Primero Reports First Quarter 2013 Results; Record Quarterly Production and Expansion On-Track

Primero Reports First Quarter 2013 Results; Record Quarterly Production and 
Expansion On-Track 
TORONTO, ONTARIO -- (Marketwired) -- 05/08/13 --  
(Please note that all dollar amounts in this news release are
expressed in U.S. dollars. Refer to the first quarter 2013 management
discussion and analysis (MD&A) and audited financial statements for
more information.) 
Primero Mining Corp. ("Primero" or the "Company") (TSX:P)(NYSE:PPP)
today reported financial results for the first quarter ended March
31, 2013. The Company reported net earnings of $17.3 million ($0.18
per share) with adjusted net earnings(1) of $9.4 million ($0.10 per
share). Operating cash flows(2) were $19.3 million ($0.20 per share).
The Company also reported a strong cash position of $141.2 million as
of March 31, 2013. 
"Primero continues to deliver strong operating and financial
results," stated Mr. Joseph F. Conway, President and Chief Executive
Officer. "During the first quarter we achieved our goal of reaching
the mill's throughput capacity of 2,150 tonnes per day, translating
into the highest gold and silver production we've reported since
acquiring San Dimas. This record production drove our strong earnings
and cash flow and positioned us to take advantage of the silver spot
market in April, earlier than last year. We were also focused on
ensuring the timely closing of the Cerro del Gallo acquisition, and
pleased that the Cerro shareholders voted overwhelmingly in favour of
the transaction on April 30th, 2013. Primero shareholders will
benefit with the diversification and increased production profile
that the Cerro del Gallo project adds to Primero."  
First Quarter Highlights: 


 
--  Strong Earnings and Cash Flow: Adjusted net earnings of $9.4 million
    ($0.10 per share) and operating cash flow before working capital changes
    of $19.3 million ($0.20 per share); 
    
--  Record Production Continues: The highest quarterly gold and silver
    production since acquiring San Dimas (24,190 ounces of gold and 1.37
    million ounces of silver) was achieved; 
    
--  Balance Sheet Strengthened: Cash position increased to $141.2 million at
    March 31, 2013, from $139.2 million at December 31, 2012, after repaying
    $7.8 million of debt during the quarter (total debt stands at $32.2
    million); 
    
--  Awarded ESR Distinction: Primero was again awarded the Socially
    Responsible Business ("ESR") distinction by Mexican Centre for
    Philanthropy; 
    
--  Positioned to Achieve Higher Annual Silver Sales at Spot Prices: Silver
    contract annual threshold achieved earlier than 2012, silver sales at
    spot market prices expected to be higher in 2013 than 2012; 
    
--  Cerro Acquisition on Track: Transaction expected to close at the end of
    May 2013, creating a diversified, high growth, competitive-cost precious
    metals producer in Mexico; 
    
--  Increased Reserves and Resources: 31% Increase in Probable Gold Mineral
    Reserves and 35% Increase in Indicated Gold Mineral Resources at
    December 31, 2012. 

