First Quarter 2011 Results                             TSX:PMay 17, 2011
Cautionary Statement                                                                                                      ...
Q1 2011 Results                  TSX:P123456                          3
Strong Financial Position  Increasing Cash Balance                                                                        ...
Financial Results                                                                            TSX:P(US$ thousands, except p...
Operating Results                                                                                                         ...
Production Guidance Maintained                                                                                            ...
San Dimas Growth Profile        Cash Flow Funded                                                                          ...
Disciplined Strategy                                                                                        TSX:P         ...
Silver Agreement          Increased Revenue, Tax Impact Remains                                                           ...
Silver Tax Mitigation Strategy                                        TSX:P123                                20114       ...
San DimasLong Life, High-Grade                                                                         TSX:PPRIMERO’S GOLD...
District Wide Potential       Longitudinal Section                                                                        ...
Sinaloa Graben – Key to Growth    Higher Grade & Wider                                                                    ...
Sinaloa Graben (Elia Vein) Sinaloa Graben – Key to Growth Higher Grade & Wider             TSX:P                          ...
Optimization & Expansion Plan                                        TSX:PINCREASE MINE DEVELOPMENTKey to production growt...
2011 Objectives                                TSX:P                   …COMMENCED                   …ON-TRACK             ...
PRIMERO MINING CORP.                    Richmond Adelaide Centre               INVESTOR RELATIONS                    120 A...
Upcoming SlideShare
Loading in …5
×

Primero Mining Q1 Results

527 views

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
527
On SlideShare
0
From Embeds
0
Number of Embeds
7
Actions
Shares
0
Downloads
3
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Primero Mining Q1 Results

