Primero csr 2013

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Primero csr 2013

  1. 1. Sustainability Report 2013 Committed to Sustainability
  2. 2. contents About Primero 1 About This Report 2 Letter from the President and CEO 6 Ethical, Transparent Governance 9 Materiality and Our Key Stakeholders 13 Building Primero Value 15 Committed to Our People 18 Committed to Our Communities 28 Protecting the Environment 34 In Closing 44 GRI Index 46 Corporate Directory IBC Committed to Sustainability All currency is in United States dollars (USD) unless otherwise noted. Front Cover Photo: Bianey Alvarado (Environmental Coordinator) and Emmanuel Santana (Environmental Supervisor) conducting quarterly water sampling along the Piaxtla River.
  3. 3. 1 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 Primero is a Canadian-based mining company that recently took its place among the mid-tier ranks of precious metals producers. As of early 2014, the company has two producing mines, the San Dimas mine in Mexico and the Black Fox mine in northern Ontario. The company also has a development project, Cerro del Gallo in Mexico, and an advanced exploration project, Grey Fox, which is adjacent to the Black Fox property. A third property in Mexico, the Ventanas project, is in the exploration phase. This growth follows a record-breaking year of production growth, reserve expansion and the announcement of the Brigus acquisition. This report only discusses results at the San Dimas mine, which, in 2013, was the company’s only operating mine. Last year’s production at San Dimas exceeded 143,000 gold equivalent ounces. As a multi-mine company, with operations in two countries, we are in the process of establishing corporate-wide policies and procedures for Corporate Social Responsibility to ensure consistency in our goals and measurement as we move into the future. About Primero
  4. 4. 2 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 We are proud to present our third annual Sustainability Report, which highlights our achievements and challenges in 2013. As we grow, we will not lose sight of our objectives of continuous improvement to workplace health and safety, environmental performance, and of sharing the benefits of mining throughout our host communities. We remain committed to transparency and accountability in sustain- ability reporting. We have appointed a new Vice President of Corporate Responsibility, whose many responsibilities include working to improve data collection and reporting, and encouraging the engagement of employees, communi- ties and other stakeholders in our sustainability initiatives. This report covers the period of January 1 through December 31, 2013. Its content is guided by common prin- ciples in sustainability reporting in our industry and by the findings of an extensive internal materiality assessment process, which is described later in this report. In the future we will broaden these materiality discussions to include various external stakeholder groups. Economic performance is not emphasized in this report: as a public company, our financial results are audited annually and reported on a regular basis, and our Annual Reports, Financial Reports and Regulatory Filings are posted on our website. Nonetheless, key economic drivers are discussed in the Delivering Primero Values section of this report. This report is primarily based on data collected at and around our San Dimas mine in Mexico. Our other properties are not discussed: the acquisition of the Cerro Del Gallo property was completed in May 2013, and the acquisition of Brigus Gold (the Black Fox mine and Grey Fox advanced exploration project) was completed in early 2014. All of our assets will be included in the 2014 Sustainability Report. The environmental and broader sustainability impact of our offices in Toronto, Vancouver and Mexico City had little effect on our overall impact, and the offices’ energy consumption data are not included in the environmental data. This report is based on data collected in 2013, with comparative data from previous years. Our previous Sustainability Reports contained errors in water consumption data, which is discussed later in this report; but there are no significant changes from previous reporting periods in the scope, boundary or measurement methods applied. For any questions regarding this report or its contents, please contact us at sustainability@primeromining.com. GRI DECLARATION This report is based on the standards of the Global Reporting Initiative (GRI), and represents Primero’s second Sustainability Report to attain a GRI level C standard of sustainability reporting. The GRI is an independent institution that has developed voluntary guidelines for sustainability reporting. The mining and metals sector supplement of the GRI reporting guidelines have also been considered and available data is included in this report. We believe that the GRI reporting guidelines help us to maintain a high standard of transparency, clarity and comparability, and that applying GRI standards demonstrates our commitment to transparent reporting, especially in those categories that are most important to our stakeholders. A GRI Index can be found at the back of this report. About THIS REPORT Our ongoing assessments of materiality will, in the future, increase the breadth of engagement in our sustainability reporting. We will be engaging in formal exercises to refine our definition of stakeholders and to survey their reporting needs.
  5. 5. 3 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 At Primero, we believe that sustainability is fundamental to our success. At the corporate level and in our relationships with our host communities, our prosperity depends on good corporate governance and building a solid framework for economic, community and environmental sustainability. Our four-step approach to sustainability begins with creating and nurturing a corporate culture based on a vision of environmental stewardship, social progress, economic achievement, and ethical, transparent governance. That vision translates into values that inform decision- making and that, ultimately, guide our behaviours, as a company and as individuals. The second step is to apply that vision and those values to developing policies and procedures that support sustainability with consistency and rigour, through standardized company-wide systems. Third, our sustainability practices must focus on materiality: on those aspects of our corporate behaviours that most concern our stakeholders. If we engage our stakeholders and ascertain their priorities—and then focus our efforts on those concerns—we are better positioned to manage risk. Later in this report, our approach to materiality is discussed at length. In 2014, we will enhance our stakeholder engagement and use the results to review and refine our Corporate Responsibility Strategy. The fourth step is ongoing engagement. Only by engaging with our stakeholders, including our host communities, can we build strong relationships, develop alliances and maintain a long-term, balanced approach to sustainability. As Primero has become a mid-tier mining company with two producing mines, we are undergoing a thorough sustainability policy renewal process. Visit our website for more: www.primeromining.com. Management’s Approach to Sustainability
  6. 6. “Our philosophy is focused on generating economic, social and environmental value in the places where we operate. ”Homero Valenzuela Social Responsibility Manager, Mexico 4 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 ECONOMIC ACHIEVEMENT By maximizing earnings and reducing operating costs, we produce results for our shareholders while also contributing to the economic and social development of our host communities. Only by creating value for our shareholders and host communities, can we sustain our company over the long term. COMMUNITY ENGAGEMENT We actively engage in meaningful dialogue with local residents, community leaders and organizations to identify opportunities and priorities for economic improvement, 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. In February 2014, for the third consecutive year, Primero’s CSR framework and commitments were assessed and the company was again awarded the “Empresa Socialmente Responsable” (ESR) or “Socially Responsible Company” designation by CEMEFI, the Mexican Center for Philanthropy. This is a prestigious award that has been given to fewer than 950 companies in 2013. It recognizes companies that are committed to sustainable economic, social and environmental operations in all areas of corporate life, including business ethics, employee health and safety, involvement with the community, and preservation of the environment. ENVIRONMENTAL STEWARDSHIP At all times, we seek to operate in a responsible manner and to mitigate the impact our 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. OUR STAKEHOLDERS This report is written for Primero stakeholders, including: employees and their families our host communities legislators and government officials shareholders, investors and financial analysts civic, special-interest and non-governmental advocacy organizations (NGOs) These groups are generally accepted as key stakeholders for sustainability reporting, and we engage with them through our AGM, community meetings, website and a dedicated email address. Our ongoing assessments of materiality will, in the future, increase the breadth of engagement in our sustainability reporting. We will be engaging in formal exercises to refine our definition of stakeholders and to survey their reporting needs. Also see Materiality and Our Key Stakeholders, later in this report. We invite sustainability-related comments and suggestions at our dedicated email address: sustainability@primeromining.com.