 
Mill Throughput Capacity Achieved During Quarter 
Primero produced 27,656 gold equivalent ounces(3) during the first
quarter of 2013 or 24,190 ounces of gold and 1.37 million ounces of
silver, 7% more and 4% more, respectively, than the same period in
2012. The increase in gold production was primarily due to 3% higher
throughput of 183,811 tonnes in 2013 up from 178,523 tonnes in 2012,
and 4% higher grade when comparing the same periods. The increase in
silver production was due to the higher throughput, while the grade
remained consistent. Gold and silver grades during the first quarter
of 2013 increased by 8%, and 6%, respectively over the fourth quarter
2012.  
Total cash costs(4) on a gold equivalent and by-product basis in the
first quarter 2013 were $719 and $589 per ounce, respectively,
compared with $674 and $532 per ounce, respectively, in the first
quarter 2012. Higher operating costs (mainly due to higher labour
costs as a result of the introduction of long-hole mining) were
partially offset by a 7% increase in gold equivalent ounces produced. 
Production Drives Improved Earnings and Cash Flow 
Revenues in the first quarter of 2013 were $46.3 million as a result
of selling 24,736 ounces of gold at an average realized price of
$1,626 per ounce, and 1.48 million ounces of silver at an average
realized price of $4.12 per ounce. Revenue was $44.0 million for the
same period in 2012 from selling 23,004 ounces of gold at an average
realized price of $1,678 per ounce and 1.33 million ounces of silver
at an average realized price of $4.08 per ounce. All of the silver
ounces in the first quarters of 2013 and 2012 were sold at a fixed
price pursuant to the silver purchase agreement(5). 
Operating cash flow before working capital changes in the first
quarter of 2013 were $19.3 million ($0.20 per share), compared to
$20.9 million ($0.24 per share) in 2012.  
The Company earned net income of $17.3 million ($0.18 per share) for
the three months ended March 31, 2013 compared with net income of
$30.1 million ($0.34 per share) for the three months ended March 31,
2012. Higher revenue was offset by higher operating expenses, higher
general and administrative expenses (due primarily to increased
share-based payment expenses), and a foreign exchange loss in the
current period as compared to a foreign exchange gain in the prior
period.  
Adjusted net income, which primarily excludes the impact of foreign
exchange rate changes on deferred tax balances, was $9.4 million
($0.10 per share) for the first quarter 2013, compared with $18.8
million ($0.21 per share) for the same period in 2012. 
Cash Position Continues to Grow 
The Company's cash position increased to $141.2 million at March 31,
2013 (after paying a $7.8 million excess free cash flow payment in
relation to the promissory note held by a subsidiary of Goldcorp
Inc.) from the December 31, 2012 balance of $139.2 million. The
Company continues to invest in organic growth while building on its
balance sheet strength.  
Capital expenditures during the first quarter 2013 totaled $8.7
million. In 2013, capital expenditures are expected to total
approximately $42 million excluding capitalized exploration expenses
of $15 million.   
With its cash balance and anticipated cash flows, Primero management
believe it is fully funded to expand production at San Dimas and
build the Cerro del Gallo project while remaining well positioned to
take advantage of strategic growth opportunities.  
Outlook for 2013 
Primero maintains its production guidance of between 120,000 and
130,000 gold equivalent ounces, an increase of up to 17% over 2012,
based on higher throughput at slightly higher grades. Cash costs for
2013 are expected to be in the range of $620 to $640 per gold
equivalent ounce or between $280 and $300 per gold ounce on a
by-product basis, similar to or below 2012 cash costs.  
Primero's 2013 outlook is summarized in the following table:  


 
----------------------------------------------------------------------------
                                                                Outlook 2013
----------------------------------------------------------------------------
Attributable gold equivalent production(3) (gold             120,000-130,000
 equivalent ounces)                                                         
Gold production(ounces)                                       90,000-100,000
Silver production(5) (ounces)                            6,000,000-6,500,000
Silver sales at spot prices(5) (ounces)                    900,000-1,000,000
Total cash costs(4)(per gold equivalent ounce)                   $620 - $640
Total cash costs(4) - by-product(per gold ounce)                 $280 - $300
Capital Expenditures($ millions)                                         $42
Exploration Expenditures($ millions)                                     $15
----------------------------------------------------------------------------

 
Material assumptions used to forecast total cash costs for 2013
include: an average gold price of $1,700 per ounce; an average silver
price of $8.52 per ounce (calculated using the silver agreement
contract price of $4.12 per ounce and assuming excess silver beyond
contract requirements is sold at an average silver price of $30 per
ounce); and foreign exchange rates of 1.00 Canadian dollars and 13
Mexican pesos to the US dollar. Based on current spot prices the 2013
outlook would not change meaningfully, except by-product cash-costs,
which would increase as a result of lower by-product credits. 
Reserves and Resources Increase 
On March 26, 2013 the Company announced 2012 year-end Mineral
Reserves and Mineral Resources for its San Dimas mine. The Company
reported that Probable Gold Mineral Reserves increased 31% over
year-end 2011, to 660,400 ounces, or 19% on a per share basis and
that Indicated Gold Resources increased 35% over year- end 2011 to
779,600 ounces (inclusive of Mineral Reserves). 


