Primero Amends Financial Statements for Deferred Tax IFRS

Primero Amends Financial Statements for Deferred Tax IFRS Transition
Adjustment 
TORONTO, ONTARIO -- (Marketwire) -- 11/08/12 --  
(Please note that all dollar amounts in this news release are
expressed in U.S. dollars unless otherwise indicated.)  
Primero Mining Corp. ("Primero" or the "Company") (TSX:P)(NYSE:PPP)
announced today that it has re-filed its consolidated financial
statements and management discussion and analysis ("MD&A") for the
year ended December 31, 2011 to include an IFRS transition adjustment
related to deferred income taxes. In addition, the Company has
amended its financial statements for the first and second quarters of
2012 but rather than re-filing those statements, has disclosed the
amendments in its financial statements for the third quarter of 2012,
released today.   
In connection with the preparation of its financial statements for
the third quarter 2012, the Company identified that during the
transition to International Financial Reporting Standards ("IFRS"),
it had not taken into account a methodology difference between
Canadian Generally Accepted Accounting Principles ("GAAP") and IFRS
with respect to translation of deferred tax assets and liabilities
denominated in a currency other than the Company's functional
currency (the US dollar). IFRS requires that where non-monetary
assets and liabilities are measured in the Company's functional
currency, but the Company's taxable profit or loss is determined in a
different currency (the Mexican peso), changes in the exchange rate
give rise to temporary differences that result in deferred tax assets
or liabilities. Under Canadian GAAP, these temporary differences were
not accounted for. As a result of the appreciation of the Mexican
peso against the US dollar in 2010 (after the acquisition of the
Company's San Dimas mine) and 2012 and the depreciation of the
Mexican peso against the US dollar in 2011, the net cumulative impact
of following the IFRS methodology as at June 30, 2012 is a decrease
in the deferred tax asset of $12.3 million and an increase in
deferred tax expense of the same amount, which subsequently reduced
at September 30, 2012 to a decrease in the deferred tax asset of $3.8
million and an increase in deferred tax expense of the same amount.
These adjustments do not
 affect cash taxes payable or the Company's
cash flows and, consistent with other companies, are adjusted out of
the Company's net income in order to report adjusted net income(1).
The 2011 year end and 2012 first and second quarter financial
statements have been amended to conform with IFRS. 
The amendments to the financial statements of the Company for the
years ended December 31, 2011 and 2010 and the six months ended June
30, 2012 are shown below. The amendments for other periods impacted
by this adjustment are disclosed in the restated MD&A for the year
ended December 31, 2011 or in the financial statements for the three
and nine months ended September 30, 2012 which are available on the
Company's website at www.primeromining.com and filed on SEDAR at
www.sedar.com. The Company has also filed with the United States
Securities and Exchange Commission an amendment to its annual report
on Form 40-F for the year ended December 31, 2011, which includes the
restated financial statements for the years ended December 31, 2011
and 2010 and the amended and restated MD&A for the year ended
December 31, 2011. The amendment to the Form 40-F has been filed on
EDGAR at www.sec.gov.  


 
As at and for the year-ended December 31, 2011                              
(In thousands of United States dollars except per share amounts)            
                                                                            
----------------------------------------------------------------------------
                                  As previously                             
                                       reported    Adjustment   As restated 
----------------------------------------------------------------------------
Deferred tax asset                       15,781       (15,438)          343 
----------------------------------------------------------------------------
Deferred tax recovery (expense)           7,918       (18,185)      (10,267)
----------------------------------------------------------------------------
Retained earnings (including net                                            
 income impact for same period)          32,596       (15,438)       17,158 
----------------------------------------------------------------------------
Net income                               67,829       (18,185)       49,644 
----------------------------------------------------------------------------
Earnings per share ($/share)              $0.77        ($0.21)        $0.56 
----------------------------------------------------------------------------
                                                                            
As at and for the year-ended December 31, 2010                              
(In thousands of United States dollars except per share amounts)            
                                                                            
----------------------------------------------------------------------------
                                  As previously                             
                                       reported     Adjustment  As restated 
----------------------------------------------------------------------------
Deferred tax asset                        6,555          2,747        9,302 
----------------------------------------------------------------------------
Deferred tax recovery (expense)            (859)         2,747        1,888 
----------------------------------------------------------------------------
Retained earnings (deficit)                                                 
 (including net income impact for                                           
 same period)                           (35,233)         2,747      (32,486)
----------------------------------------------------------------------------
Net income (loss)                       (31,458)         2,747      (28,711)
----------------------------------------------------------------------------
Earnings (loss) per share                                                   
 ($/share)                               ($0.85)         $0.07       ($0.78)
----------------------------------------------------------------------------
                                                                            
As at and for the six months ended June 30, 2012                            
(In thousands of United States dollars except per share amounts)            
                                                                            
----------------------------------------------------------------------------
                                  As previously                             
                                       reported    Adjustment   As restated 
----------------------------------------------------------------------------
Deferred tax asset                       14,055       (12,299)        1,756 
----------------------------------------------------------------------------
Deferred tax recovery (expense)          (4,272)        3,319        (1,133)
----------------------------------------------------------------------------
Retained earnings (including net                                            
 income impact for same period)          66,179       (12,299)       53,880 
--------------
--------------------------------------------------------------
Net income                               33,583         3,319        36,722 
----------------------------------------------------------------------------
Earnings per share ($/share)              $0.38         $0.04         $0.42 
----------------------------------------------------------------------------
                                                                            