  7. 7. 5 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3
  8. 8. 6 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 Letter from the President and CEO For Primero, 2013 was a year of growth, diversification, and record-breaking performance. At the San Dimas mine, our continued commitment to achieve zero harm had tangible results: the lost- time injury frequency rate was approximately half that of 2012, while annual gold production was up nearly 30%. We completed the acquisition of the Cerro del Gallo development property and began the acquisition process—which is now complete—of the Black Fox mine and the Grey Fox advanced exploration project. With these acquisitions, our workforce has grown from 1,300 to over 1,800. In preparation for our next phase of growth, we renewed our corporate obligation to sustainability. We crafted a statement of Primero “Vision and Values”, that puts, in simple language, the core principles of our culture of corporate responsibility. We are now in the process of bringing this vision and these values to every one of our operations. They will guide our behaviour and decision- making as we mature as a company. In recent years, investors and other stakeholders have become increasingly concerned with our industry’s sustainability priorities. Sustainable practices are seen as major risk-mitigating factors. As Primero has grown, we have consciously expanded our sustainability team. Not only is this the best practice for health, safety, the environment, and the welfare of our local communities, but it’s a significant component of corporate risk management. We are committed to responsible, sustainable mining, and we are building the framework for consistent industry-leading performance within a culture of continual improvement. I am proud to note that, in 2013, the San Dimas mine was certified as “Clean Industry” by the Mexican environmental authorities.
  9. 9. 7 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 In this light, I would like to note our continued commitment to sustainability, as demonstrated by the addition of a new executive to our senior management team: James Mallory, the Vice President of Corporate Responsibility. His mandate reflects our proactive stance on sustainability, responsibility and transparency. Led by our newest Vice President, we have begun the processes of policy renewal in health and safety, environmental monitoring and reporting, and corporate social responsibility. We have initiated a company-wide process for materiality: a process that, essentially, identifies the most important issues to our business and stakeholders for our sustainability reporting. Early results of that initiative can be seen in this report. In 2014, and beyond, our materiality outreach will expand to embrace external stakeholders. I am proud to note that, in 2013, the San Dimas mine was certified a “Clean Industry” by the Mexican environmental authorities. We intend to maintain that designation in the future. We also earned the coveted ESR designation Joseph F. Conway President and CEO (in English, “Socially Responsible Enterprise”), for the third consecutive year, for our best practices and sustainability policies. I would like to take this opportunity to thank the people of Primero. Our remarkable progress would not be possible without everyone’s hard work and dedication. As we look to the future, our focus is on the long term. We believe that we can only thrive when we act with responsibility, transparency and accountability toward our local communities. We share in the benefits of mining and expend considerable effort in protecting the health and welfare of our people, the economies of the communities in which they live and the environment that sustains us all. Primero Management (from left to right): Gabriel Voicu VP, Geology and Exploration, Tamara Brown VP, Investor Relations, James Mallory VP, Corporate Responsibility, Joseph F. Conway President CEO, Louis Toner VP, Project Development and Construction, H. Maura Lendon VP, Chief General Counsel and Corporate Secretary, Renaud Adams COO and David Blaiklock CFO. Not pictured: David Sandison VP, Corporate Development
  10. 10. 8 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3
  11. 11. 9 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 Social responsibility and sustainable development are integral to our company-wide strategy. Our corporate sustainability program guides our policy and decision-making regarding environmental protection, the health and safety of our people, and the socio-economic development of our host communities. Our goal is to continuously improve workplace health and safety and environmental performance, and to share the benefits of mining with local communities. CODE OF BUSINESS CONDUCT AND ETHICS Our operating practices are governed by our corporate Code of Business Conduct and Ethics. The Code is applicable to all directors, officers and employees. It embodies the commitment of Primero and our subsidiaries to conduct business in accordance with all applicable laws, rules and regulations and the highest ethical standards. The complete Code of Business Conduct and Ethics is available in the Corporate Governance section of the Primero website (www.primeromining.com). Corporate Responsibility COMMITTEE Sustainability practices are governed by the principles set out in our Health and Safety Policy, Environment and Social Responsibility Policy and Code of Business Conduct and Ethics. The Board’s Corporate Responsibility Committee (CRC), formerly the Environmental, Health and Safety Committee, provides oversight in occupational health and safety, community relations, and environmental management. The purpose of the CRC is to review and recommend corporate policies and programs and monitor activities as they relate to health, safety, environment and social matters. The CRC reports to the Board. Two of the three members of the CRC are independent members of the Board. Reflecting our focus on sustainability, a new Vice President of Corporate Responsibility was appointed in March 2014. Reporting directly to the COO, the new VP is responsible for Occupational Health and Safety, Environmental Management, Community Relations, and Risk Management. Our internal weekly and quarterly reporting tracks key Corporate Responsibility performance indicators. The complete CRC guidelines are available on the Primero website (www.primeromining.com). For 2014, the CRC will be reviewing Primero’s processes for materiality in sustainability reporting, and ongoing policy implementation in Health and Safety, environmental practices and corporate social responsibility. Ethical, Transparent Governance
  12. 12. 10 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 We invite CRC-related recommendations or direction from shareholders, employees or other stakeholders at our dedicated email address: sustainability@primeromining.com. HUMAN RIGHTS Primero respects internationally proclaimed human rights, and strives to ensure that we are not complicit in human rights abuses. There have been no incidents of discrimination, nor have there been any incidents of violations involving the rights of indigenous peoples, at any mine or project under Primero’s management. COLLECTIVE BARGAINING AND FREEDOM OF ASSOCIATION All Primero workers enjoy the right to freedom of association as provided by applicable labour law. There are two unions at the San Dimas mine, and approximately 53% of San Dimas employees are unionized. In March 2011, there was a strike at the San Dimas mill that lasted 32 days until the unions and management reached a mutually satisfactory agreement. There have been no strikes since that time. We do not believe that the right to exercise freedom of association and collective bargaining is at risk at any Primero location. WORKPLACE DIVERSITY, NON-DISCRIMINATION AND EQUITY At Primero, we do not discriminate on the basis of race, religion, ethnicity, national origin, colour, gender, age, sexual orientation, citizenship, veteran status, marital status or disability. Harassment, including sexual, physical and verbal, is prohibited. We do not allow forced or compulsory labour. We do not allow child labour as defined by the International Finance Corporation (IFC) and Primero will not knowingly employ a person who is under the legal age of