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Primero corporate presentation january


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Primero corporate presentation january

  1. 1. TSX:P NYSE:PPPCreating Value Corporate Update January 2013
  2. 2. Cautionary StatementThis presentation may contain “forward-looking” statements within the meaning of Canadian securities legislation and the United States PrivateSecurities Litigation Reform Act of 1995. Forward-looking statements relate to future events or the anticipated performance of the Company andreflect management’s expectations or beliefs regarding such future events and anticipated performance. In certain cases, forward-lookingstatements 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 verynature forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual performance ofthe Company to be materially different from any anticipated performance expressed or implied by the forward-looking statements. Such factorsinclude various risks related to the Company’s operations, including, without limitation, fluctuations in spot and forward markets for gold, silverand other metals, fluctuations in currency markets, changes in national and local governments in Mexico and the speculative nature of mineralexploration and development, risks associated with obtaining necessary exploitation and environmental licenses and permits, and the presence oflaws that may impose restrictions on mining. A complete list of risk factors are described in the Company’s annual information form and will bedetailed from time to time in the Company’s continuous disclosure, all of which are, or will be available, for review on SEDAR at presentation uses the terms “measured resources”, “indicated resources” and “inferred resources”. The Company advises readers thatalthough these terms are recognized and required by Canadian regulations (under National Instrument 43-101 Standards of Disclosure forMineral Projects (“NI43-101”)), the United States Securities and Exchange Commission does not recognize them. Readers are cautioned not toassume that any part or all of the mineral deposits in these categories will ever be converted in to reserves. In addition, “inferred resources” havea great amount of uncertainty as to their existence, and economic and legal feasibility. It cannot be assumed that all or any part of an inferredmineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form thebasis of feasibility or pre-feasibility studies, or economic studies, except for a Preliminary Assessment as defined under NI43-101. Investors arecautioned 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 describedin forward-looking statements, there may be other factors that cause its performance not to be as anticipated. The Company neither intends norassumes any obligation to update these forward-looking statements or information to reflect changes in assumptions or circumstances other thanrequired by applicable law. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and futureevents could differ materially from those currently anticipated. Accordingly, readers should not place undue reliance on forward-lookingstatements.Unless otherwise indicated, all dollar values herein are in US$. TSX:P | NYSE:PPP 2
  3. 3. Primero – Creating Value AMERICAS FOCUSED  San Dimas: Long-life, high-grade asset GOLD-SILVER PRODUCER MEXICO  Significant free cash flow  Experienced management & board  Substantial exploration upside  Pending Cerro Del Gallo acquisitionPRIMERO 2012 SHARE PRICE PERFORMANCE160%140% Primero S&P/TSX Gold Index120%100%80%60% San Dimas40% Gold-Silver Mine20% 0% Ventanas Exploration Property-20%-40% Dec-11 Jun-12 Dec-12 TSX:P | NYSE:PPP 3
