March presentation final v2

Download March presentation final v2

Post on 08-May-2015




0 download


  • 1.Corporate UpdateMarch, 2013

2. Cautionary StatementThis presentation may contain forward-looking statements within the meaning of Canadian securities legislation and the United StatesPrivate Securities Litigation Reform Act of 1995. Forward-looking statements relate to future events or the anticipated performance of theCompany and reflect managements 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 orcomparable terminology. By their very nature forward-looking statements involve known and unknown risks, uncertainties and other factorswhich may cause the actual performance of the Company to be materially different from any anticipated performance expressed or impliedby the forward-looking statements. Such factors include various risks related to the Companys operations, including, without limitation,fluctuations in spot and forward markets for gold, silver and other metals, fluctuations in currency markets, changes in national and localgovernments 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 ofrisk factors are described in the Companys annual information form and will be detailed from time to time in the Companys continuousdisclosure, all of which are, or will be available, for review on SEDAR at This 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 notto assume that any part or all of the mineral deposits in these categories will ever be converted in to reserves. In addition, inferredresources have a great amount of uncertainty as to their existence, and economic and legal feasibility. It cannot be assumed that all or anypart of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineralresources may not form the basis of feasibility or pre-feasibility studies, or economic studies, except for a Preliminary Assessment as definedunder NI43-101. Investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable.Although the Company has attempted to identify important factors that could cause actual performance to differ materially from thatdescribed in forward-looking statements, there may be other factors that cause its performance not to be as anticipated. The Companyneither intends nor assumes any obligation to update these forward-looking statements or information to reflect changes in assumptions orcircumstances other than required by applicable law. There can be no assurance that forward-looking statements will prove to be accurate,as actual results and future events could differ materially from those currently anticipated. Accordingly, readers should not place unduereliance on forward-looking statements.Unless otherwise indicated, all dollar values herein are in US$.2 3. Building Primero ValueGOAL400,000 to 500,000 ounces per yearAmericas low-risk regions onlyPipeline of growth projectsLeader in per share growth 3 4. Building the Primero PipelineDEVELOPMENTPOTENTIAL EXPANSION Cerro Del CONSTRUCTION San Dimas GalloPRODUCTION San Dimas 3,000 TPDSan Dimas 2,500 TPD Platform4 5. 2012 Record Year for Primeroo Record Revenues and Operating Cash Flowo Record Annual Productiono Excellent Cost Controlo Strong Balance Sheeto Positive Tax Rulingo Increased Silver Sales At Spoto Positive Exploration Resultso San Dimas Expansion Announcedo Cerro Del Gallo Acquisition Announced5 6. Primero Operating ResultsProduction Q4 12Q4 11 20122011(AuEq ounces) 1Mill Throughput2,0661,920 1,976 1,815 112,000+8%(tonnes per day)Gold equivalent2production 26,31023,115 111,132 102,224(gold equivalent ounces)102,000Gold production23,14320,19187,90079,564(ounces) 92,000Silver production 1.32 ounces) 20112012Gold gradeGold Probable Reserves3.90 3.703.903.86 (000s ounces)(grams per tonne)Silver grade+16% 228 223 234 226 600(grams per tonne) 5003Cash cost677 719 636 640 400($ per AuEq ounce) 3003Cash cost by-product 535 580 366 384 200($ per gold ounce) 100Capital Expenditures17.18.739.729.80($ million)Dec 30, 11 Jun 30, 12 See slide 24 for footnotes.6 7. Primero Financial ResultsEarnings4(US$ thousands, exceptQ4 12Q4 1120122011($ per