2. Cautionary Statement TSX:P
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. 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 preliminary prospectus and will be detailed from time to time in the Company’s interim and annual financial statements and
management’s discussion and analysis of those statements, 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 (“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 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$.
2
5. Corporate Strategy TSX:P
GROWTH TARGETED GROWTH OBJECTIVE
Gold Eq. ounces (000) LEADING MID-TIER
Double production by 2013 400
GOLD PRODUCER
2011 gold reserves: 1 million ounces
2011 production: 15% increase LATIN AMERICAN
ACQUISITIONS
300
LOW COST
Below industry average cash costs: trending SAN DIMAS ACQUISITIONS
below $450 per ounce by 2013 OPTIMIZATION
200 EXPLORATION
LOW RISK
OPTIMIZATION
Maintain balance sheet strength
Un-hedged gold 100
SAN DIMAS
(GOLD EQUIVALENT OUNCES)
Americas pro-mining jurisdictions only
Commitment to leading CSR programs
0
2010 2011E 2012E 2013E
5
6. Q4 2010 Operating Results
Increased Throughput TSX:P
Q4 2010 2010 2011E
3 Increased Production
AuEq oz
14%
Gold equivalent production 110,000- 25,000
24,700 100,500
(gold equivalent ounces) 120,000
Gold production 90,000- 20,000
21,200 85,400
(ounces) 100,000
Silver production 1.21 4.53 4.5-5.0 15,000
(million ounces) Q3 2010 Q4 2010
Gold grade Reduced Costs
4.01 4.46 4.8 $ per AuEq ounce
(grams per tonne)
$700
Silver grade 236 244 250
(grams per tonne)
1 $10
Cash cost $643 $581 $550-$570
$600
($ per gold equivalent ounce)
1,2
Cash cost – by-product $524 $471 $350-$370
($ per gold ounce) $500
Q3 2010 Q4 2010
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 per 6
ounce and the balance is sold at spot, which is assumed to be $24 per ounce.
7. Strong Financial Position
Solid Platform for Growth TSX:P
$55 Cash Exchange TSX:P
BALANCE SHEET at Sept 30, 2010
million Balance Cash $55 million
Promissory note1 $50 million
Convertible note2 $60 million
$50-70 Strong OWNERSHIP
million Operating Cash Flow Goldcorp 36%
Management & insiders ~3%
Institutional & float ~61%
$5 Prudent
million CAPITAL STRUCTURE
repayment per Level Of Debt Shares outstanding 88 million
year Fully Diluted 117 million
(1) Goldcorp: 5 year, 6% note repaid $5M/yr with balloon payment at end of year 5 7
(2) Goldcorp: 1 year, rolling, 3% note convertible at CDN$6
8. Improved Silver Agreement
Increased Revenue, Reduced Costs
Term Production
25 years
Old Agreement 100% of silver production at $4
(19 remaining)
Revised Agreement Life of Mine First 4 years: First 3.5 million ounces plus 50% of excess sold at $4 plus
Goldcorp supplements Silver Wheaton with additional 1.5 million ounces
50% of production above 3.5 million sold by Primero at spot
Year 5 and beyond: First 6.0 million ounces plus 50% of excess sold at $4
50% of production above 6.0 million ounces sold by Primero at spot
Increases Revenue1 Decreases Cash Costs1
1. BMO Capital Markets Research. Gold Prices 2010: $1,188, 2011: $1,300, 2012:$1,250, 2013:$1,150, Silver Prices: 2010: $18.50, 2011:$ 21.00, 2012:$20.00, 2013:$17.00 8
9. Improved Silver Agreement
Quarterly Volatility, Tax Impact Remain
Quarterly Volatility Quarterly Variation In Revenues1
Agreement structure causes quarterly
earnings volatility
Silver threshold based on anniversary of
August 6, not calendar year
Tax Impact
Primero pays tax on silver at spot price:
Gold price inc. 10%, op. cash flow inc. ~8%;
Silver:Gold Ratio
Silver price dec. 10%, op. cash flow dec. ~3-4%;
Gold and Silver price inc. 10%, op. cash flow inc.~6%; High correlation between gold & silver
96% over 10 years, 60% over 30 years
Opportunity to Further Improve
Increase San Dimas production 30 year historical silver:gold ratio 55:1
Consensus: 60:1 in 2011E, 55:1 in 2014E
Investigate all appropriate tax planning
Conclusion: Remote prospect of
alternatives
silver:gold ratio dramatically impacting
Acquisition of additional operations fundamental valuation
1. UBS Research, December 2010. Assumes flat gold ($1,400/oz) and silver ($30/oz) 9
12. San Dimas
Cash Flow Funded Growth TSX:P
200
Estimated Gold Equivalent Production1
(thousand gold equivalent ounces)
180
160
Sinaloa Graben
140
120
100
80 Central Block
60
40
Sta. Lucia
20 Sta. Rita
Tayoltita
0
2010 2011E 2012E 2013E
1. 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 per ounce; 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.