  4. 4.  Cerro shareholders to receive 0.023 of a Primero share for each Cerro share and 80.01% in “Spinco”  Friendly scheme of arrangement Terms  Cerro options to be rolled over into Primero options at a ratio of 0.023 of a Primero share for each Cerro share with corresponding upward adjustment to exercise price  Pro forma ownership: 85% Primero / 15% Cerro Resources  Implied share consideration of C$0.152 per Cerro share outstanding, as of December 12, 2012 close  Additional 80.01% of Spinco with non-Cerro Del Gallo assets plus approximately $4 million in cashConsideration Offer  Implied total transaction size of C$119 million  Offer, excluding value of Spinco exploration assets, implies a 62% premium over the 20 trading day VWAP for both companies and an 77% premium based on the closing price of Cerro Resources shares on December 12, 2012  Exclusivity: No solicitation by Cerro and Primero has right to match Other Terms  11% of Cerro Resources shares subject to support agreements  Cerro Resources shareholder vote (75% approval by at least 50% of Cerro shareholders) Conditions  Primero does not require a shareholder vote  Customary regulatory and court approvals  Cerro Resources Information Circular expected by mid March 2013Indicative Timetable  Cerro Resources shareholder vote expected in April 2013  Closing expected in early May 2013 TSX:P | NYSE:PPP 4
  5. 5.  Attractive long-life, precious metals project: Enhanced Growth  Diversifies near term production with additional 95,000 AuEq. oz per year  Doubles Reserves and Triples Measured and Indicated Resources Mexico  Leverages Primero’s regional expertise and solidifies positionConsolidation in Mexico, with further consolidation opportunities Attractive  Accretive to Primero on key metrics Valuation  Attractive total acquisition costs Asset  Asset diversification reduces risk and volatility in cash flowDiversification and earnings Re-Rating  Provides opportunity to participate in valuation re-rating asOpportunity the combination diversifies production and cash flows TSX:P | NYSE:PPP 5
  6. 6. Cerro Del Gallo Acquisition: The New Primero Increases Production1,2  Solid Production Base: (Gold Equivalent Ounces) Primero Cerro Del Gallo  Long-life, high-grade producing San Dimas mine 2052  Combines with advanced stage Cerro Del Gallo gold- 160 silver-copper project 130 111  Strong Financial Position  Internally funded development of Cerro Del Gallo  Capital available for additional opportunities 2012E 2013E 2014E 2015E Doubles Reserves and Triples Resources2,3  Large Reserve and Resource Base (Million Gold Equivalent Ounces) Primero Cerro Del Gallo  1.7 million AuEq. oz P+P Reserves and over 3.1 million 3.1 AuEq. oz M+I Resources2,3,4 2.3  Substantial exploration upside at both projects 1.7 1.01. Primero’s gold equivalent reserves and resources are adjusted for the Silver Purchase agreement.2. Assumes 100% ownership of Cerro Del Gallo (and that production commences mid-2015). Gold Equivalency 0.9 0.8 based on long-term consensus prices of Gold $1,350/oz, Silver $23.25/oz, Copper $7,447/t.3. M+I Resources include Reserves.4. See note 7 in January 23, 2012 News Release “ Primero achieves 2012 Guidance and Provides 2013 Outlook.” P+P M+I 3 TSX:P | NYSE:PPP 6
  7. 7. Balance Sheet & Cash Flow Funds Growth TSX:P Exchanges NYSE:PPP$133M Balance Sheet at Sept. 30, 2012 Cash $133 million $45 million Promissory note2Strong Cash Balance Ownership Goldcorp 32%$120M 1 Management & insiders Institutional & float ~2% ~66%Significant Operating Cash Flow Capital Structure Shares outstanding 97 million Fully Diluted3 126 million Market Cap. At Jan 21, 2013 ~C$650 million$5M Repayment per year2 1. Estimated five-year average after-tax operating cash flow based on production profile discussed in the October 15, 2012 News Release “Primero Announces Expansion of its San Dimas Mine”.Conservative Level of Debt 2. Goldcorp: 5 year, 6% note repaid $5M/yr with balloon payment at end of 2015. Principal prepayment equal to 50% of Excess Free Cash Flow. 3. Fully diluted shares include 20.8 million warrants with an exercise price of Cdn$8 per share, expiring on July 20, 2015; and 8.5 million options with an average exercise price of Cdn$5.50. TSX:P | NYSE:PPP 7