share)per share amounts)$0.50 +41%Revenues 43,597 35,645182,939 156,542$0.40Income from Mine$0.30 17,471 13,286 79,38965,090Operations$0.20Net income 1,24531 ,21649,55349,644 $0.10$-EPS0.01 0.35 0.540.562011 2012($ per share) Cash Flow4 4,528 4,685 41,29228,261Op CF before changes in working capital ($ per share)Adjusted net income $1.00 +10%Adjusted EPS 0.05 0.05 0.450.324($ per share) $0.90Operating cash flowsbefore changes in working17,775 14,602 88,80877,591$0.80capital $0.70CFPS 0.19 0.17 0.970.88($ per share)$0.60 2011 2012See slide 24 for footnotes.7 8. Primero Capital Structure$139MBalance Sheet Dec. 31, 2012 Cash$139 millionStrong Cash BalancePromissory note2 $40 million$120M Ownership 5 Goldcorp 32% Management & insiders~2%Significant Operating Cash FlowInstitutional & float ~66% Capital Structure$5M Feb.19, 2013 Repayment 97 million per year6 Shares outstanding Fully Diluted7 126 millionConservative Level of Debt Market Cap. ~C$560 million See slide 24 for footnotes.8 9. Primero Growth ProfileEstimated Production Profile8,9 250at 3,000 TPD(Attributable 000 AuEq ounces) San DimasCerro Del Gallo GalloPrimero Cerro Del 9 205160 130 111 2012E2013E 2014E2015ESee slide 24 for footnotes.9 10. Focused on Low Risk Regions in the AmericasBUILDS ON ESTABLISHED PRESENCE Risk Mining JurisdictionsMexico Remains One of the Lowest IN MEXICO Corporate OfficesSan Dimas MineGold-Silver MineDurango, Mexicoo Politically stableo Long mining historyo One of worlds largest metals producersVentanas Propertyo Excellent infrastructureExploration PropertyDurango, Mexicoo Experienced workforceCerro Del Gallo ProjectGold-Silver-Copper Development ProjectGuanajuato, Mexico 10 11. SAN DIMASA Flagship AssetDISTRICT PRODUCED 11M OUNCES OF GOLD AND 600M OUNCES OF SILVERLocationDurango-Sinaloa State BorderOwnership 100% One of Mexicos MostMetalsGold & SilverSignificant PreciousMiningU/G: cut and fill, long-holeMetals DepositsHistory 100+ years of production 2013E2Gold equivalent production 120,000-130,000(gold equivalent ounces)Gold production 80,000-90,000(ounces) 10Silver production 6.0-6.5(million ounces)10Silver sales at spot 900-1,000(thousand ounces) 3Cash cost $620-640($ per gold equivalent ounce) 3Cash cost by-product $280-300($ per gold ounce)15Capital Expenditures ($ million)$42 See slide 24 for footnotes.11 12. SAN DIMASExpansion to 2,500 TPD11ATTRACTIVE IRR AND PAYBACK PERIODTotal capital expenditure of ~$16.5 millionExpand milling capacity to 2,500 TPDo Install third ball mill, already on-siteo Reconfigure crusherso Install new tailings thickener and pumpsExpand mine throughputo Develop Sinaloa Graben veinso Connect Central Block to Sinaloa Grabeno New mining equipmentFuture expansion to 3,000 TPD possible Mill Expansion to:o Dependent on exploration success2,500 TPDCAPACITYo Minimal capital and no disruption to operationSee slide 24 for footnotes. 12 13. SAN DIMASExpansion On-Track for Q1 2014 Ball Mill Foundation Jan 20, 2013 13 13 14. SAN DIMASExpansion On-Track for Q1 2014 Ball Mill Foundation Feb. 16, 2013 14 14 15. SAN DIMASIncrease Reserves Through ExplorationLarge 22,500 hectare land package; Over 120 known veins AARANA HANGINGTAYOLTITAWALLBLOCKCENTRAL BLOCKTAYOLTITA MINESINALOA Mined 1975 - 2002GRABENTarget BLOCK TunnelsWESTCENTRAL BLOCK MINEBLOCK Mined 2002 - Present 2013 Planned Tunnels TargetTayoltita Future Planned TunnelsMill VeinsSAN ANTONIO MINEMined 1987 - 2002 Faults Ag-Au High Grade Trend A Targets Mines 15 16. SAN DIMAS District Wide Exploration Potential Longitudinal Cross Section West Block 2013 EXPLORATION Sinaloa GrabenCentral Block Tayoltita Block Arana San AntonioMined 1987-2002Mined 2012-CurrentMined 2002-Current Mined 1975-2002 Hanging WallSWNE3,000 m.3,000 m.2,000 m. 2013 EXPLORATION PROGRAM2,000 m.DRILLING FOR EXTENSIONS OF KNOWN VEINS1,000 m. 1,000 m.Source: San Dimas Geology OfficeA A012 Mineralization Ore BodiesExtension of the Favorable HorizonFaults Favorable HorizonPotential IntrusiveK I L O M E T E R S16 17. SAN DIMASFocused Exploration & DevelopmentTargeting Vein Extensions from Existing MinesDevelopmento 