 
                                                                            
----------------------------------------------------------------------------
                            Tonnage   Gold  Silver    Contained    Contained
                           (million  Grade  Grade          Gold      Silver 
Classification              tonnes)  (g/t)   (g/t) (000 ounces) (000 ounces)
Mineral Reserves                                                            
 Probable                     4.579    4.5     267          660       39,377
Mineral Resources                                                           
 Indicated                    3.748    6.5     389          780       46,877
 Inferred                     6.144    3.9     327          762       64,637
----------------------------------------------------------------------------
Notes to Mineral Reserve Statement:                                         
1. Cutoff grade of 2.4 grams per tonne ("g/t") gold equivalent ("AuEq")     
based on total operating cost of US$104.73/t. Metal prices assumed are gold 
US$1,400 per troy ounce and silver US$25 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 Mineral Resource Statement:                                        
1. Mineral Resources are total and include those resources converted to     
Mineral Reserves.                                                           
2. A 2.0g/t Au Eq cutoff grade is applied and the AuEq is calculated at a   
gold price of US$1,625 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.           

 
As at December 31, 2012, the Company added 246,623 ounces of gold to
the Probable Mineral Reserves, before depleting 91,697 ounces during
the year. This equates to replacing the 12 month gold depletion by
269%. 
There is significant exploration potential at San Dimas beyond the
stated Mineral Resources and Mineral Reserves. The scale of the
identified targets was not thoroughly reviewed at December 31, 2012,
but is expected to remain in the order of 6-10 million tonnes at
grade ranges of 3-5 grams per tonne of gold and 200-400 grams per
tonne of silver, as estimated at December 31, 2011. This potential
mineralization has been estimated by Primero from geological and
grade modeling. It should be noted that these targets are conceptual
in nature. There has been insufficient exploration to define an
associated Mineral Resource and it is uncertain if further
exploration will result in the targets being delineated as a Mineral
Resource. 
Expansion to 2,500 TPD On-Track for Q1 2014 
The Company's expansion of the San Dimas mill from 2,150 tonnes per
day ("TPD") to 2,500 TPD is expected to be completed by the end of Q4
2013. Mine development to feed the mill at the expected capacity
remains on track to be complete in Q1 2014. 
The Company has successfully increased mill throughput to an average
2,042 TPD in the first quarter of 2013, with the mill operating at
2,169 TPD in March, slightly above its current nameplate capacity of
2,150 TPD. 
Construction of the mill circuit expansion began in October 2012, and
is progressing on plan. Key components of the expansion are on-site,
including the third ball mill and an additional tailings pump. The
Company spent $0.9 million on the mill circuit expansion during the
first quarter of 2013. 
Cerro Del Gallo Acquisition Approved by Cerro Shareholders 
On April 30, 2013 Cerro Resources NL ("Cerro") shareholders voted to
approve the acquisition of Cerro by the Company, resulting in 69.2%
ownership of the Cerro del Gallo project. The scheme of arrangement
is expected to close at the end of May 2013.  
The addition of the Cerro del Gallo project is expected to increase
the Company's near-term production by approximately 95,000 gold
equivalent ounces per year(6), (7). It will also double Primero's
reserves and triple its measured and indicated resources(7). The
first production from Cerro del Gallo is expected to occur in
mid-2015(6). The Company estimates that its production will nearly
double to over 250,000 gold equivalent ounces in 2016(6),(7).  
Assuming the acquisition closes at the end of May 2013 as expected,
Primero estimates 2013 capital expenditures of between $50 and $60
million on the Cerro del Gallo project. 
Social Responsibility Award 
In April 2013, the Company was proud to again be granted the Empresa
Socialmente Responsable ("ESR") award by the Mexican Center for
Philanthropy (CEMEFI) and the Alliance for Corporate Social
Responsibility (AliaRSE). The ESR award is given to companies
operating in Mexico that are committed to sustainable economic,
social and environmental operations in all areas of corporate life,
including business ethics, involvement with the community and
preservation of the environment. 
Conference Call and Webcast Details 
The Company's senior management will host a conference call today,
Wednesday, May 8, 2013 at 11:00 a.m. EDT to discuss the first quarter
operating and financial results.  
Participants may join the call by dialing North America toll free
1-855-410-0553 or 1-646-583-7389 for calls outside Canada and the
U.S., and entering the participant passcode 956408#.  
A live and archived webcast of the conference call will also be
available at www.primeromining.com under the News and Events section
or by clicking here: 
http://event.onlineseminarsolutions.com/r.htm?e=604844&s=1&k=AC3908F
148CB41889439DAA2D3382B32 
A recorded playback of the Q1 2013 results call will be available
until June 8, 2013 by dialing 1-855-410-0556 or 646-583-7395 and
entering the call back passcode 337298#. 
This release should be read in conjunction with Primero's first
quarter 2013 financial statements and MD&A report on the Company's
website, www.primeromining.com, in the "Financial Reports" section
under "Investors", or on the SEDAR website at www.sedar.com, or on
the Edgar website www.sec.gov. 
(1) Adjusted net income and adjusted net income (loss) per share are
non-GAAP measures. Neither of these non-GAAP performance measures has
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 first quarter 2013 MD&A for a