  8. 8. 2013 Production Guidance Increasing Production Forecast San Dimas 2013 Production 2013E (gold equivalent ounces) 17% 130 1 120 Gold equivalent production 120,000-130,000 9% 110 (gold equivalent ounces) 100 90 Gold production 80,000-90,000 80 (ounces) 70 60 Silver production 6.0-6.5 2011 2012 2013E (million ounces) 2 Reducing Cash Costs Cash cost $620-640 (By-Product $ per gold ounce) ($ per gold equivalent ounce) 500 2 Cash cost – by-product 400 5% $280-300 17% ($ per gold ounce) 300 3 200 Capital Expenditures $42 ($ million) 1001. “Gold equivalent ounces” include revenue from silver converted to a gold equivalent based on 2013 estimated average realized commodity prices ($1,700 per ounce of gold and $8.52 per ounce of silver in - full year 2013). 2011 2012 2013E2. Cash cost is a non-GAAP measure. Refer to the third quarter 2012 MD&A for a reconciliation of cash costs.3. Excludes capitalized exploration. TSX:P | NYSE:PPP 8
  9. 9. 2013 Capital Expenditures Estimated 2013 Capital Expenditures Outlook 2013 San Dimas Underground Development $9.9 million Sustaining Capital $11.6 million Waste Rock Pad $6.8 million Mill Expansion $10.7 million Other Projects $3.0 million Total1 $42 million1 . Excludes capitalized exploration. TSX:P | NYSE:PPP 9
  10. 10. Strong Production Growth Combined Production Expected to Increase to more than 200,000 AuEq. Oz in 2015 Estimated Production Profile1,2 (Attributable 000 AuEq ounces) Primero Cerro Del Gallo 2052 160 130 111 2012E 2013E 2014E 2015E1 . “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 Cerro Resources publically disclosed production estimates delayed by 12 months.2. Assumes 100% ownership of Cerro Del Gallo and that it begins production in mid-2015. TSX:P | NYSE:PPP 10
  11. 11. Positive Silver LeverageRecent Tax Ruling Created Positive Leverage to SilverPrimero sells 50% of annual silver production above 3.5 million ounces at spot Remainder sold at ~$4 per ounce under silver purchase agreement Threshold commences August 6 to following August 5 Threshold increases to 6.0 million ounces on August 6, 2014 Planned expansion anticipated to generate similar silver sales at spot as 2012 post August 6, 2014 Silver as Percentage of 2013E Revenue Silver Gold 25% 75% TSX:P | NYSE:PPP 11
  12. 12. Objective: Become a Leading Intermediate Gold ProducerFocused Strategy Deliver Optimize and operational and expand financial results existing mine/s Diversify through opportunistic, Increase accretive Reserves acquisitions through exploration TSX:P | NYSE:PPP 12
  13. 13. Delivering Operational & Financial Results Increasing Earnings1 Increasing Throughput2 Adjusted EPS ($ per share) (tonnes per day) $0.50 2,000 95% 9% $0.40 1,900 $0.30 1,800 $0.20 1,700 $0.10 $- 1,600 Sep 30, 2011 Sep 30, 2012 Sep 30, 2011 Sep 30, 2012Increasing Cash Flow Increasing ProductionOp CF before changes in working capital ($ per share) (AuEq ounces) 112,000 9%$0.90 12%$0.80 102,000$0.70$0.60 92,000 Sep 30, 2011 Sep 30, 2012 2011 2012 1. Refer to third quarter 2012 MD&A for adjustments. 2. Based on 365 days per year. TSX:P | NYSE:PPP 13
  14. 14. Delivering Results:Increased San Dimas Reserves and Resources at Mid-Year Probable Gold Reserves  Probable Gold Reserves increased by 16% (000s ounces) 16% 600  Indicated Gold Resources increased 17% 500 400  Inferred Gold Resources increased by 23% 300 200  Replaced Depletion by 265% at mid-year 100 0  Increased Reserve average grade and width Dec 30, 11 Jun 30, 12 Increased Reserve Grade (grams per tonne of gold)RESERVES & RESOURCES1 (at June 30, 2012, Resources include Reserves.) 5.0 7% Tonnage Gold Grade Silver Grade Gold SilverClassification (Mt) (g/t) (g/ t) (koz) (koz)Mineral Reserves 4.5 Probable 3.785 4.8 290 584 34,700Mineral Resources Indicated 3.193 6.6 400 678 40,630 4.0 Dec 30, 11 Jun 30, 12 Inferred 6.865 4.0 300 866 67,500 1 . See Slide 38 for Reserve & Resource notes & details and Slide 11 for silver purchase agreement details . TSX:P | NYSE:PPP 14