6,500 metres development driftingo Tunnels joining Sinaloa Graben andCentral Block being completedo Lower level tunnel commenced, expectedto be completed in 18-24 monthsExplorationo $15.4 million exploration programo 34,000 metres delineation drillingo 40,000 metres exploration drilling, plus3,800 metres of exploration drifting17 18. SAN DIMAS2012 Discoveries in 2013 Mine PlanSignificant Opportunity Close to InfrastructureLocated in Prolific Central CorridorStrategic Underground Drill Locationso Alexa located 125m north of Victoriao Drilling from old El Pilar workings, Sinaloa Grabeno Targeting inclusion in Reserves by 2012 tunnel and east-west drift from Robertitayear-endo Mining access achieved within 12 monthsof discovery 18 19. CERRO DEL GALLOA Transformational AcquisitionTransaction Detailso Cerro shareholders to receive 0.023 of a Primero share for each Cerro share and 80.01% inSpincoo Transaction value of $119 million as at announcement date December 12, 2012o Cerro Resources NL shareholder approval meeting mid April 2013, transaction expected toclose in Q2 2012Benefits to Primero Shareholderso Accretive to Primero on key metricso Leverages Primeros regional expertise and solidifies position in Mexico, with furtherconsolidation opportunitieso Diversifies near term production with additional 95,000 AuEq. oz per yearo Doubles Reserves and Triples Measured and Indicated ResourcesBenefits to Cerro Resources Shareholderso Attractive premiumo Significantly improved market presence and liquidityo Provides opportunity to participate in valuation re-rating as the combination diversifiesproduction and cash flows19 20. CERRO DEL GALLOProvides ~95,000 AuEq ounces per year starting 201512Technical Overviewo Open pit, heap leach gold-silver-copperprojecto Large resource base relative to reserveso Excellent local infrastructure in a regionknown to actively support miningo Two phased development plan12o Phase I heap leach facility with SART metallurgical processing to recover silver andcoppero Commercial Production of Phase I expected in 2015o Potential future Phase II incorporates Carbon In Leach (CIL) and presents optimizationopportunity12 See slide 24 for footnotes. 20 21. CERRO DEL GALLOLarge Gold Domain Resource3.2M oz of Gold or 5.6M oz of Gold Equivalent 13,14See slide 24 for footnotes. 21 22. CERRO DEL GALLOCerro Del Gallo Development Plan 2013 20142015Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4Detailed Engineering GeotechnicalPermitting/LandAcquisitionEarth Works Mill TestsAcid Generation TestsSART OptimizationPlant & MillConstructionEstimated Transaction Closing ProductionCommissioningCommercialProductionPhase IIFeasibility Study 2222 23. The Primero OpportunityA Compelling Investmento San Dimas: A Platform for Cash Generationo Transformational Cerro Del Gallo Acquisition Scheduled to Close in Q2 2013o Cash Flow and Capital to Fund Growtho Significant Exploration Potential at San Dimas and Cerro Del Galloo Attractive Valuation on Key Metrics 23 19 24. Footnotes1.Based on 365 days per year.2.Gold equivalent ounces include revenue from silver converted to a gold equivalent based on estimated average realized commodity prices ($1,600per ounce of gold and $9.41 per ounce of silver in full year 2012, consensus prices thereafter).3.Cash cost is a non-GAAP measure. Refer to the fourth quarter 2012 MD&A for a reconciliation of cash costs.4.Refer to fourth quarter 2012 MD&A for adjustments.5.Estimated five-year average after-tax operating cash flow based on production profile discussed in the October 15, 2012 News Release PrimeroAnnounces Expansion of its San Dimas Mine.6.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.7.Fully diluted shares include 20.8 million warrants with an exercise price of Cdn$8 per share, expiring on July 20, 2015; and 7.8 million options with anaverage exercise price of Cdn$5.65.8.