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    Primero corporate presentation january 2012 rev Primero corporate presentation january 2012 rev Presentation Transcript

    • Focused on Production Focused on Growth Corporate Update January 2012 NYSE:PPP TSX:P | NYSE:PPP TSX:P
    • Cautionary StatementThis presentation may contain “forward-looking” statements within the meaning of Canadian securities legislation and the United States Private SecuritiesLitigation Reform Act of 1995. Forward-looking statements relate to future events or the anticipated performance of the Company and reflectmanagement’s expectations or beliefs regarding such future events and anticipated performance. In certain cases, forward-looking statements can beidentified 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 betaken”, “occur” or “be achieved”, or the negative of these words or comparable terminology. By their very nature forward-looking statements involveknown and unknown risks, uncertainties and other factors which may cause the actual performance of the Company to be materially different from anyanticipated 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 innational and local governments in Mexico and the speculative nature of mineral exploration and development, risks associated with obtaining necessaryexploitation and environmental licenses and permits, and the presence of laws that may impose restrictions on mining. A complete list of risk factors aredescribed 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 willbe 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 theseterms are recognized and required by Canadian regulations (under National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI43-101”)),the United States Securities and Exchange Commission does not recognize them. Readers are cautioned not to assume that any part or all of the mineraldeposits 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 fora Preliminary Assessment as defined under NI43-101. Investors are cautioned not to assume that part or all of an inferred resource exists, or is economicallyor 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 anyobligation to update these forward-looking statements or information to reflect changes in assumptions or circumstances other than required by applicablelaw. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially fromthose currently anticipated. Accordingly, readers should not place undue reliance on forward-looking statements.Unless otherwise indicated, all dollar values herein are in US$. TSX:P | NYSE:PPP 2
    • Who is Primero? Long-Life, High-Grade Gold-Silver Producer Strong Management & Board Vancouver Office Solid Capital Structure to fund growth Toronto Office Cdn$280 million market capitalization Attractive Valuation San Dimas Gold-Silver Mine DURANGO MEXICOCorporate August 2010 January 2012 Acquired San Dimas • Strengthened Balance Sheet • Increased throughputHistory from Goldcorp • Listed on TSX:P, NYSE:PPP • Exploration success TSX:P | NYSE:PPP 3
    • San Dimas MineSolid Production Platform in Mining Friendly Jurisdiction MEXICO Sierra Madre Trend Rich History 100 + Produced over 11 million ounces of gold and 590 million ounces of silver. Average grade of 5.1 grams per tonne over last 40 years. Significant Potential 90 Over 100 known veins, very few fully % explored. High-grade central corridor open along strike and at depth. History of 90% resource to reserve conversion. Solid Production Platform San Dimas 2 X Solid production platform to build a Gold-Silver Mine diversified intermediate producer. Focused Ventanas on doubling production through Exploration Property optimization and expansion. TSX:P | NYSE:PPP 4
