increasing our
  8. 8. 6 PRIMERO SUSTAINABILITY REPORT 2011Focused on Ethical, Transparent GovernanceCorporate Social Responsibility Code of Business Conduct and EthicsCorporate Social Responsibility is key to our company-wide strategy. Our operating practices are governed by the principles set out inWe have an active Corporate Social Responsibility (CSR) program our Health and Safety Policy and our corporate Code of Businessthat guides us in policy and decisions regarding environmental Conduct and Ethics. The Code is applicable to all directors, officers andprotection, the health and safety of our people, and the socio- employees. It embodies the commitment of Primero and our subsidiarieseconomic development of our host communities. We are committed to conduct business in accordance with all applicable laws, rules andto embedding corporate social responsibility in all our daily actions. regulations and the highest ethical standards. The Code of BusinessOur goal is to continuously improve workplace health and safety and Conduct and Ethics is available on the Primero website.environmental performance, and to share the benefits of mining withlocal communities. Health, Safety and Environment Committee Sustainability practices are the responsibility of the Board of DirectorsWe strive to instill a safety-first culture among our employees, and the Health, Safety and Environment Committee (HSEC). Thecontractors and visitors. This includes improving working conditions HSEC reports to the Board. Its purpose is to review and recommendand conserving the health and physical safety of all our employees. It corporate policies and monitor activities as they relate to health, safetyextends to preserving the environment and safeguarding the health of and environmental matters, to review and recommend corporatethe inhabitants of the communities in which we operate, who in the policies and programs in connection with social issues affectingfuture could become our employees. communities where the Company conducts operations. Internal weeklyIn 2012, we plan to promote and expand our CSR programs, with a and quarterly reporting tracks performance indicators including humanfocus on building employee and community awareness of health and resources, health and safety performance, environmental monitoring,safety issues and protection of the environment. compliance with permits, materials inputs and outputs, and community relations activities. The complete HSEC guidelines are available on the Primero website.
  9. 9. PRIMERO SUSTAINABILITY REPORT 2011 7Collective Bargaining and Freedom of Association Human RightsAll Primero workers enjoy the right to freedom of association as Primero respects internationally proclaimed human rights, and strivesprovided by applicable labour law, and a large percentage of mine to ensure that we are not complicit in human rights abuses.workers are trade union members. We do not believe that the right toexercise freedom of association and collective bargaining is at risk at Whistleblower Policyany Primero location. Our corporate Whistleblower Policy allows any employee to communicate a concern or complaint confidentially and anonymously,Workplace Diversity, Non-Discrimination with the expectation of a timely response and the assurance thatand Equity there will be no retribution or negative consequences. We provide aAt Primero, we do not discriminate on the basis of race, religion, confidential email address (reportline@primeromining.com) and a toll-ethnicity, national origin, colour, gender, age, sexual orientation, free complaint reporting hotline (1-877-508-5716) which is availablecitizenship, veteran status, marital status or disability. Harassment, 24 hours a day, 7 days a week.including sexual, physical and verbal, is prohibited.We do not allow any child labour, forced or compulsory labour.
  10. 10. 8 PRIMERO SUSTAINABILITY REPORT 2011Focused on Production: the San Dimas MineThe San Dimas mine is located in central west Mexico, in theState of Durango, approximately 150 km west of Durango and125 km northeast of Mazatlán. The mine is 100% owned byPrimero. The San Dimas gold-silver deposit is one of the mostsignificant precious metal deposits in Mexico in a very largemining district.
  11. 11. PRIMERO SUSTAINABILITY REPORT 2011 9As we continue along our path to becoming a leading mid-tier gold producer, we are committed to supporting sustainable policiesand practices in mine exploration, development and operations. Corporate responsibility is embedded into our daily activities. Ourgoal is to continuously improve workplace health and safety, and environmental performance, and to share the benefits of miningwith our local communities.A key component of our commitment is transparent, accountable sustainability reporting. Our Board of Directors and seniormanagement team have committed to the sustainability reporting process, and are working to improve data collection and toencourage employee engagement in all of our sustainability initiatives.As a public company, Primero’s financial results are audited annually and reported on a regular basis. Our Annual Reports, FinancialReports and Regulatory Filings are posted on our website. Therefore, economic performance is not emphasized in this report. San Dimas 2011 facts San Dimas Staff (as of end of year 2011) 102,200 oz 79,600 oz 4.6M oz 1,055 131 100% Gold equivalent* Gold Silver Employees Contractors Employees & Contractors who are Mexican nationals* Gold equivalent ounces include silver produced and converted to a gold equivalent, based on average commodity prices received in the period.