  15. 15. Optimize San Dimas Increasing ThroughputMaximize Current Throughput by end of Q1 2013 (tonnes per day) ~6% Ensure throughput at mill capacity of 2,150 TPD by 2,000 9% end of Q1 2013Control Costs Control costs per tonne Improve productivity per man shift 1,500 2011 2012 2013EOptimize Grade Reducing By-Product Cash Costs Implement 3D Planning (By-Product $ per gold ounce) Control mining dilution 500 400 5% 17%Accelerate Mine Development 300 Increase number of mining faces 200 Complete lateral haulage connections between 100 current mining and exploration areas - 2011 2012 2013E TSX:P | NYSE:PPP 15
  16. 16. Expand San Dimas to 2,500 TPDProject IRR of 150%, with payback period of less than 24 months1Total capital expenditure of ~$16.5 millionExpand milling capacity to 2,500 TPD Install third ball mill, already on-site Reconfigure crushers Install new tailings thickener and pumpsExpand mine throughput Develop Sinaloa Graben veins Connect Central Block to Sinaloa Graben New mining equipment Mill Expansion to:Future expansion to 3,000 TPD possible 2,500 TPD Dependent on exploration success CAPACITY Minimal capital and no disruption to operation 1 . See October 15, 2012 News Release “Primero Announces Expansion of its San Dimas Mine” for details. TSX:P | NYSE:PPP 16
  17. 17. Expansion Timeline Expansion to 2,500TPD and Potential for Further Expansion to 3,000TPD 2013 2014 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Optimization (SD at 2,150TPD) 3D Mine Planning Expansion 1 (SD at 2,500TPD) Crushing/Grinding LeachingPotential Expansion 2 (SD at 3,000TPD) Exploration TSX:P | NYSE:PPP 17
  18. 18. Increase Reserves Through ExplorationLarge 22,500 hectare land package; Over 120 known veins; Produced 11 million oz to date ARANA HANGING TAYOLTITA WALL BLOCK CENTRAL BLOCK TAYOLTITA MINE SINALOA Mined 1975 - 2002 GRABEN Target BLOCK WEST CENTRAL BLOCK MINE BLOCK Mined 2002 - Present Target SAN ANTONIO MINE Mined 1987 - 2002 TSX:P | NYSE:PPP 18
  19. 19. Improved Geological Understanding Unlocks District Wide Exploration Potential West Block 2013 EXPLORATION Sinaloa Graben Central Block Tayoltita Block Arana San Antonio Mined 1987-2002 Mined 2012-Current Mined 2002-Current Mined 1975-2002 Hanging WallSW NE3,000 m. 3,000 m.2,000 m. 2013 EXPLORATION PROGRAM 2,000 m. DRILLING FOR EXTENSIONS OF KNOWN VEINS1,000 m. 1,000 m. Source: San Dimas Geology Office 0 1 2 Mineralization – Ore Bodies Extension of the Favorable Horizon Faults Favorable Horizon Potential Intrusive K I L O M E T E R S TSX:P | NYSE:PPP 19
  20. 20. Aggressive 2013 Exploration & Development ProgramProgram Targets Vein Extensions from Existing Mines Development  6,500 metres development drifting  Tunnels joining Sinaloa Graben and Central Block being completed  Lower level tunnel commenced, expected to be completed in 18-24 months Exploration  $15.4 million exploration program  50,000 metres delineation drilling  32,000 metres exploration drilling, plus 3,800 metres of exploration drifting TSX:P | NYSE:PPP 20
  21. 21. Two Veins Discovered in 2012 in 2013 Mine Plan Alexa and Victoria Veins Close to InfrastructureLocated in Prolific Central Corridor Strategic Underground Drill Locations Alexa located 125m north of Victoria  Drilling from old El Pilar workings, Sinaloa Targeting inclusion in Reserves by 2012 year- Graben tunnel and east-west drift from end Robertita Mining access achieved within 12 months of discovery TSX:P | NYSE:PPP 21
  22. 22. Diversification Through AcquisitionCerro Del Gallo Fit Selective Acquisition Criteria Growth Strategy  Primary objective is asset base diversification LEADING MID-TIER GOLD PRODUCER  Near term focus on advanced projects AMERICAS ACQUISITION/S ACQUISITIONS  Longer term focus to create a portfolio of early and advanced stage projects ACQUISITION/S SAN DIMAS  Mining friendly jurisdictions in the Americas OPTIMIZATION EXPLORATION only OPTIMIZATION & EXPANSION  Focus on similar scale to San Dimas SAN DIMAS PLATFORM TSX:P | NYSE:PPP 22