reconciliation of adjusted net income (loss) to reported net income
(loss).  
(2) "Operating cash flow" is operating cash flow before working
capital changes. This and operating cash flows before working capital
changes per share are non-GAAP measures which the Company believes
provides a better indicator of the Company's ability to generate cash
flow from its mining operations. See the first quarter 2013 MD&A for
a reconciliation of operating cash flows to GAAP. 
(3) "Gold equivalent ounces" include silver ounces produced, and
converted to a gold equivalent based on a ratio of the average
commodity prices realized for each period. The ratio for the first
quarter 2013 was based on realized prices of $1,626 per ounce of gold
and $4.12 per ounce of silver. The ratio used for the 2013 guidance
projection was based on estimated average prices of $1,700 per ounce
of gold and $8.52 per ounce of silver. 
(4) Total cash costs per gold equivalent ounce and total cash costs
on a by-product basis are non-GAAP measures. Total cash costs per
gold equivalent ounce is defined as cost of production (including
refining costs) divided by the total number of gold equivalent ounces
produced. Total cash costs on a by-product basis are calculated by
deducting the by-product silver credits from operating costs. The
Company reports total cash costs on a production basis. In the gold
mining industry, these are common performance measures but do not
have any standardized meaning, and are non-GAAP measures. The Company
follows the recommendations of the Gold Institute standard. The
Company believes that, in addition to conventional measures, prepared
in accordance with GAAP, certain investors use this information to
evaluate the Company's performance and ability to generate cash flow.
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. See the first
quarter 2013 MD&A for a reconciliation of total cash costs to
reported operating expenses (the nearest GAAP measure). 
(5) According to the silver purchase agreement between the Company
and Silver Wheaton Corp., 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 $4.12
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.  
(6) Assuming the successful closing of the Cerro Del Gallo
acquisition as announced by the Company on December 12, 2012 in the
news release "Primero to Acquire Cerro Del Gallo", available on the
Company's website www.primeromining.com or Sedar www.sedar.com and
that it begins production in mid-2015 in addition to the successful
expansion of San Dimas to over 160,000 gold equivalent ounces per
annum. 
(7) Assuming Goldcorp Inc.'s 30.8% position in Cerro Del Gallo is
diluted to a net profit interest and that resources include reserves.
Primero has filed a technical report under National Instrument 43-101
- Standards of Disclosure for Mineral Projects ("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.  
About Primero 
Primero Mining Corp. is a Canadian-based precious metals producer and
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 gold. The Company has
intentions to become an intermediate gold 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 Mining Corp. and its
consolidated subsidiaries (collectively, "Primero" or the "Company").
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", "expects", "is expected", "is possible", "budget",
"scheduled", "estimates", "continues to", "remains", "to be",
"forecasts", "intends", "anticipates", "believes" or variations of
such words and phrases or statements that certain actions, events or
results "are anticipated", "may", "could", "would", "might" or "will
benefit", "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 Company's ability to deliver
strong operating and financial results, the level of gold equivalent
production at San Dimas; the realization of silver sales at spot
prices; the amount of gold equivalent ounces production in 2013, the
cash costs for 2013; the capital expenditures in 2013; the pending
acquisition of the Cerro del Gallo asset and the amount and timing of
anticipated production from that asset; the probability of
encountering high grade mineralization in, and the exploration
potential of, the Company's exploration targets; the ability to
generate significant free cash flow while repaying debt and also
internally funding future growth; the expansion initiatives of the
San Dimas mine and mill; and 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 expectations and
beliefs of management; the specific assumptions set forth above in
this news release including in the footnotes; 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; that the Company
will sell some of its silver production at spot prices in 2013; that
the Company identifies higher grade veins in sufficient quantities of
minable ore in the Central Block and in Sinaloa Graben; that all
required approvals are obtained and there are no significant
disruptions in the closing of the transaction with Cerro; that there
are no material variations in the current tax and regulatory
environment; that the Company will receive required permits and
access to surface rights; that the Company can access financing,
appropriate equipment and sufficient labour; 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: the Company may not be able to achieve planned
production levels; or generate significant free cash flow, the
Company may not be able to expand production at San Dimas, or close
the acquisition of the Cerro del Gallo asset or develop it to realize
anticipated production levels, Goldcorp's interest in the Cerro del
Gallo project may not be diluted to a net profit interest, the
Company may be required to change 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 expansion initiatives may not be completed or provide
the benefits as anticipated; 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 registration
statement on Form 40-F 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 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. 
SUMMARIZED FINANCIAL & OPERATING RESULTS 
(in thousands of United States dollars, except per share and per
ounce amounts - unaudited) 