  12. 12. 10 PRIMERO SUSTAINABILITY REPORT 2011Focused on our PeopleOur people, both employees and contractors, are our greatestasset. Our success depends on the skilled, hard-workingpeople who work in the San Dimas operation, and in returnwe seek to maintain a culture of safety in which everyone iscontinually reminded of the importance of keeping themselvesand their colleagues healthy and injury-free. We treat peoplefairly and without discrimination, with full regard for theirhuman rights.
  13. 13. PRIMERO SUSTAINABILITY REPORT 2011 11Health and Safety Performance We run monthly campaigns focused on health or safety issues, such asAt San Dimas, we are committed to the safety, health and welfare defensive driving, safe handling of sodium cyanide and security in highof our employees, contractors and visitors to the worksite, and our altitude work. In 2011, we participated in a Self-Management Programcommitment extends to the residents of nearby communities. We for Safety and Health at Work, in conjunction with the Mexicanstrive to ensure an injury-free workplace though education and Ministry of Labour. Compliance with our workplace Health and Safetytraining, and policies and procedures that consistently promote safety. regulations was measured at 93%.Employees are recognized for their safety awareness each month as away to encourage safe practices. Workplace injuries We regret to report that a tragic accident occurred in 2011, resultingOur Health and Safety Administration system is guided by our in the death of a mine worker. We extend our deepest sympathies toCentral Safety Committee, which is chaired by the mine’s General the family and friends of our employee. As a result of the accident weManager and includes management, department heads and employee conducted a thorough assessment of the incident and reviewed ourrepresentatives. The committee meets on a monthly basis and safety training policies. Throughout San Dimas, workers were givendiscusses safety-related issues including accident investigations, safety refreshers and safe work practices were given added emphasis.observations, prevention, and more. Despite this fatality, we achieved a reduction in overall accidentA number of committees, subcommittees and working groups frequency, marking the sixth consecutive year in which injuriesare dedicated to preventing accidents, including the Preventive have declined.Observations Subcommittee, which detects and reports unsafe acts orconditions, and “Prevention Circles” that discuss and seek to minimize In 2012, we hope to earn the Silver Helmet Award, an annual awardspecific dangers. The Subcommittee on Accident and Incident given by the Mexican government in recognition of the best safetyInvestigation analyzes risks and investigates incidents that occur. records in the mining industry.