  23. 23. 2013 Objectives & Catalysts Produce 120,000-130,000 AuEq oz Upcoming Catalysts 2013 Replace resources with 100% of production Q1 Q2 Close Cerro Del Gallo Acquisition Reserves & Resources Exploration Maintain industry leading Corporate Results Responsibility standards Cerro Del Gallo Closing Continue to assess high quality project(s) in Potential announcement of expansion to 3,000 TPD (before 2013 year-end) mining friendly jurisdictions in the Americas TSX:P | NYSE:PPP 23
  24. 24. The Primero OpportunityCompelling Investment ArgumentSan Dimas: Long-Life, High-Grade AssetTransformational Cerro Del GalloAcquisition Scheduled to Close in MayCash Flow and Capital to Fund GrowthSignificant Exploration PotentialProven Management & BoardAttractive Valuation TSX:P | NYSE:PPP 24
  25. 25. TSX:P NYSE:PPPAppendix A: Acquisition of Cerro Del Gallo
  26. 26. Cerro Del Gallo Project, GuanajuatoOverview Open pit, heap leach gold-silver-copper project Large resource base relative to reserves Excellent local infrastructure in a region known to actively support mining Two phased development plan with estimated 1.3 million ounces recovered over 15 year mine life1 Phase I heap leach facility with SART metallurgical processing to recover silver and copper Commercial Production of Phase I expected in 2015 Future Phase II incorporates Carbon In Leach (CIL) and presents optimization opportunity 1. Cerro Resources Phase I Definitive Feasibility Study as of May 2012 and Phase II Preliminary Economic Assessment as of May 2011. TSX:P | NYSE:PPP 26
  27. 27. Cerro Del Gallo Cerro Resources Technical Details Phase I Heap Leach (Source: Cerro Resources Definitive Feasibility Study June 2012) Heap Leach Grades 0.69 g/t Au, 14.8g/t Ag, 0.08% Cu Strip Ratio1 0.91 Capital Costs $154 million Primero to complete its own Operating Costs2 $514/AuEq.oz optimization studies Phase I Life of Mine (LOM) 7.2 years Phase I Average Annual Production3 94,600 AuEq.oz Permitting To be completed in 2013 Phase I + II Heap Leach and CIL (Source: Cerro Resources Preliminary Economic Assessment May 2011) CIL Gold Grades 0.67 g/t Au, 14.2g/t Ag, 0.09% Cu Strip Ratio 0.74 Capital Costs4 $237 million Operating Costs $549/AuEq.oz Phase I + II Life of Mine (LOM) 14.2 years Phase I + II Average Annual Production5 90,000 AuEq.oz1. 9 million tonnes of ‘fresh’ material expected to be mined during Phase I for processing in Phase II. The material has been treated as ‘waste’ material for purposes of calculating the Phase I LOM strip ratio.2. Cash cost is a non-GAAP measure as estimated by Cerro Resources and include costs for mining, processing, metal transport and refining and administration but do not include capital costs or royalties (4%).3. Gold equivalent ounces estimated by Cerro Resources include revenue from silver and copper converted to a gold equivalent based three year historic prices as of Definitive Feasibility Study of June 2012, of Gold $1,341/oz, Silver $25.58/oz and Copper $7,582/tonne.4. Based from $154 million capital estimate from DFS, June 2012, the balance $83 million from the PEA, May 2011.5. Gold equivalent ounces estimated by Cerro Resources include revenue from silver and copper converted to a gold equivalent based on two year historic prices as of Preliminary Economic Assessment of April 2011, of Gold $1,571/oz and Silver $19.81/oz. TSX:P | NYSE:PPP 27
  28. 28. Cerro Del Gallo Large Gold Domain Resource Cerro Del Gallo hosts a 209 million tonne gold domain measured and indicated resource containing 3.2 million ounces of gold or 5.58 million ounces of gold equivalent1 ,21. As estimated by Cerro Resources using gold, silver and copper price of US$1,341/oz, US$25.58/oz and US$7,582/t (or $3.44/lb) respectively. See Golder Associates Technical Report, 2008.2. See note 7 in January 23, 2012 News Release “ Primero achieves 2012 Guidance and Provides 2013 Outlook.” TSX:P | NYSE:PPP 28
