The ‘New’ Americas Gold Play
Mackie Research Capital Gold Conference 2010   TSX:P
October 2010
Cautionary Statement                                                                                                      ...
Investment Highlights   TSX:P




                                3
Strategy of Growth
        Acquisition Track Record                                                                       ...
Capital Structure                                                                                                         ...
Financial Strength
           Sufficient Capital to Fund Growth                                                           ...
Improved Cash Flow
          Amended Silver Agreement
                                                                    ...
San Dimas
                            Solid Platform with expansion & exploration potential                               ...
San Dimas
       2010 Guidance                                                                                            ...
Optimization   TSX:P
Established Infrastructure
       Building for the Future                                 TSX:P


          Mill capacity ...
Infrastructure Projects
Tailings Filter 3                   TSX:P


 100% filtering capacity

 Eliminates wet tailings

 A...
Infrastructure Projects
New Waste Rock Impoundment                                 TSX:P


 3 million m3 Capacity

 Proper...
Infrastructure Projects
Las Truchas Hydro Plant                       TSX:P


 Clean, low cost energy

 7.3MW of installed...
Optimization Review
Expansion Opportunity                         TSX:P


 Mine planning:
  •   Ensure sufficient producti...
Growth   TSX:P
Long History of Reserve Growth                                                                                            ...
Proven 90% Resource Conversion
       Opportunity for Long Term Strategic Planning                                        ...
Significant Exploration Upside
A Key Focus                                                             TSX:P


  More than...
2010 Exploration Success
  Already Replaced 2010 Production                                         TSX:P


      2010 exp...
Exploration Success Throughout
       Higher Grade and New Reserves                                                       ...
The Value Proposition
Unlocking Value                                                                                                           ...
P/NAV Multiples                                                                                                           ...
Cash Flow Multiples                                                                                                       ...
Why Primero Mining?                                                                   TSX:P


  Established Mexican operat...
APPENDICES
Experienced Management                                                         TSX:P


Wade Nesmith | Executive Chairman
 ...
Board of Directors                                                      TSX:P


Wade Nesmith | Chairman                  M...
District Wide Upside – Long Section                                                                                    TSX...
PRIMERO MINING CORP.
Richmond Adelaide Centre
120 Adelaide Street West, Suite 1202
Toronto, ON M5H 1T1
T 416 814 3160 F 41...
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Primero mackie research presentation upload

