RBC Capital Markets Underground Mining Technical Session Ernest Mast President & COO October 22, 2015
Cautionary Statement This presentation may contain forward-looking statements within the meaning of Canadian securities legislation and the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to future events or the anticipated performance of the Company and reflect management s expectations or beliefs regarding such future events and anticipated performance. In certain cases, forward-looking statements can be identified by the use of words such as plans, expects, is expected, budget, scheduled, estimates, forecasts, intends, anticipates or believes, or variations of such words and phrases or statements that certain actions, events or results may, could, would, might, or will be taken, occur or be achieved, or the negative of these words or comparable terminology. Forward-looking information includes statements respecting currently ongoing matters which will continue and statements in the present or past tense which are not historical facts. 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. This presentation uses the terms measured resources, indicated resources and inferred resources. The Company advises readers that although these terms are recognized and required by Canadian regulations (under National Instrument 43-101 Standards of Disclosure for Mineral Projects ( NI 43-101 ), the United States Securities and Exchange Commission does not recognize them. Readers are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted in to reserves. In addition, inferred resources have a great amount of uncertainty as to their existence, and economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, or economic studies, except for a Preliminary Assessment as defined under NI43-101. Investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable. Although the Company has attempted to identify important factors that could cause actual performance to differ materially from that described in forward-looking statements, there may be other factors that cause its performance not to be as anticipated. The Company neither intends nor assumes any obligation to update these forward-looking statements or information to reflect changes in assumptions or circumstances other than required by applicable law. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those currently anticipated. Accordingly, readers should not place undue reliance on forward-looking statements. Unless otherwise indicated, all dollar values herein are in US$. TSX P NYSE PPP 2
PRIMERO KEY ASSETS Operating High Grade Underground Mines San Dimas Black Fox LOCATION Sinaloa-Durango, Mexico LOCATION Timmins, Ontario, Canada OWNERSHIP 100% (silver stream 1 ) METALS MINING CAPACITY Gold & Silver Underground 2,500 TPD (nameplate) GRADE 5.7 g/t 4 2015E 180,000 AuEq oz 1 $915 per oz 2,3 all-in sustaining costs OWNERSHIP 100% (8% gold stream 1 ) METALS MINING CAPACITY Gold Underground & Stockpile 2,500 TPD GRADE 4.0 g/t 4 2015E 80,000 AuEq oz 1 $1,175 per oz 2,3 all-in sustaining costs Producing Mine Development Project Exploration Property San Dimas Mine SINALOA-DURANGO BORDER Ventanas Exploration Property DURANGO Cerro Del Gallo Project GUANAJUATO Black Fox Mine TIMMINS, ONTARIO Grey Fox Project TIMMINS, ONTARIO Corporate Office TORONTO, ONTARIO *See final slide for footnotes. TSX P NYSE PPP 3
SAN DIMAS Low-Cost Cornerstone of a Gold District LOCATION Mineral Reserves and Mineral Resources (December 31, 2014, Mineral Resources include Mineral Reserves) Classification Mineral Reserves Sinaloa-Durango, Mexico OWNERSHIP 100% (silver stream 1 ) METALS MINING CAPACITY Gold & Silver Underground 2,500 TPD (nameplate) PRODUCTION 1,5 175,000-185,000 AuEq oz CASH COSTS 2,3 $590-$640/AuEq oz Tonnage (Mt) Gold Grade (g/t) Cont. Gold (koz) Proven & Probable 4.5 5.7 818 Mineral Resources (includes Mineral Reserves) Measured & Indicated 4.6 6.6 970 Inferred 6.5 3.8 786 San Dimas Mine SINALOA-DURANGO BORDER Mexico Ventanas Exploration Property DURANGO Mazatlan *See final slide for footnotes. TSX P NYSE PPP 4