 
SUMMARIZED FINANCIAL DATA                                                   
                                                                            
                                                                            
                                                                            
                                                       Three months ended   
                                                      31-Mar-13   31-Mar-12 
----------------------------------------------------------------------------
Operating Data                                                              
Tonnes of ore milled                                    183,811     178,523 
Produced                                                                    
  Gold equivalent (ounces)                               27,656      25,793 
  Gold (ounces)                                          24,190      22,588 
  Silver (million ounces)                                  1.37        1.32 
Sold                                                                        
  Gold equivalent (ounces)                               28,474      26,229 
  Gold (ounces)                                          24,736      23,004 
  Silver (million ounces)                                  1.48        1.33 
Average realized prices                                                     
  Gold ($/ounce)                                    $     1,626 $     1,678 
  Silver ($/ounce)(1)                               $      4.12 $      4.08 
Total cash costs (per gold ounce)                                           
  Gold equivalant basis                             $       719 $       674 
  By-product basis                                  $       589 $       532 
                                                                            
                                                                            
Financial Data                                                    (Restated)
(in thousands of US dollars except per share                                
 amounts)                                                                   
Revenues                                                 46,321      44,004 
Earnings from mine operations                            15,706      18,662 
Net income                                               17,325      30,143 
Basic income per share                                     0.18        0.34 
Diluted income per share                                   0.18        0.31 
Operating cash flows before working capital changes      19,309      20,944 
Assets                                                                      
  Mining interests                                      497,300     486,606 
  Total assets                                          692,015     636,210 
Liabilities                                                                 
  Long-term liabilities                                  48,745      52,196 
  Total liabilities                                     101,675     117,343 
Equity                                                  590,340     518,867 
Weighted average shares outstanding (basic)(000's)   97,251,956  88,259,831 
Weighted average shares outstanding                                         
 (diluted)(000's)                                    98,034,449  96,705,098 
                                                                            
SUMMARIZED OPERATING DATA                                                   
                                                                            
                                                                            
                                               Three months ended           
                          31-Mar-13 31-Dec-12 30-Sep-12 30-Jun-12 31-Mar-12 
----------------------------------------------------------------------------
                                                                            