  14. 14. 12 PRIMERO SUSTAINABILITY REPORT 2011Employee and Community Health mining region, and everywhere we operate, we seek to be recognizedIn addition to injury prevention, the San Dimas mine’s Integral Safety as an employer of choice by offering competitive wages, above-averageSystem is intended to improve the health and welfare of our workers, benefits, as well as by preferentially hiring locally and recognizing andtheir families and the surrounding communities. The system seeks rewarding employee performance.to identify and prevent sickness through ongoing monitoring and We are committed to fair and equitable labour practices in everycheckups, including: operation and office. A large proportion of our workforce is unionized— • illness prevention programs in fact, in April of 2011, a strike by the union of millworkers stopped • epidemiological disease-detection programs for all employees production for a month. Currently, relations with employees and the exposed to noise, dust, hazardous chemical substances etc. unions are good. • frequent medical checkups Emergency Response Plans • anti-doping and alcohol tests The San Dimas mine has a history of strong emergency-preparednessSan Dimas maintains on-site hospital facilities with x-ray, ultrasound, a practices. Our rescue teams are trained and equipped to handle nearlysurgery room and clinical lab, which are available for all employees and any type of emergency that could occur in an underground mine. Theycontractors. receive specialized training in first aid, mine rescue and rope rescues including rappelling and vertical rescue.Our Workforce & Labour Practices As an indication of their high standards, the San Dimas rescue teamThroughout Primero we foster a culture of inclusivity and acceptance won first place in the National Competition of Rescue Squads organizedof gender, race, cultural background, age, religion and disability. At by the Mining Chamber of Mexico, for the sixth consecutive year.the San Dimas operation we are continuing the culture of respect thatwas well established by the mine’s previous owner. In this traditional
  15. 15. PRIMERO SUSTAINABILITY REPORT 2011 13Lost time incidents LTI Index 9 9 0.53 0.55 7 0.476 0.39 3 3 0.21 0.1806 07 08 09 10 11 06 07 08 09 10 11All Incidents All frequency index 7.0865 61 53 4.97 31 29 30 3.23 2.14 1.96 1.8406 07 08 09 10 11 06 07 08 09 10 11Injury Frequency, 2011Lost time Total reportable Significant potentialinjuries injuries incidents Fatalities LTIFR AIFR3 27 65 1 0.18 1.84Staff Breakdown Full-Time Employees Hourly (Union) Contractors TotalMexico City Office 13 Nil Nil 13San Dimas Mine 488 567 131 1,186Vancouver Office 5 Nil 1 6Toronto Office 7 Nil Nil 7TOTAL 513 567 132 1,212San Dimas regional hiring78% 9% 4% 7% 2%Durango State Sinaloa State Zacatecas State Guanajuato State Otros State
  16. 16. 14 PRIMERO SUSTAINABILITY REPORT 2011Focused on our CommunitiesWe at Primero are constantly aware that every action we takehas an effect on nearby communities. We are grateful that weare welcomed among them and strive to continue to improveconditions for local communities where possible.The San Dimas mine has invested in significant infrastructure ESR recognitionupgrades, in the form of improvements to roads, electrical and In March of 2012, CEMEFI, the Mexican Centre for Philanthropycommunication systems and medical facilities—which, though (Centro Mexicano para la Filantropia) designated us an ESR, a “Sociallydeveloped to serve our mining operations, are shared by the entire Responsible Enterprise”. While we received the award in 2012, it iscommunity. In addition to those benefits, we actively contribute to a in recognition of our corporate social performance in 2011. An ESRbroad range of social and community initiatives, often in collaboration designation means that a company is committed to sustainability inwith local and regional authorities. economic, social and environmental spheres, and is in complianceWe support education and training, though subsidizing teachers’ with rigorous standards of quality-of-life, business ethics, communitysalaries, building classrooms and helping to pay the tuition for engagement, and environmental stewardship. Fewer than 690hundreds of students from pre-school through secondary school. We companies across Mexico have earned the ESR designation.subsidize technical training for future miners. We have contributed to Community Developmentthe construction of sports facilities for the community’s benefit. We As a critical step in establishing our presence as the new owner of thesupport local health care facilities and subsidize childcare, to help our San Dimas mine, we carried out a community-wide economic, socialworking-parent employees and the communities at large. And we and cultural development survey in the local area. Nearly 1,000 surveyspromote the growth of a self-sustaining local economy by helping to were distributed (covering 95% of households in the community)develop new, non-mining businesses. requesting general information on their family and living conditions,In 2011, we began planning a bimonthly magazine that will serve as relationships and health. The results will assist us in developing futurea communication channel to the workers of San Dimas and their community support programs.community, and promote the community’s personal and socio-culturalgrowth. The first issue was published in early 2012.