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.9.Assumes 100% ownership of Cerro Del Gallo and that it begins production in mid-2015.10. Silver production is subject to a silver purchase agreement. Refer to the fourth quarter 2012 MD&A for details.11. See October 15, 2012 News Release Primero Announces Expansion of its San Dimas Mine for details.12. Cerro Resources Phase I Definitive Feasibility Study as of May 2012 and Phase II Preliminary Economic Assessment as of May 2011.13. 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. SeeCerro Resources Phase I Definitive Feasibility Study as of May 2012.14. See note 7 in January 23, 2012 News Release Primero achieves 2012 Guidance and Provides 2013 Outlook.15. Does not include exploration costs. 24 25. Primero MomentumPrimero ProductionAppendix A: Acquisition of Cerro Del Gallo 26. CERRO DEL GALLOTechnical DetailsPhase 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% CuStrip Ratio10.91Capital Costs $154 millionOperating Costs2$514/AuEq.ozPhase I Life of Mine (LOM)7.2 yearsPrimero to complete its ownPhase I Average Annual Production394,600 AuEq.oz optimization studiesPermittingTo be completed in 2013 1. 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 forpurposes 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 andadministration 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 historicprices as of Definitive Feasibility Study of June 2012, of Gold $1,341/oz, Silver $25.58/oz and Copper $7,582/tonne. 26 27. CERRO DEL GALLO Reserves and In-Pit Resources1 Total Resources Within the Gold Domain - 20082M Tonnes AuAu AgAg CuCuAu Eq* AuEqCategory(g/t) (M ozs)(g/t) (M ozs)(%) (M lbs) (g/t)(M oz)Measured & Indicated 209.00.483.22 11.070.3 0.08 396.9 0.83 5.58Inferred20.00.300.197.0 4.5 0.0939.7 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 20123M TonnesAu AuAg AgCu Cu Au Eq* AuEqCategory(g/t) (M ozs) (g/t) (M ozs) (%) (M lbs) (g/t)(M oz)Proven & Probable32.20.69 0.7114.8 15.30.08 56.41.11 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 20114,5M TonnesAu AuAg AgCu Cu Au Eq* AuEqCategory(g/t) (M ozs) (g/t) (M ozs) (%) (M lbs) (g/t)(M oz)Measured & Indicated 47.90.60 0.9213.3 20.50.10103.41.03 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, 2013 News Release Primero achieves 2012 Guidance and Provides 2013 Outlook.27 28. Significantly Increases Reserves & Resources1 New Primero Attributable Gold Equivalent Reserves and Resources1,2,4 +261% (million gold equivalent ounces)2.3 Cerro Del GalloPrimero San Dimas +133% 0.8P+P M+I 3 Inferred1. Primeros gold equivalent reserves and and resources are adjusted for the silver purchase agreement and only attributable silver ounces to Primero are included. 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, 2013 News Release Primero achieves 2012 Guidance and Provides 2013 Outlook.28 29. CERRO DEL GALLOExploration Upside PotentialPotential Exploration Targets Early stage regional prospecting previously returned1: o 1.5m @ 590g/t Ag and 3.40g/t Au o 4.6m @ 428g/t Ag and 3.52g/t Au o 3.6m @ 359g/t Ag and 1.57g/t Au o 4.6m @ 239g/t Ag and 1.91g/t Au o 6.0m @ 243g/t Ag and 1.70g/t Au o 3.1m @ 200g/t Ag and 1.05g/t Au o 7.6m @ 168g/t Ag and 1.51g/t Au 1. As reported by Cerro Resources in November 16,2012Investor Presentation: 29 30. CERRO DEL GALLOTransaction SummaryoCreates a diversified, high growth, low cost producer in Mexico with further consolidation opportunitiesoStrengthens growth profile and cash flows with estimated production of approximately 260,000 Au Eq. ounces by 20162oCombined attributable proven and probable reserves of approximately 1.7 million Au Eq. ounces and measured and indicated resources of 3.1 million Au Eq. ounces1oStrong balance sheet with cash flow sufficient to fund development growthoSignificant additional exploration upsideoSolidifies and leverages Primeros established presence in MexicooDelivers on strategy of delivering value to shareholders through low risk exposure to precious metals in the AmericasoAttractive acquisition metrics and accretive on key measuresoLimited dilution of only 15% to Primero shareholders1.See note 7 in January 23, 2013 News Release Primero achieves 2012 Guidance and Provides 2013 Outlook.2.Assuming the successful closing of the Cerro Del Gallo acquisition as announced by the Company on December 12, 2012 in the news release Primero toAcquire Cerro Del Gallo, available on the Companys website or Sedar and that it begins production in mid-2015 inaddition to the successful expansion of San Dimas to over 160,000 gold equivalent ounces per annum. 