  29. 29. Cerro Del GalloRESERVES AND IN-PIT RESOURCES1 Total Resources Within the Gold Domain - 20082 M Tonnes Au Au Ag Ag Cu Cu Au Eq* AuEq Category (g/t) (M ozs) (g/t) (M ozs) (%) (M lbs) (g/t) (M oz) Measured & Indicated 209.0 0.48 3.22 11.0 70.3 0.08 396.9 0.83 5.58 Inferred 20.0 0.30 0.19 7.0 4.5 0.09 39.7 0.59 0.38 1. 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 Golder Associates Technical Report, 2008. Phase I Heap Leach In-pit Proven and Probable Reserves – DFS June 20123 M Tonnes Au Au Ag Ag Cu Cu Au Eq* AuEqCategory (g/t) (M ozs) (g/t) (M ozs) (%) (M lbs) (g/t) (M oz)Proven & Probable 32.2 0.69 0.71 14.8 15.3 0.08 56.4 1.11 1.15 3. These reserves are reported using internal cut-off grades of 0.24 and 0.29 gAuEq/t for weathered and partially oxidized, respectively. Phase II In-pit Resources (excluding P+P Reserves) – PEA May 20114,5 M Tonnes Au Au Ag Ag Cu Cu Au Eq* AuEqCategory (g/t) (M ozs) (g/t) (M ozs) (%) (M lbs) (g/t) (M oz)Measured & Indicated 47.9 0.60 0.92 13.3 20.5 0.10 103.4 1.03 1.58 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 respectively. 5. See note 7 in January 23, 2012 News Release “ Primero achieves 2012 Guidance and Provides 2013 Outlook.” TSX:P | NYSE:PPP 29
  30. 30. New Primero Attributable Gold Equivalent Reserves and Resources1,2 (million gold equivalent ounces) Cerro Del Gallo Primero +261% 3.1 +133% 1.7 1.2 1.2 2.3 1.0 0.9 0.8 P+P M+I Inferred1. Primero’s gold equivalent reserves and and resources are adjusted for the silver purchase agreement and only attributable silver ounces to Primero are included. 3 29% of all silver reserves and resources for San Dimas are considered attributable.2. Based on 100% ownership of Cerro Del Gallo. Gold Equivalency based on long-term prices per ounce: Gold $1,350, Silver $23.25, Copper $7,447.3. M+I Resources include Reserves.4. See note 7 in January 23, 2012 News Release “ Primero achieves 2012 Guidance and Provides 2013 Outlook.” TSX:P | NYSE:PPP 30
  31. 31. Cerro Del Gallo Development Plan 2013 2014 2015 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Detailed Engineering GeotechnicalPermitting/Land Acquisition Earth Works Mill TestsAcid Generation Tests SART OptimizationPlant & MillConstruction Estimated Transaction Closing ProductionCommissioning Commercial Production Phase IIFeasibility Study TSX:P | NYSE:PPP 31
  32. 32. Cerro Del Gallo Exploration Upside PotentialPotential Exploration Targets Early stage regional prospecting previously returned1:  1.5m @ 590g/t Ag and 3.40g/t Au  4.6m @ 428g/t Ag and 3.52g/t Au  3.6m @ 359g/t Ag and 1.57g/t Au  4.6m @ 239g/t Ag and 1.91g/t Au  6.0m @ 243g/t Ag and 1.70g/t Au  3.1m @ 200g/t Ag and 1.05g/t Au  7.6m @ 168g/t Ag and 1.51g/t Au 1. As reported by Cerro Resources. TSX:P | NYSE:PPP 32
  33. 33. Transaction Summary Creates a diversified, high growth, low cost producer in Mexico with further consolidation opportunities Strengthens growth profile and cash flows with estimated production of 260,000 Au Eq. ounces by 2016 Combined attributable proven and probable reserves of approximately 1.7 million Au Eq. ounces and measured and indicated resources of 3.1 million Au Eq. ounces1 Strong balance sheet with cash flow sufficient to fund development growth Significant additional exploration upside Solidifies and leverages Primero’s established presence in Mexico Delivers on strategy of delivering value to shareholders through low risk exposure to precious metals in the Americas Attractive acquisition metrics and accretive on key measures Limited dilution of only 15% to Primero shareholders1.See note 7 in January 23, 2012 News Release “ Primero achieves 2012 Guidance and Provides 2013 Outlook.” TSX:P | NYSE:PPP 33
  34. 34. Other Appendices TSX:P | NYSE:PPP 34