employment or where that employment would contravene the IFC definition of child labour. There were no incidents of child labour reported to the company in 2013, nor were any operations considered to have significant risk for incidents of child labour. Compliance with Laws and Regulations In 2013, there were no legal actions taken against the company for anti-competitive behaviour. There was no form of non-monetary sanction taken against the site during the reporting period. In 2012, the Federal Attorney for Environmental Protection (PROFEPA) notified the Company of a 31,200 peso fine related to a tailing spill in 2012. The resolution notification referred to non-compliance to a “hazardous waste” regulation. In March 2013, the Company and PROFEPA came to terms that the tailings are not considered “hazardous waste”, at which point the Company agreed to pay the nominal fine, which was paid in the first quarter of 2013. Following the corrective actions implemented by the Company, an external consulting firm completed an on-site inspection and concluded that the actions taken by the Company were sufficient and that no long-term damage to the aquatic life had resulted. “It’s an inclusive process, where we can’t do it alone. We value the contributions of our employees and our community. And I think the community feels that they’re being heard. ”Jim Mallory VP Corporate Responsibility
  13. 13. 11 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 WHISTLEBLOWER POLICY In 2013, our corporate Whistleblower Policy was updated to reflect leading ethical practices. It allows any employee to communicate a concern or complaint confidentially and anonymously, with the expectation of a timely response and the assurance that there will be no retribution or negative consequences. Employees have three options to communicate concerns securely and anonymously. All employees are informed of these channels, which are also posted on our website. CONFLICT-FREE GOLD The Conflict-Free Gold Standard is an industry-led approach to combat the potential misuse of mined gold to fund armed conflict (www.gold.org). Primero supports the World Gold Council in its efforts to eliminate unethical gold production and to increase transparency of gold mining companies. The gold that we produce is in conformance with the Conflict-Free Gold Standard: it has been extracted in a manner that does not cause, support or benefit unlawful armed conflict, nor does it contribute to serious human rights abuses or breaches of international humanitarian law. In 2013, we conducted an assessment and process review to ensure our compliance with the Conflict-Free Gold Standard. Our internal assessment and processes were then reviewed by Ernst and Young LLP (EY), who carried out a limited assurance engagement on Primero’s Conflict-Free Gold Report for the San Dimas mine’s operations in 2013. The complete report, Conflict-Free Gold Report for Primero Mining Corp, along with EY’s limited assurance statement, are available on the Primero website (www.primeromining.com). We’re Listening ! Speak Up with Confidence through ClearView Connects™ 3 Easy Options: 1. Online: www.clearviewconnects.com 2. Phone: 0 1 800 253 3222 (Mexico) 1 866 840 8719 (Canada) 3. Mail: P.O. Box 11017 Toronto, ON M1E 1N0 Canada We’re Listening ! Speak Up with Confidence through ClearView Connects™ 3 Easy Options: 1. Online: www.clearviewconnects.com 2. Phone: 0 1 800 253 3222 (Mexico) 1 866 840 8719 (Canada) 3. Mail: P.O. Box 11017 Toronto, ON M1E 1N0 Canada
  14. 14. Table 1 The complete list of material issues considered in 2013’s internal assessment Environmental stewardship Stakeholder engagement and social progress Economic achievement Governance Energy use Community trust and social license to operate Local procurement Ethical business practices GHG emissions Community wellness Resource nationalism Regulatory compliance Tailing management Diversity and inclusiveness Tax reform and legal risk Water management Education and training Value creation Employee training and career development Wealth distribution and economic contributions Health and safety Infrastructure and services Land access Security Supplier development
  15. 15. “We really want to understand our stakeholders’ sustainability concerns and what role we play in working together with them. ”Jim Mallory VP Corporate Responsibility 13 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 In a Sustainability and Strategy Report, it is essential to identify the material topics—those economic, environmental, social and governance topics of greatest importance to our stakeholders and to the company— and the threshold at which aspects become sufficiently important that they should be managed and reported. In 2013, we committed to a process of internal assessments of materiality and during the year we began the process. We utilized independent guidelines and standards, described in Global Reporting Initiative (GRI) guidance and best practices used to define materiality for Sustainability reporting. We explored many potentially material issues, which were identified through industry benchmarking, international standards, emerging issues and internal discussions. We discussed their importance to Primero’s vision for sustainable development. Through this exercise, we developed an initial ranking of material issues and their importance to the business. The list was further refined using the Primero Enterprise Risk Management (ERM) process to plot the issues and assess the possible risks they may pose. The material issues and priorities identified in the internal assessment will drive our sustainability reporting and our medium to long-term strategy. Our reporting will improve as we focus on performance measures and other key performance indicators (KPIs) that reflect and address our stakeholders’ concerns. The internal assessment determined these material issues and priorities: 1) Health and Safety, 2) Community Trust and Social License to Operate, 3) Value Creation and Wealth Distribution, 4) Regulatory Compliance and 5) Water Management. The complete list of issues considered is in the table on page 12. While we understand that all the issues are important, it is valuable to establish priorities in order to take a long- term, focused, balanced view of the most material issues to our business and our stakeholders. In 2014, we will continue to improve our process for reporting materiality through a validation process with our key external stakeholders and refine our Corporate Responsibility strategy. MATERIALITY and Our Key Stakeholders Community Trust and Social License to Operate PAGE 29 Value Creation and Wealth Distribution PAGE 15 Regulatory Compliance PAGE 10 Water Management PAGE 36 1 2 3 4 5 Health and Safety PAGE 19
  16. 16. 14 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 $111Mstrong cash balance 29%PRODUCTION increase 32%Reserves increase $200Mrevenue Growth
  17. 17. 15 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 Primero is a Canadian-based company with headquarters in Toronto and offices in Vancouver and Mexico City. In May 2013, Primero Mining acquired the Cerro del Gallo development project and in late 2013, the acquisition of Brigus Gold was announced. In March 2014, that deal was finalized, transforming Primero into a multi- mine company with the addition of the Black Fox mine. In 2013, we operated one mine, the San Dimas mine in Mexico’s San Dimas district, as well as the Ventanas exploration project in Durango State. Most of the data in this Sustainability Report relates to San Dimas, but our corporate offices are included where relevant. Primero is developing a good relationship with the com- munities around the Cerro del Gallo property and is planning a more comprehensive stakeholder mapping and community engagement program for 2014. Because of the limited field- work on the Cerro del Gallo property, which was acquired in May 2013, its performance data is not covered in this report. Building Primero Value Table 2 San Dimas facts Ownership 100% Primero Location State of Durango (central west Mexico), approximately 150 km west of Durango, 125 km northeast of Mazatlán Description Gold-silver deposit Underground mine, using mechanized cut-and-fill mining methods and longhole 2012 2013 Production Gold equivalent* ounces 111,132 143,114 Gold ounces 87,900 111,983 Silver million ounces 5.13 6.05 Staff Employees 1,148 1,247 Contractors 117 73 % Union members 45.6% 52.6% % Mexican 100% 99.9% * Gold equivalent ounces include silver produced and converted to a gold equivalent, based on average commodity prices received in the period. Our products are sold to refineries or smelters, and then into worldwide precious metals markets. We do not sell directly to the public. Vancouver Corporate Office Toronto Corporate Office Black Fox Mine San Dimas Mine Cerro del Gallo Project Mexico City Office Grey Fox Exploration Project