  17. 17. PRIMERO SUSTAINABILITY REPORT 2011 15Local education and training Training womenIn 2011, we provided a 75% tuition subsidy to all 220 students (pre- The “Miner Women” project aims to increase the number of womenschool through secondary school) attending the local school, whether employed in all areas of the San Dimas operation, and to elevate theirthey are our employees’ children or not. status and improve their quality of life. Women have been recruitedThe CONALEP trade school in Tayoltita was originally established by and trained as specialized machinery operators, especially large,the San Dimas mine to improve the career prospects for local youth, heavy-duty equipment and electro-hydraulic jumbos. Graduates of theand provide a source of trained young professionals for the mine. program become significant financial contributors, and in some cases,Out of all the Metallurgical Mining and Electromechanical graduates are their family’s sole income earner.of 2011, nine are current company employees and 25 are from the In collaboration with SEMARNAT (the Mexican environmentalcommunity. authority) we delivered a workshop on “Product manufacturingIn collaboration with Youth Integration Centers, we held school-based using solid wastes” to 40 women from the Las Truchas community.talks and workshops on addiction which were attended by 1,500 The women then benefited from a three-week temporarystudents. We supported “Health Week” in Tayoltita, in which the employment program.municipality along with educational and health institutions, promoted Environmental awarenesstobacco, alcohol and drug prevention. In 2011, we delivered a number of campaigns to increase environmentalChild care awareness, including:In partnership with the Ministry of Social Development for Tayoltita, we • organizing schools, the municipality and its workforce to clearrenovated the town’s Child Care building, providing a safe educational up the debris along the Piaxtla River (16 tons of garbage wereenvironment for up to 35 under-4-year-old children of working parents. removed), complemented by talks to encourage respect for the environmentCulture and recreation • a community campaign to collect and dispose of outdatedIn collaboration with the community’s Youth Integration Centers, household appliances: three tons were sent to Durango forwe ran a series of sports, cultural and recreational activities for 50 proper disposalcommunity children from 4 to 12 years of age. • support for the global “Earth Hour” campaign that encouragesAdult education everyone on the planet to turn off their lights from 8:30 pm toIn response to employee requests for greater career opportunities and 9:30 pm on the 30th of March, to build awareness of energyskills development, we teamed up with the Mexican government and saving and the environmental impact of CO2 in the atmospherelaunched an Adult Education Program for employees, families and • providing talks to students on water care, energy and theresidents. Since 2006, 268 students have graduated from the program. environment, as part of the “School always open” program (in collaboration with the Ministry of Education and the Youth Integration Centre) • giving environmental awareness talks to 778 employees and more than 1,200 children from local primary schools
  18. 18. 16 PRIMERO SUSTAINABILITY REPORT 2011Focused on the EnvironmentAt Primero, our environmental focus is to act withresponsibility and transparency in developing miningprojects, and to proactively seek to minimize the footprint ofour operations. Precautionary measures are taken to avoiddamage to ecosystems wherever possible. When adverseimpacts occur, integrated programs are implemented topromote the recovery of the affected ecosystems.
  19. 19. PRIMERO SUSTAINABILITY REPORT 2011 17For years, San Dimas has been “Clean Industry” certified by the As Mexican laws and regulations evolve and become more closelyMexican environmental authority, the Procuraduria Federal de aligned with world standards, we at Primero are committed toProtección al Ambiente (PROFEPA). We are pleased to report that remaining in compliance.again in 2011, we received “Clean Industry” certification. In 2011, a series of improvements were completed (which began in 2008, on the recommendation of international consultants) relatedManagement Approach to Environmental to tailings management and the stability of the tailings dams. TheResponsibility upgraded tailings containment sites are now fully operational andAt San Dimas, our mining, exploration and development activities are comply with international regulations.subject to the applicable Mexican laws and regulations relating to theprotection of the environment, including planning for the eventualclosure of the mine, and reclaiming the mining properties after miningand processing has ceased. Water USeThe Environmental Management System (EMS) in place at San Dimas Water Used (raw process water)is widely respected for its effectiveness in identifying and avoiding, 2011reducing or eliminating the environmental impacts of mining andprocessing. Our aim at San Dimas is to meet the environmentalstandards of the leading gold and copper producing countries. Total used by plant 574,891 m3For many years the San Dimas operation has engaged in a voluntary Amount recycled 501,300 m3 (87%)self-evaluation program, to improve performance by identifyingdeficiencies, measuring performance and implementing improvementprograms to remain in compliance with all of the relevant regulations.