30 31. CERRO DEL GALLOCautionary StatementCerro Resources NL (Cerro) has filed a technical report under National Instrument 43-101 - Standards of Disclosure for MineralProjects (NI 43-101) entitled Technical Report, First Stage Heap Leach Feasibility Study, Cerro del Gallo Gold Silver Project,Guanajuato, Mexico (the Technical Report) with an effective date of May 11, 2012. Mr. Gabriel Voicu P.Geo, Vice President,Geology and Exploration, Primero, who is a qualified person for the purposes of NI 43-101, has reviewed the Technical Report onbehalf of Primero. To the best of Primeros knowledge, information and belief, there is no new material scientific or technicalinformation that would make the Technical Report inaccurate or misleading. Primero plans to file a technical report on the CerroDel Gallo project within 180 days of December 13, 2012 in accordance with the requirements of NI 43-101.Cautionary Note to US Investors Regarding Mineral Reporting Standards:Primero prepares its disclosure in accordance with the requirements of securities laws in effect in Canada, which differ from therequirements of US securities laws. Terms relating to mineral resources and mineral reserves in this material change report andother documents referenced herein are defined in accordance with NI 43-101 under the guidelines set out in the CanadianInstitute of Mining, Metallurgy, and Petroleum Standards on Mineral Resources and Mineral Reserves. The Securities and ExchangeCommission (the SEC) permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that acompany can economically and legally extract or produce. Primero uses certain terms, such as, measured mineral resources,indicated mineral resources, inferred mineral resources and probable mineral reserves, that the SEC does not recognize(these terms may be used in this presentation and other documents referenced herein and are included in the public filings ofPrimero which have been filed with securities commissions or similar authorities in Canada).31 32. Primero MomentumOther Appendices 33. SAN DIMAS PositiveCreated Positive Leverage to SilverRecent Tax RulingLeverage to Silver Primero sells 50% of annual silver production above 3.5 million ounces at spot o Remainder sold at ~$4 per ounce under silver purchase agreement o Threshold commences August 6 to following August 5 o Threshold increases to 6.0 million ounces on August 6, 2014 o 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% 33 34. SAN DIMASExpansion TimelineExpansion to 2,500 TPD and Potential for Further Expansion to 3,000 TPD 2013 2014 Q1 Q2Q3 Q4Q1Q2Q3 Q4Optimization(SD at 2,150 TPD) 3D Mine Planning Expansion 1(SD at 2,500 TPD) Crushing/Grinding Leaching Potential Expansion 2(SD at 3,000 TPD) Exploration 34 35. Executive Management Joseph F. Conway | President & C.E.O. 1 Tamara Brown | VP, Investor Relations o Former CEO, President and Director of IAMGOLD o Former Director Investor Relations for IAMGOLD; from 2003 to 2010 Partner of a Toronto based, boutique investment bank; Professional engineer in mining industry o Former President, CEO and Director of Repadre Capital from 1995 to 2003 H. Maura Lendon | VP, Chief General Counsel and Corporate Secretary o 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 - o Former SVP, American Operations for IAMGOLD Canada of AT&T o Former General Manager of Rosebel Gold Mine 2007 to 2010 o Former General Manager El Toqui Mine in Chile Gabriel Voicu | VP, Geology and Exploration and then the El Mochito Mine in Honduras o 25 Years of mining experience, formerly held senior technical and exploration positions with Cambior and Iamgold David Blaiklock | C.F.O. o Former controller IntraWest David Sandison | VP, Corporate Development o Previously controller for a number of public and private companies in real