12
13. Optimization & Expansion
TSX:P
INCREASE MINE DEVELOPMENT
Key to production growth
OPERATE MILL AT DESIGN CAPACITY
Current:1,600-1,800 tpd, Design: 2,100 tpd
EXPAND MILL TO 2,500 TPD BY 2013
Mill: 2,100 tpd, Leach: 2,500 tpd
POTENTIAL EXPANSION BEYOND 2,500 tpd
2011 review
13
14. 2011 - Focused on Growth
TSX:P
3
2010 2011E
Production: 15% increase
Gold equivalent production 110,000
100,500
(gold equivalent ounces) -120,000
Targeting gold reserves: 1 million oz
Gold production 90,000-
85,400
Targeting throughput of 1,900 tpd (ounces) 100,000
Silver production 4.53 4.5-5.0
(million ounces)
Grades expected to increase
Gold grade 4.46 4.8
(grams per tonne)
Development up 50%:
Silver grade 244 250
$11.4 million or 8,900 metres (grams per tonne)
1
Cash cost – gold equivalent $550-
Exploration doubled to $12 million: ($ per gold equivalent ounce)
$581
$570
54,000 metres diamond drilling – 30% more Cash cost
1,2
– by-product $350-
than 2010 levels $471
($ per gold ounce) $370
3,800 metres exploration drifting – Ten-fold
increase over 2010 levels Capital Expenditures $26 $31
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 per 14
ounce and the balance is sold at spot, which is assumed to be $24 per ounce.
15. Sinaloa Graben Key to Growth TSX:P
Sinaloa Graben million ounce resource potential
90% of resources added in 2010 from Sinaloa Graben (340,000 ounces)
Higher Grade:
Average reserve grades of 4.8 g/t Au, 339 g/t Ag
Sinaloa Graben results show ~6.0 – 10.0 g/t
Wider:
Current average mining width ~1.5m
Sinaloa Graben results show ~3.0 – 8.0m
2011 Target:
Approach Roberta, Robertita (main production veins in adjacent Central Block)
Significantly increase Sinaloa Graben reserves and resources
15
16. 2011 Main Development & Targets TSX:P
1,000 m
Roberta 14-920
Marinas 15-185
SG Tunnel
Roberta
2011
vein
Budget
Project
Vein
El Pilar 7-790 SG Aranza vein Fault
Santa Lucia 1-017
Sinaloa Graben
7-488
16
17. San Dimas
Higher Grade Sinaloa Graben
DDH Ag g/t Au g/t m
RO-16-02 132
RO-20-05 514
3.27
4.23
1.43
1.27
SAN FRANCISO N
Central Block
CULEBRA
Arana
7
CANDELARIA Hanging Wall
Tayoltita
DDH Ag g/t Au g/t m
A-25-217(1) 778 7.9 0.80
DDH Ag g/t Au g/t m HW-4G-01B 302 8.7 0.60
MAR-9-17 514 8.86 2.45 6 BLENDITA
DDH Ag g/t Au g/t m
CORONADO PATRICIA
SOL-9-02 549 10.67 1.81 5 Santa Rita
3 4 mine
5 HERMANOS LEGEND
DDH Ag g/t Au g/t m EL SOL
PIL 7-01 508 16.0 2.90
Ag-Au High
S. ANTONIO
2 Mill
West MINE Grade Trend
Block 1 TAYOLTITA Proposed Tunnel
San Antonio TOWN
mine Tunnel Budget 2011
DDH Ag g/t Au g/t m Tunnel done
TGS-S-22 958 6.81 8.56 Vein
TGS-S-15 403 8.08 7.52
Fault
Dev Ag g/t Au g/t m
Town
RAMP7-129W 1,115 10.30 2.75
RAMP8-129E 2,054 22.8 3.20 Mill
RAMP8-129E 1,449 14.0 4.20
VERDOSA 0 1 2 km
Piaxtla River
(Source: San Dimas Geological Office) 17
19. Re-rating Opportunity TSX:P
Primero Share Price Performance
80%
Primero Gold Silver
60% Silver up 52%
or $9.70
40%
20%
Gold up 11%
or $129
0%
P down 22%
-20% 30% from peak
-40%
August September October November December January
$1 ($10) increase in Silver (Gold flat), decreases op. cash flow ~$700k ($7.4MM)
$10 ($100) increase in Gold (Silver flat), increases op. cash flow by ~$700k ($7.1MM)
From Aug 6 to today Silver increased by ~$10 and Gold increased by ~$130