  35. 35. Executive Management Joseph F. Conway | President & C.E.O. 1 Tamara Brown | VP, Investor Relations  Former CEO, President and Director of IAMGOLD  Former Director Investor Relations for IAMGOLD; from 2003 to 2010 Partner of a Toronto based, boutique investment bank; Professional engineer in mining industry  Former President, CEO and Director of Repadre Capital from 1995 to 2003 H. Maura Lendon | VP, Chief General Counsel and Corporate Secretary  Former Senior Vice President, Chief Legal Officer Renaud Adams | C.O.O. and Corporate Secretary of HudBay Minerals Inc.; Chief Counsel Canada, Chief Privacy Officer -  Former SVP, American Operations for IAMGOLD Canada of AT&T  Former General Manager of Rosebel Gold Mine 2007 to 2010  Former General Manager El Toqui Mine in Chile Gabriel Voicu| VP, Geology and Exploration and then the El Mochito Mine in Honduras  25 Years of mining experience, formerly held senior technical and exploration positions with Cambior and Iamgold David Blaiklock | C.F.O.  Former controller IntraWest David Sandison | VP, Corporate Development  Previously controller for a number of public and private companies in real estate development  Former VP, Corporate Development of Clarity Capital ; Director, Corporate Development Xstrata Zinc Canada ; Director Business Development, Noranda/Falconbridge;;Former EVP, Noranda Chile Board Committees: 1.Health, Safety and Environment TSX:P | NYSE:PPP 35
  36. 36. Board of Directors Wade Nesmith | Chairman Rohan Hazelton | Director 1,5 Robert Quartermain | Director 2,3  Founder of Primero  VP, Strategy, Goldcorp  Founder and President & CEO,  Founding and current director  Formerly with Wheaton River Pretivm Resources of Silver Wheaton, Chairman of and Deloitte & Touche LLP  Former President, Silver Standard Selwyn Resources  Director of Vista Gold Corp. and Canplats Resources David Demers | Director2,3,4,5 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  Chair of Primero Audit Committee, Resources Corp. Chair of Audit Committee of B.C. Lottery Corporation and member of the Audit Committee of Canalaska Uranium Ltd. Grant Edey | Director 3,5 Eduardo Luna | Director 1 Joseph Conway | Director1 see Executive Management  Former Director of Breakwater  Former EVP & President, Resources, former director of Mexico. Former Chairman and Queenstake Resources, Santa CEO of Silver Wheaton, Board Committees: 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 36
  37. 37. June 30, 2012 Mineral Resources and Mineral Reserves1 Classification Tonnage Gold Grade (g/t) Silver Grade Contained Gold Contained Silver(MINERAL RESOURCES (million tonnes) (g/ t) (000 ounces) (000 ounces) INCLUDE MINERAL RESERVES)Mineral Reserves Probable 3.785 4.8 290 584 34,700Mineral Resources Indicated 3.193 6.6 400 678 40,630 Inferred 6.865 4.0 300 866 67,500Notes to Reserve Statement:1. Cutoff grade of 2.52g/t gold equivalent (“AuEq”) based on total operating cost of US$98.5/t. Metal prices assumed are gold US$1,250 per troy ounce and silver US$20 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$1.00.4. 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 National Instrument 43-101 (“NI 43-101”).Notes to Resource Statement:1. Mineral Resources are total and include those resources converted to Mineral Reserves.2. A 2g/t AuEq cutoff grade is applied and the AuEq is calculated at a gold price of US$1,400 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.4. The Mineral Resource estimates were prepared by Mr. Rodney Webster MAusIMM, MAIG and Mr. J. Morton Shannon P.Geo., both of AMC Mining 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 tonneof 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 todefine an associated Mineral Resource and it is uncertain if further exploration will result in the targetbeing delineated as a Mineral Resource. TSX:P | NYSE:PPP 37