  18. 18. 16 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3
  19. 19. 17 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 Table 3 DIRECT ECONOMIC REVENUE GENERATED IN 2012 and 2013 Direct economic value generated (in US Dollars) 2012 2013 a) Revenues 182,939,000 200,326,000 Economic value distributed b) Operating costs (goods and services) 38,569,645 47,353,724 c) Employee wages and benefits 28,683,336 37,549,034 d) Payments to providers of capital 19,074 14,843,000 e) Payments to governments (Mexico) 591,633 728,565 f) Community investments 826,089 836,242 Economic value retained 114,249,223 99,015,435 Greater detail on the company’s and mine’s revenues, production, customers and markets is included in the Annual Report, which is available on Primero’s website: www.primeromining.com. Local Procurement Primero is committed to helping create a sustainable local economy through local purchasing and small business development. At the San Dimas Mine a local supplier is providing uniforms for our employees and a number of new entrepreneurs are providing trucking services to mine operations. In 2014 we will explore environment and social performance requirements for suppliers and contractors at all our operations and continue to promote local entrepreneurship. distribution of goods and services purchased in 2013 Local (Tayoltita) Regional (Durango state) National (rest of Mexico) International 67% 16% 16% 1%
  20. 20. 18 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 COMMITTED to our PEOPLE “It’s not that one individual is going to work towards sustainability, it’s something the whole organization needs to work on together. ”Jim Mallory VP Corporate Responsibility
  21. 21. 19 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 Our Vision To be the most respected precious metals producer in the Americas, admired for the excellence of its people, its values and its delivery on commitments. Our Values Respect We value the diversity of our employees and other stakeholders and treat each other with dignity and honesty. Integrity We are uncompromising and consistent in our commitment to transparent, responsible actions. Focused We have the courage to take bold steps to excel and we apply a disciplined approach to deliver on our objectives. Teamwork We work together and recognize that each person contributes and makes a difference. HEALTH AND SAFETY At every Primero mine and project, we strive to protect the health, safety and welfare of our people and their communities. We focus on safety leadership and fostering a safety-first work culture through programs like our Zero Harm program and our Circles of Prevention. The Zero Harm program focuses on 10 critical tasks, such as rock scaling, driver accreditation, and explosives handling, and ensures that employees performing those tasks have the prior training and, if appropriate, the accreditation. In 2013, our injury statistics continued to improve: accident frequency declined by 25% and the All Accident Frequency Index dropped for the sixth consecutive year. COMMITTED to Our People As we grow from a one-mine operator to a multi-mine company, we are very focused on our core asset—our people. Our first priority is our people, and their safety and well-being on the job, their human rights, and their professional development.
  22. 22. 20 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 HEALTH AND SAFETY GOVERNANCE At the San Dimas mine, there are a number of committees and groups whose purpose is to maintain a safety-first culture and monitor safety performance. In total, more than 130 employees or 10% of the workforce participated in the different committees and continuous improvement working groups. Central Safety and Security Committee, a Formal Health and Safety Committee, guides our Health and Safety Administration system. The committee is chaired by the mine’s General Manager and includes operations and services superintendents (permanent members) and area heads, supervisors and employees (temporary members). The committee meets on a monthly basis to discuss potential risks and preventive measures, and to choose a safety “employee of the month”. Documentary System Subcommittee, an 18-member subcommittee, has joint management/labour representation and defines safety-related work procedures and instructions. Preventive Observations Subcommittee detects unsafe acts and conditions and follows up until they are corrected. In 2013, there were more than 3,000 of these preventive observations conducted (approximately eight per day). Accident and Incident Investigation Subcommittee analyzes and investigates lost-time accidents and near-miss incidents. In 2013, three lost-time accidents and six near-miss incidents were investigated. Circles of Prevention at San Dimas enhance a safety- first work culture through developing improvement opportunities and helping monitor and advise on occupational safety programs. In 2013, there were five different working groups, on subjects including assessing rock fall incidents, improving underground workplace conditions, reducing risk in the processing plant, and maintaining an orderly workplace.
  23. 23. 21 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 Table 4 Safety System Key Performance Indicators 2013 Key Performance Indicators % Completion Health and Safety Committee Meetings 82% Supervisor Safety Meetings 68% Scheduled Inspections 75% Planned Hazard Observations 33% Corrective Actions Closed 75% Key Performance Indicators for improved health and safety Our ongoing Health and Safety governance processes are generating leading Key Performance Indicators (KPIs) for health and safety. These are proving valuable in helping us adjust our focus to the factors that represent higher risks, and helping us focus on early corrective measures, which is already resulting in improved safety performance. We are committed to generating, and acting on, more KPIs as we continually review and refresh our safety management system. COMPLIANCE WITH STANDARDS The mine was inspected three times by the regulators and no examples of non-compliance were observed. In addition, a new Standard for Underground Mines was implemented in October of 2013. HEALTH AND SAFETY PERFORMANCE Primero recognizes the dangers inherent in the type of work we do. Accordingly, we place enormous emphasis on safe work practices and training—efforts that have resulted in a steady year-on-year decline in overall accident frequency. Our ultimate objective is to become a zero harm operation. For 2014, our goal is an overall reduction of 15% in our All Injury Frequency rate at operations in Canada and Mexico.
  24. 24. 22 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 “We know that mining is a high-risk activity; however, we are taking every possible measure to identify those risks, give our workers the tools to control them and, this way, have a safer work environment. ”Miguel Mares Safety and Environmental Manager
  25. 25. 23 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 1.85 1.1 0.95 1.5 2011 2012 2013 2014 * LTIFR is the number of lost-time injuries per 200,000 hours worked. (Lost-time injuries x 200,000 hours) ÷ Total Hours Worked. ** AIFR is the number of all injuries per 200,000 hours worked. Includes employees and contractors at all sites and corporate offices as well as the corporate exploration team. Table 5 Injury Frequency Injury Type 2011 2012 2013 Lost-time injuries 3 6 3 Total reportable injuries 27 20 17 Significant potential incidents 65 42 29 Fatalities 1 1 0 LTIFR (lost-time injury frequency rate) 0.18 0.36 0.17 AIFR (all injury frequency rate) 1.84 1.50 1.12 For 2014, our goal is an overall reduction of 15% in our All Injury Frequency rate at operations in Canada and Mexico.