This increased 2011E op. cash flow by ~$2MM - yet Primero share price decreased 22%
1. Estimates based on Company data. Gold Price: 2011: $1,400; Silver Price: 2011: $24.00
Note: As of Jan 10, 2011
19
20. Superior Production & CFPS Growth TSX:P
2010 to 2013E Production Growth1 2010 to 2013E CFPS Growth 2
160%
450%
140% 400%
120% 350%
300%
100%
250%
80%
200%
60%
150%
40%
100%
20%
50%
0% 0%
Jaguar
Jaguar
Gammon
Alamos
Alamos
Gammon
Primero
Primero
New Gold
New Gold
Minefinders
Minefinders
1. Estimates based on street estimates (Primero based on company reports);
2. BMO Capital Markets Research (Jaguar based on consensus), January 31, 2011. 20
Note: As of Jan 31, 2011
23. Transaction Overview
TSX:P
1. $510 million structured as:
$216 million in cash
$184 million in shares of Primero (~36% ownership)
$50 million 5-year 6% note ($5 million annually plus final balloon payment at the end of year 5)
$60 million 1-year 3% note convertible at C$6.00 per share 23
24. Strong Management & Board TSX:P
Wade Nesmith | Executive Chairman Robert A. Quartermain
Founder of Mala Noche Former President, Silver Standard
Director of Vista Gold Corp. and Canplats Resources
Founding and current director of Silver
Wheaton, Chairman of Geovic Mining and Grant Edey
Selwyn Resources Director of Breakwater Resources and former
director of Queenstake Resources, Santa Cruz Gold
Former CFO, IAMGOLD
Joseph F. Conway | President & C.E.O.
Former CEO, President and Director of Timo Jauristo
IAMGOLD from 2003 to 2010 EVP, Corporate Development, Goldcorp
Rohan Hazelton
Eduardo Luna | President, Mexico VP, Finance, Goldcorp
Former Chairman and CEO of Silver Wheaton, David Demers
Executive VP of Goldcorp and Luismin S.A. de Founder, CEO and Director Westport Innovations
C.V. (San Dimas) and President of Mexican Director of Cummins Westport and Juniper Engines
Mining Chamber and the Silver Institute
Michael Riley
Chartered accountant with more than 26 years of
accounting experience
Audit committee chair B.C. Lottery Corporation and
Seacliff Construction
24
25. District Wide Upside – Long Section TSX:P
2011
Priority
SW NE
San Antonio Sinaloa Graben Central Block Tayoltita Block Arana
West Block Castellana and
3,000 m.
Block Robertas Hanging Wall 3,000 m.
2,000 m. 2,000 m.
1,000 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 S
25
26. Sinaloa Graben
Higher Grade and Wider Widths
Sinaloa Graben Tunnel: Julieta - Sinaloa Norte vein (San Salvador system)
Sinaloa Mine Sinaloa Graben San Salvador ( Central Block )
(San Antonio Area)
7-660 L NE
SW Ag g/t Au g/t m
189 3.13 1.24
1,000 m 1,000 m
500 m 500 m
San Luis Tunnel Elev
San Luis Tunnel
Santa Anita Tunnel
0m 0m
DDH TGS-S-22 DDH TGS S-15 DDH TGS 7-17
Sinaloa Norte Intercept Sinaloa Norte intercept Julieta intercept
Ag g/t Au g/t m Ag g/t Au g/t m Ag g/t Au g/t m
958 6.81 8.56m 403 8.08 7.52 481 3.73 2.22
0 500 1000
Explanation Drilling Plan 2010
Proven Ore Drifting Plan M E T E R S
Probable Ore Drifting Plan 2010
Probable Ore by Drilling Drifting Done
26
27. PRIMERO MINING CORP.
Richmond Adelaide Centre
120 Adelaide Street West, Suite 1202
Toronto, ON M5H 1T1
T 416 814 3160 F 416 814 3170
TF 877 619 3160
Email: info@primeromining.com
INVESTOR RELATIONS
Tamara Brown
Vice President, Investor Relations
T 416 814 3168
tbrown@primeromining.com
The ‘New’ Americas Gold Play