  1. 1. The ‘New’ Americas Gold Play Mackie Research Capital Gold Conference 2010 TSX:P October 2010
  2. 2. Cautionary Statement TSX:P 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 preliminary prospectus and will be detailed from time to time in the Company’s interim and annual financial statements and management’s discussion and analysis of those statements, 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 (“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 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. 3. Investment Highlights TSX:P 3
  4. 4. Strategy of Growth Acquisition Track Record TSX:P GROWTH TARGETED GROWTH OBJECTIVE1 2010-2011: Optimization & resource expansion LEADING MID-TIER GOLD PRODUCER 2011-2012: Potential Latin American acquisitions 400 Leading mid-tier gold producer by 2013 LATIN AMERICAN ACQUISITIONS LOW CASH COST 300 Below industry average cash costs SAN DIMAS LOW RISK OPTIMIZATION ACQUISITIONS Maintain balance sheet strength 200 EXPLORATION Un-hedged gold OPTIMIZATION Americas pro-mining jurisdictions only SAN DIMAS RESPONSIBILITY 100 (GOLD EQUIVALENT OUNCES) Sustainable growth Commitment to leading CSR programs 0 2010 2011 2012 2013 1. Production based on five year average, source NI 43-101 technical report 4
  5. 5. Capital Structure TSX:P Cash ~$50 million Shares outstanding 88 million Debt $50 million1 Fully diluted 117 million Convertible note $60 million Warrants outstanding 22 million (1) 5 year, 6% note repaid $5M/yr with balloon payment at end of year 5 Options outstanding 8 million Price (C$) Volume (000) 9 1400 Jul 8, 2010 Aug 19, 2010 8 June 2, 2010 Announced revised Commenced 1200 Announced San Dimas Terms of offering and trading on TSX 7 acquisition, San Dimas acquisition 1000 6 Joe Conway appointed CEO 800 5 Sep 20, 2010 4 Aug 6, 2010 600 Q3 Exploration Completion of 3 Update San Dimas acquisition 400 2 200 1 0 0 January February March April May June July August September 5
  6. 6. Financial Strength Sufficient Capital to Fund Growth TSX:P Cash flow engine to fund growth ~$50 million cash ~$70 million operating cash flow/yr Robust operating margins After Tax Operating Cash Flow1,2 ($M) After Tax Cumulative Cash Balance1,3 ($M) $90 $900 Au / $15.00 Ag $1,220 Au / $17.50 Ag $350 Free Cash Flow Opening Cash $80 $300 $70 $250 $60 $50 $200 $40 $150 $30 $100 $20 $1,220 Au / $1,220 Au / $1,220 Au / $1,220 Au / $1,220 Au / $17.50 Ag $17.50 Ag $17.50 Ag $17.50 Ag $17.50 Ag $50 $15.00 Ag $15.00 Ag $15.00 Ag $15.00 Ag $15.00 Ag $900 Au / $900 Au / $900 Au / $900 Au / $900 Au / $10 $- $- YEAR1 YEAR2 YEAR3 YEAR4 YEAR5 YEAR1 YEAR2 YEAR3 YEAR4 YEAR5 1. Includes Silver Wheaton contract impact, resulting in an effective tax rate of approximately 55% 2. Includes interest expense on the Goldcorp promissory and convertables notes 3. Free cash flow includes interest expense on the Goldcorp secured promissory and convertible notes and principal repayment on the Goldcorp secured promissory note (principal on convertible note is paid through excess cash 6 from financing and exercise of warrants)
  7. 7. Improved Cash Flow Amended Silver Agreement Old Agreement To 25 Years All silver sold at ~$4 for 25 years (19 years remaining) Amended Agreement First 3.5 million oz Ag plus 50% of excess sold to SLW at ~$4 First 4 years 50% of Ag production above 3.5 million oz sold at spot First 6 million oz Ag plus 50% of excess sold to SLW at ~$4 Year 5 to LOM 50% of Ag production above 6 million oz sold at spot Increased Gold Equivalent Ounces1 Amended Goldcorp 250 Gold Eq Additional Gold Eq Gold Five year average annual : Agreement1 2009 200 Production1 Gold (oz) 107,000 113,000 150 Gold Eq (Au Eq oz) 157,000 113,000 Spot Silver Exposure2 (oz) 1,800,000 0 100 Cash Cost1 Co-product (per Au Eq oz) $337 $392 50 By-product (per oz) $60 $287 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1. Average annual production and cash cost for next 5 years, gold equivalent based on $900/oz gold and $15/oz silver 2. Attributable to Primero under amended silver purchase agreement and based on NI 43-101 report Source: NI 43-101 technical report and Goldcorp public reports 7