(1) Adjusted net income is a non-GAAP measure. This non-GAAP performance    
measure does not have any standardized meaning and is therefore unlikely to 
be comparable to other measures presented by other issuers. The Company     
believes that, in addition to conventional measures prepared in accordance  
with GAAP, the Company and certain investors use this information to        
evaluate the Company's performance. Accordingly, it is intended to provide  
additional information and should not be considered in isolation or as a    
substitute for measures of performance prepared in accordance with GAAP.    
Refer to the year end 2011 MD&A for a reconciliation of adjusted net income 
to reported net income.                                                     

 
About Primero  
Primero Mining Corp. is a Canadian-based precious metals producer
that owns 100% of the San Dimas gold-silver mine in Mexico. Primero
is focused on delivering superior, sustainable value for all
stakeholders with low-risk exposure to precious metals. The Company
has intentions to become an intermediate producer by building a
portfolio of high quality, low cost precious metals assets in the
Americas.  
Primero's website is www.primeromining.com. 
CAUTIONARY NOTE ON FORWARD-LOOKING INFORMATION  
This news release contains "forward-looking statements", within the
meaning of the United States Private Securities Litigation Reform Act
of 1995 and applicable Canadian securities legislation, concerning
the business and operations of Primero. All statements, other than
statements of historical fact, are forward-looking statements.
Generally, forward-looking statements can be identified by the use of
forward-looking terminology such as "plans", "potential", "expects",
"is expected", "promising", "budget", "scheduled", "targeted", "is
targeting", "estimates", "forecasts", "intends", "anticipates",
"believes", "if realized", "in the near future" or variations of such
words and phrases or statements that certain actions, events or
results "may", "could", "would", "might" or "will continue", "will
allow", "occur" or "be achieved" or the negative connotation thereof. 
Forward-looking statements in this news release include, but are not
limited to, statements regarding the anticipated implications of
amendments to financial statements and management's belief regarding
the Company's intentions to become an intermediate gold producer.   
The assumptions made by the Company in preparing the forward-looking
information contained in this news release, which may prove to be
incorrect, include, but are not limited to, the assumptions set forth
herein and in the management's discussion and analysis and the
Company's annual report on Form 40-F for the year ended December 31,
2011, as amended, on file with the U.S. Securities and Exchange
Commission and its most recent Annual Information Form on file with
the Canadian provincial securities regulatory authorities as well as
the expectations and beliefs of management and that there are no
significant disruptions affecting operations; that development and
expansion at San Dimas proceeds on a basis consistent with current
expectations and the Company does not change its development and
exploration plans; that the exchange rate between the Canadian
dollar, Mexican peso and the United States dollar remain consistent
with current levels or as set out in this news release; that prices
for gold and silver remain consistent with the Company's
expectations; that production meets expectations and is consistent
with estimations; that there are no material variations in the
current tax and regulatory environment or the tax positions taken by
the Company; that the Company can access financing, appropriate
equipment and sufficient labour; and that the political environment
within Mexico will continue to support the development of
environmentally safe mining projects.  
Forward-looking statements are subject to known and unknown risks,
uncertainties and other important factors that may cause the actual
results, performance or achievements of Primero to be materially
different from those expressed or implied by such forward-looking
statements, including impact of amendments to financial statements;
the timing of financial statement amendments; the ability to maintain
effective controls over financial reporting; the risks that the
Company may not be able to achieve planned production levels; the
Company may not be able to expand production at San Dimas; the
Company may be required to change or may experience delay in its
development and exploration plans with a negative impact on
production; the Company may not discover mineralization in minable
quantities; the exchange rate between the Canadian dollar, the
Mexican peso and the United States dollar may change with an adverse
impact on the Company's financial results; the Company may not be
able to become an intermediate gold producer by building a portfolio
of high quality, low cost precious metals assets in the Americas.
Certain of these factors are discussed in greater detail in Primero's
annual report on Form 40-F for the year ended December 31, 2011, as
amended, on file with the U.S. Securities and Exchange Commission,
and its most recent Annual Information Form and management's
discussion and analysis, as amended, on file with the Canadian
provincial securities regulatory authorities and available at
www.sedar.com.   
Should one or more of these risks and uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may
vary materially from those described in forward-looking statements.
In addition, although Primero has attempted to identify important
factors that could cause actual actions, events or results to differ
materially from those described in forward-looking statements, there
may be other factors that cause actions, events or results not to be
as anticipated, estimated or intended. There can be no assurance that
such statements will prove to be accurate, as actual results and
future events could differ materially from those anticipated in such
statements. Accordingly, readers should not place undue reliance on
forward-looking statements.  
Forward-looking statements are made as of the date hereof and
accordingly are subject to change after such date. Forward-looking
statements are provided for the purpose of providing information
about management's current expectations and plans and allowing
investors and others to get a better understanding of our operating
environment. Primero does not undertake to update any forward-looking
statements that are included in this document, except in accordance
with applicable securities laws.
Contacts:
Primero Mining Corp.
Tamara Brown
VP, Investor Relations
(416) 814 3168
tbrown@primeromining.com
www.primeromining.com
 
 
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