SAN DIMAS Long History of High Grade Production Primero Has Demonstrated Significant Production Growth 250,000 LUISMIN GOLDCORP PRIMERO Sinaloa Graben Discovery Subsequent Acquisition of San Dimas by Primero 10.00 200,000 Central Block Discovery (Roberta, Robertita & Santa Lucía veins) Acquisition of Luismin by Wheaton River Jessica Vein Discovery 8.00 Gold Production (ounces AuEq 1 ) 150,000 100,000 Victoria Vein Discovery 6.00 4.00 50,000 2.00 0 0.00 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E CURRENT RESERVE GRADE Gold Grade (g/t) Gold (oz) Gold Equivalent (AuEqoz) Gold Grade (g/t) *See final slide for footnotes. TSX P NYSE PPP 5
SAN DIMAS Prior to Primero Ownership Declining Production 218,000 AuEq 1 produced in 2006 134,000 AuEq 1 produced in 2009 Declining Investment +$60M of capital expenditures in 2007 reduced to ~$20M in 2009 Resulted in 2010: Mine operating at 1,600 TPD Unused 2,100 TPD mill capacity Exclusive use of Cut & Fill methods Polygonal reserve/resource estimation Veins/working faces reduced 50% from 2006-2010 San Dimas Capital Expenditures ($ millions) $63 $32 $22 Primero Previous Operator $11 $13 2007 2008 2009 2010 **Primero completed the acquisition of San Dimas in August 2010 Source: RBC Capital Markets Year # of Active Veins Avg. Width Avg. Length # of Faces 2001 16 1.9 72 59 2002 16 1.7 85 64 2003 16 1.8 88 68 2004 21 1.9 83 58 2005 20 2.1 106 70 2006 22 2.1 114 81 2007 21 2.3 129 71 2008 20 2.3 110 60 2009 11 2.0 95 47 2010 12 2.0 84 42 *See final slide for footnotes. TSX P NYSE PPP 6
SAN DIMAS Primero s Approach Recapitalization of the Mine Annual investment in San Dimas increased 60% from 2010-2013 2013 spending included expansionary capital to increase mill capacity to 2,500 TPD throughput Specific focus on: Reserve/resource estimation Introduced geostatistical block modelling using kriging Reduced area of influence of drill holes Resulted in ounces being downgraded to the exploration potential category, improving quality of reserves and resources in order to improve mine planning Introduction of Long-Hole Mining New technologies enabled mining of narrow veins, with less dilution than the old wider jumbos Increased Focus on In-Mine Exploration Opened Sinaloa Graben Block using drifting as predominant exploration tool Increased Mine Production & Mill Throughput Successive increases to 2,500 TPD (completed in Q1 2014) and to 3,000 TPD (expected completion April 2016) Capital Expenditures ($ millions) 5 Primero Previous Operator $11 $13 Au Eq Au 100 102 85 $30 80 $40 111 88 $66 143 112 $59 161 126 $54 2010 2011 2012 2013 2014 2015E Production Growth (koz) 1,5 180 150 2010 2011 2012 2013 2014 2015E *See final slide for footnotes. TSX P NYSE PPP 7
SAN DIMAS Ongoing Optimization & Production Growth Production Increasing by up to 15% in 2015 over 2014 Mill expansion to 3,000 TPD ahead of schedule Mill expansion capital reduced by $8.7 million Completed expansion expected to drop cash costs by ~$50 per ounce from 2014 levels Grade increasing toward 5.7g/t reserve grade Productivity Improvements Moving from 5.5 day, 3x8-hour shifts to 7 day, 2x12-hour shifts Increasing high performance development crews Completed strategic tunnels to reduce haulage routes and lower costs Optimization Programs Increasing to 40% long-hole mining in 2015 Introduced tailings washing system to optimize recoveries Expanded hydro-electric facility to 14 MW ($0.015 /kwh vs $0.12 /kwh from the grid) Annual Production (koz) 250 200 150 100 50 0 San Dimas Production & Projected Growth (koz) 1,6 102 80 111 88 143 112 108% GROWTH (2011-2017E) 161 126 180 150 190 215 5 2011 2012 2013 2014 2015E 2016E 2017E AuEq Au Au Grade 20 16 12 CURRENT RESERVE GRADE 4 0 TSX P NYSE PPP 8 8 Gold Grade (g/t) *See final slide for footnotes.