    • Focused on Production Increasing ThroughputMaximize Throughput (tonnes per day) 8% Ensure daily throughput at capacity (2,100 tpd) 2,000 8% Focus on mill expansionControl Costs Reduce costs per tonne 1,500 Improve productivity per man shift 2010 2011 2012EOptimize Grade Reducing Costs ($ per ounce by-product) Estimation review underway $500 $87 $44- Control mining dilution $450 $74 $400Accelerate Mine Development $350 $300 Increase number of mining faces $250 Complete lateral haulage connections between $200 2010 2011 2012E current mining and exploration areas TSX:P | NYSE:PPP 5
    • Focused on GrowthObjective is to Become an Intermediate Gold Producer (~ 400,000 AuEq oz) San Dimas Expansion (to ~200,000 AuEq oz) Growth Strategy  Focused on significant high-grade discovery LEADING MID-TIER  Focused on accelerating mine development GOLD PRODUCER  Targeting mill expansion to 2,500+ tpd AMERICAS ACQUISITIONS ACQUISITIONS Acquisitions ACQUISITIONS  Diversify asset base SAN DIMAS ACQUISITIONS OPTIMIZATION  Create a portfolio of early and advanced stage projects OPTIMIZATION EXPLORATION Competitive Advantage  Utilize capital structure SAN DIMAS PLATFORM  Leverage board and strategic partners TSX:P | NYSE:PPP 6
    • Balanced Capital Structure TSX:P Exchanges NYSE:PPP$107M 1 Balance Sheet at Sept 30, 2011 Cash1 Promissory note3 $107 million $50 millionSolid Cash Balance Convertible note4 $60 million Ownership Goldcorp 36%$90M 2 Management & insiders Institutional & float ~3% ~61%Strong Operating Cash Flow Capital Structure Shares outstanding 88 million Fully Diluted 117 million$5M Repayment per year Market Cap. At January 18, 2012 1. Cdn$280 million $30 million of convertible note paid on October 19, 2011, $5 million of promissory note wasConservative Level of Debt 2. paid on December 31,2011. Estimated 2011 and 2012 average after-tax cash flow based on a gold price of $1,600/oz and spot silver $30/oz, see Jan 17, 2012 Press Release. 3. Goldcorp: 5 year, 6% note repaid $5M/yr with balloon payment at end of 2015. 4. Goldcorp: 1 year, 3% note maturing August 6, 2012, convertible at any time at CDN$6 or on maturity at the greater of CDN$3.74 or 90% of the 5 day VWAP before the maturity date. TSX:P | NYSE:PPP 7
    • Strong Financial Results Increasing Earnings(US$ thousands, except per share 1 Adjusted EPS ($ per share)amounts) Q3 2011 Q3 2010 $0.10Revenues 46,079 18,853 $-Earnings from Mine Operations 22,170 895 $(0.10)Net income (loss) 35,066 (35,630) $(0.20)EPS ($ per share) 0.40 (0.68) Q1 2011 Q2 2011 Q3 2011 Increasing Cash FlowAdjusted net income (loss) 5,716 (12,210) Op CF before changes in working capital ($ per share)Adjusted EPS ($ per share) 0.06 (0.23) $0.50Operating cash flows before $0.30 50,549 (27)changes in working capital $0.10CFPS ($ per share) 0.57 – $(0.10)1. Primero acquired the San Dimas mine on August 6, 2010, operating it for 55 out of 92 days in Q3 2010. Q1 2011 Q2 2011 Q3 2011 TSX:P | NYSE:PPP 8
    • Operating Results & Guidance Increasing Throughput (tonnes per day) 2012E 2011 8%Mill Throughput 2,050 1,950 2,000 8%(tonnes per day) 1Gold equivalent production 100,000-110,000 102,200(gold equivalent ounces)Gold production 80,000-90,000 79,600(ounces) 1,500Silver production 2010 2011 2012E 4.50-5.00 4.60(million ounces)Gold grade 3.7 3.85 Reducing Costs(grams per tonne) ($ per ounce by-product)Silver grade 225 229 $500 $87(grams per tonne) $450 $44-74 2 $400Cash cost $630-660 $640($ per gold equivalent ounce) $350 2 $300Cash cost – by-product $310-340 $384($ per gold ounce) $250 $2001 . “Gold equivalent ounces” include silver ounces converted to a gold equivalent based on estimated average realized 2010 2011 2012E commodity prices of $1,600 per ounce of gold and $9.41 per ounce of silver.2. Cash cost is a non-GAAP measure. Refer to the 2011 MD&A for a reconciliation of cash costs to operating expenses. TSX:P | NYSE:PPP 9