estate developmento Former VP, Corporate Development of Clarity Capital ; Director, Corporate Development Xstrata Zinc Canada ; Director Business Development, Noranda/Falconbridge;;Former EVP, Noranda ChileBoard Committees: 1.Health, Safety and Environment 35 36. Board of DirectorsWade Nesmith | Chairman Rohan Hazelton | Director 1,5Robert Quartermain | Director 2,3o Founder of Primeroo VP, Strategy, Goldcorp o Founder and President & CEO,o Founding and current director o Formerly with Wheaton RiverPretivm Resourcesof Silver Wheaton, former and Deloitte & Touche LLPo Former President, Silver StandardChairman of Selwyn Resources o Director of Vista Gold Corp. and Canplats ResourcesDavid Demers | Director2,3,4,5Timo Jauristo | Director 2 Michael Riley | Director 5o Founder, CEO and Director o EVP, Corporate Development,o Chartered accountant with moreWestport InnovationsGoldcorp than 26 years of accountingo Director of Cummins Westporto Former CEO of Zincore Metals experienceand Juniper Engines Inc. and Southwesterno 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 | Director1see Executive Managemento Former Director of Breakwater o Former EVP & President,Resources, former director of Mexico. Former Chairman andQueenstake Resources, Santa CEO of Silver Wheaton, Board Committees:Cruz Gold Executive VP of Goldcorp and 1.Health, Safety and Environmento Former CFO, IAMGOLD Luismin S.A. de C.V. (San Dimas) 2. Human Resources and Compensationand President of Mexican 3. Governance and NominatingMining Chamber and the Silver4. Lead Director 5. AuditInstitute 36 37. SAN DIMAS Mineral Resources and Mineral Reserves, June 30, 2012ClassificationTonnageGold Grade (g/t)Silver Grade Contained GoldContained Silver(MINERAL RESOURCES(million tonnes) (g/ t)(000 ounces)(000 ounces)INCLUDE MINERAL RESERVES)Mineral Reserves Probable3.7854.829058434,700Mineral Resources Indicated 3.1936.640067840,630 Inferred6.8654.030086667,500Notes 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. 37 38. SAN DIMASReserves & Resources within Wireframes by Vein Estimated as at June 30, 2012Inferred ResourcesReservesIndicated Resourcesconstrained within wireframes BlockVein Tonnes (t)Au (g/t) Au (oz) Percentage Tonnes (t) Au (g/t)Au (oz) Percentage Tonnes (t) Au (g/t)Au (oz)PercentageCentralRobertita 1,007,000 5.60182,30031%766,000 8.12 199,800 29% 603,0006.17119,700 25%CentralRoberta 992,000 5.40172,10029%709,000 9.13 208,100 31% 759,0004.61112,500 24%CentralMarina 1299,000 7.0067,800 12%279,000 8.3975,194 11% 182,0006.39 37,4208%SinaloaElia143,000 6.1028,1005%100,000 9.6331,1005%82,0009.28 24,6005%CentralSan Enrique 197,000 4.3027,0005%186,000 5.0730,3004%97,0003.88 12,1003%CentralSanta Lucia 341,000 2.0022,1004%384,000 2.1226,1004% 302,0001.51 14,6003%SinaloaAranza146,000 4.1019,2003%120,000 5.6021,7003%33,0007.988,5002%CentralCastellana216,000 2.5017,4003%207,000 3.1721,1003% 183,0002.87 16,9004%CentralCelia 160,000 2.6013,3002%154,000 3.1515,6002% 159,0002.95 15,0003%CentralMarina 2 76,000 4.8011,6002%99,0006.2920,0003%93,0005.99 18,0004%CentralGloria 51,000 6.6010,9002%34,000 11.2312,2002%23,0008.136,0001%CentralJael 56,000 2.60 4,7001%49,0003.41 5,4001%21,0004.97 34001%CentralSoledad46,000 2.90 4,3001%42,0004.76 6,5001%32,0004.194,3001%CentralGabriela 47,000 2.00 3,0001%42,0002.90 3,9001%43,0002.37 33001%CentralSan Salvador5,000 1.30 2000%14,0001.15 5000%30,0000.939000%CentralAngelica4,000 1.80 2000% 8,0001.73 5000%35,0001.83 20000%SinaloaVictoria 346,0006.46 71,700 15%SinaloaAlexa 26,0008.947,5002% Total 3,785,000 4.80584,3003,193,0006.60 677,994 3,049,0004.90478,420 381 . See slide 36 for Total Inferred Resources including veins outside wireframes. 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 reservesused 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.39 40. Tamara Brown Vice President, Investor RelationsPRIMERO MINING CORP. T 416 814 316820 Queen Street West, Suite 2301 info@primeromining.comToronto, ON M5H 3R3T 416 814 3160 F 416 814 3170Trading SymbolsTF 877 619 3160Common Shares TSX:P, NYSE:PPPwww.primeromining.comWarrantsTSX:P.WT