SAN DIMAS Strong Returns for Exploration Spending Jessica Vein (Primero Discovery 2014) Not included in 2014 Resource estimate, currently being mined Open with drifting along 300 metres strike and 30 metres dip averaging 10.0 g/t gold and 1,500 g/t silver Located under volcanic capping Perez Vein (Primero Discovery 2013) Intercepts include 7.4 g/t gold and 528 g/t silver over 11.9 metres Victoria Vein (Primero Discovery 2013) Reserves of 168koz of gold at 9.1 g/t and 7.9Moz of silver at 428 g/t Central Block Average distance between productive veins is 530 metres 1.8 million contained ounces of gold (mined plus current resource, excluding Jessica vein) Average yield of 265 ounces per metre interval between productive veins Central Block under-explored south of Piaxtla River, located below volcanic capping, and accessible via the El Cristo Tunnel. TSX P NYSE PPP 9
BLACK FOX COMPLEX District Wide Proven Depth Potential LOCATION Timmins, Ontario OWNERSHIP 100% (8% gold stream 1 ) METALS Gold MINING Open Pit & Underground CAPACITY 2,500 TPD PRODUCTION 1,5 75,000-85,000 oz CASH COSTS 2,3 $820-$870/ oz Mineral Reserves and Mineral Resources (December 31, 2014, Mineral Resources include Mineral Reserves) Classification Mineral Reserves Proven & Probable Property Tonnage (Mt) Gold Grade (g/t) Cont. Gold (koz) Black Fox 3.0 4.0 393 Mineral Resources (includes Mineral Reserves) Measured & Indicated Black Fox 3.6 5.3 608 Measured & Indicated Grey Fox 4.7 4.4 668 Inferred Black Fox 0.3 8.3 68 Inferred Grey Fox 1.3 4.2 174 Timmins, Ontario *See final slide for footnotes. TSX P NYSE PPP 10
BLACK FOX COMPLEX Prior to Primero Ownership $14 $60 $11 $54 BRIGUS $12 $18 $17 $32 $27 $29 2011 2012 2013 2014 2015E 56 Effects of Underinvestment Black Fox Complex Capital Expenditures ($ millions) 5 Black Fox Production Profile (koz) 1,5 77 99 73 Exploration Expenditures Capital Expenditures PRIMERO 80 2011 2012 2013 2014 2015E *See final slide for footnotes. Black Fox Received Strong Investment in 2011-2012 Set the stage for 98,710 ounces of gold production in 2013 Enabled increased operating flexibility with open pit and underground mine working in conjunction Declining Gold Price Meant Underground Investment Not Possible for Junior Miner +$75M of capital expenditures in 2011 reduced to ~$45M in 2013 In 2013: $14M spend on underground sustaining capital and exploration vs. $39M in 2011 Result in Early-2014: Mine operating hand-to-mouth with little consideration for long-term planning High percentage of small cut and fill stopes in remnant areas vs. higher quality long hole stopes Mill operating well below capacity averaging 1,665 TPD throughput in Q1 2014 TSX P NYSE PPP 11
BLACK FOX COMPLEX Optimization & Significant Exploration Potential Production Improvements Underway Mill throughput increased to 2,500TPD, permits received to operate mill at maximum 3,200 TPD Underground throughput of 1,000 TPD achieved on short-term basis, but Q3 2015 average impacted by ground conditions Management changes implemented Equipment utilization and availability project commenced using Six Sigma methodology Ramp to Deep Central Zone Commenced Construction is underway to the 640 metre level, initial gold production to commence in early 2016 Deep Central Zone estimated resource of 160 koz at 8.5 g/t, and remains open along strike and at depth New drill pads planned to target mineralization 800-1,000 metres depth and below Exploration Upside Successful H1 2015 drilling program Total 2015 drilling of 134,000 metres Maximizing Asset Utilization Grey Fox open-pit scoping study to be completed by Q1 2016 Mining Complex with Upside Opportunity Declining All-In Sustaining Costs ($ per AuEq oz) $1,771-40% $1,071 Q2 2014 Q2 2015 TSX P NYSE PPP 12