  20. 20. 18 PRIMERO SUSTAINABILITY REPORT 2011Waste Management (process and non-process) Mine Closure and ReclamationTailings management at San Dimas is challenged by the As a responsible mine operator we always take into considerationdistrict’s rugged terrain and steep canyons. Following a number the fact that every mine has a finite life. As mining progresses at Sanof improvements relating to the stability of the dams and the Dimas we continue to update our plans for the mine’s closure plan.management of our tailings, our tailings sites now comply with In our financial statements we have accounted for the reclamationinternational guidelines. and closure costs for the mine, which ensure that the lands andAt the Tayoltita tailings operation, significant capital improvements water will be returned to a safe and environmentally sound state onhave been made in recent years. Pumps and pumping systems have termination of mining.been upgraded. Spill containment systems have been improved and While operations continue, we practice progressive reclamationa spill recovery trough installed. The tailings dam area was fenced to of any lands that are no longer used for mining activities. Weprevent access by people and animals, and further improvements to have reclaimed three of the older tailings dams near the Tayoltitathe dam and operating practices are planned. mill, whose land has been reclaimed for use as a soccer field, aIn the Piaxtla river, downstream of the Tayoltita tailings deposits, water softball field, and a garden nursery.quality monitoring has not shown any environmental impact, although In 2011 reclamation proceeded on the tailings facilities of the Sanin periods of heavy rain, the suspended solids in the water increase. Antonio Mill, which was closed in 2003. This reclamation projectIn 2011, we completed the installation of a third tailings filter, bringing will be complete in 2012.the combined capacity of the three-filter system to 410,400 tonnes Environmental Regulatory Complianceper year. With the new filter, San Dimas has achieved 85% efficiency in The San Dimas Mine is presently involved in an environmentalthe tailings filtering process. In the first five months that the new filter certification process (as a Primero-owned company). Progress inwas operating, we were able to recover an average of 43,000 tonnes of 2011 included:solution per month, which was recycled into the leaching process. • SEMARNAT (the Mexican environmental authority) assignedEnergy Consumption and Greenhouse Gas Emissions San Dimas an Environmental Registry NumberEnergy use and GHG emissions are significantly minimized by our use • San Dimas surrendered the operating permit related to theof hydroelectric power, most of which is generated by the Las Truchas previous ownerHydroelectric plant, which is owned and operated by Primero. • San Dimas was granted an Environmental License (LAU) toThe Las Truchas dam and power plant harnesses the power potential operate mine and processing facilitiesof the Las Truchas basin to provide the mine with economical, reliable • seeking approval for an Environmental Impact Assessment, Sanand clean power. The 34 kVA power line runs 42 km from the dam to Dimas submitted a project proposal for the Rio Piaxtla diversionthe San Dimas mine. Beginning in 2005, the plant went though Phase I and a related waste rock depositof a major expansion and efficiency upgrade, and in 2010 the plant wasconnected to the Mexican Federal Power Commission’s supply system. Air quality measurement In 2011, we engaged a third-party contactor (On-Site Analítica deWe are currently reviewing a Phase II expansion of the Las Truchas México, S. A de C.V.) to carry out an atmospheric study of the Sanfacility that would, if approved, increase capacity from its current Dimas operation. The study confirmed that:50 GWh up to approximately 150 GWh. This would support mineexpansion and allow excess power to be sold into the Mexican national • particulates from mining processes were in compliance withenergy grid. regulations (NOM-043-SEMARNAT-1993) • emissions from the plant’s burners were in compliance withBiodiversity and at-risk species regulations (NOM-085 - SEMARNAT-1994, for burners withIn 2011, a thorough study was made of aquatic life in the Piaxtla river heating capacity of less than 5250 Mj/h)upstream and downstream from the San Dimas mine, to measurethe abundance and diversity of life, including endangered species.