    • Silver Purchase AgreementPortion of Silver Sales Subject to Silver Purchase AgreementPrimero sells 50% of annual production above 3.5 million ounces at spot Remainder sold at ~$4 per ounce under silver purchase agreement Threshold increases to 6.0 million ounces in 2015Reducing tax impact Advance tax ruling commenced, seeking taxes be based on realized revenue Silver call options used to limit tax impact, silver call options at strike $49/oz to cover 30% of expected sales under purchase agreement (to cover tax liability) Increase San Dimas production and diversify asset base TSX:P | NYSE:PPP 10
    • Focused onSan Dimas Growth TSX:P | NYSE:PPP
    • Long History of Reserve Growth San Dimas Proven & Probable Gold Reserves 1,000Thousands Ounces 900 800 700 600 500 400 300 200 100 - TSX:P | NYSE:PPP 12
    • High Rate of Resource to Reserve Conversion Increased Exploration Linked to Reserve Increases San Dimas Gold Reserve Replacement (2003-2010) 1,000,000 900,000 800,000 700,000 600,000Ounces 500,000 400,000 300,000 200,000 100,000 0 Initial 2003 2004 2005 2006 2007 2008 2009 2010 End Reserve Additions Production TSX:P | NYSE:PPP 13
    • History of High-Grade New Discoveries Linked to Highest Grade San Dimas Historical Grades 14 800 Tayoltita Central Block Sinaloa Graben 700 12 600 10 500 Silver Grade (g/t)Gold Grade (g/t) 8 400 6 Average Silver Grade 353 g/t 300 Average Gold Grade 5.1 g/t 4 200 2 100 Gold Grade Silver Grade 0 0 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 TSX:P | NYSE:PPP 14
    • Focused on Improving Predictability Large Grade Variability with Historical Estimation Method  Estimation method under review  Improved grade reconciliation: • Required for effective mine planning • Expected to lead to a more efficient expansion plan • Expected to result in improved exploration successSan Dimas Difference Between Predicted and Actual Grade80%60%40%20% 0%-20% Gold Grade Silver Grade-40% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 TSX:P | NYSE:PPP 15
    • District Wide Exploration Potential West Block 2012 EXPLORATION Sinaloa Graben Central Block Tayoltita Block Arana San Antonio Mined 1987-2002 2012 EXPLORATION Mined 2002-Current Mined 1975-2002 Hanging WallSW NE3,000 m. 6.81 4.7 3,000 m. g/t average grade g/t average grade2,000 m. 3+1 1.5 2,000 m. m average width m average width1,000 m. 1,000 m. Source: San Dimas Geology Office Mineralization – Ore Bodies Extension of the Favorable Horizon 0 1 2 Favorable Horizon Exploration Potential K I L O M E T E R S 1. Average Sinaloa Graben reserve grade reported in 2010 Reserve and Resource Statement 2. Indicative of exploration results to date TSX:P | NYSE:PPP 16
    • San Dimas: High-Grade TrendFocused Exploration Program TAYOLTITA BLOCK ARANA HANGING CENTRAL WALL BLOCK TAYOLTITA MINE SINALOA Mined 1975 - 2002 GRABEN 2012 BLOCK Target WEST BLOCK CENTRAL MINE Mined 2002 - Present 2012 Target Tayoltita Mill SAN ANTONIO MINE Mined 1987 - 2002 TSX:P | NYSE:PPP 17
    • 2011 Results Highlight Sinaloa Graben Potential 2012 Program Designed to Target Vein Extensions from Existing Mines CENTRAL BLOCK SINALOA Length Width Silver Gold 2012 GRABEN TargetDrift (m) (g/t) BLOCK1. Aranza 7-129W 79 2.2 543 5.2 2 WEST CENTRAL BLOCK Mined 2002 - Present Elia 8-285W 221 2.8 1,491 15.9 BLOCK Elia 8-359W 69 2.2 668 8.1 6 2012 52. Rob 21-822E 167 3.0 686 13.8 4 TargetDrill Hole SAN ANTONIO3. TGS-S-22 8.56 958 6.8 Mined 1987 - 2002 TGS-S-15 7.52 403 8.1 34. PIL 7-01 2.90 508 16.0 15. SOL-9-02 1.81 549 10.676. MAR-9-17 2.45 514 8.86 TSX:P | NYSE:PPP 18
    • Focused on Potential 2012 Exploration ProgramDevelopment drifting key to expansion 22,000 metres drifting and raiseIncreased delineation drilling Exploration drilling remains aggressive 36,000 metres delineation drilling  30,000 metres diamond drilling D TSX:P | NYSE:PPP 19
    • Focused on Potential Testing for Second ‘Boiling Zone’Historical Geological Model Recognized One Boiling Zone 150-200 metres highGeology Consistent with Second Potential Boiling Zone Running parallel and below first TSX:P | NYSE:PPP 20