  26. 26. 24 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 HEALTH PROTECTION AND TRAINING In addition to injury prevention, the San Dimas mine’s Integral Safety System is intended to improve the health and welfare of our workers, their families and the surrounding communities. The system seeks to identify and prevent sickness through ongoing monitoring and check-ups, including: Preventive programs for disease detection Epidemiological disease-detection programs for all employees exposed to noise, dust, hazardous chemical substances, etc. Biological and environmental monitoring Annual medical exams Anti-doping and alcohol tests for workers The San Dimas mine maintains on-site hospital facilities, with x-ray, ultrasound, a surgery room and clinical lab, which are available for all employees and contractors. The management is assessing the results of the programs. A new major injury-prevention program began in November 2013. As well, an ongoing, monthly safety campaign focuses on a specific topic. The campaigns include awareness talks, training courses and revision of standards. Topics have included among others: energy isolation (lock out – tag out), defensive driving, safety in work at heights, and safe handling of sodium cyanide. “At Primero, Community and Social Responsibility isn’t just about developing programs, it’s about making a real difference in the lives of people—at work and in their communities. ”Renaud Adams Chief Operating Officer
  27. 27. 25 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 Table 6 Staff Breakdown Location Full-Time Employees Hourly (Union) Contractors Women Men Total Mexico City Office 10 0 0 4 6 10 San Dimas Mine 553 694 73 119 1,201 1,320 Vancouver Office 5 0 1 3 3 6 Toronto Office 19 0 1 6 14 20 Total 587 694 75 132 1,224 1,356 Management Approach to Labour Practices Throughout Primero, we foster a culture of inclusivity and acceptance of gender, race, cultural background, age, religion and disability. We are committed to fair and equitable labour practices in every operation and office. More than half of our mining workforce (52.6%) is unionized. Everywhere we operate, we seek to be recognized as an employer of choice by offering competitive wages, above-average benefits, as well as by preferentially hiring locally and recognizing and rewarding employee performance. Table 7 Gender distribution (San Dimas) Female 119 (9%) Male 1,201 (91%) Total 1,320 regional hiring 2013 Employee Turnover: 8.4% Durango State Sinaloa State Zacatecas State Guanajuato State Other 78% 8% 3% 3% 8%
  28. 28. 26 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3
  29. 29. 27 HEALTH AND SAFETY AGREEMENTS More than half the mining workforce at the San Dimas mine is unionized, with health and safety agreements that include: Personal protective equipment Joint management-employee health and safety committees Participation of worker representatives in health and safety inspections, audits, and accident investigations Training and education Right to refuse unsafe work Periodic inspections WORKER AND MANAGEMENT TRAINING Primero runs an annual training program for superintendents, area managers, supervisors and workers. The training is developed based on the needs of each department and depending on the area. In 2013, more than 20,600 man-hours were dedicated to theoretical and practical training, with topics including: Safety leadership Underground heavy-equipment operations Explosives handling First aid and mine rescue training Rock mechanics Environmental awareness in the workplace Computer training Project management English classes DISTRIBUTION OF EMPLOYEE TRAINING Management Superintendents Area foreman Supervisors Assistants Operators and labour workforce 45% 5% 10% 12% 18% 10%
  30. 30. 28 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 COMMITTED TO our Communities “It (Primero) cares about its people, their sources of em- ployment and the communities that we live in… The truth is, my family is happy living here with me and it’s a privilege to work for Primero. ”Gustavo Berrios Process Plant Superintendent
  31. 31. 29 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 COMMITTED to Our Communities COMMUNITY DEVELOPMENT We are committed to maintaining a vibrant, economically diverse local community. The San Dimas mine has brought significant infrastructure upgrades to the community, in the form of improvements to roads, electrical and communication systems and medical facilities. Although these were developed to serve the mining operations, they are shared by the entire community. In addition to these benefits, we actively contribute to a broad range of social and community initiatives, often in collaboration with local and regional authorities. Table 8 PUBLIC INFRASTRUCTURE/COMMUNITY CONTRIBUTIONS* 2012 2013 Community infrastructure facilities (water supply, roads, schools, hospitals, etc.) $232,734 $235,594 Community services (through funding of costs and/or staffing with Primero employees) $593,355 $600,647 * Donations for infrastructure and provision of services, provided primarily as a public service, from which Primero does not seek to gain direct economic benefit.
  32. 32. 30 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 “When I was 11 years old, we had to leave this community and I came back five years ago to work in this company that gave me this chance. And the truth is, I’m very happy to return to my community and give something back, especially in environmental issues, which are so important nowadays. ”Bianey Alvarado Environmental Coordinator
  33. 33. 31 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 CHILD CARE With the change of administration of the Federal Government, the daycare facilities program that operated in Tayoltita through the Secretariat of Social Development (SEDESOL) was closed. We are still in discussions with the SEDESOL in search of a solution to reopen the daycare facilities. ENVIRONMENTAL AWARENESS Raising environmental awareness in the community is always a priority. In 2013, we continued our annual environmental awareness campaign, reaching approximately 1,000 students from 10 different educational institutions. Students from preschool through to high school participated in discussions relating to environmental education, energy and water conservation, waste classification, and regional flora and wildlife. CULTURE AND RECREATION Recreational, cultural and sporting activities were provided for employees and their families in the 2013 Primero “Grandes Familias” program. Monthly activities included recreational sporting activities and training sessions for spouses and other family members. In 2014, the recreational program “The Community is Primero” will continue these sporting and cultural activities and extend them to the entire Tayoltita community. “Primero Grandes Familias is a program that focuses on housewives and the workers’ children, looking for a sense of belonging within the company. ”José Luis Ramírez Díaz Human Resources Superintendent
  34. 34. 32 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 “By taking an internship in the company, the students have the opportunity to access the lab facilities, workshops, mine, topography maps when needed and the installations inside and outside the mine. ”Octavio Prado Pacheco Director CONALEP, Tayoltita Campus The College of Professional Technical Education (conalep) COMMUNITY TRAINING The College of Professional Technical Education (CONALEP) trade school in Tayoltita was established in 2004 by the San Dimas mine in cooperation with the state government. The mine funded the construction and equipping of the school, where students participate in classroom activities as well as hands-on practical experience in Primero’s laboratories and workshops. We continue to provide logistical support for classroom operations and lodging for rural students. In 2013, our support for CONALEP won us First Place Distinction for Practices in Education and Employment from the Mexican Ministries of Education and Labour. Since the program began, there have been seven years of graduating classes and more than 60% of the 156 graduates have been hired to work for Primero. We continue to work in concert with the Durango Adult Education Institute and more than 260 participants from Tayoltita have been part of the program.
  35. 35. 33 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 Table 9 ACADEMIC SCHOLARSHIPS Level of study Staff that benefits Number of scholarships 2012 2013 Technical high school studies Union employees’ children 21 23 Computing courses Union employees’ children 12 21 Technical studies/CONALEP Union employees’ children 7 7 High school Employees’ children 8 7 Bachelor’s degree Employees’ children 10 10 Master’s degree Employees’ children 2 1 TOTAL 60 69 Employee Scholarships Primero offers post-secondary educational scholarships and student loans. In 2013, there were 10 employees completing their post-secondary education either in person or online. Community Scholarships Primero offers a scholarship program for local Ejido land- owners and their communities. In 2013, 15 scholarships were presented to students at the post-secondary (6) and preparatory or high school level (9). “It’s a company that honestly puts its workers before everything else. ”Adriana Alvarado Sanchez Assistant Mine Planner Adriana was a CONALEP student when the San Dimas mine began the Women Miners program. She was employed while she completed her training as a metallurgical technician, and on graduation was hired full time at San Dimas as a heavy equipment operator. She then received a scholarship to take an Engineering degree in Mining at the University of Guanajuato. Adriana is employed as an Assistant Mine Planner while completing her University degree.