Notes to Investors Regarding the Use of Resources This 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 accordance with Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects ( NI 43-101 ) and the Canadian Institute of Mining, Metallurgy and Petroleum classification systems. NI 43-101 is a rule developed by the Canadian Securities Administrators that establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. These standards differ significantly from the requirements of the United States Securities and Exchange Commission (the SEC ), and reserve and resource estimates disclosed in this presentation may not be comparable to similar information 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 regulatory authorities. For United States reporting purposes, SEC Industry Guide 7 under the United States Securities Exchange Act of 1934, as amended, as interpreted by Staff of the SEC, applies different standards in order to classify mineralization as a reserve. As a result, the definition of probable reserves used in NI 43-101 differs from the definition in the SEC Industry Guide 7. Under SEC standards, mineralization may not be classified as a reserve unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. Among other things, all necessary permits would be required to be in hand or issuance imminent in order to classify mineralized material as reserves under 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. The Company 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 mineral reserves. Further, inferred resources have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically. Therefore, United States investors are also cautioned not to assume that all or any part of the inferred resources exist. In accordance with Canadian securities laws, estimates of inferred resources cannot form the basis of feasibility or other economic studies. It cannot be assumed that all or any 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 as in 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 exploration provided that the disclosure (i) states with equal prominence that the potential quantity and grade is conceptual in nature, that there has been insufficient exploration 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 included in this presentation. United States investors are cautioned that disclosure of such exploration potential is conceptual in nature by definition and there is no assurance that exploration will result in any category of NI 43-101 mineral resources being identified. TSX P NYSE PPP 13
Footnotes 1. Gold equivalent ounces include silver ounces produced at San Dimas, and converted to a gold equivalent based on a ratio of the average commodity prices realized for each period. Silver production is subject to a silver purchase agreement. The silver purchase agreement dictates that until August 6, 2014 Primero will deliver to Silver Wheaton a per annum amount equal to the first 3.5 million ounces of silver produced at San Dimas and 50% of any excess at $4.16 per ounce (increasing by 1% per year). Thereafter Primero will deliver to Silver Wheaton a per annum amount equal to the first 6.0 million ounces of silver produced at San Dimas and 50% of any excess at $4.20 per ounce (increasing by 1% per year). The Company will receive silver spot prices only after the annual threshold amount has been delivered. Black Fox is subject to a gold purchase agreement under which Sandstorm is entitled to 8% of production at the Black Fox mine and 6.3% at the Black Fox Extension. 2. Cash costs and All-in Sustaining Costs are non-gaap measures. Refer to the Company s second quarter 2015 MD&A for a reconciliation to operating expenses. 3. Major assumptions include a flat gold price per ounce of $1,200, a flat silver price per ounce of $18. 4. Grade shown is total proven and probable reserve grade as at December 31, 2014. Refer to the Company s news release dated March 18, 2015. 5. Based on 2015 Guidance, refer to the Company s second quarter 2015 MD&A. 6. Assumes San Dimas operates at least at 3,000 TPD from end of Q2 2016; and Primero management estimates for Black Fox production, based on 2,200-2,300 TPD operation and underground throughput increasing to 1,000 TPD by the end of 2015. TSX P NYSE PPP 14
Notes TSX P NYSE PPP 15
Primero Mining Corp. 79 Wellington St. West, Suite 2100 Toronto, ON, M5K 1H1 T 416 814 3160 TF 877 619 3160 www.primeromining.com TSX: P NYSE: PPP Investor Relations Evan Young Manager, Investor Relations T 416 814 3168 info@primeromining.com