  1. 1. First Quarter 2011 Results TSX:PMay 17, 2011
  2. 2. Cautionary Statement TSX:PThis presentation may contain “forward-looking” statements within the meaning of Canadian securities legislation and the United States Private SecuritiesLitigation Reform Act of 1995. Forward-looking statements relate to future events or the anticipated performance of the Company and reflectmanagement’s expectations or beliefs regarding such future events and anticipated performance. In certain cases, forward-looking statements can beidentified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, ”estimates”, ”forecasts”, ”intends”, ”anticipates” or“believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, ”could”, “would”, ”might”, or “will betaken”, “occur” or “be achieved”, or the negative of these words or comparable terminology. By their very nature forward-looking statements involveknown and unknown risks, uncertainties and other factors which may cause the actual performance of the Company to be materially different from anyanticipated performance expressed or implied by the forward-looking statements. Such factors include various risks related to the Company’s operations,including, without limitation, fluctuations in spot and forward markets for gold, silver and other metals, fluctuations in currency markets, changes innational and local governments in Mexico and the speculative nature of mineral exploration and development, risks associated with obtaining necessaryexploitation and environmental licenses and permits, and the presence of laws that may impose restrictions on mining. A complete list of risk factors aredescribed in the Company’s annual information form and will be detailed from time to time in the Company’s continuous disclosure, all of which are, or willbe available, for review on SEDAR at www.sedar.com.This presentation uses the terms “measured resources”, “indicated resources” and “inferred resources”. The Company advises readers that although theseterms are recognized and required by Canadian regulations (under National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI43-101”)),the United States Securities and Exchange Commission does not recognize them. Readers are cautioned not to assume that any part or all of the mineraldeposits in these categories will ever be converted in to reserves. In addition, “inferred resources” have a great amount of uncertainty as to their existence,and economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category.Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, or economic studies, except fora Preliminary Assessment as defined under NI43-101. Investors are cautioned not to assume that part or all of an inferred resource exists, or is economicallyor legally mineable.Although the Company has attempted to identify important factors that could cause actual performance to differ materially from that described in forward-looking statements, there may be other factors that cause its performance not to be as anticipated. The Company neither intends nor assumes anyobligation to update these forward-looking statements or information to reflect changes in assumptions or circumstances other than required by applicablelaw. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially fromthose currently anticipated. Accordingly, readers should not place undue reliance on forward-looking statements.Unless otherwise indicated, all dollar values herein are in US$. 2
  3. 3. Q1 2011 Results TSX:P123456 3
  4. 4. Strong Financial Position Increasing Cash Balance TSX:P $65 Increased Exchange TSX:P BALANCE SHEET at Mar 31, 2011 million Cash Balance Cash $65 million Promissory note1 $50 million Convertible note2 $60 million $90 Strong OWNERSHIP million3 Operating Cash Flow Goldcorp 36% Management & insiders ~3% Institutional & float ~61% $5 Prudent CAPITAL STRUCTURE million Shares outstanding repayment per Level Of Debt 88 million Fully Diluted 117 million year Market Cap. At May 12, 2011 $410 million1. Goldcorp: 5 year, 6% note repaid $5M/yr with balloon payment at end of year 52. Goldcorp: 1 year, rolling, 3% note convertible at CDN$6 43. Estimated 5 year average after-tax cash flow based on Primero’s five-year plan.
  5. 5. Financial Results TSX:P(US$ thousands, except per share amounts) Q1 2011 Q1 2010 Q4 2010Revenues 33,988 - 41,425Earnings from Mine 10,912 - 13,250OperationsEarnings (loss) (7,895) (318) 6,893Earnings (loss) per share (0.09) (0.11) 0.08Cash provided by (used in) 11,779 (129) 11,517operating activities 5
  6. 6. Operating Results TSX:P 1 Q1 2011 Q4 2010 Q3 2010 Increasing Throughput (tonnes per day) Throughput 1,870 1,840 1,580 2,000 30tpd (tonnes per day) Gold equivalent production 24,100 24,800 21,800 1,500 (gold equivalent ounces) Gold production 20,500 21,200 18,400 (ounces) 1,000 Q3 2010 Q4 2010 Q1 2011 Silver production 1.23 1.21 1.01 (million ounces) Reducing Costs $ per AuEq ounce Gold grade 4.03 4.01 4.03 (grams per tonne) Silver grade 250 236 227 $21 $600 (grams per tonne) 2 Cash cost $624 $645 $653 ($ per gold equivalent ounce) 2 Cash cost – by-product $491 $524 $552 ($ per gold ounce) $500 Q3 2010 Q4 2010 Q 20111. The San Dimas mine was acquired by Primero on August 6, 2010. Operating data for Q3 2010 comprises results during Goldcorp’s ownership (July 1 – Aug 5).2 .Cash cost is a non-GAAP measure. Refer to the first quarter 2011 MD&A for a reconciliation of cash costs to operating expenses. 6