  36. 36. 34 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 protecting THE Environment “We strive at all times to act with responsibility and transparency in our actions and in our reporting practices. ”Jim Mallory VP Corporate Responsibility
  37. 37. 35 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 protecting the Environment As our company grows, and our production increases, it is inevitable that our water consumption and waste numbers will rise. We are nonetheless committed to minimizing our environmental footprint through improving process efficiency, recycling water and optimizing our operations wherever possible. We strive at all times to act with responsibility and transparency in our actions and in our reporting practices. In order to provide accurate comparisons of year-on-year environmental performance, we are including measurements of the intensity of our activity—in other words, our environmental impact per tonne of ore processed. MANAGEMENT APPROACH TO ENVIRONMENTAL RESPONSIBILITY Our mining, exploration and development activities are subject to the applicable environmental laws and regulations, which include planning for the eventual closure of the mine and reclaiming the mining properties after mining and processing has ceased. Our aim is to match the environmental standards of leading gold and silver producers. At all times, we manage our operations in compliance with, or in excess of, all relevant environmental standards. Precautionary measures are taken to avoid damage to ecosystems wherever possible. When adverse impacts occur, integrated programs are implemented to promote the recovery of the affected ecosystems. At San Dimas, the Environmental Management System (EMS) helps reduce or eliminate environmental impacts through precautionary measures that mitigate damage and promote recovery and reclamation. Our system is widely respected for its effectiveness in identifying and avoiding, reducing or eliminating the environmental impacts of mining and processing. We are committed to minimizing our environmental footprint through improving process efficiency, recycling water and optimizing our operations wherever possible.
  38. 38. 36 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 * Water use for 2011 is not reported, as we believe previous statistics to be inaccurate. Since 2012, the plant has been maintaining a more detailed water balance, which was not available in 2011. Table 10 WATER USE* Total Water Withdrawal by Source 2012 2013 Self-extracted water—water drawn from the environment via a facility or equipment controlled by the operation (e.g., bores, rivers, dams. etc.) 328,000 m3 344,000 m3 Surface water—including water from wetlands, rivers, lakes, and oceans 0 0 Recycled water 282,000 m3 479,000 m3 Total water used 610,000 m3 824,000 m3 % Recycled water 46.1 % 58.2.7% “CLEAN INDUSTRY” CERTIFICATION In 2013, the San Dimas mine was certified a “Clean Industry” by PROFEPA, Mexico’s Federal Environmental Protection authority. The Clean Industry Initiative is a voluntary program that assesses regulatory compliance and best practices in environmental performance. The mine’s audit process was completed in 2012 and the two-year certification was granted in May 2013. We intend to continue to improve our environmental standards and performance. 0.455 0.449 2012 2013 Water use Intensity (m3 fresh water per tonne of ore processed) WATER MANAGEMENT Water management is a prime concern in the San Dimas region. While production at the mine grew significantly in 2013, overall water use increased only slightly, due to significant improvements in the amount of water recycled back to the process plant. We plan to continue to improve water efficiency through recycling, reuse and treatment.
  39. 39. 37 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3
  40. 40. 38 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 Most of the electrical power for the San Dimas mine is provided by our own hydroelectric generation system, the Las Truchas dam and power plant. The Las Truchas hydroelectric power plant provides economical, reliable and clean power that supplied approximately 63% of the mine’s requirements in 2013. A 34 kVA power line runs 42 km from the dam to the San Dimas mine. The remainder of the mine’s requirements are supplied by the Federal Power Commission Supply System (FPCSS), and hydroelectric and back-up diesel generators, which are interconnected with the FPCSS. In 2012, a Phase II expansion was approved, that will increase capacity from its current 43 GW to approximately 67 GW per year. This will support mine and mill expansion. The Phase II expansion is due for completion in the second half of 2014. As shown in the tables below, the San Dimas mine uses both direct energy (primary sources such as diesel and gasoline) and indirect energy (produced by converting primary energy into other forms, such as electricity). Table 11 ENERGY CONSUMPTION Direct 2011 2012 2013 Diesel (stationary) 17,940.96 GJ 22,382.73 GJ 19,416.2 GJ Diesel (transport) 90,592.52 GJ 89,134.29 GJ 84,116.9 GJ Gasoline (000s litres) 3,764.45 GJ 2,047.33 GJ 3,780.9 GJ Indirect Electricity purchased: Las Truchas 142,365.6 GJ 123,847.2 GJ 154,929.6 GJ Electricity purchased: Mexican Federal Power Commission 66,438 GJ 98,481.6 GJ 85,626.0 GJ ENERGY CONSUMPTION AND GREENHOUSE GAS EMISSIONS
  41. 41. 39 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 The National Greenhouse Accounts Factors have been used to convert energy consumption into atmospheric emissions (in CO2 e). The same CO2 conversion factors were used for the last three years. In 2014, we will be reporting atmospheric emissions for multiple mine sites and will adjust conversion factors consistent with their respective jurisdictions. Table 12 GREENHOUSE GAS EMISSIONS (AS TONNES OF CO2 e) Direct 2011 2012 2013 Diesel (stationary) 1,323 1,652 1,433 Diesel (transport) 6,525 6,714 6,336 Gasoline 272 147 271 Indirect Electricity 8,396 15,236 13,680 Total 16,516 23,749 21,720 0.0329 0.0249 0.0283 2011 2012 2013 Average GHG Emission Intensity (Tonnes of CO2 e per tonne of ore processed)
  42. 42. 40 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3
  43. 43. 41 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 AIR QUALITY MEASUREMENT In 2013, we engaged a third-party contractor (On-Site Analítica de México, S. A de C.V.) to carry out an atmospheric study of the San Dimas operation. * Particulates from mining processes were in compliance with regulations. Table 13 Total Suspended Particulates (NOM-043-SEMARNAT-1993) Process Limits (mg/m3 ) 2011 2012 2013* Refinery 480 3.8 4.9 22.8 Sample Preparation 600 8.0 1.5 2.8 Laboratory 750 4.9 0.0 4.6 Laboratory (refinery) 570 9.8 3.4 2.5 Crushing Dust Collector (1) 410 80.8 15.9 36.1 Crushing Dust Collector (2) 400 13.7 5.2 140.3 Emissions from the plant’s hot oil heater at the refinery were in compliance with regulations (NOM-085- SEMARNAT-1994, for burners with heating capacity of less than 5250 Mj/h). WASTE MANAGEMENT In any mining operation, waste materials are generated. These wastes are categorized as: Non-hazardous process waste (mining waste), which includes waste rock and materials that are removed in order to access the mineralized ore and the tailings. Non-hazardous general waste, which includes scrap steel, packaging and other non-hazardous discarded materials and domestic waste. Hazardous wastes: materials that can pose a threat to health unless safely managed, such as used oil or grease, contaminated soil, chemical packaging, batteries, etc. The following table presents the results of three years of measurement. At San Dimas, the Hazardous Waste Management Plan establishes procedures for planning, reducing, collecting, storing, transporting, and performing final disposal of hazardous residues. The Mining Waste Management Plan ensures that the areas where wastes will be stored comply with safety measures that ensure the stability of the deposit and prevent acid drainage, leachate and runoffs into the environment, including monitoring. In 2013, permitting was received, and construction began, on a new waste rock storage area. Construction is nearing completion. Hazardous wastes increased, compared to 2012, because the operation’s chemical supplier stopped allowing the return of the contaminated packaging for reagents. Additionally, the volume of materials recovered from sump maintenance increased. All hazardous materials are collected, stored, transported and finally disposed in a manner consistent with the hazardous waste management plan for final disposal.