  38. 38. Reserves & Resources within Wireframes by Vein Estimated as at June 30, 2012 Inferred Resources Reserves Indicated Resources constrained within wireframes Block Vein Tonnes (t) Au (g/t) Au (oz) Percentage Tonnes (t) Au (g/t) Au (oz) Percentage Tonnes (t) Au (g/t) Au (oz) PercentageCentral Robertita 1,007,000 5.60 182,300 31% 766,000 8.12 199,800 29% 603,000 6.17 119,700 25%Central Roberta 992,000 5.40 172,100 29% 709,000 9.13 208,100 31% 759,000 4.61 112,500 24%Central Marina 1 299,000 7.00 67,800 12% 279,000 8.39 75,194 11% 182,000 6.39 37,420 8%Sinaloa Elia 143,000 6.10 28,100 5% 100,000 9.63 31,100 5% 82,000 9.28 24,600 5%Central San Enrique 197,000 4.30 27,000 5% 186,000 5.07 30,300 4% 97,000 3.88 12,100 3%Central Santa Lucia 341,000 2.00 22,100 4% 384,000 2.12 26,100 4% 302,000 1.51 14,600 3%Sinaloa Aranza 146,000 4.10 19,200 3% 120,000 5.60 21,700 3% 33,000 7.98 8,500 2%Central Castellana 216,000 2.50 17,400 3% 207,000 3.17 21,100 3% 183,000 2.87 16,900 4%Central Celia 160,000 2.60 13,300 2% 154,000 3.15 15,600 2% 159,000 2.95 15,000 3%Central Marina 2 76,000 4.80 11,600 2% 99,000 6.29 20,000 3% 93,000 5.99 18,000 4%Central Gloria 51,000 6.60 10,900 2% 34,000 11.23 12,200 2% 23,000 8.13 6,000 1%Central Jael 56,000 2.60 4,700 1% 49,000 3.41 5,400 1% 21,000 4.97 3400 1%Central Soledad 46,000 2.90 4,300 1% 42,000 4.76 6,500 1% 32,000 4.19 4,300 1%Central Gabriela 47,000 2.00 3,000 1% 42,000 2.90 3,900 1% 43,000 2.37 3300 1%Central San Salvador 5,000 1.30 200 0% 14,000 1.15 500 0% 30,000 0.93 900 0%Central Angelica 4,000 1.80 200 0% 8,000 1.73 500 0% 35,000 1.83 2000 0%Sinaloa Victoria 346,000 6.46 71,700 15%Sinaloa Alexa 26,000 8.94 7,500 2% Total 3,785,000 4.80 584,300 3,193,000 6.60 677,994 3,049,000 4.90 478,420 1 . See slide 38 for Total Inferred Resources including veins outside wireframes. TSX:P | NYSE:PPP 38
  39. 39. Notes to Investors Regarding the Use of ResourcesThis 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 accordancewith Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy andPetroleum classification systems. NI 43-101 is a rule developed by the Canadian Securities Administrators that establishes standards for all public disclosurean issuer makes of scientific and technical information concerning mineral projects. These standards differ significantly from the requirements of the UnitedStates Securities and Exchange Commission (the “SEC”), and reserve and resource estimates disclosed in this presentation may not be comparable to similarinformation 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 regulatoryauthorities. For United States reporting purposes, SEC Industry Guide 7 under the United States Securities Exchange Act of 1934, as amended, asinterpreted 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” unlessthe determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination ismade. Among other things, all necessary permits would be required to be in hand or issuance imminent in order to classify mineralized material as reservesunder 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. TheCompany 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 mineralreserves. Further, “inferred resources” have a great amount of uncertainty as to their existence and as to whether they can be mined legally oreconomically. Therefore, United States investors are also cautioned not to assume that all or any part of the “inferred resources” exist. In accordance withCanadian securities laws, estimates of “inferred resources” cannot form the basis of feasibility or other economic studies. It cannot be assumed that all orany 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 asin 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 explorationprovided that the disclosure (i) states with equal prominence that the potential quantity and grade is conceptual in nature, that there has been insufficientexploration 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 includedin this presentation. United States investors are cautioned that disclosure of such exploration potential is conceptual in nature by definition and there is noassurance that exploration will result in any category of NI 43-101 mineral resources being identified. TSX:P | NYSE:PPP 39
  40. 40. TSX:P NYSE:PPP Focused on ProductionPRIMERO MINING CORP.20 Queen Street West, Suite 2301 Focused on Growth Tamara Brown Vice President, Investor RelationsToronto, ON M5H 3R3 T 416 814 3168T 416 814 3160 F 416 814 3170 info@primeromining.comTF 877 619 Trading Symbols Common Shares TSX:P, NYSE:PPP Warrants TSX:P.WT