  8. 8. San Dimas Solid Platform with expansion & exploration potential TSX:P World-class gold-silver mine plus 227km2 of exploration concessions in epithermal district San Dimas 250 year history with historical production estimated Mazatlan Durango at 11 million ounces of gold and over 582 million ounces silver Ownership 100% Skilled workforce of 1,080 people Location Mexico Production1 157,000 SAN DIMAS HISTORICAL GOLD PRODUCTION Estimated 5 year average gold equivalent ounces 180 9.0 Au (LHS) Cash Cost1 $337 160 Au Grade (RHS) 8.0 Estimated 5 year average per gold equivalent ounce 140 7.0 Est. LOM 25 years Au Production (koz) 120 6.0 Proven & Probable Reserves Au grade (g/t) 100 5.0 (at Dec 31, 2009) Tonnes Gold Silver Gold Silver 80 4.0 (millions) (g/t) (g/t) (Moz) (Moz) 60 3.0 5.6 4.8 339 0.9 60.9 40 2.0 Inferred Resources (at Dec 31, 2009) 20 1.0 Tonnes Gold Silver Gold Silver (millions) (g/t) (g/t) (Moz) (Moz) - - 2003 2004 2005 2006 2007 2008 2009 15.2 3.3 317 1.6 154.6 1. Average annual production and cash cost for next 5 years, gold equivalent based on $900/oz gold and $15/oz silver Source: NI 43-101 technical report 8
  9. 9. San Dimas 2010 Guidance TSX:P Goldcorp Inc. Primero Reported Unaudited Estimated Estimated Jun 30, Jul 1, 2010 to Aug 6, 2010 to Dec 31, 2010 Full Year 2010 2010 Aug 5, 2010 Gold produced (ounces) 45,800 7,700 37,000-42,000 90,000-95,000 Silver produced(1) (ounces) 2,315,500 429,900 1,755,000-1,955,000 4,500,000-4,700,000 Total cash costs(2) (per gold equivalent ounce) $529(3) $655 $450 - $480 $500 - $530 Total cash costs(2) - by-product (per gold ounce) $411 $555 $330 - $360 $390 - $420 Capital expenditures (US$ millions) 10 4 12 26 1) Refer to slide 8 for silver purchase agreement details 2) Cash costs are a non-GAAP performance measure 3) Calculated from Goldcorp Inc.’s Second Quarter 2010 Report Material assumptions used to forecast total cash costs (1) for 2010 include: $1,200 per ounce for gold; by-product silver price of $4.04 per ounce; an oil price of $95 per barrel and foreign exchange rates of 1.03 Canadian dollars and 12.63 Mexican pesos to the US dollar. 9
  10. 10. Optimization TSX:P
  11. 11. Established Infrastructure Building for the Future TSX:P Mill capacity 2,100 tpd - expansion potential Dry tailings filter plant, capacity 2,100 tpd RECENT INVESTMENTS New tailings pumping system Tunnels connecting Central Block to Sinaloa Graben Las Truchas Hydro Plant CURRENT PROJECTS Tailings Filter 3 Waste Rock Impoundment New Sub Station 1. Source NI 43-101 technical report 11
  12. 12. Infrastructure Projects Tailings Filter 3 TSX:P 100% filtering capacity Eliminates wet tailings Allows process plant flexibility 12
  13. 13. Infrastructure Projects New Waste Rock Impoundment TSX:P 3 million m3 Capacity Proper disposal for waste rock San Luis bridge: safer, all seasons access Access road Cementery Cut Slope Wall protection (250 m) Slope Slope Slope 13
  14. 14. Infrastructure Projects Las Truchas Hydro Plant TSX:P Clean, low cost energy 7.3MW of installed capacity Truchas avg cost: $0.015 per kw/hr CFE general Grid avg cost: $0.11 per kw/hr Provides 76% of San Dimas energy demand Savings of ~$4.8M per year Saves 23,500 tonnes of CO2 greenhouse gas Power line prepared for 14 MW 2011: Stage 2 - additional 7MW 14
  15. 15. Optimization Review Expansion Opportunity TSX:P Mine planning: • Ensure sufficient production headings • Strategic tunnel planning Operate mill at design capacity • Current:~1,900 tpd, Design: 2,100 tpd Match milling to leaching capacity • Mill: 2,100 tpd, Leach: 2,500 tpd Complete technical review in 2010 15
  16. 16. Growth TSX:P
  17. 17. Long History of Reserve Growth TSX:P San Dimas Historical Reserve Growth and Cumulative Production1 7 5 3 AuEq (Moz) 1 1 3 5 Reserve (Beg. of Year) Add'l Resource (Beg. of Year) Cumulative Production 1 Shows San Dimas total gold equivalent ounces based on a 60:1 ratio, part of which is under a silver purchase agreement as detailed in slide 8 17