  7. 7. Production Guidance Maintained TSX:P 3 2011E Production up 15% Gold equivalent production 110,000 - 120,000 (gold equivalent ounces) Silver sold at spot partial Q2/Q3 Gold production 90,000 - 100,000 (ounces) Silver at spot Development up 50%: (ounces) 500,000 – 750,000  $11.4 million or 8,900 metres Total silver production 4.5 – 5.0 (million ounces) 1 Exploration doubled to $12 million: Cash cost – gold equivalent $550 - $570 ($ per gold equivalent ounce)  54,000 metres diamond drilling – 30% 1,2 more than 2010 levels Cash cost – by-product $350 - $370 ($ per gold ounce)  3,800 metres exploration drifting – Ten- fold increase over 2010 levels Capital Expenditures $31 (millions)1. Cash cost is a non-GAAP measure.2. Cash costs (by-product) per gold ounce reported for San Dimas by Goldcorp Inc. are not comparable to Primero cash cost numbers due to certain inter-company transactions that are reversed for Goldcorp Inc.’s consolidated reporting.3. 2011 forecasts assume an average gold price of $1,400 per ounce; an average silver price of $6.63 per ounce, as according to the silver purchase agreement the first 3.5 million ounces and 50% of the excess of silver are sold at $4.04 7 per ounce and the balance is sold at spot, which is assumed to be $24 per ounce.
  8. 8. San Dimas Growth Profile Cash Flow Funded TSX:P 200 Estimated San Dimas Gold Equivalent Production1 (thousand gold equivalent ounces) 180 Sinaloa Graben 160 140 120 Central Block 100 80 60 40 Sta. Lucia 20 Sta. Rita Tayoltita 0 2010 2011E 2012E 2013E1. Forecast production figures were calculated using the following metal prices: 2011: gold $1,400 per ounce; silver $24 per ounce; silver price received from Silver Wheaton $4.04 per ounce. 2012: gold $1,450 per ounce; silver $25 perounce; silver price received from Silver Wheaton $4.08 per ounce. 2013: gold $1,270 per ounce; silver $21 per ounce; silver price received from Silver Wheaton $4.12 per ounce. 8
  9. 9. Disciplined Strategy TSX:P GROWTH OBJECTIVE Gold Eq. ounces (000) LEADING MID-TIER1 GOLD PRODUCER 400 Double San Dimas production by 2013 1 Additional exploration opportunity LATIN AMERICAN ACQUISITIONS 3002 SAN DIMAS ACQUISITIONS Cash costs trending below $450 per AuEq oz1 OPTIMIZATION 200 Reduce taxes EXPLORATION3 OPTIMIZATION 100 Maintain balance sheet strength SAN DIMAS (GOLD EQUIVALENT OUNCES) Americas pro-mining jurisdictions only Committed to leading CSR programs 0 2010 2011E 2012E 2013E1. See Primero Press Release of January 17, 2011. 9
  10. 10. Silver Agreement Increased Revenue, Tax Impact Remains TSX:P Amended Agreement – Anniversary August 6 First 3.5 million oz annual Ag production plus 50% of excess sold to SLW at ~$4 2010-2014 50% of annual Ag production above 3.5 million oz sold at spot First 6 million oz annual Ag production plus 50% of excess sold to SLW at ~$4 2015-LOM 50% of annual Ag production above 6 million oz sold at spot Silver Agreement Impacts on Primero Disproportionate Tax: Estimated Quarterly Variation In Revenues1 Primero currently pays tax on silver at spot Quarterly Volatility: Anniversary August 6, not calendar year1. UBS Research, “Higher sales leads to a strong Q4 result”, February 2011. Assumes flat gold ($1,400/oz) and silver ($30/oz) 10
  11. 11. Silver Tax Mitigation Strategy TSX:P123 20114 ongoing5 11
  12. 12. San DimasLong Life, High-Grade TSX:PPRIMERO’S GOLD RESERVES & RESOURCES0.9M 4.7ozs Gold Reserves grams per tonne grade Dolores Mulatos Pinos Altos Ocampo2.0M 3.7ozs Gold Inferred Resources grams per tonne grade El Sauzal La Cienega Penasquito Durango MazatlanPRIMERO’S SILVER RESERVES & RESOURCES San Dimas63Mozs Silver Reserves 332 grams per tonne grade Gold-Silver Mine DURANGO MEXICO Ventanas Exploration Property179M 330 DURANGO MEXICOozs Silver Inferred Resources grams per tonne grade 12
  13. 13. District Wide Potential Longitudinal Section TSX:P San Antonio Sinaloa Graben Central Block Tayoltita Block Arana Mined 1987-2002 Mined 2002-Current Mined 1975-2002 2011 EXPLORATION Hanging Wall West Block PRIORITYSW NE3,000 m. 6.8 4.7 3,000 m. g/t average grade g/t average grade2,000 m. 3 – 81 1.5 2,000 m. m average width m average width1,000 m. 1,000 m. Source: San Dimas Geology Office Mineralization – Ore Bodies Extension of the Favorable Horizon 0 1 2 Favorable Horizon Potential K I L O M E T E R S1. Indicative of exploration results to date 13
  14. 14. Sinaloa Graben – Key to Growth Higher Grade & Wider TSX:P Sinaloa Central Block Tayoltita Block Arana Hanging WallSan Antonio West Block Graben Dev Ag g/t Au g/t m Block 1. RAMP7-129W 1,115 10.30 2.75 RAMP8-129E 2,054 22.8 3.20 7 RAMP8-129E 1,449 14.0 4.20 DDH Ag g/t Au g/t m SAN VICENTE 2. TGS-S-22 958 6.81 8.56 TGS-S-15 403 8.08 7.52 Santa Rita 3. PIL 7-01 508 16.0 2.90 6 4. SOL-9-02 549 10.67 1.81 mine 5. MAR-9-17 514 8.86 2.45 6. RO-20-05 514 4.23 1.27 5 7. A-25-217(1) 778 7.9 0.80 3 4 HW-4G-01B 302 8.7 0.60 TAYOLTITA LEGEND 2 TOWN & MILL 1 Ag-Au High Grade Trend San Antonio Proposed Tunnel mine Tunnel 2011 Tunnel done Vein N Fault Town 0 1 2 km Piaxtla River (Source: San Dimas Geological Office) 14
  15. 15. Sinaloa Graben (Elia Vein) Sinaloa Graben – Key to Growth Higher Grade & Wider TSX:P 15
  16. 16. Optimization & Expansion Plan TSX:PINCREASE MINE DEVELOPMENTKey to production growthOPERATE MILL AT DESIGN CAPACITYCurrent:~1,890 tpd, Design: 2,100 tpdEXPAND MILL TO 2,500 TPD BY 2013Mill: 2,100 tpd, Leach: 2,500 tpdPOTENTIAL EXPANSION BEYOND 2,500 tpd2011 review 16
  17. 17. 2011 Objectives TSX:P …COMMENCED …ON-TRACK …ON-TRACK …ON-TRACK …ON-GOINGQ3Q4Q1 17
  18. 18. PRIMERO MINING CORP. Richmond Adelaide Centre INVESTOR RELATIONS 120 Adelaide Street West, Suite 1202 Tamara Brown Toronto, ON M5H 1T1 Vice President, Investor Relations T 416 814 3160 F 416 814 3170 T 416 814 3168 TF 877 619 3160 tbrown@primeromining.comFirst Quarter 2011 Results

×