    • Mill Expansion RequirementsMill Expansion Depends of Mine DevelopmentMill Crushing Capacity is 2,100 tpdMill Leaching Capacity is already 2,500 tpdThird Ball Mill On-Site Engineering design commenced Targeting expansion decision by 2013Tailings Filter Expansion Completed Capacity 3,300 tpd Third Dry Tailings Filter Completed 3,300 tpd TOTAL CAPACITY TSX:P | NYSE:PPP 21
    • Focus on Social Responsibility Health and Safety  World class health and safety policies  Won First Aid competition at 2010 National Mining Rescue Contest Environment  Certified as ‘Clean Industry’ by the Procuraduria Federal de Proteccion al Ambiente (Mexican EPA)  Hydroelectric Plant supplies majority of mines power Community  Renowned community development programs  Promote education: sponsored 47 high school graduates in 2010  Local employment and procurement TSX:P | NYSE:PPP 22
    • Why Primero? MEXICO Sierra Madre TrendLong-Life, High-Grade AssetProven Management & BoardStrong Capital Structure to Fund GrowthSignificant Exploration PotentialAttractive Valuation San Dimas Gold-Silver Mine Ventanas Exploration Property TSX:P | NYSE:PPP 23
    • Appendices TSX:P | NYSE:PPP 24
    • Executive Management Joseph F. Conway | President & C.E.O. 1 David Sandison | VP Corporate Development  Former CEO, President and Director of IAMGOLD  Former VP, Corporate Development of from 2003 to 2010 Clarity Capital  Former President, CEO and Director of Repadre  Former Director, Corporate Development Capital from 1995 to 2003 Xstrata Zinc Canada and prior was VP at Novicourt Renaud Adams | C.O.O. Joaquin Merino | VP Exploration  Former SVP, American Operations for IAMGOLD  Former VP, Exploration of Apogee Minerals  Former General Manager of Rosebel Gold Mine  Former exploration manager for Placer Dome 2007 to 2010 at Porgera Mine  Former General Manager El Toqui Mine in Chile and then the El Mochito Mine in Honduras David Blaiklock | C.F.O. Tamara Brown | VP Investor Relations  Former controller IntraWest  Former Director Investor Relations for IAMGOLD  Previously controller for a number of public and  Previously partner of a Toronto based, boutique private companies in real estate development investment bank and professional engineer in mining industry Board Committees: 1.Health, Safety and Environment TSX:P | NYSE:PPP 25
    • Board of Directors Wade Nesmith | Chairman Rohan Hazelton | Director 1,5 Robert Quartermain | Director 2,3  Founder of Mala Noche  VP, Finance, Goldcorp  Former President, Silver Standard  Founding and current director  Formerly with Wheaton River  Director of Vista Gold Corp. of Silver Wheaton, Chairman of and Deloitte & Touche LLP and Canplats Resources Geovic Mining and Selwyn Resources David Demers | Director2,3,4 Timo Jauristo | Director 2 Michael Riley | Director 5  Founder, CEO and Director  EVP, Corporate Development,  Chartered accountant with more Westport Innovations Goldcorp than 26 years of accounting  Director of Cummins Westport  Former CEO of Zincore Metals experience and Juniper Engines Inc. and Southwestern  Audit committee chair B.C. Resources Corp. Lottery Corporation and Seacliff Construction Grant Edey | Director 3,5 Eduardo Luna | Director 1 Joseph Conway | Director1 see Executive Management  Director of Breakwater  Former EVP & President, Resources and former Mexico. Former Chairman and director of Queenstake CEO of Silver Wheaton, Board Committees: Resources, Santa Cruz Gold Executive VP of Goldcorp and 1.Health, Safety and Environment  Former CFO, IAMGOLD Luismin S.A. de C.V. (San Dimas) 2. Human Resources and Compensation and President of Mexican 3. Governance and Nominating Mining Chamber and the Silver 4. Lead Director 5. Audit Institute TSX:P | NYSE:PPP 26
    • Notes TSX:P | NYSE:PPP 27
    • PRIMERO MINING CORP. Joseph ConwayRichmond Adelaide Centre President & C.E.O.120 Adelaide Street West, Suite 1202Toronto, ON M5H 1T1 Investor RelationsT 416 814 3160 F 416 814 3170 T 416 814 3168TF 877 619 3160 info@primeromining.comwww.primeromining.com Trading Symbols Common Shares TSX:P NYSE:PPP Warrants TSX:P.WT NYSE:PPP TSX:P | NYSE:PPP TSX:P