  18. 18. Proven 90% Resource Conversion Opportunity for Long Term Strategic Planning TSX:P San Dimas Reserve Replacement based on Au ounces (2003-2009)1 1,000,000 Reserve Additions Production 900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 Initial 2003 2004 2005 2006 2007 2008 2009 End Proven & Probable Reserves (as at Dec. 31, 2009) Inferred Resources (as at Dec. 31, 2009) (exclusive of reserves) million Gold Silver Gold Silver million Gold Silver Gold Silver tonnes (g/t) (g/t) (Moz) (Moz) tonnes (g/t) (g/t) (Moz) (Moz) 5.6 4.8 339 0.9 60.9 15.2 3.3 317 1.6 154.6 1. NI 43-101 technical report 18
  19. 19. Significant Exploration Upside A Key Focus TSX:P More than 100 known veins in district Significant new high-grade veins in the Sinaloa Graben Sinaloa Graben million ounce resource potential (only 27koz at Dec. 31, 2009) Additional discoveries likely and will add to current reserves Likely lead to increased 2011 exploration budget 19
  20. 20. 2010 Exploration Success Already Replaced 2010 Production TSX:P 2010 exploration budget of $13.5 million Total 2010 exploration drilling - 38,000 metres 28,000 metres completed to date Already nearly replaced estimated 2010 production: additional 83,000 ounces of gold & 5.3 ounces of silver Intercepts well above reserve grade Estimated Proven & Grade (g/t) Gold Silver Tonnes Probable Reserves Gold Silver (ounces) (million ounces) Exploration Drilling 219,302 5.1 348 36,000 2.5 Exploration Drifting 199,948 7.2 439 47,000 2.8 Total New Reserves 419,250 6.1 391 83,000 5.3 20
  21. 21. Exploration Success Throughout Higher Grade and New Reserves TSX:P DDH Ag g/t Au g/t m RO-16-02 132 RO-20-05 514 3.27 4.23 1.43 1.27 SAN FRANCISCO N Tayoltita Central Block Block CULEBRA Arana CANDELARIA Hanging Wall San Vicente Tayoltita DDH Ag g/t Au g/t m Area mine A-25-217(1) 778 7.9 0.80 Central HW-4G-01B 302 8.7 0.60 Block mine BLENDITA CORONADO PATRICIA DDH Ag g/t Au g/t m Santa Rita MAR-9-17 514 8.86 2.45 Pilar mine mine 5 HERMANOS LEGEND DDH Ag g/t Au g/t m S. ANTONIO EL SOL SOL-9-02 549 10.67 1.81 Mill Ag-Au High West Block GUADALUPE Grade Trend TAYOLTITA Proposed Tunnel San Antonio Tunnel Budget 2010 mine Tunnel done EL CRISTO TUNNEL ROSARIO Vein SINALOA GRABEN TUNNEL DDH Ag g/t Au g/t m Fault TGS-S-22 958 6.81 8.56 EL ABRA Town TGS-S-15 403 8.08 7.52 LA VERDOSA RAMP Mill DDH Ag g/t Au g/t m VERDOSA 0 1 2 km RAMP7-129W 1,115 10.30 2.75 Piaxtla River (Source: San Dimas Geological Office) 21
  22. 22. The Value Proposition
  23. 23. Unlocking Value TSX:P 2010E Gold Eq Production (000 oz)1 2010E Cash Cost ($/Au Eq oz)1,2 Market Capitalization ($B)1 450 $800 $3.0 400 $700 $2.5 350 2010 Gold Eq Production (000 oz) $600 Market Capitalization (US$B) 300 $2.0 US$/Au Eq oz $500 250 $351 $400 $1.5 200 149 $300 150 $1.0 $200 100 $0.4 $0.5 50 $100 0 $0 $0.0 Primero Primero Lake Shore Lake Shore New Gold Alamos Alamos Golden Star New Gold Aurizon* Golden Star Aurizon* Northgate Minefinders Northgate Minefinders Gammon Gammon Kirkland* Kirkland* B2Gold B2Gold Jaguar* Jaguar* Aurizon* Primero Alamos Golden Star New Gold Lake Shore Northgate Minefinders Gammon Kirkland* B2Gold Jaguar* 1. Estimates based on Canaccord Genuity research (except for names noted with “*” which are based on company reports and street estimates); Canaccord Genuity prices: Gold Price: 2010: $1,215, 2011: $1,200, 2012: $1,100, 2013: $1,000, 2014: $900, LT: $900; Silver Price: 2010: $18.80, 2011: $19.00, 2012: $18.00, 2013: $17.00, 2014: $16.00, LT: $16.00; Primero 2010E gold equivalent production is annualized. 2. Cash cost based on total cash cost per gold equivalent ounce Note: As of Sept. 2, 2010 23
  24. 24. P/NAV Multiples TSX:P P/NAV Multiples (5% $900 Au/ $16 Ag)1,2 3.0x 2.5x Inter. Average: 2.11x 2.0x 1.5x Jr. Average: 1.40x 1.0x 1.14x 0.5x - Eldorado Gammon Primero B2Gold Jaguar* Alamos Yamana Randgold Northgate Agnico New Gold Lake Shore Minefinders Aurizon* Golden Star IAMGOLD Red Back Kinross Barrick Kirkland* Silver Wheaton Goldcorp Junior Intermediate Senior 1. Estimates based on Canaccord Genuity research (except for names noted with “*” which are based on company reports and street estimates); Canaccord Genuity prices: Gold Price: 2010: $1,215, 2011: $1,200, 2012: $1,100, 2013: $1,000, 2014: $900, LT: $900; Silver Price: 2010: $18.80, 2011: $19.00, 2012: $18.00, 2013: $17.00, 2014: $16.00, LT: $16.00 2. Primero NAV calculation assumes non-NI 43-101 resources upside Note: As of Sept. 2, 2010 24