Operating Data                                                              
Tonnes of ore milled        183,811   190,073   177,926   174,742   178,523 
Average millhead grade                                                      
 (grams/tonne)                                                              
 Gold                          4.20      3.90      3.40      4.25      4.05 
 Silver                         242       228       210       256       242 
Average recovery rate (%)                                                   
 Gold                            98%       97%       97%       97%       97%
 Silver                          96%       95%       95%       95%       95%
Produced                                                                    
 Gold equivalent (ounces)    27,656    26,310    25,582    33,598    25,793 
 Gold (ounces)               24,190    23,143    18,892    23,277    22,588 
 Silver (million ounces)       1.37      1.32      1.14      1.36      1.32 
Sold                                                                        
 Gold equivalent (ounces)    28,474    25,416    23,251    35,442    26,229 
 Gold (ounces)               24,736    22,404    17,100    24,876    23,004 
 Silver at fixed price                                                      
  (million ounces) (1)         1.48      1.25      0.80      0.92      1.33 
 Silver at spot (million                                                    
  ounces) (1)                     -         -      0.25      0.47         - 
Average realized price                                                      
 (per ounce)                                                                
 Gold                     $   1,626 $   1,715 $   1,646 $   1,610 $   1,678 
 Silver (1)               $    4.12 $    4.12 $    9.66 $   12.24 $    4.08 
Total cash operating                                                        
 costs ($000s)            $  19,873 $  17,818 $  17,872 $  17,645 $  17,381 
Total cash costs (per                                                       
 gold ounce) (2)                                                            
 Gold equivalent basis    $     719 $     677 $     699 $     525 $     674 
 By-product basis         $     589 $     535 $     363 $      44 $     532 
                                                                            
(1) Due to a silver purchase agreement originally entered into in 2004, all 
 silver produced prior to August 6, 2010 was sold to Silver Wheaton at a    
 fixed price. As a result of restructuring the silver purchase agreement on 
 August 6, 2010, Primero will be able to sell some silver production at spot
 prices, subject to minimum threshold amounts being met(5)                  
(2) Total cash costs per gold ounce on a gold equivalent and by-product     
 basis are non-GAAP financial measures. Refer to "Non-GAAP measure - Total  
 cash costs per gold ounce calculation" in the Company's first quarter 2013 
 MD&A for a reconciliation to operating expenses.                           

 
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME 


 
THREE MONTHS ENDED MARCH 31, 2013 and 2012                                  
(In thousands of United States dollars, except for share and per share      
 amounts) (Unaudited)                                                       
                                                  Three months ended March  
                                                             31,            
                                                         2013          2012 
                                                                 (Restated) 
----------------------------------------------------------------------------
                                                            $             $ 
                                                                            
                                                                            
Revenue                                                46,321        44,004 
----------------------------------------------------------------------------
                                                                            
Operating expenses                                    (22,463)      (18,893)
Depreciation and depletion                             (8,152)       (6,449)
----------------------------------------------------------------------------
Total cost of sales                                   (30,615)      (25,342)
----------------------------------------------------------------------------
                                                                            
Earnings from mine operations                          15,706        18,662 
General and administrative expenses                    (7,796)       (3,515)
----------------------------------------------------------------------------
                                                                            
Earnings from operations                                7,910        15,147 
Other expense                                            (327)          (89)
Foreign exchange (loss) gain                           (1,360)        1,484 
Finance income                                            111           137 
Finance expense                                          (509)       (1,147)
Loss on derivative contracts                                -           (20)
----------------------------------------------------------------------------
                                                                            
Earnings before income taxes                            5,825        15,512 
                                                                            
Income tax recovery                                    11,500        14,631 
----------------------------------------------------------------------------
                                                                            
Net income for the period                              17,325        30,143 
----------------------------------------------------------------------------
                                                                            
Other comprehensive income                                                  
  Exchange differences on translation of foreign                            
   operations                                             346           244 
----------------------------------------------------------------------------
Total comprehensive income for the period              17,671        30,387 
----------------------------------------------------------------------------
                                                                            
Basic income per share                                   0.18          0.34 
Diluted income per share                                 0.18          0.31 
----------------------------------------------------------------------------
                                                                            
Weighted average number of                                                  
common shares outstanding                                                   
  Basic                                            97,251,956    88,259,831 
  Diluted                                          98,034,449    96,705,098 
----------------------------------------------------------------------------
                                                                            
PRIMERO MINING CORP.                                                        
CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS                               
(In thousands of United States dollars) (Unaudited)                         
                                                   March 31,   December 31, 
                                                        2013           2012 
                                                                            