  21. 21. PRIMERO SUSTAINABILITY REPORT 2011 19 Waste Water Quality Process Waste Station VA- 04 (000s tonnes) 2011 Lower (EPT): (Upstream) 1,038 Station VA- 05 Waste Rock 76% within mine, Better (EPT): (8km downstream from Tayoltita) 24% outside mine Tailings 663 Hazardous Waste Aquatic Habitat Quality (tonnes) 2011 Station VA- 04 Marginal Used oil (Upstream) 48 Final Disposition: Sara Abigail Station VA- 03 Oil-impregnated solids Marginal 31 Downstream from the San Luis Final Disposition: Industrial waste disposal mine entrance Used grease 6 Station VA- 05 Marginal Hazardous wastes (in containers) 2 (8km downstream from Tayoltita) Contaminated soil 21 Station VA- 06 Sub-optimal Below the Cupias bridge Sludge from pits with hydrocarbons 5 Fluorescent lamps 0.2 (ton/year) Diesel 0.9 Greenhouse Gas Emissions*, 2011 Filtered tailings Diesel Gasoline Power 700,740 Final Disposition: Tailings dam (as tonnes of CO2) (as tonnes of CO2) (as tonnes of CO2) Solution coming from tailings filtration 6,524 272 8,396 456,300 Final Disposition: Returned to the process Fish Species Diversity Endangered species found** Station VA- 04 Lower abundance Catostomus plebeius (all seasons) (Upstream) Station VA- 03 Ictalurus pricei Downstream from the San Luis Major diversity mine entrance Poeciliopsis latidens (all seasons) Station VA- 05 Ictalurus pricei (8km downstream from Tayoltita) Poeciliopsis latidens (all seasons) Station VA- 06 Ictalurus pricei Greater abundance Below the Cupias bridge Poeciliopsis latidens (all seasons) Energy Consumption, 2011 Diesel Consumption Gasoline Consumption Power Purchased Power Purchased Power Purchased (000s litres) (000s litres) (diesel generators) (Las Truchas) (Mexican Federal Power Commission) 2,485 114 1,397 MWhrs 39,546 MWhrs 18,455 MWhrs* calculated using National Greenhouse Accounts Factors (2011)** defined as endangered Mexico-native species of flora and fauna-risk in “NOM-059-SEMARNAT-2010”
  22. 22. 20 PRIMERO SUSTAINABILITY REPORT 2011In ClosingAs a relatively new company operating a long establishedmine, Primero finds itself in a fortunate position. We inherited astrong safety record, solid environmental policies and practices,a motivated workforce and well-established relationships tothe local community where mining has been a way of life forhundreds of years.
  23. 23. PRIMERO SUSTAINABILITY REPORT 2011 21For the near future, our primary concerns and objectives focus on improving our environmental practices. While we have always beenin compliance with the regulations that are in force, we are advancing our standards. I feel it is important to report a recent tailingsspill that occurred in early 2012, after the period covered by this report. Although the spill was minor, the result of a leak in the pipelinefeeding the dry tailings facility, it triggered a thorough review of our containment systems. We have taken a series of corrective actionsand ran a preliminary assessment to confirm that there has been no residual impact on the aquatic life of the Piaxtla River. In 2012 wewill improve the containment structures for the tailings pipe and conduct an external assessment of the river.We will continue to maintain a culture of safety at Primero and I am confident that we can achieve our aggressive goal of a further50% reduction in workplace accidents in 2012.I would like to take this opportunity to thank everyone at Primero who has contributed to our collective efforts in health, safety,environmental stewardship and socio-economic sustainability. Through 2012 and beyond, I look forward to continued developmentand improvements to our corporate culture of safety, respect and responsibility to each other, our communities and the environment. Joseph F. Conway President & Chief Executive Officer
  24. 24. This report is written for Primero employees and theirfamilies, our host communities, legislators andgovernment officials, analysts, civic, special-interestand non-governmental advocacy organisations (NGOs)and other stakeholders. We invite sustainability-relatedcomments and suggestions, and maintain a dedicatedemail address: sustainability@primeromining.com.Primero MiningRichmond Adelaide Centre120 Adelaide Street West, Suite 1202Toronto, ON M5H 1T1T: 416 814 3160 F: 416 814 3170TF: 1 877 619 3160E: info@primeromining.comwww.primeromining.com

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