  25. 25. Cash Flow Multiples TSX:P Cash Flow Multiples (2010)1,2 35x 30x 25x Inter. Average: 18.8x 20x Jr. Average: 15.9x 15x 10x 5x 6.4x - Minefinders Jaguar* Primero Alamos Randgold B2Gold New Gold Yamana Northgate Agnico Kinross Aurizon* Eldorado IAMGOLD Golden Star Kirkland* Red Back Silver Wheaton Gammon Barrick Goldcorp Junior Intermediate Senior 1. Estimates based on Canaccord Genuity research (except for names noted with “*” which are based on company reports and street estimates); Canaccord Genuity prices: Gold Price: 2010: $1,215, 2011: $1,200, 2012: $1,100, 2013: $1,000, 2014: $900, LT: $900; Silver Price: 2010: $18.80, 2011: $19.00, 2012: $18.00, 2013: $17.00, 2014: $16.00, LT: $16.00 2. Operating cash flow includes interest payments on Goldcorp note Note: As of Sept. 2, 2010 25
  26. 26. Why Primero Mining? TSX:P Established Mexican operations 157,000 gold equivalent ounces (2010-2014 average) Significant cash flow Market preferred geography Proven management & board Acquisition & operations track record Long life, low cost production P&P reserves of 860,000 oz Au and 61 M oz Ag Total resources of 2.5 M oz Au and 216 M oz Ag Industry low cash cost profile Ideal growth platform Well positioned to quickly become a leading mid-tier gold producer Attractive valuation – re-rating opportunity Potential re-rating as Primero trades at a discount to peers on all significant value metrics Source: Production, cash cost and resource numbers from NI 43-101 technical report 26
  27. 27. APPENDICES
  28. 28. Experienced Management TSX:P Wade Nesmith | Executive Chairman Founder of Mala Noche and CEO since incorporation Former President of Westport Innovations (Europe) Founding and current director of Silver Wheaton, Chairman of each of Geovic Mining and Selwyn Resources Joseph F. Conway | President and C.E.O. Former CEO, President and Director of IAMGOLD from 2003 to 2010 Grew IAMGOLD from a $50 million royalty company to a $6 billion intermediate gold producer with a sector leading growth profile Eduardo Luna | 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 Chairman of the Advisory Board of the Faculty of Mines at the University of Guanajuato and of the Mineral Resources Council in Mexico 28
  29. 29. Board of Directors TSX:P Wade Nesmith | Chairman Michael Riley Chartered accountant with more than Joseph F. Conway 26 years of accounting experience Chair of the audit committee of B.C. Eduardo Luna Lottery Corporation and Seacliff Construction Timo Jauristo Robert A. Quartermain EVP, Corporate Development, Goldcorp Former President, Silver Standard Director of Vista Gold Corp. and Rohan Hazelton Canplats Resources • VP, Finance, Goldcorp Grant Edey David Demers Director of Breakwater Resources and Founder, CEO and Director Westport former director of Queenstake Innovations Resources and Santa Cruz Gold Director of Cummins Westport and Former CFO, IAMGOLD Juniper Engines 29
  30. 30. District Wide Upside – Long Section TSX:P 2010 2010 Priority Priority SW NE San Antonio Sinaloa Graben Central Block Tayoltita Block Arana West Block Castellana and 3,000 m. Block Robertas Hanging Wall 3,000 m. 2,000 m. 2,000 m. 1,000 m. 1,000 m. Source: San Dimas Geology Office Mineralization – Ore Bodies Extension of the Favorable Horizon 0 1 2 Favorable Horizon Potential K I L O M E T E R S 30
  31. 31. PRIMERO MINING CORP. Richmond Adelaide Centre 120 Adelaide Street West, Suite 1202 Toronto, ON M5H 1T1 T 416 814 3160 F 416 814 3170 TF 877 619 3160 Email: info@primeromining.com INVESTOR RELATIONS Tamara Brown Vice President, Investor Relations T 416 814 3168 tbrown@primeromining.com The ‘New’ Americas Gold Play

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