                                                           $              $ 
                                                                            
Assets                                                                      
Current assets                                                              
  Cash                                               141,246        139,244 
  Trade and other receivables                          6,377          3,792 
  Taxes receivable                                     6,010          5,914 
  Prepaid expenses                                     8,244          4,607 
  Inventories                                          9,383         11,044 
----------------------------------------------------------------------------
Total current assets                                 171,260        164,601 
                                                                            
Non-current assets                                                          
  Mining interests                                   497,300        496,132 
  Deferred tax asset                                  23,455          9,773 
----------------------------------------------------------------------------
Total assets                                         692,015        670,506 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Liabilities                                                                 
Current liabilities                                                         
  Trade and other payables                            44,437         36,520 
  Taxes payable                                        1,386          2,209 
  Current portion of decommissioning liability         2,107          2,182 
  Current portion of long-term debt                    5,000         12,786 
----------------------------------------------------------------------------
Total current liabilities                             52,930         53,697 
                                                                            
Non-current liabilities                                                     
  Taxes payable                                        7,532          6,055 
  Decommissioning liability                            6,262          6,101 
  Long-term debt                                      27,214         27,214 
  Other long-term liabilities                          7,737          5,701 
----------------------------------------------------------------------------
Total liabilities                                    101,675         98,768 
----------------------------------------------------------------------------
                                                                            
Equity                                                                      
Share capital                                        458,353        456,734 
Warrant reserve                                       34,237         34,237 
Share-based payment reserve                           14,432         15,120 
Foreign currency translation reserve                    (718)        (1,064)
Retained earnings                                     84,036         66,711 
----------------------------------------------------------------------------
Total equity                                         590,340        571,738 
----------------------------------------------------------------------------
Total liabilities and equity                         692,015        670,506 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
PRIMERO MINING CORP.                                                        
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS THREE MONTHS ENDED  
 MARCH 31, 2013 and 2012                                                    
(In thousands Of United States dollars) (Unaudited)                         
                                                             2013      2012 
----------------------------------------------------------------------------
                                                                $         $ 
                                                                            
                                                                            
Operating activities                                                        
  Earnings before income taxes                              5,825    15,512 
  Adjustments for:                                                          
    Depreciation and depletion                              8,152     6,449 
    Payments relating to decommissioning liability            (53)        - 
    Share-based payments - stock option plan                   56       663 
    Share-based payments - Phantom Share Unit Plan          4,902      (107)
    Payments made under the Phantom Share Unit Plan          (650)     (229)
    Loss on derivative asset                                    -        20 
    Assets written off                                         65        79 
    Unrealized foreign exchange loss (gain)                   927    (1,744)
    Taxes paid                                               (313)     (709)
Other adjustments                                                           
Finance income (disclosed in investing activities)           (111)     (137)
Finance expense                                               509     1,147 
----------------------------------------------------------------------------
Cash provided by operating activities before working                        
 capital changes                                           19,309    20,944 
                                                                            
  Changes in non-cash working capital                      (1,601)    1,442 
----------------------------------------------------------------------------
Cash provided by operating activities                      17,708    22,386 
----------------------------------------------------------------------------
                                                                            
                                                                            
Investing activities                                                        
  Expenditures on exploration and evaluation assets        (6,443)   (3,274)
  Expenditures on mining interests                         (2,301)   (4,587)
  Interest received                                           111       137 
----------------------------------------------------------------------------
Cash used in investing activities                          (8,633)   (7,724)
----------------------------------------------------------------------------
                                                                            
                                                                            
Financing activities                                                        
  Repayment of debt                                        (7,786)   (5,000)
  Proceeds on exercise of options                             875         - 
  Interest paid                                                 -    (4,406)
----------------------------------------------------------------------------
Cash used in financing activities                          (6,911)   (9,406)
----------------------------------------------------------------------------
                                                                            
                                                                            
Effect of foreign exchange rate changes on cash              (162)      251 
----------------------------------------------------------------------------
                                                                            
                                                                            
Increase in cash                                            2,002     5,507 
Cash, beginning of period                                 139,244    80,761 
----------------------------------------------------------------------------
Cash, end of period                                       141,246    86,268 
----------------------------------------------------------------------------

Contacts:
Primero Mining Corp.
Tamara Brown
VP, Investor Relations
(416) 814 3168
tbrown@primeromining.com
www.primeromining.com
 
 
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