  44. 44. 42 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 Table 14 MINING WASTE Process Waste 2011 2012 2013 Waste rock (000s tonnes) Backfill % Waste rock storage % 1,038 76% 24% 950 43% 57% 831.1 32% 68% Tailings (000s tonnes) 663.0 721.3 766.9 Table 15 HAZARDOUS AND NON-HAZARDOUS WASTE Waste Type 2012 2013 Non-hazardous waste 268 tonnes 250 tonnes Hazardous wastes 165 tonnes 198 tonnes TAILINGS Tailings management at San Dimas is challenged by the district’s rugged terrain and steep canyons. San Dimas operates a dry stack tailing deposition facility producing a filtered “cake” that is deposited and compacted inside the tailing storage area. In 2013, the company purchased a third tailing pump and made improvements to the containment system for the tailing pipeline. In January 2012, a broken pipeline between the plant and the Cupías tailings storage facility (TSF) caused a spill of tailings containing 5 ppm cyanide into the Piaxtla River, affecting an area of 2.5 kilometres. The fault was corrected and both PROFEPA and CNA were notified. The municipality of San Dimas considered the incident to be localized and controlled, stating that the damage was limited to the death of small concentrations of fish. All of PROFEPA’s recommendations were implemented, including a new containment structure for the tailings pipe. In September 2012, CNA fined Primero 93,500 pesos, which we promptly paid. PROFEPA later notified
  45. 45. 43 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 VA-03 VA-06 VA-04 VA-05 VA-10 VA-03 2 Km VA-06 VA-04 Tayoltita Tailing Storage Facility Piaxtla River PiaxtlaRiver Process Plant the company of a 31,200 peso fine for non-compliance to a “hazardous waste” regulation; Primero and PROFEPA later came to terms that the tailings were not considered “hazardous waste”, and in early 2013, a nominal fine was paid. An external consulting firm inspected the site and concluded that the corrective actions were sufficient and there had been no long-term damage to aquatic life. BIODIVERSITY AND AQUATIC MONITORING Since 2010, a third-party consultant (Environmental Consulting and Technology Inc. de CV) has monitored water quality and aquatic life in the Piaxtla River. In 2013, they monitored three sampling stations: Located upstream of the area of influence of Tayoltita village activities (station VA-04) Located within the areas of influence of the village of Tayoltita/San Dimas (station VA-06) Located further downstream of Tayoltita/San Dimas (station VA-03) Habitats are classified as Optimum, Sub-optimal, Marginal and Poor. The EPA characterizes “Sub-optimal” as adequate to maintain the populations of the epifauna and fish areas, while “Marginal” is less than desirable for their viability (EPA, 2002a). In 2013, the habitat quality at station VA-04 was categorized as Sub-optimal (unchanged from 2012), while the habitat quality at VA-03 and VA-06 stations declined from Sub-optimal to Marginal. General pH values from all stations and sampling from 2010 and 2013, ranged around 7.3. The historical average concentration of dissolved oxygen (DO) is 7.47 mg/L, and the average flow values at all stations is 6.07 m3 /sec. Notwithstanding the decline in habitat quality over 2013, station VA-03 recorded the highest values of richness and abundance. During 2013’s sampling, 8,575 organisms were collected. Insects represented more than 90% of the macro invertebrates. The abundance of fish was lower than in previous surveys (2010 through 2013), which may be due to climatic conditions, as the study was conducted after the rainy season had ended. MINE CLOSURE AND RECLAMATION Every mine has a finite life. As mining proceeds at San Dimas, we continue to update our plans for the mine’s eventual closure. The Company has accrued a decommissioning liability consisting of reclamation and closure costs for the San Dimas mine and is reported in our financial statements. There was no progressive closure activity in 2013 at San Dimas and we expect to resume remediation of the historical San Antonio tailings in 2015.
  46. 46. 44 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 As one of the industry’s newest mid-tier gold producers, we intend to demonstrate an unyielding commitment to sustainability at each of our operations. Through 2014 and beyond, we will establish and maintain company-wide standards for recording and reporting sustainability information, and we will continue to meet stringent Global Reporting Initiative guidelines. Primero did not seek assurance for this report, but consulted Ernst and Young for input and advice. We are proud of the recognition and awards that we have received for social, health and safety, and environmental performance. They are proof of our ability to deliver on our commitments. As Primero proceeds along its growth trajectory, we will maintain our culture of continual improvement in sustainability. In Closing “As we look to the future, our focus is on the long term. We believe that we can only thrive when we act with responsibility, transparency and accountability toward our local communities. We share in the benefits of mining and expend considerable effort in protecting the health and welfare of our people, the economies of the communities in which they live, and the environment that sustains us all. ”Joseph F. Conway President and CEO
  47. 47. 45 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3
  48. 48. 46 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 1. STRATEGY AND ANALYSIS Source Page 1.1 Statement from the most senior decision maker of the organization about the relevance of sustainability to the organization and its strategy 6 1.2 Description of key impacts, risks and opportunities 6 2. ORGANIZATIONAL PROFILE Source Page 2.1 Name of the organization 1 2.2 Primary brands, products, and/or services 1, 15 2.3 Operational structure of the organization, including main divisions, operating companies, subsidiaries, and joint ventures 1, 15 2.4 Location of organization's headquarters 15 2.5 Number and name of countries where the organization operates, with either major operations or that are specifically relevant to sustainability 15 2.7 Markets served including geographic, sectors and customers 15 2.8 Scale of the organization 15,AR,QReports 2.9 Significant changes during the reporting period regarding size, structure, or ownership 2 2.10 Awards received in the reporting period 33, 36, BC 3. REPORT PARAMETERS Source Page 3.1 Reporting period (e.g., fiscal/calendar year) for information provided 2 3.2 Date of most recent report 2 3.3 Reporting cycle 2 3.4 Contact point for questions regarding the report or its contents 2 3.5 Process for defining report content 2, 4, 13 3.6 Boundary of the report (e.g., countries, divisions, subsidiaries, leased facilities, joint ventures, suppliers) 2 3.7 Any specific limitations on the scope or boundary of the report 2 3.10 Explanation of the effect of any re-statements of information provided in earlier reports, and the reasons for such re-statement (e.g. mergers/acquisitions, change of base years/periods, nature of business, measurement methods) 2 3.11 Significant changes from previous reporting periods in the scope, boundary, or measurement methods applied in the report 2 3.12 Location of the Standard Disclosures in the report 2 3.13 Policy and practice relating to seeking external assurance 11 4. Governance, Commitments, and Engagement Source Page 4.1 Governance structure of the organization, including committees under the highest governance body responsible for specific tasks AR, Website 4.4 Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body 10 GRI index
  49. 49. 47 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 4.8 Internally developed statements of mission or values, codes of conduct, and principles relevant to economic, environmental, and social performance and the status of their implementation 7, 19, 21, 35 4.12 Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses 2, 11, 4, 21 4.14 Stakeholder engagement 4, 13 4.15 Basis for identification and selection of stakeholders with whom to engage, 4, 13 4.16 Approaches to stakeholder engagement, including frequency of engagement by type and stakeholder group 13 4.17 Key topics and concerns that have been raised through stakeholder engagement, and how the organization has reported to those key topics and concerns, including through this report 12 ECONOMIC INDICATORS Source Page EC1 Direct economic value generated and distributed, including revenues, operating costs, employee compensation, community investments and payments to capital providers and governments 17 EC6 Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation 17 ENVIRONMENTAL PERFORMANCE INDICATORS Source Page EN1 Materials used by weight or volume 42, 43 EN3 Direct energy consumption by primary energy source 38 EN4 Indirect energy consumption by primary energy source 38 EN6 Initiatives to provide energy efficient or renewable energy based products and services, and reductions in energy requirements as a result of these initiatives 17, 38 EN7 Initiatives to reduce indirect energy consumption and reductions achieved 38 EN8 Total water withdrawal by source 36 EN10 Percentage and total volume of water recycled and reused 36 EN12 Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas 42 EN13 Habitat protected or restored 43 EN16 Total direct and indirect greenhouse gas emissions 39 EN22 Total weight of waste by type and disposal method 42 EN24 Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally 42 EN26 Initiatives to mitigate environmental impacts of products and services, and extent of impact 35, 36, 38 EN27 Initiatives to mitigate environmental impacts of products and services, and extent of impact 35, 41 EN28 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations 42
  50. 50. 48 P r i m e r o s u s ta i n a b i l i t y r e p o r t 2 0 1 3 LABOuR PRACTICES AND DECENT WORK PERFORMANCE INDICATORS Source Page LA1 Total workforce by employment type, employment contract, and region 15, 25 LA4 Percentage of employees covered by collective bargaining agreements 10, 29 LA6 Percentage of total workforce represented in formal joint management worker health and safety committees that help monitor and advise on occupational health and safety programs 19 LA7 Rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities by region and by gender 23 LA8 Education, training, counselling, prevention, and risk-control programs in place to assist workforce members, their families, or community members regarding serious diseases 20, 24 LA9 Health and safety topics covered in formal agreements with trade unions 20, 27 LA11 Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings 27, 29 HUMAN RIGHTS INDICATORS Source Page HR4 Total number of incidents of discrimination and actions taken 10 HR9 Total number of incidents of violations involving rights of Indigenous peoples and actions taken 10 SOCIETY PERFORMANCE INDICATORS Source Page SO7 Total number of legal actions for anticompetitive behaviour, anti-trust, and monopoly practices and their outcomes 10 SO8 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations 42 MINING SECTOR INDICATORS Source Page MM2 The number and percentage of total sites identified as requiring biodiversity management plans according to stated criteria, and the number (percentage) of those sites with plans in place 43 MM3 Total amounts of overburden, rock, tailings and sludges and their associated risks. 42 MM4 Number of strikes and lock-outs exceeding one week’s duration, by country 10 Cautionary Statement This report may contain “forward-looking” statements within the meaning of Canadian securities legislation and the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to future events or the anticipated performance of the Company and reflect management’s expectations or beliefs regarding such future events and anticipated performance. In certain cases, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, ”estimates”, ”forecasts”, ”intends”, ”anticipates” or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, ”could”, “would”, ”might”, or “will be taken”, “occur” or “be achieved”, or the negative of these words or comparable terminology. By their very nature forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual performance of the Company to be materially different from any anticipated performance expressed or implied by the forward-looking statements. Such factors include various risks related to the Company’s operations, including, without limitation, fluctuations in spot and forward markets for gold, silver and other metals, fluctuations in currency markets, changes in national and local governments in Mexico and the speculative nature of mineral exploration and development, risks associated with obtaining necessary exploitation and environmental licenses and permits, and the presence of laws that may impose restrictions on mining. A complete list of risk factors are described in the Company’s annual information form and will be detailed from time to time in the Company’s continuous disclosure, all of which are, or will be available, for review on SEDAR at www.sedar.com.
  51. 51. corporate Directory Directors Wade Nesmith Chairman Vancouver, BC Joseph F. Conway President Chief Executive Officer Primero Mining Corp. Toronto, ON David Demers 2, 3, 4, 5 Chief Executive Officer Westport Innovations Inc. Vancouver, BC Grant Edey 3, 5 Corporate Director Mississauga, ON Rohan Hazelton 1, 5 Vice President Strategy Goldcorp Inc. Vancouver, BC Timo Jauristo 2 Executive Vice President Corporate Development Goldcorp Inc. Vancouver, BC Eduardo Luna 1 Corporate Director Mexico City, Mexico Brad Marchant 1 Corporate Director Vancouver, BC Robert A. Quartermain 2, 3 President Chief Executive Officer Pretium Resources Inc. Vancouver, BC Michael Riley 5 Corporate Director Vancouver, BC Board Committees 1 Member of the Corporate Responsibility Committee 2 Member of the Human Resources Committee 3 Member of the Governance and Nominating Committee 4 Lead Director 5 Member of the Audit Committee Officers Joseph F. Conway President Chief Executive Officer Renaud Adams Chief Operating Officer David Blaiklock Chief Financial Officer Tamara Brown Vice President, Investor Relations H. Maura Lendon Vice President, Chief General Counsel and Corporate Secretary James Mallory Vice President, Corporate Responsibility David Sandison Vice President, Corporate Development Louis Toner Vice President, Project Development and Construction Gabriel Voicu Vice President, Geology and Exploration Corporate Offices Vancouver One Bentall Centre, Suite 1640 505 Burrard Street, Box 24 Vancouver, BC, Canada V7X 1M6 T 604 669 0040 F 604 669 0014 Toronto 20 Queen Street West, Suite 2301 Toronto, ON, Canada M5H 3R3 T 416 814 3160 F 416 814 3170 TF 1 877 619 3160 Operation Offices Mexico City Arquimedes 33, 2nd Floor Colonia Polanco 11560 Mexico, D. F. Mexico T +52 55 52 80 6083 Investor Inquiries Tamara Brown Vice President, Investor Relations T 416 814 3168 Tania Shaw Manager, Investor Relations T 416 814 3179 F 416 814 3170 E info@primeromining.com Website www.primeromining.com We welcome feedback on this report or on any other aspect of sustainability at Primero. Please contact us at sustainability@primeromining.com. FSC Logo Primero Mining is a proud member of the World Gold Council. Production Notes Design and Production: Macrae Creative Location Photography: Salvador Casares Bonastre/Diseña - Creatividad a... Tiempo! Printing: RRD Printed in Canada This paper has been certified to meet the environmental and social standards of the Forest Stewardship Council® (FSC®) and comes from responsibly managed forests and/or verified recycled sources.
  52. 52. www.primeromining.com In February 2014, for the third consecutive year, Primero’s CSR framework and commitments were assessed and the company was again awarded the “Empresa Socialmente Responsable” (ESR) or “Socially Responsible Company” designation by CEMEFI, the Mexican Center for Philanthropy. This is a prestigious award that has been given to fewer than 950 companies in 2013. It recognizes companies that are committed to sustainable economic, social and environmental operations in all areas of corporate life, including business ethics, employee health and safety, involvement with the community, and preservation of the environment.

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